RBC wins appeal in loan lawsuit
An Island software company and two of it directors will have to pay more than $75,000 to the Royal Bank after the P.E.I. Court of Appeal overturned a lower court decision.
In a unanimous decision, Justice John Mitchell, writing for the appeal court, wrote that P.E.I. Supreme Court Justice Ben Taylor erred in finding there was a genuine issue for trial.
The appeal judges ruled in favour of the bank and entered a summary judgment for $75,000 plus interest against MJL Enterprises, Paul Mullin and Matthew MacDonald.
MJL Enterprises is a software company in Charlottetown. MacDonald and Mullin are shareholders and directors in the company. Mullin is also a lawyer and represented the respondents in the court case.
Jason MacDonald was initially named in the lawsuit, but he was no longer a party to the proceedings after declaring bankruptcy.
At issue was a $75,000 loan the bank gave MJL Enterprises, for which the respondents signed personal guarantees.
The bank sought to recover the money through a summary judgment, which would avoid the matter going to trial.
In October 2016, Taylor issued a decision dismissing the summary judgment motion, saying in his view the defendants had a viable defence and a genuine issue for trial.
The defendants argued a bank employee told them they would be getting a loan for $150,000 but only gave them half that amount.
RBC demanded repayment of the loan after MJL defaulted.
Mitchell wrote in the appeal decision the only reasonable inference that could be drawn was the respondents were aware the loan was for $75,000.
“They had the choice to either sign the loan agreement or not,” Mitchell wrote.
In granting the appeal, the court also awarded the bank $8,710 in costs.