Don't Sign If You Don't Know What You're Signing

The recent Court of Appeal decision, Bank of Montreal v. Utility Engineers Corporation et al., 2025 ONCA 311 ("Utility Engineers"), serves as a good reminder that it is difficult, if not impossible, to escape a personal guarantee by claiming that you did not know what you were signing.

In this case, the bank had provide a credit facility to a company that was secured by personal guarantees given by an officer of the company and his mother. When the company defaulted, the bank sued the company for breach of the loan agreement, and sued the mother and son on their personal guarantees. The mother's defence (among other things) was that the bank was obliged to explain the loan documents to her, and that she did not know that she was signing a personal guarantee (known as a defence of non est factum – "not my act"). The bank succeeded on a summary judgment motion in its claim for the company's debt against the mother, and the mother appealed.