



COURT OF APPEAL FOR ONTARIO

CITATION: Royal Bank of Canada v. FTVRB2 Inc., 2016 ONCA 73

DATE:  20160126

DOCKET: C60565

Gillese, MacFarland and van Rensburg JJ.A.

BETWEEN

Royal Bank of Canada

Plaintiff (Respondent in Appeal)

and

FTVRB2
    Inc., FTVRTZ Inc., NMF-TV Inc.,
Janice Olivia Goldman


and
    Aaron Goldman

Defendants (Appellant)

AND BETWEEN:

Royal Bank of Canada

Plaintiff (Respondent in Appeal)

and

Janice Olivia Goldman

Defendant (Appellant)

Joseph Kary, for the appellant, Janice Oliver Goldman

Rachel Moses, for the respondent RBC

Heard:  January 18, 2016

On appeal from the order of Justice Barbara Conway of the
    Superior Court of Justice, dated May 1, 2015.

ENDORSEMENT

[1]

The appellant appeals the order from the summary judgment of the motion
    judge wherein she granted judgment in favour of the Bank on the basis of
    certain guarantees signed by the appellant.

[2]

There is no issue that the appellant signed the guarantees nor is there
    any question that the loans which are the subject of the guarantees are long in
    default.

[3]

The appellant argues that the motion judge erred both procedurally and
    substantively.

Alleged Procedural Error

[4]

First, Mr. Kary argues that the motion judge erred in proceeding with
    the Banks motion for summary judgment in the face of clear evidence of the
    appellants lack of capacity.

[5]

Issues about the appellants capacity or, more accurately, lack of
    capacity were first raised in November, 2013 before Mesbur J. on a receivership
    motion by the Bank in relation to the three companies, the debts of which underlie
    the guarantees that are the subject of this appeal.  In her reasons, Mesbur J.
    noted that the motion before her had been adjourned repeatedly since March 21,
    2013 and that As for Janice Goldman, her lawyer Mr. Tock raises for the very
    first time today a potential issue as to her capacity.  He has filed no
    material.

[6]

On the record before us the appellants lack of capacity was also raised
    in July, 2013 before McEwen J. where he noted:

Defendant Goldmans solicitor Mr. Tock advises that he has
    heard from the solicitor for Ms. Goldmans son that she may have developed
    psychological issues that affect her capacity.

This is not the first time that Ms. Goldman has
    alleged issues with capacity (see Mesbur J. endorsement of Nov. 29/13).  To
    date, however no steps have been taken by her in this regard to determine the
    issues.

[7]

He proceeded over the objection of Ms. Goldmans then lawyer to set a
    schedule for the delivery of materials and any cross-examinations and fixed the
    date for the hearing of the summary judgment motion for May 1, 2015. The
    appellant thereafter changed counsel and a motion was brought before Penny J.
    on November 13, 2014. The schedule was somewhat altered in relation to the
    exchange of materials and cross-examinations but the May 1, 2015 date for the
    return of the summary judgment motion was confirmed and marked peremptory to the
    respondent (Ms. Goldman, the appellant). There is nothing in that endorsement
    about any lack of capacity of the appellant.

[8]

On December 16, 2014, the parties were before Patillo J. who merely
    noted that no action was required and that the timetable had been complied
    with late!.

[9]

The next appearance was before Patillo J. again on April 10, 2015.  His
    endorsement reads:

Counsel for Ms. Goldman has raised capacity concerns with
    respect to his client.  The issue is not new.  It has been raised on more than one
    occasion in the past.  Yet no one on Ms. Goldmans side has taken any steps to
    deal with it, specifically in respect of this action.  Accordingly there is no
    basis to interfere with the May 1, 2015 motion date, which is peremptory to Ms.
    Goldman among others.

[10]

The
    motion came on before the motion judge on May 1, 2015 as scheduled and Mr. Kary
    again sought an adjournment on the basis that his client lacked capacity. He
    had recently filed, on behalf of his client, three affidavits.

[11]

The
    first   from his law partner Grace Kwan   has nothing to do with the
    appellants capacity.

[12]

Second,
    the affidavit of Aaron Goldman (the appellants son) offered hearsay evidence
    that his mother was advised by her doctors on January 9, 2015 that she had
    been diagnosed with dementia and early stage of Alzheimers. In addition, he
    provided details of his own observations of his mothers conduct and behaviour
    and attached certain records from a medical centre and a letter from a
    physician dated February 3, 2015.

[13]

The
    letter states: Mrs. Goldman has diagnosis of early stage Alzheimers
    disease.  He says nothing about any lack of capacity.

[14]

The
    records from the medical centre do not assist the appellant.  The January 7,
    2015 note of a neurologist notes that Mrs. Goldman may require assistance with
    sorting out her financial difficulties.  I have referred her to the social work
    services at the Memory Care Clinic.  Additionally, she should appoint a power
    of attorney.  There is no suggestion that the appellant lacks capacity 
    indeed the only reasonable interpretation that can be put on this statement is
    that she has the capacity to make the appointment.

[15]

Similarly
    the note of January 9, 2015 recites that the appellant had newly diagnosed
    early stage Alzheimers disease but went on to recite the appellants
    agreement to start medication and willingness to participate in a research
    study if qualified.  There is no concern expressed in that note about any lack
    of capacity to consent to treatment.

[16]

Leaving
    aside the issue of whether these materials, filed as they were as part of an
    affidavit by the appellants son, were properly admissible  they do not
    provide any evidence that the appellant lacked capacity at the time of the
    summary judgment motion on May 1, 2015.

[17]

The
    third affidavit  from the appellants former co-worker  speaks  to her
    forgetfulness.   This is of no assistance  on the issue of capacity.   Ms.  Chazan
     is not qualified to make any diagnosis of lack of capacity and, in any event,
    memory issues do not equate with incapacity.

[18]

The
    law presumes capacity.  Anyone alleging lack of capacity has the onus to prove
    it.

[19]

As
    this court noted in
Barnes v. Kirk
, [1968] 2 O.R. 213 at para. 6:

The partys unsoundness of mind constitutes such a valid reason,
    but the onus of establishing that fact rests squarely on the party alleging it.
    The question essentially is one to be decided upon medical evidence; without
    direct cogent evidence from a person duly qualified to speak with authority
    upon the subject, it is difficult to perceive how the Court could pass upon the
    question judicially.

[20]

In
    our view, there was no evidence before the motion judge to support a finding
    that the appellant lacked capacity at that time.

[21]

There
    has been no motion before this court to receive fresh evidence in relation to
    the issue.

[22]

The
    motion judge made no error in proceeding with the motion as she did.  We do not
    accept this ground of appeal.

Substantive Issues

[23]

Next
    the appellant argues that because the corporation used the loan money advanced
    by the Bank for a purpose other than the purpose for which it was advanced this
    constitutes a material change to the loan arrangement that would, absent the
    appellants consent, release her from the guarantee.

[24]

We
    do not accept this submission. The undisputed evidence is that the Bank
    advanced the loan money as it was directed to do by Aaron Goldman, the
    appellants son and principal of the three companies.

[25]

This
    was a continuing all accounts guarantee, the precise form of guarantee
    considered by this court in
Royal Bank of Canada v. Samson
, 2013 ONCA
    313, where at para. 32 the court noted:

The purpose of a continuing all accounts guarantee is to allow
    the customer and the lender to alter their business arrangements without having
    to involve the guarantor.

[26]

The
    motion judge considered the defences of
non est factum
, the Banks
    failure to fully advance the loan amounts, the alleged lack of independent
    legal advice and alleged undue influence.  She rejected each and every one of
    them on the basis of the evidence before her.

[27]

On
non est factum
, she concluded that at the time the guarantees were
    executed the appellant was an intelligent woman, who had previously guaranteed
    her sons companies loan arrangements, knew that this was a guarantee,
    admitted that she was given an opportunity to get independent legal advice and
    knew what she was signing  and concluded there was nothing to it. We agree.

The defences of undue influence and the lack of
    independent legal advice were considered contextually and found to have no
    basis on the evidence. The appellant was a highly educated and intelligent
    woman when she signed the guarantees in 2010-2012.  She knew and understood
    exactly what it was she was signing. Other than the fact that Aaron Goldman is
    the appellants son and he is younger than his mother, there is no evidence to
    support this defence and the relationship alone without more is no defence.

[28]

As
    to the appellants argument that the Bank did not fully advance the loan monies
     again, this is met by the fact that it was an all accounts continuing
    guarantee.  By its terms, the guarantor was obligated to pay on demand all
    debts and liabilities to the Bank owing by the debtor. There was no requirement
    that the monies be fully advanced before she became obligated to the Bank.

[29]

We
    see no error in the motion judges findings and would not interfere.

[30]

The
    appeal is dismissed with costs to the respondent fixed in the sum of $13,000.00.


E.E. Gillese J.A.


J.
    MacFarland J.A.

K.
    van Rensburg J.A.


