



COURT OF APPEAL FOR ONTARIO

CITATION: Business
    Development Bank of Canada v. Almadi, 2016 ONCA 428

DATE: 20160601

DOCKET: C61411

Doherty, Tulloch and Benotto JJ.A.

BETWEEN

Business Development Bank of Canada

Plaintiff (Respondent)

and

Joanne M. Almadi also known as Jo-Anne Almadi also known as Joanne Hill
    and Gordon M. Almadi also known as Gordon Almadi

Defendants
    (Appellants)

Brandon Jaffe, for the defendants (appellants)

Sean N. Zeitz, for the plaintiff (respondent)

Heard and released orally:  May 24, 2016

On appeal from the judgment of Justice Bale of the Superior
    Court of Justice, dated November 10, 2015, with reasons reported at 2015 ONSC
    6912.

ENDORSEMENT

Issue #1  Did the motion judge err in granting relief to the
    respondent under s. 95 of the
Bankruptcy and Insolvency Ac
t (
BIA
)?

[1]

This submission mischaracterizes the motion judges reasons and the
    order he made.  He was careful not to grant any relief under s. 95 of the
BIA
. 
    Instead, he granted judgment to the respondent on the guarantee.

[2]

In coming to that conclusion, the motion judge made two important
    findings of fact:

·

The respondent took payment on the debt from the primary debtor
    based on the misrepresentation by the guarantor (Mr. Almadi, the appellant) on
    behalf of the primary debtor that the primary debtor would be closing its
    business and paying all of its creditors (see reasons para. 22); and

·

At the time of the payment to the respondent, the primary
    debtor was insolvent, rendering the payments a preference under s. 95 of the
BIA
(see reasons paras. 18-20).

[3]

We see no basis upon which to interfere with either findings of fact. 
    Those findings were available in the context of a summary judgment motion.

[4]

On the facts as found by the motion judge, the respondents decision to
    effectively return the improper payment to RBC, which stood in the shoes of the
    Trustee who in turn stood in the shoes of the primary debtor, revived the
    guarantors obligation under the debt.  To hold otherwise, would be to require
    a needless litigation in the context of the bankruptcy proceeding and, on the
    facts of this case, would allow the guarantors to shelter behind the
    misrepresentations made to the respondent by Mr. Almadi.

Issue #2  Did the respondent fail to make demand on the
    guarantee as required by the terms of the guarantee?

[5]

The motion judge did not make a finding whether the respondents demand
    complied with the terms of s. 7 of the guarantee.  There was evidence going both
    ways on this point.  The motion judge instead rejected this submission on the
    basis that any failure to make the formal demand as required by s. 7 caused no
    prejudice to the appellant (see paras. 25-27).  In our view, it was open to the
    motion judge on the evidence to reject this submission on that basis:  see
Alberta
    Opportunity Co. v. Schinnour
, [1990] A.J. No. 1125 (Alta. C.A.), leave to
    appeal refused, [1991] S.C.C.A.

[6]

The appeal is dismissed.

[7]

We agree with the respondents submission that the respondent is
    entitled to substantial indemnity costs in light of para. 2 of the guarantee.  Costs
    to the respondent on the appeal in the amount of $15,000, inclusive of
    disbursements and relevant taxes.

Doherty J.A.

M. Tulloch J.A.

M.L. Benotto J.A.


