The Defendant applied for Summary Dismissal of the Plaintiffs’ Claim arising out of a financing agreement between the parties. The Defendant had issued a commitment letter to the Plaintiffs (the “Commitment Letter”) and the Plaintiffs had paid the deposit required by the Commitment Letter (the “Deposit”). Various issues arose in the due diligence process and ultimately the Plaintiffs terminated the Commitment Letter and the Defendants did not advance any funds and did not return the Deposit. The Plaintiffs later sued the Defendant, alleging that the Defendant breached its duty of honest performance of the contract because it knew early on in the process that it could not advance funds under the Commitment Letter and did not bring this to the Plaintiffs’ attention. Further, counsel for the Defendant had indicated that the Defendant was intending to advance funds shortly, subject to resolution of remaining matters.

Master Smart stated that the test for Summary Dismissal under Rule 7.3(1)(b) required the Court to consider whether a fair and just determination could be made on the record. The Master reviewed the evidence and indicated that the Plaintiffs were informed throughout the process that much more needed to be done before funds could be advanced under the Commitment Letter. Master Smart determined that a single careless statement by counsel could not have misled the Plaintiffs. The suggestion that the Defendant, who was in the business of lending and who continued to work with the Plaintiffs to provide funding, would want to deceive the Plaintiffs and drag out the process lacked any air of reality. For this reason, Master Smart granted Summary Dismissal of the Claim, with the exception that the Plaintiffs could renew their Application for return of the Deposit within 30 days of entry of the Master’s Order.