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Counter Claims Not Allowed in Petition Proceedings

The BC Appeal court in Edward Chapman Ltd v FS Property Inc 2022 BCCA 213 in a foreclosure proceeding ruled that the current rules do not provide for the filing of a counter claim to a petition. The matter must first be converted to an action.

Rule 16-1 provides for the type of pleadings that can be filed in a petition proceeding.

[17] Further, R. 16-1(18) provides:

(18) Without limiting the court’s right under Rule 22-1 (7) (d) to transfer the proceeding referred to in this rule to the trial list, the court may, whether or not on the application of a party, apply any other of these Supreme Court Civil Rules to a proceeding referred to in this rule.

[18] Rule 16-1(18) acknowledges the ability, under R. 22-1(7), to refer a petition proceeding to the trial list. This would involve converting the proceeding to an action, and giving directions for the filing of pleadings and any other necessary directions, as contemplated by R. 22-1(7).

[19] But R. 16-1(18) also provides flexibility for a petition proceeding to employ some of the tools of an action for determination of issues within the petition proceeding itself, such as limited discovery. These tools can be borrowed and used selectively, while preserving the summary nature of the petition proceeding: see L’Association des parents de l’école Rose-des-Vents v. Conseil scolaire francophone de la Colombie-Britannique, 2011 BCSC 89 at para. 30.

[20] In my view, R. 16-1(18) does not permit the filing of a counterclaim within a petition proceeding.

[21] A counterclaim is provided for in R. 3-4. It is a form of pleading a claim, delivered within an action after a notice of civil claim has been filed. Rule 3-4(1) provides:
(1) A defendant in an action who wishes to pursue a claim within that action against the plaintiff must, within the time set out for the filing of a response to civil claim under Rule 3-3 (3), file a counterclaim in Form 3 that accords with Rule 3-7.

[22] The form of a counterclaim is a prescribed form under the Rules, Form 3. The beginning of the form itself incorporates the words:

This action has been brought by the plaintiff(s) against the defendant(s) for the relief set out in the notice of civil claim filed in this action.

[23] The logic of the Rules and Forms as a whole, make it clear that a counterclaim can only be advanced within an action. In my view, the decision of 1076586 Alberta Ltd. v. Stoneset Equities Ltd., 2015 BCCA 182, still applies, including the holding, at para. 60, that there would have to be an action (either by notice of civil claim or by order that the petition stand as a notice of civil claim), not a petition proceeding, in order for there to be a counterclaim.

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