The Respondents entered into an acquisition agreement with the Appellant to acquire the Appellant’s business for $70 million, with potential additional contingent payments (the Arrangement Agreement). One of the Respondents provided $7 million in bridge financing (the Bridge Loan) to support the Appellant’s development until completion of the acquisition. Later, the Respondents issued notice of alleged breaches under the Arrangement Agreement, prompting the Appellant to initiate an Action for specific performance, while the Respondents counterclaimed for repayment of the Bridge Loan.

The Applications Judge granted the Respondents Summary Judgment for the loan repayment, which was the subject of this Appeal.

The Court noted that, under Rule 7.3(1)(a), Summary Judgment may be granted if there is no defence to a claim or part of it. The Court cited the three-part test for determining whether Summary Judgment is appropriate, as set out in Hryniak v Mauldin, 2014 SCC 7: (1) the judge can make the necessary findings of fact, (2) the judge can apply the law to the facts, and (3) it is a proportionate, more expeditious and less expensive means to achieve a just result.

When considering partial Summary Judgment, the Court must balance fairness and efficiency. The Court noted that partial Summary Judgment should avoid duplicative or inconsistent findings, which may not serve justice if other claims proceed to Trial.

In this case, the Applications Judge granted Summary Judgment on the Respondents’ Counterclaim. Although a Counterclaim is an independent Action under Rule 3.57, partial Summary Judgment principles apply if the Counterclaim shares similar facts or legal issues with the main claim. The Court referenced cases indicating that interconnected claims and Counterclaims may require a full Trial to avoid injustice or inefficient outcomes, which was applicable to this case.

In the result, the Appeal was allowed.