The plaintiffs sought a declaration that an equipment lease, general security agreement, and personal guarantee with the defendant financing company were void after the equipment supplier absconded with the advanced funds and failed to deliver the equipment.
The financing company counterclaimed for the balance owing under the lease.
The court found that the financing company failed to ensure delivery of the equipment before advancing funds, constituting a fundamental breach.
Furthermore, the court held that the no-cancellation clause was unenforceable because the financing company failed to bring it to the plaintiffs' attention.
The agreements were declared void, the financing company's claim was dismissed, and it was ordered to return the funds paid by the plaintiffs.
