This Application was brought by the Plaintiff, Gateway, for Summary Judgment against one of the Defendants, Capital. Capital also brought a concurrent Application for Summary Dismissal. The issue was essentially whether Capital was liable to Gateway for a $70,000 holdback.

Capital entered into a mortgage agreement with another of the Defendants, 1384125 Alberta Ltd., the mortgagor. Under the terms of the mortgage, while some amounts were advanced to the mortgagor, $70,000 was held back. Its release was conditional on certain steps being taken by the mortgagor.

The mortgagor then granted a second mortgage over the same lands to Gateway. Shortly after, Capital received a copy of an “Irrevocable Assignment” from the mortgagor’s solicitor, advising that the mortgagor had assigned any further funds to be advanced from the unfunded mortgage proceeds to Gateway. Following receipt of the assignment, Capital nevertheless advanced $43,000 under the holdback to the mortgagor, rather than Gateway. Gateway brought this Action against Capital claiming it owed it the entire amount of the holdback. Capital argued that it had no liability to Gateway.

Lee J. determined that this matter could proceed by way of Summary Judgment, as the only issue to be determined was whether, as a matter of law, any liability ought to be imposed on Capital to Gateway for the payments made from the holdback funds, or any other amount.

Lee J. stated that the test for Summary Dismissal was set out in Rules 7.2 and 7.3. After reviewing the circumstances of the case, Lee J. granted Summary Judgment in favour of Gateway in the amount of $43,000.