DATE: 20060523

DOCKET: C43622

COURT OF APPEAL FOR ONTARIO

RE:

NATIONAL BANK OF CANADA (Plaintiff/Respondent) –and–JULIAN REED, MICHAEL MCCARTNEY, AND REED ENERGY CORPORATION (Defendants/Appellant)

BEFORE:

CATZMAN, LASKIN AND MACPHERSON JJ.A.

COUNSEL:

Harold Maltz

for the appellant

Deborah E. Palter and Freya M. Painting

for the respondent

HEARD & ENDORSED:

May 23, 2006

On appeal from the judgment of Justice J.P. McMahon of the Superior Court of Justice, dated March 30, 2005 made at Toronto, Ontario.

A P P E A L B O O K E N D O R S E M E N T

[1] Notwithstanding the capable submissions of Mr. Maltz, we agree with the reasons of the trial judge, particularly his findings that compliance with the ratios was a condition inserted for the benefit of the bank alone, and not the guarantors; and that the forbearance agreement signed by the appellant clearly removed any challenge he might have made to his liability under the guarantee.

[2] The appeal is dismissed with costs, which we fix in the amount of $17,500 plus disbursements and GST.