Legal Blog

Guarantee

Business Development Bank of Canada v. VDF Wine Importers 2019 Ont SCJ

When sued by creditor, guarantor claimed that the guarantee was not enforceable because, when he gave the guarantee, he thought that he was a director and officer of the corporate debtor and, actually, was not. He argued that had he received independent legal advice, he would have discovered that he was not a director or officer and would not have signed the guarantee. The court held that the guarantee was not unconscionable and was not conditional upon the guarantor having a control or ownership interest in the corporate debtor. The court held that non est factum did not apply because the guarantor did not sign the guarantee as a result of a bank misrepresentation and, in any event, was careless in signing the guarantee. Finally, the court held that it was irrelevant whether the bank failed to follow its own “know your client” policies.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.