7.3: Summary Judgment (Application and decision)

Case Summary

The Plaintiff sued the Defendants for repayment of three loans. The Defendants argued that the Plaintiff never forwarded the proceeds of the loans to their intended recipients; therefore, there was no consideration and no loans enforceable against them. The Defendants counterclaimed against the Plaintiff and others for rescission of the loan agreements, and also alleged breaches of contract and fiduciary duties, and sought an accounting and damages.

The Defendants/Plaintiffs by Counterclaim applied for Summary Judgment on their Counterclaim. Justice Hall reviewed Rule 7.3 and observed that the test for Summary Judgment has changed from “plain and obvious” or “clear or beyond doubt” to a less stringent test of “whether there is any issue of merit that genuinely requires a trial”.

Justice Hall was satisfied on the evidentiary record that the Plaintiff did not forward the loan funds. As such, the Plaintiff wholly failed to perform its obligations. The Plaintiff’s claim was dismissed and the Defendants were awarded Summary Judgment for all of the funds they paid to the Plaintiff under the loan agreement.

The Defendants also sought Summary Judgment against the other Defendants by Counterclaim. These claims were essentially for fraud, alleging that many of the representations made by the Defendants by Counterclaim were inaccurate and the invested funds were put to unauthorized uses. Hall J. held that, based on the lean evidentiary record before the Court, the Defendants’ claims for repayment of their investments could not be dealt with summarily.

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