Legal Blog

So What

 Often we see defences to collection actions that relate to matters that the defendant feels important, but that are irrelevant to the action. At that point, we have to obtain the relevant documentation and bring a motion for summary judgment. Of course, we are not the only law firm that does this. A similar situation arose in CIBC v. Nazareth, a 2011 decision of the Ontario Superior Court of Justice.

Basics

The bank sued for payment on a secured line of credit. Under the agreement, the loan became due if a lien was registered against the property. Canada Revenue Agency registered a lien and the bank demanded payment. The bank sued after the debtor failed to pay.

The debtor, who represented himself, defended the action and counterclaimed for malicious prosecution and other alleged misconduct.

The Story

The debtor claimed that he was the victim of identity theft and other frauds. He filed one of the Nigerian scam letters as part of his case. He also filed some Visa cards that he said he never applied for, a divorce petition against him from somebody to whom he was never married, and a letter purportedly from the bank congratulating him on turning 19 and asking him to sign and return a signature card (odd, since he was 38 years of age at the time).

Finally, he complained that the bank acted improperly when it refused to accept his investment accounts as repayment of the loan. Unfortunately, CRA had served a requirement to pay on the bank that bound these investments and, by that time, the debtor had no authority to transfer anything.

Result

Given the defences, which were interesting but irrelevant to the loan, and given that the bank had nothing to do with the identity fraud, the judge concluded that there was no genuine issue for trial and granted judgment to the bank. The judge also granted the bank substantial indemnity costs and dismissed the debtor’s counterclaim.

The debtor had his day in court to tell his story, but it was a costly day.