Master Prowse

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

Case Summary

The Plaintiff (“Flock”) commenced an Action against the Defendants, including ComplyWorks Ltd. (“CWL”) for wrongful dismissal and breach of a promise to provide Flock with a 5% interest in CWL (the “Equity Agreement”). Among the Defendants were CWL’s eight directors. Four of those directors (the “Directors”) asked that the Claim against them be Summarily Dismissed under Rule 7.3, or, alternatively, struck out under Rule 3.68.

The only evidence advanced by the Directors in support of their Application for Summary Dismissal was an Affidavit by one of CWL’s directors who was not an Applicant. The Affidavit only contained hearsay evidence. Master Prowse noted that pursuant to Rule 13.18, hearsay evidence cannot be used in Applications that may dispose of all or part of a Claim. Master Prowse stated that, in a Summary Dismissal Application, the usual practice is to assume that the Respondent’s evidence is true, and to then consider whether, notwithstanding the adverse facts, the Applicant was entitled to Summary Dismissal. Master Prowse held that the Directors failed to advance any evidence that their defence was “unassailable”, and thus declined to Summarily Dismiss the Claim against them.

Master Prowse also declined to strike the Claim against the Directors, noting that no evidence is admissible for striking a Claim under Rule 3.68. The Court must consider the allegations in the Statement of Claim to be true. Master Prowse noted that the Statement of Claim disclosed an allegation that the Equity Agreement was as between Flock and CWL and its directors. Accordingly, the Directors were proper Defendants in the Action and the Claim against them could not be struck. The Directors’ Application was dismissed.

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