SUPERIOR COURT OF JUSTICE – ONTARIO

(COMMERCIAL LIST)

COURT FILE NO.: CV-13-9992-00CL
DATE: 20130327

APPLICATION UNDER SUBSECTION 243(1) OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, C. B-3, AS AMENDED AND S. 101 OF THE COURTS OF JUSTICE ACT, R.S.O. 1990, c. C.43, AS AMENDED

RE: ROYAL BANK OF CANADA, Applicant

AND:

PRIME PRINTEX LTD., ALI MAKARY a.k.a. ALI MARKARY AND SHAHIN HENDI, Respondents

BEFORE: MORAWETZ J.

COUNSEL:
K. Preston, for the Royal Bank of Canada, Applicant

B. Hosseini, for Ali Makary, Respondent

P. Di Monte, for Shahin Hendi, Respondent

HEARD: MARCH 26, 2013

ENDORSEMENT

[1] Counsel to Ms. Hendi takes the position that judgment should be granted against Mr. Makary.

[2] Counsel to Mr. Makary takes the position that Ms. Hendi bears responsibility for the debt owed to Royal Bank of Canada (“RBC”) as she was in charge of the business affairs of Prime Printex Ltd. (“Prime”).

[3] In a nutshell, the above statements set out the problem facing the respondents. Each blames the other for the debt owed to RBC.

[4] The record clearly establishes that RBC advanced the money to Prime and that the respondents jointly executed two guarantees, one for $65,000 and one for $75,000.

[5] The guarantees are in the RBC standard form.

[6] The guarantees provide that RBC shall not be bound to exhaust its recourse against Prime before being entitled to payment from the guarantors.

[7] Proper demand has been made on Prime. Prime is in receivership.

[8] Demand has been made on the guarantors. No payment has been made by the guarantors.

[9] The submissions made by counsel to Ms. Hendi at paragraphs 22-23 of his factum do not amount a tenable defence.

[10] The fact that Ms. Hendi blames Mr. Makary has no impact on her liability to RBC. Further, the guarantee cannot be interpreted in the manner suggested by counsel, namely, that the guarantee indicates that Ms. Hendi is to be called upon to repay the guarantees in the ultimate case of a deficiency which has not happened. This interpretation of the guarantee, which was not supported by any case law, is simply in conflict with paragraph 3 of the guarantee which provides that the bank need not exhaust its recourse against Prime prior to proceeding against the guarantors.

[11] The guarantee executed by Ms. Hendi provides the basis for the action commenced by RBC. I have not been persuaded that there is any basis for refusing the application.

[12] The submissions made by counsel to Mr. Makary at paragraph 21-22 of his factum do not amount to a tenable defence. Again, the language of the guarantee provides the clear basis for the application. I have not been persuaded that there should be a stay of proceedings with respect to the actions taken by RBC.

[13] After realization of the assets of Prime, the receiver will be required to provide a proper accounting to the respondents and RBC will be required to provide appropriate credit on the outstanding debt. However, this accounting is not an issue for today.

[14] I am satisfied that the record establishes that RBC is entitled to obtain judgment as against Mr. Makary and Ms. Hendi in the amounts requested.

[15] Judgment is granted in the following amounts as against Mr. Makary and Ms. Hendi:

(a) $65,000 with interest at RBC prime plus 2% per annum from January 21, 2013 to date of payment;

(b) $75,000 with interest at RBC prime plus 3% per annum from January 21, 2013 to date of payment.

[16] Costs are also award in the total amount of $10,000 inclusive of HST, payable jointly.

MORAWETZ J.

Date: March 27, 2013