



COURT OF APPEAL FOR ONTARIO

CITATION: Global Food Traders Inc. v. Massalin, 2015 ONCA 362

DATE: 20150521

DOCKET: C59862

MacPherson, Gillese and van Rensburg JJ.A.

BETWEEN

Global Food Traders Inc. and Xela International
    Inc.

Plaintiffs (Respondents)

and

Fernando Massalin
,
    Maria Massalin, Tifco Foods, Inc., 2091399 Ontario Inc. and Latinamerican Foods
    Inc.

Defendants (Appellant)

Elaine Peritz and Sarah Turgeon, for the appellant

Martin Mendelzon, for the respondents

Heard: May 19, 2015

On appeal from the judgment of Justice James M. Spence of
    the Superior Court of Justice, dated December 18, 2014.

ENDORSEMENT

[1]

In April 2012, Global Food Traders (GFT) and Latinamerican Foods Inc.
    (LAFI) entered into a purchase agreement under which GFT sold its trademarks
    and customer base to LAFI for $500,000, payable by 50 post-dated cheques for
    $10,000 each (the Agreement).

[2]

Mr. Massalin, the sole officer, director and controlling mind of LAFI,
    executed the Agreement on behalf of LAFI.

[3]

Below the signatures of the parties to the Agreement, there is the
    following statement:

The undersigned is executing this Agreement solely in
    connection with his obligations as set forth in Section 1 of this Agreement.

[4]

Mr. Massalin personally signed below this statement.

[5]

The relevant part of section 1 of the Agreement can be found in its last
    two sentences, which read as follows:

The Purchase Price shall be payable in 50 equal monthly
    installments of $10,000 commencing April 30, 2012 by post-dated cheques.
If
    Mr. Massalins obligations are called upon pursuant to this Section he shall
    within three days provide the Seller with immediately available funds to cover
    any bounced or NSF cheques
.  [Emphasis added.]

[6]

GFT performed in accordance with the Agreement.  However, after
    receiving $140,000, the balance of LAFIs post-dated cheques were not
    honoured.  GFT sued.

[7]

LAFI is currently in receivership.

[8]

At the motion below, there was no dispute raised as to LAFIs failure to
    pay or the amount owing under the Agreement.

[9]

By judgment dated Dec 8, 2014, GFT was granted partial summary judgment
    against Mr. Massalin.  The motion judge found that the guarantee in para. 1
    of the Agreement was valid and enforceable.

[10]

Mr.
    Massalin appeals.  He submits that:

1.

the motion must be remitted for rehearing because the motion judge gave
    no reasons for decision;

2.

the decision is flawed because the motion judge failed to make a finding
    of liability as against LAFI; and

3.

the motion judge erred in finding that s. 1 of the Agreement constituted
    a guarantee.

[11]

We
    do not agree.

[12]

We
    reject the appellants submission that the motion judges reasons are
    inadequate.  While brief, the reasons convey the reasoning below as to the
    meaning of s. 1.

[13]

We
    see no merit in the appellants second submission.  On the motion below, the
    appellant did not dispute the amounts which GFT stated LAFI owed under the
    Agreement. Moreover, we do not accept that without a finding of liability
    against LAFI, there can be no finding of liability on the personal guarantee
    and because LAFI is in receivership, there can be no finding of its liability
    absent leave of the court or consent of the receiver. A personal guarantee
    provides a contracting party with recourse if the principal debtor is unable to
    pay, even where the principal debtor goes bankrupt:
Royal Building
    Supplies Ltd. v. Tabrco Management Ltd. et al
, 2006 CarswellOnt
    8900(S.C.), affd 2007 CarswellOnt 831 (C.A.)  and
Setanta Sports Na Ltd.
    v. Score Television Network Ltd.
, 2009 CanLII 41213 (Ont. S.C.).

[14]

Finally,
    while the word guarantee is not used in section 1, it is clear from that
    section and underscored by the statement at the foot of the Agreement, that
    section 1 contains Mr. Massalins personal guarantee of LAFIs payment
    obligations under the Agreement.  Indeed, although Mr. Massalin baldly denies
    that section 1 contains a personal guarantee, he offers no other explanation
    for what meaning could be given to the last sentence of that section or for why
    he signed the Agreement in his personal capacity.  While there is a lack of
    precision in the wording of section 1, there can be no misapprehension as to
    what the parties were agreeing to when they executed the Agreement.  Mr.
    Massalin, the sole director, officer and controlling mind of LAFI, a closely
    held corporation, was providing his personal guarantee to pay any amounts
    required to cover LAFIs bounced or NSF cheques under the Agreement.

[15]

We
    note, as well, that the record shows that Mr. Massalin acknowledged his
    liability both before and after signing the Agreement in his personal capacity.

[16]

Accordingly,
    the appeal is dismissed with costs to the respondent fixed at $6,930, all
    inclusive.

J.C.
    MacPherson J.A.

E.E.
    Gillese J.A.

K.
    van Rensburg J.A.


