Ontario Civil

Debtor and Creditor

Demand made by bank supported by loan and security documents

Plaintiff bank brought motion for summary judgment. Bank advanced loan to defendant borrower that was guaranteed by defendant. Loan was evidenced by demand promissory note, which specifically indicated it was payable on demand. Guarantee was payable on demand. Bank admitted that borrower was current with respect to payments due and owing on loan. However, bank maintained that non-financial default of borrowers was sufficient to allow it to make demand for entire loan. Judgment for plaintiff. Borrower executed demand promissory note and demand collateral mortgage. Defendant executed personal demand guarantee. Security given by borrower by defendant prevailed over any conflict in wording of facility letter. Bank was entitled to make demand in accordance with those documents and they did not restrict bank from making demand prior to conclusion of five-year term of loan. Trial was not needed. Financial statements produced were clear. Trial was not needed to determine credibility of defendant. Demand made by bank was supported by loan and security documents that stipulated very clearly that they were payable on demand. Validity of documents was confirmed. Non-financial breaches of facility letter were concerning, real and created understandable breakdown of business relationship. Bank was granted summary judgment for full amount owing and for possession on collateral mortgage.

Bank of China (Canada) v. Ocean Sands Developments Ltd. (Mar. 7, 2013, Ont. S.C.J., C.A. Gilmore J., File No. CV-12-108282-00) 226 A.C.W.S. (3d) 746.

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