Some but not all of the Defendants in the Action applied to strike all or part of the Plaintiffs’ fourth Amended Statement of Claim pursuant to Rule 3.68(2)(b), arguing that it did not disclose a reasonable cause of action. In response, the Plaintiffs submitted a proposed fifth Amended Statement of Claim, in which some claims had been abandoned and others particularized. The Plaintiffs argued that the proposed fifth Amended Statement of Claim disclosed a reasonable cause of action and should not be struck.

Justice Henderson noted that the test for striking pleadings pursuant to Rule 3.68(2)(b) is whether the claim, as pleaded, has a reasonable prospect of success. It will only be struck if it is plain and obvious that the pleading discloses no reasonable cause of action, even when all the facts pleaded are presumed to be true. While facts on a motion to strike are generally presumed to be true, there are some exceptions – for instance, “bare allegations with no supporting facts should not be assumed to be true”. His Lordship also explained that the Court should be cognizant of the “culture shift” endorsed by the Supreme Court in Hryniak v Mauldin, 2014 SCC 7 (CanLII) which requires Courts to consider a “proportionate timely and affordable remedy” to fairly and efficiently determine the issues between the parties. This is consistent with Rule 1.2(2)(a) and (b), which explains that the Rules are intended to be used to identify the real issues in dispute, and facilitate resolution quickly.

Next, Justice Henderson considered the allegations in the proposed fifth Amended Statement of Claim – which included negligent and fraudulent misrepresentations, the existence and breach of a contract, and circumstances allowing for the corporate veil to be lifted. The Defendants argued that “bald allegations” within it did not provide the particulars required to explain why the corporate veil should be lifted. Justice Henderson noted that allegations of fraud and fraudulent misrepresentation must be pleaded with particularity in accordance with Rule 13.7, but emphasized that the claim should be considered and read as a whole. When that was done, the facts pleaded provided more than “bald allegations”. As such, the Application was dismissed.