The plaintiff bank brought a motion for summary judgment against guarantors of a corporate loan following default under a small business term loan agreement.
The responding guarantors argued they believed each was liable only for one-quarter of the guaranteed amount and claimed they had not received independent legal advice before signing the guarantees.
The court held that absent fraud, misrepresentation, undue influence, or a valid non est factum defence, the bank had no obligation to ensure the guarantors obtained independent legal advice.
The court further found that the relationship between the bank and the guarantors was purely commercial and did not give rise to any duty of care.
Because the guarantees contained entire agreement clauses and the alleged misunderstanding did not render the documents fundamentally different from what was signed, the defences failed and summary judgment was granted.
