Raj Datt

The respondent purchased a property using funds borrowed from family and friends.

She later obtained a mortgage to repay them, but based on advice from the appellants, directed the mortgage funds to the appellant corporation.

The appellants distributed a portion of the funds but retained the balance of $174,500.

The motion judge granted summary judgment for unjust enrichment, ordering the return of the funds.

On appeal, the appellants argued the motion judge improperly relied on hearsay evidence.

The Court of Appeal dismissed the appeal, finding the evidence was not improper hearsay, the text messages were admissions, and the appellants failed to put their best foot forward on the motion.

The moving defendants sought summary judgment dismissing claims arising from alleged transfers of corporate funds intended to defeat enforcement of a foreign judgment against a related company.

The plaintiff alleged that the defendants participated in a scheme to transfer and dissipate assets through affiliated corporations to hinder creditors.

The court found that the evidentiary record raised serious credibility concerns and that the moving defendants’ evidence was internally inconsistent regarding their knowledge of the transactions.

The court concluded that the record suggested the defendants may have benefited from the transfers and that key factual issues, including knowledge and participation in the alleged scheme, required assessment at trial.

Summary judgment was therefore inappropriate and the claims were allowed to proceed to trial.

Following dismissal of the plaintiff’s action, the successful defendant sought costs including substantial indemnity costs after a rejected settlement offer under Rule 49 of the Rules of Civil Procedure.

The court considered the interaction of Rules 49.10, 49.13, and 57.01 and the jurisprudence governing elevated cost awards.

The court held that substantial indemnity costs require reprehensible or egregious conduct unless specifically triggered by Rule 49.10, which did not apply where the plaintiff obtained no judgment.

As there was no misconduct by the plaintiff, elevated costs were not warranted.

The court nevertheless awarded the successful defendant partial indemnity costs in a reduced amount reflecting fairness and reasonable expectations.