Canada Case Law

Sicotte v. 2399153 Ontario Ltd.

Court

Court of Appeal for Ontario

The motion judge erred by conflating enforceability against the borrower with guarantors' liability; the Postponement Agreement subordinated enforcement against the borrower but did not extinguish or postpone the guarantors' independent contractual obligations; the mortgage had matured and amounts were owing; therefore summary judgment was granted for the appellant against each guarantor for one‑third of the outstanding debt and the motion judge's dismissal was set aside.

Source excerpt

• Postponement of debt
• Guarantee enforcement
• Summary judgment
• Contract interpretation
• Priority of security

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Century Services Corp. v. LeRoy

Court

Supreme Court of British Columbia

Foreclosure judgment on remittal fixing the redemption amount, allowing improvident realization set-off, and adjusting interest in equity.

• Improvident realization
• Equitable set-off/mitigation
• Duty to realize commercially reasonably
• Agency and vicarious liability of private receiver
• Contractual interest vs equitable relief
• Redemption period

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Royal Bank of Canada v. 3255177 Nova Scotia Limited

Court

Supreme Court of Nova Scotia

The affidavits and documentary evidence established the indebtedness and valid, unambiguous personal guarantees; the defendants failed to adduce evidence creating a genuine issue of material fact or a real chance of success on undue influence or lack of advice; accordingly under Rule 13.04 summary judgment was mandatory and was granted for RBC against the debtor company and the non-bankrupt guarantors, with the proceeding stayed as to the bankrupt guarantor.

Source excerpt

• Summary judgment
• Guarantee enforcement
• Undue influence
• Independent legal advice
• Stay of proceedings due to bankruptcy

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Safeway Holdings (Alberta) Ltd. v. Cactus Ridge Estates Inc.

Court

Supreme Court of British Columbia

Safeway’s application for immediate judgment on an assigned guarantee was dismissed. The court found triable issues and sent liability under the guarantee to trial.

• Liability of guarantors
• Assignment of security
• Mortgagee in possession
• Contribution between co-sureties
• Choice of law clause
• Triable issue standard

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Bank of Montreal v. No. 249 Seabright Holdings Ltd.

Court

Supreme Court of British Columbia

Bank of Montreal obtained judgment against the respondents on guarantees and security after the court held the bank had not acted in bad faith or materially altered the guarantors’ risk.

• Debtor-in-possession financing
• Mortgage advance obligations
• Guarantee liability
• Ccaa proceedings
• Receiver-manager appointment
• Priority of liens and receiver's certificates

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Zale v. Johns

Court

Supreme Court of British Columbia

On summary trial, the court found Steven Johns liable for unpaid share-purchase payments and enforced Burt Johns’ limited personal guarantee for $200,000.

• Share purchase agreement
• Promissory note
• Limited personal guarantee
• Acceleration clause
• Indulgence and release of guarantor
• Parol evidence and interpretation of written guarantees

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0722053 B.C. Ltd. v. Malloch Logging Limited

Court

Supreme Court of British Columbia

The court granted summary judgment on a promissory note and personal guarantee, rejecting alleged oral misrepresentations and applying the parol evidence rule.

• Promissory note
• Personal guarantee
• Entire agreement clause
• Summary trial procedure
• Interest on judgment
• Enforceability of security agreements

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HSBC Bank Canada v. Ford

Court

Supreme Court of Nova Scotia

The court found on the evidence there was no genuine issue for trial on liability under the unequivocal wording of the personal guarantee; the defendant's allegations of creditor improvidence or prejudice were speculative and lacked evidentiary force sufficient to give the defence a real chance of success, and the guarantee's terms and authorities cited permitted HSBC's conduct; accordingly summary judgment was appropriate for the principal amount claimed, with a directed accounting under Rule 13.05 to determine any reductions from collections.

Source excerpt

• Summary judgment
• Commercial reasonableness
• Guarantor's liability
• Enforcement of security
• Proof of claim in bankruptcy

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Royal Bank of Canada v. Aquattro Estates Limited Partnership

Court

Supreme Court of British Columbia

The court refused summary trial in a guarantee enforcement dispute, finding the credit documents and alleged improvident realization raised complex factual issues requiring a full trial.

• Guarantee enforcement
• Interpretation of credit agreements
• Improvident realization of security
• Duty of care to guarantor
• Forbearance agreements
• Priority and agency agreements

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Bank of Nova Scotia v. A. MacKenzie's Auto Mart Inc.

Court

Supreme Court of Nova Scotia

The Bank established the first stage for summary judgment but the defendant provided evidence that could, if proven at trial, show the Bank knew the indebtedness was increased by fraudulent acts and failed to advise or intervene; whether the guarantee's terms exempt the Bank from equitable duties is a question of contract interpretation requiring trial. Therefore summary judgment is inappropriate and the motion is dismissed.

Source excerpt

• Personal guarantee
• Summary judgment
• Equitable defenses
• Negligence
• Contractual exclusion of equitable rights
• Security preservation

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