7.3: Summary Judgment (Application and decision)

Case Summary

The Plaintiff and Defendants by Counterclaim brought an Application for Summary Judgment of the Action and dismissal of the Counterclaim. The Plaintiff sought payment for equipment supplied to the Defendant, the amounts of which were undisputed. The Defendant disputed owing the amounts claimed because of alleged unsuitability of the equipment and counterclaimed for costs incurred for equipment repair which were not reimbursed by the Plaintiff.

The Plaintiff also sued the guarantor to the purchase and financing agreements for repayment of the debt. The guarantee was executed in Alberta but stated that it was to be governed by the laws of the State of Wisconsin, USA. No Guarantees Acknowledgment Act Certificate was completed or executed. The guarantor argued that Alberta law governed as no foreign law was pleaded or proven; therefore, because no Notarial Certificate was executed, the guarantee was unenforceable. The Plaintiff tendered evidence from a lawyer in Wisconsin who claimed that the State of Wisconsin does not require a signatory to a guarantee to sign before a Notary Public.

Master Smart held that there was insufficient evidence to determine the validity and amounts of the offsets claimed by the Defendant in its Statement of Defence and Counterclaim. For that reason, Master Smart gave judgment to the Plaintiff for the principal amount owing but ordered a stay of enforcement pending a determination of the validity and amount of the setoffs claimed. Because of the potential offsets, Master Smart denied the Application to summarily dismiss the Counterclaim.

With respect to the guarantee, numerous allegations of misrepresentation and collateral agreements were raised with respect to its enforceability. Without knowing how those issues might be dealt with under Wisconsin law, Summary Judgment was denied for the Claims against the guarantor.

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