4.34: Stay of proceedings on transfer or transmission of interest
7.3: Summary Judgment (Application and decision)

Case Summary

Master Mason considered whether the Applicant, Ms. Bentley, was entitled to Judgment against two of the Respondents, Mr. Hooton and Mr. Schmidt, for fraud. Ms. Bentley provided a loan to Mr. Hooton, Mr. Schmidt, and the other Respondent, Mrs. Schmidt. The loan was secured by a mortgage against the home of Mr. and Mrs. Schmidt. Following default, Ms. Bentley sought foreclosure for the loan balance. However, the mortgage was declared invalid when it was determined that Mrs. Schmidt had no knowledge of the loan and her signature had been forged on the mortgage documents.

The issue before Master Mason was whether Ms. Bentley, who had no knowledge of the fraud, could get Judgment against Mr. Hooton and Mr. Schmidt who perpetrated the fraud.

As a preliminary matter, Master Mason considered Rule 4.34 which stays an Action on the death of a Defendant. The Court was advised that Mr. Hooton had passed away. Master Mason ruled that Ms. Bentley’s Statement of Claim and Mr. Schmidt’s Third Party Claim against Mr. Hooton could proceed because the only evidence of his death were statements in Mr. Schmidt’s Affidavit. If confirmation of Mr. Hooton’s death could be made, his estate could seek to set Judgments against him aside. Mr. Hooton had not defended the claims against him even prior to his death.

Master Mason then considered Ms. Bentley’s Application for Summary Judgment against Mr. Schmidt for the loan balance. Master Mason noted that Summary Judgment is appropriate when the record is sufficient to decide a matter fairly and justly. That was the case in this instance. The Court of Queen’s Bench had previously found that Mr. Schmidt was involved in the fraud, and the Court of Appeal went so far as to find that he forged his wife’s signature on the documents.

Master Mason awarded both Ms. Bentley and Mr. Schmidt Judgment against Mr. Hooton in default of a defence. Master Mason also granted Judgment against Mr. Schmidt in favour of Ms. Bentley.

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