ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 10302/15
DATE: 2015/10/15
B E T W E E N:
Royal Bank of Canada
Clark D. Peddle, for the Plaintiff
Plaintiff
- and -
Maxim Steel Inc. and Nasser Dabirian
Julian Binavince, for the Defendants
Defendants
HEARD at Welland, Ontario:
October 13, 2015
The Honourable Justice T. Maddalena
ENDORSEMENT ON MOTION
[1] This is a motion brought by the plaintiff Royal Bank of Canada for summary judgment against the defendant, Nasser Dabirian, pursuant to a guarantee and postponement of claim executed by the defendant (Dabirian) on April 30, 2007 in favour of the Royal Bank of Canada, limited to the amount of $125,000.00 plus interest.
[2] I agree with both the plaintiff and the defendant as each of them has described accurately the state of the current law on summary judgment in each of their respective factums. Therefore, I do not repeat the law on summary judgment here but adopt the position on the summary judgment law as outlined by both parties.
[3] Further, both the plaintiff and the defendant have agreed on the quantum outstanding leaving only liability as the issue between the plaintiff and the defendant for this motion.
[4] Nasser Dabirian (“Dabirian”) is sole shareholder and director of Maxim Steel Inc.
[5] Loan facilities available to the company, Maxim Steel Inc., under a loan agreement with the plaintiff Royal Bank of Canada (“the Bank”) included a line of credit and a corporate Visa.
[6] As part of security for the obligations of the company, Dabirian executed a guarantee and postponement of claim dated on or about the 30th of April 2007 limited to $125,000.00 plus interest.
[7] On or about October 21, 2014, the Bank made a demand upon the company and Dabirian for amounts outstanding.
[8] On March 2, 2015 the Bank obtained default judgment against the company for $171,537.54.
[9] This is not a case of non est factum and Dabirian states that it is his signature on the guarantee and postponement of claim dated April 30, 2007, but he does not recall signing it.
[10] The 2007 guarantee is an all accounts guarantee and is continuing and pertains to past, present and future liabilities.
[11] The defendant Dabirian suggests the Bank has failed to discharge its burden of proof with respect to the rule established in the case of Tilden Rent-A-Car Co. v. Clendenning (1978), 1978 1446 (ON CA), 83 D.L.R. (3d) 400. The defendant pleads that the Bank failed to clearly point out that the Bank was relying on the 2007 guarantee and that the Bank’s obligation and burden was to make sure that Dabirian understood the onerous provision of the all accounts, continuing and unlimited in time, guarantee.
[12] The defendant accordingly states that as a result of the Bank’s failure to discharge its onus, the defendant is discharged from his obligation pursuant to the 2007 postponement and guarantee.
[13] I do not agree. In Tilden the court found that the plaintiff took no steps to alert the defendant to the onerous provisions in the plaintiff’s standard form contract. This is not applicable to the instant case. In the instant case, Dabirian is the directing mind of Maxim Steel Inc. and he consented to act as guarantor for his corporation.
[14] Further, Dabirian has a Master’s Degree in Economics, as well as post-graduate studies in economics at McMaster University. He clearly executed the guarantee and postponement of claim on April 30, 2007. He knew without this document that no monies would be advanced to his corporation.
[15] I agree with the plaintiff that the Bank has no positive duty to the guarantor. Simply put, without the execution of the guarantee, no monies would have been advanced to the corporation and the defendant Dabirian clearly knew that.
[16] The defendant also refers to the positive obligations as outlined in the case of Manulife Bank of Canada v. Conlin, 1996 182 (SCC), 1996 CarswellOnt 3941. In this case, the Supreme Court of Canada concluded that a guarantor’s spouse was not bound by a mortgage renewal agreement where the spouse was not properly notified of mortgage renewal terms. The principles outlined in Manulife are not applicable in the instant case. This guarantee stands on its own and has a clear reference to all accounts and is a continuing guarantee which covers all of the liabilities which “shall apply to and secure any ultimate balance due or remaining unpaid to the Bank”. The only restriction on the guarantee is that it is limited to the sum of $125,000.00 together with interest from the date of demand for payment at a rate equal to the Bank’s prime interest rate per annum in effect from time to time plus 1.5%, as well after as before default judgment.
[17] Therefore, I find the guarantee clear and unequivocal on its face. No monies have been paid by either the corporation or Dabirian to the Bank. Accordingly, summary judgment shall issue in favour of the plaintiff Bank for $130,338.88 up to and including October 13, 2015. The plaintiff shall calculate the additional interest up to and including October 15, 2015 and add that sum to the $130,338.88.
Costs
[18] The parties have agreed in advance regarding each of their respective costs. Accordingly, costs are fixed and payable by the defendant Dabirian to the Bank in the amount of $8,254.16 (all inclusive).
Maddalena J.
Released: October 15, 2015
COURT FILE NO.: 10302/15
DATE: 2015/10/15
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Royal Bank of Canada
Plaintiff
- and –
Maxim Steel Inc. and Nasser Dabirian
Defendants
ENDORSEMENT ON MOTION
Maddalena J.
Released: October 15, 2015