Turning Meritless Defences into Swift Judgments

When a defence lacks merit, early and decisive procedural action can deliver efficient and favourable results. This is often the case in matters involving loan guarantees where the borrower has defaulted. Guarantors may raise irrelevant or unsubstantiated arguments to avoid honouring their obligations, sometimes with the strategic intent of delaying litigation to dispose of assets, particularly real property.

In a recent matter, Elina Fish of SZK acted for the Bank of Montreal against two joint and several guarantors who engaged in precisely such tactics while actively listing their home for sale. Recognizing the risk to recovery, Ms. Fish implemented an assertive litigation strategy. This included obtaining default judgment, filing a Writ of Seizure and Sale to prevent the completion of the property transaction, and preparing to oppose an anticipated motion to set aside the judgment. To further reinforce the client’s position on costs, Ms. Fish extended a “with prejudice” settlement offer that would allow the guarantors to file a defence and proceed with a summary judgment motion, while keeping the writ filed.

The matter concluded with judgment in favour of BMO, together with a cost award. This case highlights the value of prompt and strategic procedural measures when confronting meritless defences, particularly where there is a risk of asset dissipation.