CITATION: DHAWAN v. SHAILS COMMUNICATION INC. ET AL, 2016 ONSC 7743

COURT FILE NO.: 15-63664

DATE: 20161208

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: RAJENDER SINGH DHAWAN PLAINTIFF

AND

SHAILS COMMUNICATION INC., SANTOSH SHAIL, SWAPNA SHAIL and TD CANADA TRUST DEFENDANTS

BEFORE: MASTER CHAMPAGNE

COUNSEL: David Debenham, for the plaintiff

Santosh Shail, for the defendants

HEARD: September 8, 2016

decision

Introduction

[1] The plaintiff moves for partial summary judgment against two of the defendants, Santosh Shail and Swapna Shail (the “Shails”), and for an order finding the Shails personally liable for the judgment against Shail Communications Inc. (“SCI”), rendered on consent on April 14, 2016, by Justice Ray.

Background

[2] SCI is a corporation incorporated in Ontario which provides services and programming using electronic media.

[3] Santosh Shail (“Santosh”) is a director and the President of SCI. Swapna Shail (“Swapna”) is a director and the Treasurer of SCI. The Shails are business people.

[4] The plaintiff is an individual residing in Ottawa, Ontario, who invested various sums of money in SCI to secure and operate a number of communication projects.

[5] Between July 2010 and March 2013, the plaintiff advanced SCI a total of $750,000.00, and was owed at least $883,905.16 (including the $750,000.00 advance), pursuant to one of the agreements signed by the parties. He was paid back $639,845.20, leaving a shortfall of $244,059.96. In April 2016, the parties consented to judgment against SCI in that amount, but SCI does not have the funds to pay it. At issue is whether the Shails should be found personally liable for that judgment. The plaintiff alleges that the Shails signed a number of personal guarantees for the debts of SCI for which they are personally liable. He also alleges oppression under s. 248 of the Business Corporations Act, R.S.O. 1990, c. B.16, claiming that the Shails paid themselves $407,000.00 when SCI owed the plaintiff money. The Shails take the position that the personal guarantees are invalid and unenforceable. They deny that any payments made to them by SCI were improper or oppressive to the plaintiff.

[6] The Shails dispute the plaintiff’s allegations and further argue that this matter should be stayed because the parties did not attend mediation or arbitration as required by the first contract they signed.

Evidence

[7] It is undisputed that on July 7, 2010 the plaintiff and SCI entered into an agreement pursuant to which the plaintiff advanced SCI $50,000.00 to submit a bid bond on an education project in Ethiopia. The project involved procuring the right to sell educational television programming to the government of Ethiopia (the “Ethiopia Project”). The contract provided that the plaintiff would extend a further $250,000.00 in financing to fund the project if the bid was successful. The bid was accepted by the Ethiopian government and the plaintiff advanced SCI the further $250,000.00.

[8] The agreement between the parties provided that the plaintiff was to receive 25 percent from net profits of the Ethiopian Project, in addition to securing the return of the principal sum of $300,000.00. Under the terms of the agreement, the plaintiff was a signatory for all withdrawals of any amount of funds from the two SCI bank accounts dedicated to the Ethiopian Project. While the agreement states that the plaintiff would become a shareholder for a 25 percent share of SCI, the Shails dispute that he is a shareholder as the agreement also says that his role is limited to that of an investor. This dispute is not material to the outcome of this motion and will not be addressed in this decision.

[9] An additional provision of the contract required the parties to submit to mediation or arbitration in the event that a dispute arose between them. The Shails contend that the plaintiff breached that clause by proceeding to court and have asked this Court to grant them a stay of proceedings, although no motion for such relief has been brought.

[10] In addition to the $300,000.00 advanced for the Ethiopia Project, it is undisputed that the plaintiff advanced a further $200,000.00 to SCI prior to March 2013 and that, in March 2013, he advanced another $250,000.00 for SCI’s project in India.

[11] The Shails do not dispute that the plaintiff advanced SCI a total of $750,000.00 for projects in Ethiopia, Brazil, and India, and that SCI was obligated to repay that principal amount along with a share in profits or interest on loans for the various projects.

[12] While the parties may dispute what, if anything, SCI owes the plaintiff for his investment in other projects, there is no dispute that the profit from SCI for the Ethiopian Project was $535,620.64 and that the plaintiff was owed $133,905.16, which represented 25 percent of the profits as contemplated by the agreement between the parties.

[13] The parties also agree that the plaintiff was paid $516,933.15 by SCI and that he seized the sum of $122,912.05 from SCI’s frozen bank account.

[14] To recap, the parties agree that SCI owes the plaintiff $883,905.16, based on the following payments:

(a) $750,000.00 advanced by the plaintiff to SCI for various projects; and

(b) $133,905.16, representing 25 percent of the profits from the Ethiopian Project.

[15] The parties also agree that SCI repaid the plaintiff $639,845.20, comprised of the following sums:

(a) $516,933.15, paid by SCI to the plaintiff; and

(b) $122,912.05, seized by the plaintiff from SCI’s frozen bank account;

[16] On the basis of these uncontested numbers, the plaintiff moved for summary judgment against SCI and, on April 14, 2016, the Shails consented to a judgment against SCI in the sum of $244,059.96, plus $17,000.00 in costs for the motion.

[17] The plaintiff alleges that the Shails gave personal guarantees for the debts of SCI. The plaintiff also alleges that the Shails improperly diverted $407,000.00 to themselves and denuded SCI’s accounts, rendering it unable to pay the judgment against it.

[18] It is not disputed that the Shails gave the plaintiff a promissory note and personal guarantee on July 7, 2010. The promissory note was for $50,000.00 and the personal guarantee was for the debts of SCI at that time and into the future. The Shails position is that the guarantee was only meant to cover $50,000.00 arising out of the plaintiff’s initial advance on the Ethiopia Project. Their contention is not supported by the wording of the guarantee, which states the following, at para. 2:

Guarantee. The guarantors, severally and jointly, hereby unconditionally and irrevocably guarantees [sic], as a continuing obligation, payment to the Lender forth-with after demand therefor of all present and future indebtedness, obligations and liabilities of any kind whatsoever which the Bor-rower [sic] has incurred or may incur or be under to the Lender arising under or in connection with the note (herein collectively referred to as the “obligations”) all amounts payable by the guarantors here under shall be [sic] paid to the Lender at his address as aforesaid or as otherwise directed by the Lender. For greater certainty, this shall be a continuing guarantee and shall cover all of the obligations now or hereafter existing and shall apply to and secure any ultimate balance due or remaining due to the Lender.

[19] The plaintiff argues that the guarantee was meant to be a continuing guarantee on a series of long term loans. SCI’s Vendor QuickReport dated 04/09/13, below, supports that contention:

[20] In addition to the promissory note and guarantee of July 7, 2010, the plaintiff also had the Shails execute promissory notes and personal guarantees in March 2013, which coincided with an advancement of funds at that time. He emailed the notes and guarantees to the Shails in early March 2013 and they were signed and returned to him by Swapna on March 10th, 2013. The first note and guarantee, dated March 4, 2013, is for $100,000.00 and the second note and guarantee, dated March 5, 2013, is for $340,000.00. The Shails argue that the guarantees signed on March 4^th and March 5^th, 2013 are invalid because they were not signed by Santosh in Ottawa, because they were for an inflated amount, and because they were tricked by the plaintiff into signing them.

[21] There is no dispute that, upon receiving a commitment by the plaintiff to loan SCI a further $250,000.00, Swapna signed the personal guarantees and promissory notes dated March 4^th and March 5^th, 2013. She states she did not find the amounts of the notes fair or representative of the sums advanced but signed them in any event, trusting the plaintiff. Santosh says he did not sign the promissory note and guarantee in Ottawa on March 5, 2013, as he was not in Canada at the time. He tendered a copy of his passport in evidence purportedly showing that he was out of the country. The passport documents are unclear and I was not able to ascertain where Santosh was at the time the notes and guarantees were signed. He did not give evidence as to his whereabouts. In his affidavit of September 2, 2016 he goes on to say that he “never individually guaranteed any debts of SCI”.

[22] This evidence is inconsistent with the personal guarantee signed by the Shails on July 27, 2010, which Santosh acknowledges he signed, nor is it consistent with the Shails’ Statement of Defence (the “Defence”), at paragraph 57, where they allege that they were tricked into signing the notes and guarantees of March 4^th and 5^th, 2013.

[23] While the Shails submit that, at the time the Defence was drafted, they were in India and erroneous information was submitted in the Defence by their lawyer, they did not amend their Defence. Further, their Defence is consistent with Santosh Shail’s own sworn evidence at his examination for discovery that the plaintiff had him sign the notes and guarantees at a time when he knew that the Brazilian Project was at risk of failing.

[24] The Defence is also consistent with the Shails’ Response to the Request to Admit, dated April 7, 2015, in which they dispute the amount of the notes and guarantees of March 4^th and 5^th, 2015, stating the sums should be $50,000.00 for the first note and guarantee and $250,000.00 for the second note. Again, the Shails do not deny signing them. They allege that the plaintiff had them execute the notes for an inflated amount and that he mislead them into signing them at a time when, unbeknownst to them but known the plaintiff, the Brazilian Project was at risk. They contend that this non-disclosure and the inflated amount of the notes make them invalid. The plaintiff submits that the Shails were aware of the status of the Brazilian Project when they signed the notes and he points to two emails he purports to have forwarded to Santosh Shail in January 2013, which were communications between the plaintiff and a law firm in Brazil outlining concerns about the project. This evidence was not helpful, as the email sent to Santosh on January 9, 2013, purportedly forwarding the email exchange that outlined the issues with the Brazilian Project, was time stamped at 10:03 a.m. and the email being forwarded was time stamped as 10:40 a.m. the same day. While that may have been as a result of a time difference, it was not explained by the plaintiff. A similar email exchange took place on January 10, 2013 with similar time differences. I therefore make no finding as to whether the Shails were aware that the Brazilian Project was in jeopardy. That does not make a difference on this motion as I conclude that at least the second note, signed on March 5, 2013, was a condition of obtaining funds from a lender in Montreal. In fact, Swapna, the Shails’ son, and the plaintiff drove to Montreal with the notes to secure the funds from the Montreal lender.

[25] The plaintiff alleges oppression, arguing that the Shails secretly and improperly diverted funds from the two SCI accounts for which he had signing authority, denuding SCI of funds to pay the judgment against it. It is uncontested that SCI paid the plaintiff $516,933.15 and that the plaintiff seized $122,912.05 from SCI’s bank account. The timing of these payments to the plaintiff is unclear from the evidence. It appears to be uncontested that, by April 11, 2013, the plaintiff had been paid $456,933.00 of these funds. The Shails characterize that amount as exceeding what they owed the plaintiff for Ethiopian project and claim that it was paid in advance of when it was due. It is also uncontested that, between 2012 and September 10 2014, the Shails paid themselves $327,000.00 in project management fees and $80,000.00 in dividends. They argue that they were entitled to the fees and dividends and that the plaintiff approved them. The plaintiff denies approving those payments. The plaintiff’s evidence is that, in July 2010, he and the Shails opened two SCI bank accounts at the TD Bank in Emerald Plaza and that, unbeknownst to him, SCI had two other accounts at the same bank, as did the Shails. Between 2010 and 2015, there are a number of transfers from the Ethiopian Project account to two other SCI accounts, as well as to the Shails’ personal accounts. There are also a number of transfers to the plaintiff. All but one of the transfers of funds in evidence appear to have been done without the plaintiff’s signature. The plaintiff states that he was unaware of the two additional SCI bank accounts and that he had no knowledge of the transactions which he alleges were done without his authorization as required by the agreement. The Shails’ evidence is that the plaintiff was aware of and approved all transactions including those to their personal accounts. They point to the fact that he was provided with an excel spreadsheet, with tabs showing the additional bank accounts, as evidence of his knowledge and approval. There is no evidence as to what was in the excel spreadsheets and whether the plaintiff could open the tabs, so this evidence is unhelpful. A determination of this issue rests largely on credibility and I make no findings in this regard. In any event, my decision does not turn on this evidence.

[26] Ultimately, the plaintiff called in the loans and demanded payment of what he felt he was owed. The parties agreed to summary judgment against SCI and here we are.

Issues

[27] The issues to be decided on the motion are as follows:

1. Whether the evidence before me is such that I feel confident that I can fairly resolve the dispute by way of partial summary judgment.

2. Whether the personal guarantee signed by the Shails on July 7^th, 2010 is a continuing guarantee, thus rendering the Shails personally liable for the judgment against SCI.

3. Whether the Shails are personally liable for the judgment against SCI pursuant to the personal guarantees they signed on March 4^th and 5^th, 2013.

4. Whether the transfer of $407,000.00 from SCI to the Shails, rendering SCI unable to pay the judgment against it, amounts to oppression.

5. Whether this matter should be stayed pursuant to s. 7(1) of the Arbitration Act, 1991, S.O. 1991, c. 17.

Decision

[28] For reasons that follow, on the evidence before me, I find that Santosh and Swapna Shails are personally liable for the judgment against SCI in the sum of $244,059.96, in addition to costs in the sum of $17,000.00.

Analysis

Summary Judgment

[29] Rule 20.04(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that a court shall grant summary judgment if the court is satisfied that there is no genuine issue for trial with respect to a claim or defence. Rule 20.04(2.1) allows me to weigh the evidence and make inferences and findings of credibility in making that determination.

[30] The case of Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 is the leading case on summary judgment. It provides, at para. 49, that:

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[31] Further, the Court in Hryniak states, at para. 57, that:

On a summary judgment motion, the evidence need not be equivalent to that at trial, but must be such that the judge is confident that she can fairly resolve the dispute.

[32] I am satisfied that the evidence before me allows me to make findings of fact such that I am confident I can fairly resolve the dispute between the parties. The undisputed evidence is that the plaintiff advanced $750,000.00 to SCI for various projects and SCI repaid him $516,233.00. In addition, the plaintiff seized the sum of $122,912.20 from SCI’s bank accounts. While there is a dispute between the parties as to whether the amounts the plaintiff advanced to SCI were loans for an investment or whether the plaintiff was a shareholder, there is no dispute that SCI owes the plaintiff $244,059.96, plus $17,000.00 in costs: there is a consent judgment against SCI in this regard. There is also no dispute that both Swapna and Santosh Shails signed a personal guarantee on July 7, 2010 for the indebtedness of SCI. The Shails concede that Swapna signed further promissory notes and personal guarantees in March 2013 and, while Santosh denies that he signed the notes and guarantees in Ottawa in March 2013, there is significant evidence that he signed them, perhaps elsewhere. In addition, there is no dispute that, in 2012 and 2013, the Shails transferred themselves $327,000.00 in project management fees and $80,000.00 in dividends. The dispute between the parties is the characterization of those transfers. The plaintiff alleges that the Shails had no right to the sums, which were transferred without his knowledge or approval at a time when SCI owed him money. The Shails argue that they were entitled to the fees and dividends and the plaintiff was aware of the transfers and approved them. This dispute is not relevant to the outcome of this motion.

[Section 7](https://www.canlii.org/en/on/laws/stat/so-1991-c-17/latest/so-1991-c-17.html#sec7_smooth) of the [Arbitration Act, 1991](https://www.canlii.org/en/on/laws/stat/so-1991-c-17/latest/so-1991-c-17.html) – the Defendant’s Request for a Stay of Proceedings

[33] The Shails sought a stay of proceedings under sections 6 and 7 of the Arbitration Act, 1991, S.O. 1991, c. 17 (“Arbitration Act”), alleging that the plaintiff breached the terms of the Agreement dated July 7, 2010, which required the parties to engage in arbitration to resolve any disputes between them. While no motion was before me requesting a stay, given the fact that the defendants are unrepresented, I will address the issue.

[34] Section 7 of the Arbitration Act sets out as follows:

7. (1) If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding.

Exceptions

(2) However, the court may refuse to stay the proceeding in any of the following cases:

1. A party entered into the arbitration agreement while under a legal incapacity.

2. The arbitration agreement is invalid.

3. The subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law.

4. The motion was brought with undue delay.

5. The matter is a proper one for default or summary judgment.

[35] The plaintiff argues that a stay should not be entertained by this court as the defendants did not bring their motion in a timely way and, further, that the plaintiff’s claim for oppression dispensed with the requirement to have the matter arbitrated. In Bouchan v. Slipacoff (2009), 2009 CanLII 728 (ON SC), 94 O.R. (3d) 741 (S.C.), Justice O’Marra found that claims for oppression under Ontario’s Business Corporations Act (“OBCA”) fall outside of the ambit of arbitration. He also found that the defendants in that case did not advance their position at the earliest opportunity, raising it some eight months after they had filed a defence and after significant steps had been taken in the action. Similarly, in the present case, the plaintiff claims oppression, among other relief, and the defendants are raising the issue after significant steps in this proceeding have been taken. The defendants issued their Statement of Defence on April 20, 2015 and, while they raised the issue of the requirement of the parties to attend arbitration in their defence, no motion was brought until now. A number of steps have taken place in this proceeding to date, including examinations for discovery, at least two motions (including one for summary judgment on April 14, 2016), and a number of case conferences. On those facts, I am refusing to stay these proceedings pursuant to s. 7(2)4 of the Arbitration Act as the defendants have raised the issue far too late. In addition, in keeping with O’Marra J.’s reasoning in Bouchan, I find that the plaintiff’s claim for oppression removes it from the scope of the Arbitration Act.

Oppression

[36] Where directors of a corporation act oppressively, they can be found personally liable toward shareholders and creditors of the corporation (OBCA, s. 248). For oppression to be found, there must be conduct that is oppressive, unfairly prejudicial or unfairly disregards the claimant’s reasonable expectations (Ibid.). The leading case on oppression is BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, [2008] 3 S.C.R. 560, which, in the simplest terms, requires a claimant to articulate his or her reasonable expectations and to provide evidence of misconduct that disregards those expectations. In the case before me, the evidence of each party on this point is diverse. The plaintiff claims that the Shails secreted away hundreds of thousands of dollars to which they were not entitled, at a time when they owed him money. The Shails contend that they were entitled to the funds they transferred to themselves and that the plaintiff was aware of and approved the transfers. Leaving aside that credibility will be important to determine this issue, the evidence on this motion left too many unanswered questions: What were the plaintiff’s reasonable expectations regarding the advances made by SCI following the initial $300,000.00 for the Ethiopia Project? While the parties acknowledge that an additional $450,000.00 was advanced, the Court was provided with little evidence regarding the subsequent loans and their conditions other than the fact that the plaintiff secured a loan of $250,000.00 in March 2013 against which he appears to have had the Shails execute promissory notes for $440,000.00. The validity of those notes and guarantees may be an issue as will be discussed below. What about the rest of the monies loaned? What were the terms of those advances? Were payments to be made at the completion of the various projects? What was the status of those projects when the demand for repayment was made? The evidence before the Court is not such that the issue of oppression can be decided by way of summary judgment. If the claim is pursued beyond this motion, it will be a matter for the trial judge to decide.

Guarantees

(a) The March 2013 Promissory Notes and Guarantees

[37] The validity of the notes and guarantees of March 4^th and March 5^th, 2013 are disputed by the parties. The Shails contend that one of the guarantees was not signed by Santosh in Ottawa as set out in the guarantee and that, in any event, they were tricked into signing them. The plaintiff’s evidence is that he sent the Shails the notes and guarantees by email and they were returned to him signed and witnessed on March 10, 2013, on which date he, Swapna, and her son went to Montreal to pick up funds from a third-party lender. Those facts are not disputed, but Swapna’s evidence is that, although she signed the notes, she felt that the amount on the notes was inflated. As set out previously, Santosh denies signing the note dated March 5, 2013 in Ottawa in the presence of the purported witness. I have already found that he signed the note, albeit perhaps not in Ottawa. The Shails submit that the notes cannot be made for more than what was advanced. I disagree. Promissory notes are governed by the federal Bills of Exchange Act, R.S.C. 1985, c. B-4, and must be unconditional and signed by the promisor, payable to either the party holding the note or to a person specified in the note. There is no requirement a note be tied to a loan amount. They need not be witnessed and they are not necessarily invalid if they do not specify value given (see Bills of Exchange Act, s. 26). Similarly, a guarantee need not be witnessed in Ontario. Although a widespread practice, there is no requirement that the signature of the surety be witnessed. The Statute of Frauds, R.S.O. 1990, c. S.19, requires that a guarantee be in writing and signed by the party to be charged; it does not require that the signing party’s signature be witnessed (see Bank of Montréal v. 1480863 Ontario Inc., 2007 CanLII 13359 (Ont. S.C.), at para. 15, per Ross J.). I am of the view that, on the face of them, these notes and guarantees meet the criteria in the Bills of Exchange Act. Given that the Shails’ allegations of misrepresentation could impact their validity, I am not relying on the March 2013 notes and guarantees in coming to my decision and I make no finding as to the alleged misrepresentation.

(b) The July 7, 2010 Guarantee

[38] The plaintiff argues that the July 7, 2010 guarantee signed by the Shails is a continuing personal guarantee. The Shails contend that it only covered the first $50,000.00 advance. The plaintiff points to the wording of the guarantee and to SCI’s QuickVendor Report, which characterizes the sums advanced by the plaintiff as long term loans. He contends that the wording of the guarantee and the actions of the parties between 2010 and 2013 in relation to the series of loans from the plaintiff and periodic repayments by SCI supports this conclusion. The Shails offer little evidence to support their argument other than their bald assertion that it was not meant to be a continuing guarantee. They point to the section in paragraph 2 of the guarantee that refers to indebtedness by SCI “under to the Lender arising under or in connection with the note (herein collectively referred to as the “obligations”)” and argue that this is evidence that the guarantee was meant to apply to the note. I agree that the indebtedness includes the note but the passage as a whole says the guarantee covers “obligations and liabilities of any kind whatsoever which the Bor-rower [sic] has incurred or may incur or be under to the Lender arising under or in connection with the note (herein collectively referred to as the “obligations”)” [Emphasis added]. That suggests to me that the $50,000.00 note was meant to be included along with other contemplated indebtedness. The last sentence of paragraph 2 of the guarantee that “[f]or greater certainty, this shall be a continuing guarantee and shall cover all of the obligations now or hereafter existing and shall apply to and secure any ultimate balance due or remaining due to the Lender”.[Emphasis added] makes that clear.

[39] In assessing the parties’ contradictory evidence, I am guided by Rule 20.04(2.1) and by the analysis in Mehdi-Pour at paragraph 20 which makes clear that bald and unsupported assertions of fact are insufficient evidence on a motion for summary judgment (see Guarantee Co. of North America v. Gordon Capital Corp., 1999 CanLII 664 (SCC), [1999] 3 S.C.R. 423; Neighbourhoods of Cornell Inc. v. 1440106 Ontario Inc. (2004), 22 R.P.R. (4th) 176 (Ont. C.A.), leave to appeal to S.C.C. refused, [2004] S.C.C.A. No. 390. See also Rozin v. Ilitchev (2003), 2003 CanLII 21313 (ON CA), 66 O.R. (3d) 410). Applying the reasoning in those cases, I reject the Shails’ evidence, which flies in the face of documented and substantiated evidence that clearly shows that the plaintiff made a series of long term loans and advances to SCI and that SCI repaid him various sums over a period of three years. These actions are consistent with the wording of the guarantee which I have outlined.

[40] The language of the guarantee signed by the Shails is similar to the language in Royal Bank of Canada v. Samson Management & Solutions Ltd., 2013 ONCA 313, which sets out, at para. 24, the following:

The first paragraph on the first page of the guarantee is critical. It provides that Ms. Cusack will pay on demand to RBC: "all debts and liabilities, present or future, direct or indirect, absolute or contingent, mature or not, at any time owing by..." Samson to RBC, "or remaining unpaid by the customer to the Bank, heretofore or hereafter incurred or arising and...incurred by or arising from agreement or dealings between the Bank and the customer…”

[41] At paragraphs 60 to 66 of that case, the Ontario Court of Appeal found the guarantor liable for the debts of Samson Management & Solutions (“Samson”), despite the fact that the Royal Bank of Canada had increased Samson’s loan without informing the guarantor. The guarantee was found by the court to be a “continuing all accounts guarantee” (at para. 28). In my view, so too is the guarantee signed by the Shails on July 7, 2010. The evidence on this motion supports the argument that the Shails intended to guarantee the present and future debt and SCI. The guarantee is a personal guarantee which specifically and clearly states that it is a continuing guarantee. The wording of the guarantee contemplates future loans by the plaintiff and future indebtedness by SCI which in fact occurred. In the circumstances, I find that the Shails are personally liable for the debts of SCI.

Disposition

[42] The plaintiff shall therefore be granted summary judgment against Swapna and Santosh Shail in the sum of $244,059.96, plus $17,000.00 costs.

Master Champagne

Date: December 8, 2016