The Plaintiff filed a claim against the Defendant mortgagor seeking foreclosure on a mortgage between the two parties. The Defendant’s Statement of Defence and Third Party Notice alleged that Third Parties, including a bank employee, had fraudulently induced him to execute the mortgage.

The Plaintiff filed an Application for Summary Judgment. The Court referred to and relied on prior mortgage fraud cases that found that where there is possible involvement of or misrepresentation by the Plaintiff bank in the fraud, by a bank employee or agent, Summary Judgment may be denied. Further, the Court may refuse Summary Judgment if the Plaintiff bank does not provide any evidence in reply to an allegation that its employees or agents had knowledge of and participated in the fraud.

In the circumstances of this Action, the Plaintiff bank offered no denial to allegations from the Defendant that its employee helped to perpetrate the mortgage fraud. As a result, the Court dismissed the Summary Judgment Application because it was not clear that there were no genuine issues for trial.