Mordy Mednick

The appellant corporation granted a guarantee and collateral mortgage to the respondent law firm to secure over $800,000 in unpaid legal fees owed by the appellant and related companies.

The appellant sought to rescind the guarantee, arguing its owner lacked authority and the law firm failed to recommend independent legal advice.

The Court of Appeal upheld the application judge's dismissal, finding that while the law firm breached the Rules of Professional Conduct by not recommending independent legal advice, the security remained enforceable because the transaction was fair, the client was sophisticated, and no advantage was taken.