Gill J

3.68: Court options to deal with significant deficiencies

Case Summary

The Defendant, The Guarantee Company of North America, applied to strike out the Plaintiff’s Amended Statement of Claim pursuant to Rule 3.68. The Plaintiff had contracted with a general contractor Clark Builders to construct a warehouse. After the warehouse was completed, the tenant complained about the warehouse floor. The general contractor undertook remedial work and a dispute arose as to whether that remedial work was successful. Under the terms of a performance bond, the Defendant had guaranteed the general contractor’s obligations to the Plaintiff under a design build agreement for the warehouse construction.

Justice Gill considered whether the Plaintiff’s Amended Statement of Claim disclosed a reasonable Claim under Rule 3.68(2)(b). His Lordship observed that the test for striking a Claim remained the same as that under former Rule 129. Gill J. stated further that, in Applications such as this, no evidence may be submitted pursuant to Rule 3.68(3), and the Court is to assume that the facts in the commencement document are true. The Plaintiff alleged that the Defendant owed amounts under the performance bond, and no payments had been made. Assuming that the facts pleaded were true, the allegations clearly supported a cause of action in breach of contract. On that basis alone the Plaintiff was entitled to advance its claims. Justice Gill determined that the Defendant did not meet the test under Rule 3.68, as the Defendant did not establish that it was plain and obvious, or beyond reasonable doubt, that the Claim could not succeed. Accordingly, the Application was dismissed.

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