In a Bankruptcy and Insolvency Act s. 38 fraudulent conveyance action, the defendants sought to amend their statements of defence and to introduce a counterclaim alleging abuse of process, malicious prosecution, and intimidation.
The plaintiffs opposed the amendments and moved to strike several pleadings, particularly those raising a limitation period defence.
The court held that earlier Rule 21 proceedings had finally determined the limitations issue as a question of law, meaning the defendants were barred by res judicata from re‑pleading or reframing the defence.
The court also found that the proposed counterclaim was unrelated to the trustee’s cause of action pursued under s. 38 and constituted a collateral attack on the order granting leave to commence the proceeding.
Limited amendments were permitted, but most proposed amendments were refused and several pleaded paragraphs were struck.
