The Defendants brought an Application pursuant to Rule 3.68 to strike two Statements of Claim on the grounds that they disclosed no reasonable claim or constituted an abuse of process, or both. Each of the Statements of Claim alleged that the Defendants were liable for breaches of trust and misappropriation of corporate funds.

The Court confirmed that the test for striking a pleading which discloses no reasonable claim is as follows:

• For the purpose of the analysis, the facts pled are presumed to be true;
• The claim must have no reasonable prospect of success to be struck; and
• Striking is a tool which must be used with care since the law evolves, and striking should not be used to foreclose novel claims. The approach must be generous and err on the side of permitting a novel but arguable claim to proceed to trial.

Justice Little stated that the onus on a defendant is no higher than proving that it is “plain and obvious” that the pleading discloses no reasonable claim. The Court found the Defendants in this case failed to prove that the Plaintiff’s claims had no reasonable prospect of success.

However, the Court struck both Statements of Claim because they constituted an abuse of process based on the following criteria that often characterize litigation that is both vexatious and an abuse of process:

• Collateral attacks on decisions of the courts;
• Hopeless proceedings;
• Escalating proceedings and
• Making unsubstantiated allegations of conspiracy, fraud, and misconduct.