Nicole Brown Dunbar

Following a successful summary judgment motion by the plaintiff bank enforcing guarantees, the court determined the appropriate costs award.

Although the guarantees entitled the plaintiff to substantial indemnity costs, the court exercised its discretion under s. 131 of the Courts of Justice Act and Rule 57.01 of the Rules of Civil Procedure to scrutinize the reasonableness and proportionality of the claimed amounts.

Certain time entries, including preparation for cross-examinations related to a defence under the Canada Small Business Financing Act, were found excessive and reduced.

The court also considered that the defendants had previously succeeded on a motion to compel answers and that costs relating to that step should not be included.

Costs were fixed at $18,000 in fees plus $3,879.04 in disbursements.

A lender moved for summary judgment against individual guarantors following default on a small business loan.

The defendants argued that alleged non-compliance with the Canada Small Business Financing Act and its regulations voided or limited their liability under the guarantees.

The court held that the statutory regime governs the lender’s entitlement to reimbursement from the federal government and does not alter the contractual obligations between lender and borrower or guarantors.

Any non-compliance would only disentitle the lender from recovering under the statutory program, not invalidate the guarantees.

Finding no genuine issue requiring a trial, the court granted summary judgment against the guarantors.