Executive Summary: Key Legal and Evidentiary Issues

• ASF sought to amend its cross-claim against Honeywell to include a $12.4 million claim for lost profits allegedly caused by delayed refunds.

• The proposed amendment was denied as being statute-barred under New Brunswick’s Limitations of Actions Act.

• ASF failed to show the claim was discovered after 2020, as correspondence from that year revealed it had full knowledge of the facts then.

• The court ruled the new claim was unrelated to the original lawsuit concerning a $1.3 million failed N95 mask transaction.

• Expanding the litigation to include unrelated lost orders would unduly complicate the proceedings and cause procedural disruption.

• Although the proposed claim arguably disclosed a cause of action, it was still dismissed due to limitations and irrelevance to the core dispute.

Facts of the case

In Bigfoot Inc. v. Alberta Safety First Ltd. et al., 2025 NBKB 104, the plaintiff, Bigfoot Inc., sued Alberta Safety First Ltd. (ASF), its principal Fanny Cécile Pallot, and Honeywell Limited for breach of contract. The claim arose from a 2020 agreement in which Bigfoot paid approximately $1.3 million to ASF for 500,000 N95 masks, which were never delivered. ASF did not return the funds, leading to the lawsuit. ASF asserted that it was merely a distributor for Honeywell, the alleged supplier of the masks, and filed a cross-claim against Honeywell for contribution and indemnity.

During discovery, ASF claimed it learned that Honeywell had undermined its business and diverted customers. On this basis, ASF brought a motion to amend its cross-claim to include damages for lost profits estimated at $12.4 million, stemming from an alleged inability to fill other customer orders during the same period.

Limitation period and discoverability analysis

Justice Morrison denied the motion, first addressing the statute of limitations. He applied section 5(1)(a) of New Brunswick’s Limitations of Actions Act and the Supreme Court’s discoverability principles from Grant Thornton LLP v. New Brunswick. The judge found that all material facts forming the basis of ASF’s proposed new claim were known by December 30, 2020, when Honeywell refunded the payment and terminated the relationship. This was confirmed by a 2020 demand letter from ASF’s lawyer, which warned Honeywell of damages suffered due to the delay. Since ASF’s motion to amend was not filed until June 2024, the claim was statute-barred by over a year.

ASF argued that it only discovered certain Honeywell conduct in October 2022, but the court rejected that argument. The amendment did not include diversion-related claims but focused solely on financial fallout from the 2020 refund delay, rendering the later discovery irrelevant.

Relevance and procedural concerns

The court also held that the proposed amendment raised new and unrelated issues that fell outside the scope of the main litigation. Bigfoot’s original claim and ASF’s cross-claim both focused on a specific transaction for N95 masks. In contrast, the amendment introduced claims based on alleged lost sales to other unnamed customers, which were not part of the original dispute. Allowing the amendment would fundamentally transform the litigation, increasing damages from $1.3 million to over $12 million and significantly delaying the proceedings. Discovery would need to be redone and expanded, and the court found this would unduly burden the process.

Pleading and cause of action analysis

Honeywell also argued that the proposed amendment failed to disclose a reasonable cause of action, particularly concerning breach of fiduciary duty. Justice Morrison noted the claim could have been pleaded more clearly but found it did meet the low threshold of arguability. Nonetheless, the procedural and limitations issues were sufficient to dispose of the motion.

Conclusion

The Court of King’s Bench of New Brunswick denied ASF’s motion to amend its cross-claim. The court found the proposed amendment was statute-barred, unrelated to the original claim, and would substantially expand and delay the litigation. Costs of $1,500 were awarded to Honeywell. The litigation will proceed based on the original claims relating to the failed N95 mask transaction.