The Royal Bank of Canada (RBC) moved for summary judgment against Everest Group Inc. and its guarantors (Yousaf Kahn, Zarmina S. Khan, and Shadid Saleem Khawaja) for outstanding business loans.
Everest Group, a franchisee, ceased operations after attempting to rescind its franchise agreement, which RBC deemed an event of default under the loan and security agreements.
The defendants argued that the cessation was due to exercising statutory rescission rights under the Arthur Wishart (Franchise Disclosure), 2000 Act, and should not constitute a default, and sought adjournment pending a third-party claim against the franchisor.
The court granted summary judgment, finding clear events of default based on the loan agreements' terms, including cessation of business and failure to make payments.
The court rejected the defendants' interpretation of the contracts and their argument for forbearance, stating that RBC was objectively reasonable in enforcing its rights.
