The ruling by a B.C. Supreme Court judge was ultimately decided when the plaintiff failed to appear for trial, a conclusion Furlong's lawyer described as less than ideal.
"(The plaintiff) can put his hand up, say 'Me too,' and start a process that can sully a man's reputation," Bill Smart said.
"And he doesn't even have the satisfaction of being able to have (the man) come and back up his allegations."
Judge Elliott Myers also awarded unspecified special costs to Furlong, calling the plaintiff's behaviour "egregious, reprehensible and worthy of rebuke."
The man claimed Furlong sexually abused him at a Roman Catholic school in northern B.C. in the late 1960s and 1970s.
Outside court, Furlong said he was very pleased that the proceeding was over, adding he would make a statement Tuesday.
"This was a very emotional day."
During a pre-trial conference on Friday, a judge refused the plaintiff's request to participate in the proceedings by phone from Prince Rupert after he became belligerent and called Furlong rude names. He hung up as the judge was making her ruling.
Last month, another judge threw out a separate sexual abuse claim by Grace West, while Beverly Abraham dropped her lawsuit in December.
Furlong had vehemently denied all the allegations, which surfaced in 2012 after a Vancouver-based weekly newspaper published an article saying he abused former students.
Smart told court the man who accused Furlong of sexually abusing him 45 years ago made similar abuse allegations related to another school and received $138,000 in compensation.
He read from an affidavit filed by the plaintiff in August 2005, saying another teacher sexually abused him, hit him with a strap and called him a "dirty little Indian."
After getting settlement money from that case, he falsely accused Furlong in hopes of benefiting financially again, Smart said.
"All of it — clearly lies," he said, showing documents that indicated the man did not attend the school where he said the other teacher abused him.
The man claimed he was a nine-year-old student when Furlong isolated him in a small room at Immaculata Elementary in Burns Lake, B.C., and forced him into sex acts.
The Canadian Press does not identify alleged victims of sexual assault without their consent.
Smart said the man has 35 of 53 criminal convictions for break and enter, fraud, theft, forgery and other crimes that demonstrate his "dishonest" nature.
Smart played audio of several expletive-laced voicemails left at the law firm in January, when he threatened to bring photographs and a witness to media as evidence of his allegations against Furlong.
Many of Furlong's speaking engagements were cancelled because of the allegations, Smart said, adding his client declined to attend the Winter Olympics in Sochi, Russia, fearing media attention on him would detract from the Canadian teams.
Furlong has turned down job offers and his grandchildren have faced bullying and humiliation, court heard.
"I have been deeply depressed for many months," Furlong said in a statement read by his lawyer.
"Aside from my family, there is nothing more important to me than trying to clear my name and re-establish my reputation and career."
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