HER MAJESTY THE QUEEN IN RIGHT OF NEWFOUNDLAND v. LABRADOR, 2011 NLTD 84

IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR TRIAL DIVISION ( GENERAL ) Citation : Newfoundland and Labrador (Att orney General) v. Dunphy , 2011 NLTD(G) 84 Date : 201106 13 Docket : 200401T2990 BETWEEN: HER MAJESTY THE QUEEN IN RIGHT OF NEWFOUNDLAND AND LABRADOR as represented by the Attorney General PLAINTIFF AND: KEVIN DUNPHY DEFENDANT ___________________________________________________________________ Before: The Honourable Madam Justice Deborah E. Fry ___________________________________________________________________ Place of Hearing: St. John’s , Newfoundland and Labrador Date(

s) of Hearing: June 6, 2011

Summary: Application for

summary judgment granted as the plaintiff was able to prove its claim and the defendant did not provide a bona fide defence or raise an issue against the plaintiff which ought to be tried. Appearances: Lori Williams Appearing on behalf of the Plaintiff Kevin Dunphy Appearing on his own behalf Authorities Cited:

CASES CONSIDERED: LeDrew v. Brake, (1999) (NL CA), 176 Nfld. & P.E.I.R. 288 (Nfld. C.A.); Wiltshire v.Barron, (1989) (NL CA), 81 Nfld. & P.E.I.R. 107 (Nfld. C.A.); Keating v. Aylward, (1999) (NL SC), 188 Nfld. & P.E.I.R. 125 (Nfld. (T.D)). RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D, r. 17; Student Financial Assistance Act, S.N.L.2002, c. S-29.01. REASONS FOR JUDGMENT Fry, J.: INTRODUCTION [1] The plaintiff has made an application for

summary judgment pursuant to Rule 17 of the Rules of the Supreme Court, 1986,S.N.L. 1986, c. 42, Sch. D. on the basis that defendant has no defence to the claim in the originating document.

BACKGROUND [2] On July 22, 2004 the plaintiff filed a statement of claim seeking to recover from the defendant the amount of his defaultedstudent loans. [3] The statement of claim asserts that the defendant borrowed money from the Canadian Imperial Bank of Commerce (CIBC) tofund his education and that the defendant entered into two student loan agreements with CIBC on October 22, 1997 and January 19,1998 in the amount of $1,760 each. [4] The plaintiff was party to an agreement with CIBC, dated September 1, 1994.

The agreement, which was filed along with thepleadings, made provision for students to obtain loans from CIBC to fund their education with the plaintiff acting as a limited guarantorof these loans. The defendant defaulted on his student loan agreement with CIBC and as a result, CIBC issued a demand to the plaintiffin the form of a claim for loss dated February 10, 1999 claiming the amount of $3,575.13. [5] The plaintiff paid the defaulted amount to CIBC on Mr.

Dunphy’s behalf under that agreement and now seeks repayment ofthe loan from the defendant. [6] While some payments have been made on the balance, the defendant has an outstanding balance of $3,748.44. [7] When no defence was filed, the plaintiff applied for and received a default judgment on June 28, 2005. [8] On June 25, 2010, the defendant Kevin Dunphy filed a notice of intention to proceed and filed an interlocutory application toset aside the default judgment pursuant to rule 16.06 of the Rules of the Supreme Court. [9] On August 2, 2010, the Court found that the statement of claim had not been properly served.

The Court further stated thatsince Mr. Dunphy was now aware of the proceeding and had a copy of the statement of claim, it was appropriate to make an ordervalidating the service of statement of claim. The default order was set aside and Mr. Dunphy was provided ten days to file a defence. [10] On August 12, 2010, Mr. Dunphy filed his defence. On May 11, 2011 the plaintiff filed an interlocutory application forsummary judgment pursuant to Rule 17 of the Rules of the Supreme Court. The Application for

Summary Judgment [11] The plaintiff states that the defendant has no defence to the claims set out in the statement of claim. [12] Along with the interlocutory application the plaintiff filed an affidavit of Jennifer Dooley, a financial collection officer with theDepartment of Education Student Loan Corporation, Newfoundland and Labrador. Her affidavit sets out the amounts owing by Mr.Dunphy pursuant to his student loan agreements in detailed schedules. [13] The agreement of September 1, 1994 between CIBC and the Department of Education and Finance has been filed.

Thisagreement sets out the guarantee provisions related to the Department of Education assuming responsibility for defaulted loans. [14] Ms.

Dooley’s affidavit also includes copies of the Newfoundland student loan agreements dated October 24, 1997 signed byKevin Dunphy in the amount of $1,760 and also the second student loan signed January 19, 1998 by Kevin Dunphy for a student loan inthe amount of $1,760. [15] Also filed with the affidavit is correspondence from the Government of Newfoundland and Labrador dated June 6, 2000making a demand for payment and indicating that under the agreement between the CIBC and the government, it was obligated to honortheir guarantee to the bank. The letter informs Mr.

Dunphy that his provincial student loan was paid in full by the government. The

correspondence also advised Mr. Dunphy that his student loan account was now with the Government of Newfoundland and Labradorfor collection. [16] Also filed with the plaintiff’s application are documents prepared by the affiant setting out the loan history including schedulessetting out the interest rates, accrual to date and also all payments made to a current date. [17] The defendant did not file anything in response to the application for

summary judgment, but he did appear at hearing of theapplication. Application of the

Summary Judgment Rule 17 [18] The purpose of Rule 17 is “to enable a plaintiff to obtain

summary judgment without trial, if he or she can prove his or herclaim clearly, and if the defendant is unable to provide a bona fide defence or raise an issue against the claimant which ought to betried.” LeDrew v. Brake, (1999) (NL CA), 176 Nfld. & P.E.I.R. 288 (Nfld. C.A.) at paragraph 7. [19] Rule 17.01 states: 17.01

(1) Where the defendant has filed a defence or appeared on a hearing under an originating document, the plaintiff may, on theground that the defendant has no defence to a claim in the originating document or part thereof, or has no defence to such a claim or partexcept to the amount of any damages claimed, apply to the court to enter judgment against the defendant. [20] This Rule is a rule of general application applying to every proceeding begun by statement of claim except for two namedexceptions which do not apply in this case. There are two aspects to a

summary judgment application: 1) The plaintiff must, by affidavit, show there is a factual basis to the allegations and statement of claim such that, ifunanswered, the cause of action will be made out. See paragraph 6 of Cameron, J.A.’s judgment in the LeDrew v Brake case, “verifyher claim and state her belief that the defendant has no defence”. 2) The defendant must not be able, by affidavit, to point to evidence or legal principles that raise a bona fide defence or issuewhich cannot fairly be resolved without trial.

As per Cameron, J.A., in LeDrew v Brake at paragraph 6, “disclose facts which, ifproven, would constitute a defence.” [21] Once the plaintiff has discharged his or her burden of establishing a basis for the claim, the defendant will face an evidentiaryburden of convincing the court that there is either a factual or legal issue that merits trial. Once the plaintiff submits material supportiveof each material fact comprising the cause of action, the defendant must demonstrate that there is some basis or at least an arguable casefor his or her defence.

A mere denial of the plaintiff’s case or a mere request that the plaintiff be put to proof at trial will not besufficient on an application for

summary judgment. The applications judge should not have to assess credibility weigh evidence or makefindings of fact. (LeDrew v Brake at paragraph 6 ) Contents of the Application [22] On an application for

summary judgment, the plaintiff is expected to file an affidavit verifying the claim stating the plaintiffsbelieve that there is no bona fide defence. In Wiltshire v. Barron, (1989) (NL CA), 81 Nfld. & P.E.I.R. 107 (Nfld.C.A.), the Court of Appeal declined to interfere with the refusal by the judge to grant

summary judgment because the plaintiff hadsubmitted no proof of the debt being claimed. This was so even though the court expressed the view that statement of defence disclosedno defence at all. This case emphasizes that the plaintiff must meet his or her evidentiary threshold before the defendant is even calledon to show a good defence (see also Keating v.

Aylward, (1999) (NL SC), 188 Nfld. & P.E.I.R. 125 (Nfld. (T.D)). [23] In this case I find the plaintiff has provided the appropriate documentation to meet the requirements of the first aspect of asummary judgment application and has established the evidentiary threshold required. The affidavit evidence establishes the debt, thedefault and the plaintiff’s right to make the claim against the defendant. [24] According to Goodridge, C.J.N, Rule 17 places a greater requirement on the defendant than did the former Order 13.

Thedefendant must now “file an affidavit disclosing facts showing that there is a defence.” (Wiltshire v. Barron at page 108, and LeDrewv. Brake at paras. 2 and 6). [25] The defendant has not filed an affidavit with respect to the application for

summary judgment. The only document which hasbeen filed by the defendant is the defence, which was filed on August 12, 2010. In that defence the defendant admits that he receivedmoney under the Student Financial Assistance Act, S.N.L. 2002, c. S-29.01 from CIBC as a student at the Career Academy enrolled inthe microcomputer specialist program. He states he transferred from the Career Academy at St. John's, Newfoundland to the Hamilton,Ontario campus in March of 1998. His defence states that the Career Academy ceased operations and declared bankruptcy in August1998.

The defence states that all 14 campuses across Canada, including Newfoundland, Nova Scotia and Ontario were closed. He stateshe was three months short of completing his program. His defence states that in August 1998 the province of Newfoundland announcedthat arrangements were being made with six other private colleges across the province to reallocate approximately 1400 former studentsof the Career Academy that were displaced as a result of the business closure . He stated that the province of Ontario provided nosupport for displaced students of the Career Academy after its closure.

He states he was unable to complete his education and states thathe feels he should not have to pay back the amount of student loans. [26] He seeks the following remedies:

a) to have repayment of all monies collected under his the previous default judgment dated June 28, 2005;

b) an immediate suspension of all wage garnishment activities from his employment sources;

c) an immediate cessation of monetary seizure activities from all departments of Government of Canada, including the Canada Revenue Agency; and,

d) removal of any and all credit history pertaining to his to the statement of claim from all credit reporting agencies. [ 27 ] When the defendant appeared at the hearing of this application, he advised the court that this experience had been extremely difficult for him but did not add anything further to that which had been pleaded in his defence.

He pleaded no facts or law which would support his assertion that either the Government of Newfoundland and Labrador or the Government of Ontario was responsible for ensuring that any private colleges licensed by them remained in business or that there was any duty owed by either of these governments to provide for completion of programs at other institutions.

He has pleaded no provisions of the legislation or agreements pertaining to repayment of student loans that provide for forgiveness in any circumstances like this or otherwise. [ 28 ] The case law which I have referred to uses a variety of terms to describe what the defendant must show to stave off a successful application for

summary judgment, i.e. a triable issue, a substantial question of law, a fair case for a defence, reasonable grounds for setting up a defence, a fair probability of a bona fide defence, a basis for an arguable case on a matter of substance, not a sham defence and a state of conflicting facts that should be tested by cross-examination at trial. Although this leaves me with a broad scope to refuse an application for

summary judgment, I am not satisfied that the defendant has discharged his burden as he not disclosed any defence on the collections issue. [ 29 ] I am therefore prepared to grant the plaintiff’s application in this matter for

summary judgment under Rule 17.02 in the amount of $3,748.44. _____________________________ Deborah E. Fry Justice