The guarantor wanted signing power and online access first. The court said no.
The Ontario Court of Appeal ruled that a bank officer's verbal assurances couldn't override a signed personal guarantee's written terms.
The court's July 29, 2026 decision, dismissed an appeal from a guarantor who argued he had agreed to back a company's overdraft facility only on conditions the bank never put in writing.
The guarantor provided independent contractor services to Sirius Power Corp and held himself out to Bank of Montreal as the company's vice president and chief operating officer. Sirius' sole director and shareholder needed an overdraft credit facility, and BMO required a co-signor. At a meeting on November 12, 2021, the guarantor told a BMO loan officer he would sign only if he received full signing authority over withdrawals above $5,000 and immediate online access to monitor the account. A motion judge later found the loan officer agreed to both requests and told the guarantor he would be contacted right away to arrange them - but never promised, on the bank's behalf, that Sirius would be denied credit until those steps were finished. The written guarantee contained no such condition. It stated it was unconditional and included a clause confirming it superseded any earlier discussions.
The guarantor signed the guarantee and the loan agreement after obtaining independent legal advice. Financing became available November 18, 2021, but the guarantor didn't gain online account access until December 21 - and the bank's own witness testified that access wasn't finalized internally until mid-to-late December. In the gap, Sirius overdrew its account past its $350,000 limit, including one cheque over $5,000 signed only by the director. The guarantor didn't raise the delay as a problem until a meeting in March 2022, months after he knew financing was flowing and had already seen a large single-signature cheque go through.
Justice M. Claire Wilkinson of the Superior Court of Justice, who heard the underlying motion, rejected the guarantor's arguments that the assurances amounted to conditions precedent to the guarantee, that he had been misled into signing, and that BMO owed him a duty to police the director's spending. She had ordered a mini-trial because of conflicting affidavit evidence, but ultimately sided with the bank on every point, in an April 11, 2025 decision.
On appeal, Justices Sossin, Monahan and Osborne found no error in that reasoning. The panel didn't even need to hear from BMO on the conditions-precedent and misrepresentation grounds. It also declined to consider a new negligence theory the guarantor raised for the first time on appeal, since it had not been pleaded or argued before the motion judge.
The appeal was dismissed, and BMO was awarded costs of $18,000 from the guarantor, all inclusive.
For advisors whose clients are weighing a personal guarantee on a business loan, the case is a plain lesson: get every condition in writing. Verbal assurances from a lender's staff, however clearly given, won't hold up against a signed guarantee that says otherwise - especially one backed by independent legal advice and an "entire agreement" clause.
