3.68: Court options to deal with significant deficiencies
7.3: Summary Judgment (Application and decision)
10.31: Court-ordered costs award
13.6: Pleadings: general requirements

Case Summary

This Appeal addressed three issues that were brought by various parties to this litigation. First, the Trustee in Bankruptcy appealed the striking or Summary Dismissal of large portions of the Statement of Claim filed in PricewaterhouseCoopers Inc. v Perpetual Energy Inc., 2020 ABQB 6. Further, the Respondents cross-appealed for Summary Dismissal under the Bankruptcy and Insolvency Act, RSC 1985, c B-3. Finally, the Trustee in bankruptcy appealed the Costs awarded in PricewaterhouseCoopers Inc. v Perpetual Energy Inc., 2020 ABQB 513.

The Court of Appeal, when considering striking the claim or Summary Dismissal of the claims under either Rules 3.68 or 7.3, recognized that, while both respective Rules serve as a method of addressing and weeding out unmeritorious claims prior to adjudication at Trial, the underlying considerations in determining if a claim is appropriate for either remedy is different. As the reasons under appeal were a blended analysis of the two, they were largely unhelpful. 

The Court of Appeal emphasized that, while there are some exceptions to the assumption in an Application to strike that the facts pled are true, it is imperative that the exception does not overtake the rule. The Court reiterated that there is no wide exception to the rule that no evidence is to be tendered or considered in Applications to strike. The Court highlighted two subsidiary issues in Applications to strike, namely that pleadings are to be read generously and pleadings are to allege facts, not evidence, pursuant to Rule 13.6. The Court noted that if the pleadings were insufficient, the appropriate remedy would have been to amend the pleadings or provide particulars. Ultimately, the Court allowed the Appeal and restored the struck pleadings.

Regarding the Costs Appeal, the Trustee in Bankruptcy challenged the Costs Award of 85% of solicitor-client Costs awarded to an individual Respondent, and which had held the Trustee in Bankruptcy personally liable for these Costs. The Court of Appeal recognized that, while Costs are typically awarded in accordance with Schedule C, a Trial Judge has wide discretion in awarding Costs. The Court went on to clarify that solicitor-client Costs are generally appropriate in circumstances where there has been reprehensible conduct in the course of litigation. Ultimately, the Court of Appeal did not find that the Trustee in Bankruptcy conducted the litigation in a manner that would justify enhanced Costs, and as such, allowed the Appeal.

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