Dario J

3.68: Court options to deal with significant deficiencies
7.3: Summary Judgment (Application and decision)

Case Summary

The Applicant Mr. Kos applied for Summary Judgment against the Respondent Edmonton Kenworth Ltd., or in the alternative, for an Order striking the Respondent’s Statement of Claim. The Respondent cross-applied for Summary Judgment. The Applicant was the sole director and shareholder of a transportation company. The Applicant and the transportation company entered into a lease agreement with the Respondent under which the transportation company would lease equipment from the Respondent. The Applicant also provided a personal guarantee related to the lease agreement in favour of the Respondent.

Dario J. first considered the Application to strike, noting that a Court may strike out all or part of a Claim where the pleading discloses no reasonable claim. In making this assessment, the Court must assume that the facts pleaded are true unless they are manifestly incapable of being proven. Justice Dario analysed whether the lease agreement fell within the scope of the Personal Property Security Act, RSA 2000, c P-7 (the “Act”). Dario J. held that the Act applied in part to the lease agreement; however, it was not plain and obvious that the Respondent’s claim would not succeed even if the Act applied. The Application to Strike was dismissed.

Justice Dario addressed the Cross-Applications for Summary Judgment and Summary Dismissal. Dario J. reiterated that an Application for Summary Judgment is not appropriate where viva voce evidence is needed or where the Judge is required to weigh evidence or make findings of credibility. The Applicant argued that the personal guarantee was no longer binding against him as the lease agreement had been terminated. The Respondent argued that the personal guarantee did apply to the Applicant, and sought a determination of quantum of damages. Justice Dario found that, in light of the wording of the lease agreement and the Parties’ subsequent conduct, the lease agreement had not been terminated, and the Applicant would still be liable under the personal guarantee. As such, the Court held that it could not arrive at a fair and just disposition with respect to the matter on the existing record.

Dario J. found that the Respondent had not yet disposed of the leased equipment and did not have knowledge of the quantum of the deficiencies that would be outstanding following the summary disposition. On that basis, Her Ladyship also refused to grant Summary Judgment to the Respondent.

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