The appellants appealed a summary judgment holding them liable as guarantors for unpaid principal and interest under promissory notes.
The principal debtor was restricted from making payments by an inter-creditor agreement.
The appellants argued that because the principal debtor was not in default due to the inter-creditor agreement, the guarantees were not triggered.
The Court of Appeal dismissed the appeal, upholding the motion judge's finding that the guarantees were triggered by the failure to pay, regardless of the inter-creditor agreement's restrictions on the principal debtor.
