ONCA Clarifies When Lenders Must Consider Undue Influence In Special Relationships

In Bank of Montreal v. Utility Engineers Corp., 2025 ONCA 311, the Ontario Court of Appeal ("ONCA") dismissed the guarantor's appeal because, among other findings, the respondent bank had no duty to explain the underlying loan's details to the appellant in the circumstances, and the appellant's claim of non est factum (not my act) did not apply.

Bank of Montreal ("BMO"), the respondent, granted a $500,000 overdraft facility to Utility Engineers Corporation ("Utility"). Utility's loan was secured and was personally guaranteed by both Mr. Meleknia and Ms. Songhorigakien. Ms. Songhorigakien, the appellant, is the mother of Mr. Meleknia. Both Mr. Meleknia and Ms. Songhorigakien were officers of Utility, and Ms. Songhorigakien was also a director and 50% shareholder of Utility.