Executive Summary: Key Legal and Evidentiary Issues

• Scope of a reply pleading under Rules 25.06, 25.08 and 26.05, including when a plaintiff may respond to an amended defence versus when a formal amendment to the statement of claim is required.
• Dispute over whether the plaintiffs’ second reply improperly introduced new factual allegations and new grounds of claim that should have been pleaded in the original claim or earlier reply.
• Challenge to reply paragraphs that addressed portions of the defence that had not been substantively amended, contrary to the limits on replies clarified in Van Huizen v Trisura Guarantee Insurance Company.
• Concern that substantial portions of the second reply consisted of evidence, legal argument and attempts to characterize or impugn the defendants and their counsel, rather than concise material facts.
• Case management issues arising from repeated pleadings and disclosure motions, leading the court to impose a strict timetable and to bar further motions to amend without leave.
• Costs of a motion to strike in the context of self-represented plaintiffs, including the court’s reduction of the defendants’ claimed costs and its assessment of whether the motion was a proportionate way to address the pleadings problems.

Facts of the case

The proceeding arises out of a failed real estate transaction between the plaintiffs, Mr. and Mrs. Ebadi, and the defendants, Fosters and Oakwood (also known as Navan Realty). The action was commenced in 2022 and, despite its age, had become mired at the pleadings and discovery stage due to multiple motions and case conferences concerning disclosure, undertakings and amendments to the pleadings. The plaintiffs’ original statement of claim and the defendants’ statement of defence closed the pleadings in May 2022. No reply was delivered to several portions of the original defence at that time. In February 2025, the plaintiffs sought to significantly amend their claim. The proposed amendments increased the amount of damages claimed and added a new head of loss for alleged loss of equity in the property. The defendants were prepared to consent to these amendments, but only on conditions: that fresh affidavits of documents be exchanged, that the parties re-attend examinations for discovery, and that the plaintiffs pay costs thrown away by virtue of the amendments. The plaintiffs refused to accept those conditions, leading to a motion before Justice Flaherty. In that motion, Justice Flaherty granted the plaintiffs leave to amend their statement of claim, imposed the defendants’ requested conditions and set a timetable for the delivery of all amended pleadings and subsequent procedural steps. Importantly, her endorsement provided that, “[i]f necessary, under Rule 25.08, the plaintiffs may serve and file a reply within 10 days of receiving the amended statement of defence.” Following this order, the plaintiffs delivered their amended claim and the defendants delivered their amended statement of defence and counterclaim, without further objection from either side. Some time later, the plaintiffs served what they styled as a second reply and defence to counterclaim. That pleading was not confined to answering new allegations in the amended defence. It contained extensive new narrative, responded to portions of the defence that had not been amended, and included allegations based on information the plaintiffs said they had obtained through productions, discoveries and prior motions. The plaintiffs also delivered the amended reply in “clean” form without underlining to show changes. The defendants became concerned that the second reply went well beyond what is permitted under the Rules of Civil Procedure. They asserted that it introduced new grounds of claim, responded to unamended paragraphs of the defence, contained evidentiary detail and legal argument, and included allegations aimed at attacking the character of the defendants and their solicitors. As a result, the defendants brought the motion before Associate Justice Perron to strike large portions of the second reply and to adjust the litigation timetable established by Justice Flaherty. The plaintiffs, who were self-represented, maintained that they had simply replied as permitted by Rule 25.08. They argued that the amended defence, considered as a whole, changed the context of the case and required them to plead additional facts in reply so the defendants would not be taken by surprise at trial. They also took the position that the facts referred to in the second reply were not truly new, but arose from discoveries, productions and evidence already exchanged in earlier motions. Finally, they contended that Rule 25.08 was the sole governing rule because it was the only rule mentioned by Justice Flaherty in her earlier endorsement.

Key legal framework

Associate Justice Perron began by situating the motion within the Rules of Civil Procedure that govern pleadings and amended pleadings. Rule 25.08 addresses when a party may deliver a reply. It permits a reply where necessary to set out a different version of facts from those in the defence, provided those facts were not already pleaded in the claim, or where the reply is needed to respond to a defence that might otherwise take the opposite party by surprise or raise a new issue not previously raised, subject to Rule 25.06(5). Rule 25.06(5), which applies to all pleadings, limits the use of subsequent pleadings to introduce inconsistent allegations or new grounds of claim. Where a party wishes to add allegations that are inconsistent with an earlier pleading, or that raise a new ground of claim, those changes must be made by amending the prior pleading rather than by way of a later reply. Rule 25.06 more generally requires that pleadings contain concise statements of material facts only, and explicitly prohibits pleading the evidence by which those facts will be proved or inserting legal arguments and submissions into pleadings. Rule 26.05 governs the effect of amended pleadings and the timelines for responding. While Justice Flaherty had altered the default timelines through her timetable order, Associate Justice Perron held that Rule 26.05 remained applicable because it sets the framework governing how and when a party may deliver pleadings in response to amendments. Although Justice Flaherty had referred expressly only to Rule 25.08 in her earlier endorsement, the associate justice rejected the plaintiffs’ suggestion that this limited the operation of other relevant rules or case law. He interpreted her reference to Rule 25.08 as a practical guide to the self-represented plaintiffs on when a reply is permitted, not as an exclusion of the rest of the rules governing pleadings. In analyzing the propriety of the plaintiffs’ second reply, the associate justice relied on the decision in Van Huizen v Trisura Guarantee Insurance Company. In that case, Justice Bell clarified that Rule 26.05 allows a party to amend its pleading to respond to amendments introduced by the other side, but does not authorize a party to raise entirely new issues without obtaining leave to amend its original pleading. Van Huizen also held that where plaintiffs have made an informed choice not to reply to an initial statement of defence, any later right to reply following amendments to the defence is confined to matters reasonably necessary to address the new amendments and the issues that arise from them.

Analysis of the challenged reply

The associate justice divided the objections to the second reply into two main categories. The first involved paragraphs 8 to 32 and 45 to 51, which the defendants said improperly responded to parts of the defence and counterclaim that had not been substantively amended, and contained new allegations and evidentiary detail. On review of paragraphs 22 to 72 of the amended defence, Associate Justice Perron agreed that there were no substantive amendments in these sections. The plaintiffs had originally chosen not to reply to those paragraphs. In light of Van Huizen, he concluded that the plaintiffs could not now use their second reply to plead to those same unamended portions of the defence. To do so would, in effect, allow them to bolster or expand their claim after the fact without seeking leave to further amend their statement of claim. The court also noted that most of the allegations within paragraphs 8 to 32 of the second reply were improper in form. Rather than setting out concise material facts, these passages largely set out evidence, quotations from examinations and productions, and legal argument about the interpretation of contracts and earlier rulings. Under Rule 25.06, such evidentiary and argumentative pleading is not permissible. Accordingly, the court held that paragraphs 8 to 32 of the second reply were improper and ordered that they be struck. Similar reasoning applied to the defence to counterclaim. The defendants had not amended the counterclaim portion of their pleading at all. Despite this, the plaintiffs sought, in paragraphs 45 to 51 of the second reply, to advance a fresh defence to counterclaim. Because these paragraphs also amounted to new allegations and, in part, evidential and argumentative pleading, they were likewise struck. Recognizing, however, that the plaintiffs did require a defence to counterclaim on the record, and noting the defendants’ willingness to accept a more limited form of defence, the court permitted the plaintiffs to reinsert paragraphs 28 to 32 of their original reply and defence to counterclaim. Those reinstated paragraphs would stand as the plaintiffs’ defence to the counterclaim in the fresh reply to be delivered.

Objections based on irrelevance and character attacks

The second category of objections focused on paragraphs 5 to 7 of the second reply. The defendants argued that these allegations were irrelevant to the proper issues in dispute and were mainly aimed at discrediting the defendants and their solicitors. At the motion hearing, the defendants abandoned objections to some other paragraphs, narrowing the dispute to these three. The associate justice heard submissions from both sides on each paragraph. The plaintiffs contended that the challenged passages were justified because they referred to evidence generated during the litigation, including arguments arising from court rulings, which in their view bore on the defendants’ conduct and positions in the proceedings. Consistent with his earlier analysis, Associate Justice Perron concluded that it was inappropriate to plead evidence and legal submissions in this way. Pleadings are not the place to reproduce discovery answers, characterize opponents’ conduct or rehearse arguments about earlier interlocutory decisions. For these reasons, he found that paragraphs 5 to 7 were also improper and ordered them struck from the second reply.

Case management and timetable orders

Because the dispute over the reply pleading had stalled progress under Justice Flaherty’s earlier timetable, the associate justice also addressed the future management of the action. By consent, he amended the existing timetable to set new deadlines. The plaintiffs were ordered to deliver a fresh reply by December 1, 2025, and that reply was tightly confined: it could only contain paragraphs 1 to 4 and 33 to 44 from the proposed second reply, along with paragraphs 28 to 32 of the original defence to counterclaim. The defendants were directed to produce the “production letter” previously ordered by Justice Flaherty by December 19, 2025. The parties were to exchange any supplementary affidavits of documents by February 13, 2026, complete any further examinations by April 30, 2026, and provide answers to any further undertakings within sixty days of the examinations. The associate justice expressed concern about the pattern of the litigation to date. He noted that the parties had already exchanged affidavits of documents and amended affidavits, had attended and re-attended at examinations for discovery, and had brought several motions over undertakings and disclosure. He concluded that the case, a 2022 action still stuck at the pleadings and discovery stage, could not continue to be conducted primarily by motion. Because there had already been at least two motions concerning pleadings, he held that only truly exceptional circumstances would justify further amendments to pleadings in the future. The plaintiffs, for their part, confirmed that they were not seeking any further amendments to the claim. As a result, the court ordered that there would be no further motions to amend pleadings in this action. To restore momentum and provide continuity, Associate Justice Perron placed the matter under his ongoing case management. He scheduled a one-hour case conference on May 27, 2026, to set the timetable for the final procedural steps, namely completion of mediation and the deadline for setting the action down for trial. The parties were granted leave to seek an expedited case conference before him if urgent procedural issues arose that could not be resolved by consent, but the court made clear that no further motions of any kind would be permitted unless leave was granted at such a conference. In particular, the associate justice noted that there would be no leave to bring a summary judgment motion, explaining that it would be inappropriate given the age and stage of the action and the fact that it should soon be ready to be set down for trial.

Discussion of policy terms or contractual clauses

Although the underlying dispute concerns a failed real estate transaction, the endorsement does not reproduce or analyze specific contractual clauses from the agreement of purchase and sale or any brokerage or listing agreement between the parties. Nor does it address insurance policy wording or other policy-type terms. The focus of the motion is strictly procedural: what may properly be pleaded in a reply, how the Rules of Civil Procedure govern amendments and replies, and how the litigation should be managed going forward. Any issues of contractual interpretation mentioned in the pleading (for example, the plaintiffs’ arguments about how the agreements and prior rulings should be interpreted) are only referenced indirectly by the court to illustrate why it is improper to embed detailed arguments and evidence in a reply pleading. The substance of those contractual disputes remains for determination at trial or on another merits-based hearing, not in this interlocutory endorsement.

Outcome and monetary consequences

In the result, the motion by the defendants, Fosters and Oakwood (Navan Realty), was granted. The court struck paragraphs 5 to 7, 8 to 32 and 45 to 51 of the plaintiffs’ second reply, limited and directed the content of a fresh reply, reset the litigation timetable, and assumed ongoing case management over the action with a prohibition on further motions absent leave. The defendants were therefore the successful party on the motion. On costs, the defendants had made an offer to resolve the motion on terms substantially similar to the result ultimately ordered and sought costs of $8,013.16 on a partial-then-substantial indemnity basis, or $5,824.02 on a partial indemnity scale. Balancing their success against the plaintiffs’ self-represented status, the technical nature of the pleading rules and his own doubts about whether a full motion to strike had been the only practical way to address the issues, Associate Justice Perron exercised his discretion to significantly reduce the award. He ordered the plaintiffs to pay the defendants $1,500 in costs of the motion. No damages or other monetary relief on the underlying real estate claim were determined or awarded in this decision; the only quantified amount ordered in favour of the successful party is the $1,500 costs award.