Alan J. Butcher

The appellant guaranteed her husband's business loans and provided a collateral mortgage on her home.

The bank later agreed to replace the guarantee with a new conventional mortgage, but subsequently sued on the original guarantee, which the appellant settled.

When the bank sued to enforce the new mortgage, the appellant raised defences of negligence, unconscionability, misrepresentation, and undue influence.

The Court of Appeal dismissed the defences against enforcement, finding the appellant had independent legal advice and entered the transaction freely, rebutting any presumption of undue influence.

However, the Court allowed an equitable set-off against the mortgage debt for the damages the appellant suffered when the bank breached its agreement by suing on the original guarantee.