By a previous Order of Justice Dilts, the Defendants were found to be in Contempt of Court, and were given 30 days to purge the Contempt by paying security into Court. The Defendants failed to do so, and so the Plaintiffs applied to strike the Amended Statement of Defence and Counterclaim filed by the Defendants, and to enter Judgment in the amounts sought by the Amended Statement of Claim.

Labrenz J. held that the previous Order of Justice Dilts signified that the Court had already concluded beyond a reasonable doubt that each of the Defendants were aware of the clear and unequivocal Order requiring funds be paid into Court, that the failure to pay the funds into Court was intentioned, and that the failure to make payment was not reasonably excused. Labrenz J. accepted that an Order to pay security into Court was not an Order to “pay money” and did not fall into the exception for Contempt of Court under Rule 10.52(3)(a).

The Court then considered the appropriate response for the Contempt of the Defendants and considered Rule 10.53. In doing so, the Court noted that the remedies set out in Rule 10.53 are not exhaustive, and the Court may substitute remedies where appropriate. While striking out pleadings is a drastic procedure, there are two circumstances where such a remedy may be appropriate: (1) where the breach of a Court Order prevents the party from defending an Action; or (2) where the breach constitutes a flouting or flaunting of a judicial Order and demonstrates a persistent failure to obey.

The Court was also presented with some conflicting evidence, and opted not to consider the conflicting evidence due to the unresolved credibility issues. In citing Rule 13.18, Labrenz J. commented that the Rule also operates to prohibit the use of hearsay evidence concerning the conflicting evidence at issue.

When considering the entirety of the evidence in the context of the history of the litigation, it seemed that the Defendant had offered security to the Plaintiff in an attempt to persuade the Plaintiff to forego registration of a lien, which the Plaintiff accepted. Given the history of the proceedings, the Court held that it was appropriate to strike the Amended Statement of Defence and also strike the Counterclaim of one of the Defendants.