renke J

4.22: Considerations for security for costs order
7.3: Summary Judgment (Application and decision)

Case Summary

The Plaintiffs were condominium owners, suing the Defendant developers for failing to complete the construction of interior roads in a condominium complex, as well as failing to hold money in trust under section 14 of the Condominium Property Act, RSA 2000, c C-22. The Plaintiffs claimed that the developers were negligent and had breached their sales contracts. The Defendants applied for Summary Judgment, relying on the lapse of the limitation period, pursuant to section 3(1)(a) of the Limitations Act, RSA 2000, c L-12.

The Court reviewed the recent case law concerning the test under Rule 7.3, and confirmed that Summary Judgment is suitable if a disposition that is fair and just to both parties can be made on the existing record. Practically speaking, this means Summary Judgment will be granted if there is no merit to the claim. A claim has no merit when a fair disposition can be made even if the Court assumes the accuracy of the facts and position of the non-moving party. The case law further clarifies merit as: “a genuine issue of a potentially decisive material fact”. Justice Renke also stated that the moving party under Rule 7.3(1)(b) “bears the burden of establishing that the respondent’s claim does not have merit”. Once the moving party meets this burden, the Respondent may adduce evidence to establish that its claim is meritorious.

The Court held that the date that the limitation period began to run was August 31, 2006, when the condo board, consisting of condo owners, discussed the problem of the unfinished roads. As a result, Justice Renke held that a Statement of Claim should have been filed by August 30, 2008. The claim was therefore barred by the Limitations Act. A Trial would not be necessary to establish any further facts, and the claim with respect to unfinished roads had no merit. The claims relating to holding money in trust for the condo project were likewise barred pursuant to the Limitations Act. Summary Judgment was granted.

Justice Renke considered whether the Plaintiffs would have been required to post Security for Costs if the Court had not granted the Summary Judgment Application. Renke J. stated that the test for Security for Costs has two steps. First, a consideration of the factors set out in Rule 4.22. Second, the Court should consider whether it is just and reasonable to grant an Application for Security for Costs after it has taken into account all of the factors in Rule 4.22. This Rule requires that the Court inquire into the merits of the Action, because a reasonably meritorious defence is sufficient to weigh in favour of granting Security for Costs. After analyzing the merits of the claim and considering each of the factors set out in Rule 4.22, Justice Renke found that the Defendants had a reasonably meritorious defence, and would have ordered Security for Costs.

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