The Supreme Court of Prince Edward Island has dismissed an amended third-party claim against 27 entities in a Bank of Montreal debt action, finding that it lacked the material facts needed to support a coherent legal claim.
Justice Gary G. Demeulenaere used the court-initiated procedure in Rule 2.1 in BMO v. N. LaCroix, 2026 PESC 14, released June 15, 2026. The dismissal affects only LaCroix’s amended claim against the third parties. BMO’s debt claim and LaCroix’s counterclaim against the bank remain undecided.
A narrow procedure for plainly abusive pleadings
BMO began the action over an allegedly unpaid credit-card account. LaCroix filed a defence and counterclaim, followed by a third-party claim in January 2026 and an amended version the next month. The amended pleading named companies, governments and other organizations.
After reviewing it, the court initiated Rule 2.1 proceedings. That rule permits a court to stay or dismiss a proceeding that is frivolous, vexatious or otherwise an abuse of process, using a usually written procedure.
Demeulenaere emphasized the limits of that power: the defect must be obvious on the face of the proceeding, and the streamlined process is reserved for the clearest cases. It is not a substitute for other procedural rules ordinarily used to challenge pleadings.
LaCroix received notice in February that dismissal or a stay was being considered and submitted a written response. BMO responded, and Loblaw Companies Limited, one of the named third parties, was permitted to make submissions as well. The judge reviewed all three submissions.
The amended third-party proceeding was stayed while that process unfolded, apart from the permitted submissions. As a result, a motion seeking more time to serve the amended pleading had not been heard.
Material facts were missing
The court found that the amended claim largely identified the third parties and asserted wrongdoing without setting out the material facts required by Rule 25.06(1). The written response did not supply an intelligible basis for the asserted causes of action.
The judge also found that the large damages demands had no meaningful connection to the pleaded facts. The problem was not simply the amount claimed: the pleading failed to explain actionable conduct supporting the relief sought.
Demeulenaere concluded that the amended claim was both frivolous and vexatious. Either finding would have been sufficient under Rule 2.1, but he separately considered abuse of process.
On that ground, he found it would be unfair to burden BMO’s debt action and the third parties with the procedural and practical consequences of a claim that was incapable of reasonable understanding. Requiring ordinary motions to dispose of it would waste the parties’ and court’s resources.
The amended third-party claim was dismissed against every named third party. The ruling did not resolve the remaining dispute between BMO and LaCroix or impose a requirement that LaCroix obtain permission before bringing other proceedings.
No costs were awarded. Neither BMO nor Loblaw had sought them in the court-initiated process.
