Court File and Parties

CITATION: Business Development Bank of Canada v. Nandrajog, 2008 ONCA 349

DATE: 20080505

DOCKET: C48017

COURT OF APPEAL FOR ONTARIO

O’CONNOR A.C.J.O., WATT J.A. and HACKLAND J. (ad hoc)

BETWEEN:

BUSINESS DEVELOPMENT BANK OF CANADA

Plaintiff (Respondent)

and

VED NANDRAJOG and SURINDER NANDRAJOG (SURINDER NANDRAJOG, Appellant)

Defendants (Appellant)

Milton J. Bernstein for the appellant

Carla S. Falkeisen for the respondent

Heard and orally released: April 30, 2008

On appeal from the judgment of Justice Seppi of Superior Court of Justice dated October 24, 2007.

ENDORSEMENT

[1] We agree with the motion judge that the execution of the forbearance agreement did not operate to release the appellant from the guarantee. Pursuant to clause 4(a) of the guarantee, the appellant agreed that the bank may grant time and other indulgences to the borrower without discharging or diminishing the liability of the appellant under the guarantee.

[2] In Manulife Bank of Canada v. Conlin (1994), 1994 CanLII 1357 (ON CA), 20 O.R. (3d) 499, this court held that a guarantor will not be released by changes to a loan agreement if such changes are provided for under the terms of the guarantee, or are otherwise within the contemplation of the contract. It is open to parties to a guarantee to make their own arrangements modifying or excluding the rights and defences to which a surety is entitled in law or in equity.

[3] In the result, the appeal is dismissed. Costs to the respondent are fixed in the amount of $5,986.06, inclusive of disbursements and GST.

“D. O’Connor A.C.J.O.”

“David Watt J.A.”

“Charles T. Hackland J. (ad hoc)”