The appellant bank appealed a trial judgment dismissing its action against the respondent guarantor.
The respondent had personally guaranteed a $700,000 line of credit for his company and provided a $700,000 collateral mortgage.
After the company became insolvent, the respondent paid $700,000 to discharge the mortgage, but the bank demanded an additional $700,000 under the guarantee.
The trial judge found a common mistake, holding that the parties intended the mortgage to secure the guarantee, and rectified the agreement.
The Court of Appeal dismissed the appeal, affirming that the prerequisites for rectification of unilateral mistakes do not apply to common mistakes, and the trial judge's findings were reasonably supported by the evidence.