Royal Bank of Canada v. Samson Management & Solutions Ltd. et al., (2013) 306 O.A.C. 190 (CA)

• Judge: MacPherson, Cronk and Lauwers, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: January 09, 2013
• Jurisdiction: Ontario
• Citations: (2013), 306 O.A.C. 190 (CA);2013 ONCA 313

Royal Bk. v. Samson Mgt. (2013), 306 O.A.C. 190 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. MY.016

Royal Bank of Canada (appellant) v. Samson Management & Solutions Ltd., Jason Brasseur and Cheryl Cusack (respondent)

(C55749; 2013 ONCA 313)

Indexed As: Royal Bank of Canada v. Samson Management & Solutions Ltd. et al.

Ontario Court of Appeal

MacPherson, Cronk and Lauwers, JJ.A.

May 13, 2013.

Summary:

The Royal Bank moved for summary judgment against a husband and wife on personal continuing guarantees respecting the husband's company's indebtedness to the bank. The husband and wife brought a cross-motion for summary judgment discharging the guarantees as unenforceable.

The Ontario Superior Court, in a decision reported [2012] O.T.C. Uned. 3612, held that the wife's guarantee was unenforceable. The court granted summary judgment in favour of the wife and dismissed the bank's motion for summary judgment as against her. Summary judgment was granted to the bank regarding the husband and his company. The bank appealed.

The Ontario Court of Appeal allowed the appeal and granted the bank summary judgment against the wife for $250,000 (the amount of her original guarantee).

Guarantee and Indemnity - Topic 3031

Discharge and other defences of surety - Changes in the principal contract - Material changes - A wife, after having independent legal advice, signed a continuing guarantee for the indebtedness of her husband's business to the Royal Bank ($250,000) - Over the years, the loan increased to $750,000 - No new guarantee was signed by the wife - The business failed and the bank moved for summary judgment - The motions judge refused summary judgment, holding that the wife's guarantee was unenforceable because of material changes in the loan arrangements - The bank appealed - The Ontario Court of Appeal allowed the appeal and granted summary judgment for $250,000 - There had been material changes to the loan agreements, but that was only the first step of the analysis - The language of the guarantee had to be considered - Here, the guarantee expressly permitted increases - The wife had contracted out of the protection provided to a guarantor by the common law and equity and was therefore liable under the guarantee.

Cases Noticed:

Manulife Bank of Canada v. Conlin et al., [1996] 3 S.C.R. 415; 203 N.R. 81; 94 O.A.C. 161; 139 D.L.R.(4th) 426, dist. [para. 14].

Bank of Montreal v. Negin and Negin (1996), 95 O.A.C. 230; 31 O.R.(3d) 321 (C.A.), refd to. [para. 17].

Granata Family Trust v. Royal Bank - see Strom v. Royal Bank.

Strom v. Royal Bank, [2000] O.T.C. 789 (Sup. Ct.), refd to. [para. 28].

Royal Bank of Canada v. Adecon Transport Inc., [2004] O.J. No. 6249 (Sup. Ct.), refd to. [para. 30].

Royal Bank of Canada v. Bruce Industrial Sales Ltd. et al. (1998), 110 O.A.C. 317; 40 O.R.(3d) 307 (C.A.), refd to. [para. 42].

Toronto-Dominion Bank v. Schrage (2009), 64 B.L.R.(4th) 277 (B.C.S.C.), refd to. [para. 62].

British Columbia (Attorney General) v. Malik et al. (2009), 270 B.C.A.C. 199; 454 W.A.C. 199; 91 B.C.L.R.(4th) 87; 2009 BCCA 202, refd to. [para. 62].

Canadian Imperial Bank of Commerce v. Trapp (1987), 12 B.C.L.R.(3d) 35 (C.A.), refd to. [para. 65].

Counsel:

Catherine Francis, for the appellant;

H. Richard Bennett, for the respondent.

This appeal was heard on January 9, 2013, before MacPherson, Cronk and Lauwers, JJ.A., of the Ontario Court of Appeal. The following decision was released for the court by Lauwers, J.A., on May 13, 2013.