BARE DENIALS AND VAGUE COUNTERCLAIMS – WHAT OPTIONS DOES A PLAINTIFF HAVE?
A plaintiff pursuing a debt claim arising from a construction project can often expect to receive a response denying the debt, as well as a counterclaim involving vague allegations of entitlement against the plaintiff. These pleadings may be intended to delay and frustrate the resolution of the debt claim, intimidate the plaintiff, or both. While understandably frustrating to the plaintiff, such responses and counterclaims often fail to comply with the Supreme Court Civil Rules and may be struck out. This is an important consideration for not only the plaintiff, but also a defendant who has a legitimate defence or counterclaim.
The Supreme Court Civil Rules govern the content of pleadings in an action in the Supreme Court of British Columbia. Both a response to civil claim and a counterclaim are pleadings that must comply with the Rules. Among other things, the Rules require a defendant to concisely set out its version of the disputed facts. There are no exceptions to this rule. Failure to comply may result in the response being struck out, although an opportunity to amend is generally allowed.
In Royal Bank of Canada v Pisani, 2014 BCSC 761, the defendant filed a response to civil claim that made a bare denial of the allegations against her. On application by the plaintiff, the Court struck out the response and granted judgment to the plaintiff.
The counterclaims that frequently accompany responses to debt claims often involve vague allegations of wrongdoing by the plaintiff. Commonly, an engineer, architect or contractor suing for unpaid amounts is met with a counterclaim for breach of contract and negligence which alleges project delays and the presence of vaguely described defects and deficiencies in the subject project. Occasionally, these counterclaims are not limited to the plaintiff, but include other related parties, such as corporate directors, officers and professionals who worked on a project.
In Anenda Systems Inc. v AL13 Systems Inc., 2020 BCSC 2077, the defendant in a $600,000 debt claim filed a response to civil claim that made a bare denial of the allegations against it. Additionally, it filed a counterclaim seeking more than $7,000,000 on account of numerous allegations of wrongdoing, including fraud, trademark infringements, breach of contract and conspiracy.
The Court found that the response to civil claim was not compliant with the Rules and struck it out entirely, with leave to amend. With respect to the counterclaim, in addition to finding that it was not compliant with the Rules, the Court held that it should be heard as a separate action, since it would unduly complicate, delay and otherwise inconvenience the resolution of the debt claim.
An additional option available to a plaintiff is a demand for particulars. This allows the plaintiff to require that the defendant provide further information about its response or counterclaim. If the defendant does not respond, the plaintiff can apply to the Court to compel a response.
Although bare denials and vague counterclaims are frustrating, plaintiffs are not left without options. A plaintiff faced with these pleadings should consider the following questions:
- are the pleadings, in whole or in part, in contravention of the Rules;
- should particulars be sought; and
- might the Court order the counterclaim to be heard separately?
If the answer to any of these questions is “yes,” the plaintiff should pursue an appropriate remedy. Occasionally, this can be resolved by making a demand to the defendant to come into compliance with the Rules. Otherwise, the plaintiff will have to seek a remedy from the Court.
This article addresses just some of the potential options available to a plaintiff in these circumstances. Plaintiffs should seek legal advice regarding their specific circumstances and available options.
While this article addresses options available to a plaintiff, the information is equally important to a defendant in a debt action who has a legitimate defence or counterclaim. If a defendant fails to comply with the Supreme Court Civil Rules, it risks the Court making an order against it.