Adam Beyhum

The appellants appealed a motion judge's decision that prevented them from discontinuing their action against certain defendants and granted summary judgment dismissing the action against those defendants.

The Court of Appeal found that the motion judge erred in interpreting the Rules of Civil Procedure regarding when pleadings are closed in a multi-defendant action, clarifying that pleadings are not closed until they are complete against all defendants.

However, the Court upheld the motion judge's alternative finding that the notice of discontinuance constituted an abuse of process and affirmed the grant of summary judgment, as well as the award of substantial indemnity costs, finding no genuine issue for trial and that the action was frivolous and vexatious.

The applicant credit union sought an order appointing a receiver and manager over the property and assets of the respondent hotel franchisee and its owner due to significant loan defaults.

The respondents opposed the application, arguing they had a plan to sell the property and refinance to pay off their creditors.

The court found the respondents' proposed sale agreement was not firm and lacked evidence of financial viability.

Concluding that the applicant's security was at risk and a receiver was necessary to stabilize the business, the court granted the application and appointed the receiver, though it declined to authorize an immediate assignment into bankruptcy.