In the context of construction litigation, the Defendants by Counterclaim Kevin Lacroix (“Lacroix”) and 0989842 BC Ltd. (collectively the “Applicants”) applied to strike portions of the Colony Management Inc.’s (“Colony”) Counterclaim on the basis that it did not disclose a cause of action known to law and that Colony’s allegations of fraud were advanced without the particulars required by Rules 13.6 and 13.7.

Justice Sulyma noted that Rule 3.68 provides that the Court may order that all or any part of a claim, defence, or pleading be struck out. In addition, Rule 3.68, though similar to the former Rule 129, must be viewed through the lens of the foundational Rule 1.2. Sulyma J. stated that the test for striking pleadings includes a determination of whether there is any reasonable prospect that the claim will succeed, assuming the facts pleaded are true, while erring on the side of generosity in permitting novel claims to proceed.

Justice Sulyma held that the Applicants did not establish that the Counterclaim had no reasonable prospect of success. Her Ladyship determined that Lacroix’s conduct as alleged in the Counterclaim was central to Colony’s primary defence to the Plaintiff’s Claim, and therefore the impugned Pleadings in the Counterclaim were not an abuse of process.

Sulyma J. noted that portions of Colony’s Counterclaim made broad allegations against the Applicants pertaining to theft, fraud, and unjust enrichment. Justice Sulyma noted that while it is permissible to plead broad allegations in a counterclaim, the pleading is required to include facts upon which the party relies. Sulyma J. struck out the paragraphs of the Counterclaim that did not provide a factual basis, but otherwise dismissed the Application.