The appellants, directors and officers of a bankrupt general contractor, appealed the dismissal of their motion to amend their statement of defence and compel further document production in a subrogated breach of trust action brought by the respondent sureties.
The Court of Appeal held that improvident underwriting was not a tenable defence to a subrogated action for breach of trust under the Construction Lien Act.
The Court also held that the limitation period in s. 45(1)(h) of the Limitations Act applies only to penal actions, whereas s. 13 of the Construction Lien Act is remedial, making the limitation defence untenable.
However, the Court allowed the appeal in part, granting leave to amend the statement of defence to plead the doctrine of laches.
