A guarantor who negotiates protections across a boardroom table and then signs an unconditional guarantee has usually negotiated nothing. That is the practical lesson of Bank of Montreal v. Saidani, 2026 ONCA 550, released July 29, 2026, in which the Court of Appeal dismissed a guarantor’s appeal from summary judgment and ordered him to pay $18,000 in costs. For lawyers who paper credit facilities rather than enforce them, it is a useful reminder about where a client’s protections have to live.

The bargain that was never written down

Sirius Power Corp. needed an overdraft facility. BMO was prepared to lend up to $350,000 but required a co-signor. Peter Harvey, an independent contractor who had held himself out to the bank as Sirius’s Vice President and Chief Operating Officer, was the candidate. Ilyes Saidani was Sirius’s sole director and shareholder.

At a meeting on November 12, 2021, Mr. Harvey said he would guarantee the facility on two conditions. He wanted full signing authority over the line, including pre-approval of any withdrawal over $5,000, and he wanted immediate online access to the Sirius account. The motion judge found that BMO’s loan officer agreed to both and told Mr. Harvey he would be contacted immediately to arrange them. That same officer also told him the loan agreement and the guarantee were standard form documents that could not be changed.

Mr. Harvey signed. The written guarantee stated that it was without conditions. He also delivered a Certificate of Independent Legal Advice.

The administrative steps took roughly a month. He did not access the account online until December 21, 2021. By then Sirius had overdrawn past the $350,000 limit, and at least one cheque over $5,000 had cleared on Mr. Saidani’s signature alone. Mr. Harvey said nothing about the delay until March 2022, when he asked BMO for additional funds and was refused.

Why the assurances did not survive contact with the document

Mr. Harvey argued that the assurances were conditions precedent to the guarantee, that BMO had misrepresented the position, and that BMO had been negligent. He lost on all three in the court below and again on appeal. The panel did not even call on BMO to respond to the first two grounds (para. 12).

What is striking is that the motion judge accepted the assurances had actually been given (para. 16). This was not a credibility contest the guarantor lost — the bank’s officer initially denied the conversation and acknowledged it only on cross-examination. It made no difference, because the record contained the following (para. 14): no written document setting out any conditions; a guarantee signed with independent legal advice; an entire agreement clause confirming the guarantee superseded prior agreements; a further clause confirming there were no conditions other than those in the document; knowledge on Mr. Harvey’s part that the facility was live before he had access, with no complaint until March; and a $15,000 cheque he received, drawn on the credit account and bearing only Mr. Saidani’s signature, about which he also said nothing.

Schedule C and the limits of a creative reading

Mr. Harvey’s best textual argument was Schedule C to the guarantee, headed “Conditions Precedent to Advances… 2. Completion of all facility documentation and account agreement and authorities, as applicable”. He submitted that the loan officer’s assurances were incorporated into the guarantee through that language. The motion judge rejected the reading, and the Court of Appeal saw no error: the schedule refers only to documentation required by BMO, not to conditions a guarantor may have requested (paras. 17–19).

The point generalizes. A boilerplate conditions-precedent schedule built around the lender’s own closing checklist will not do double duty as a home for the guarantor’s commercial protections.

The independent legal advice certificate

Mr. Harvey also argued the advice was not truly independent because Mr. Saidani had found the lawyer. The motion judge held that BMO was entitled to rely on the Certificate of Independent Legal Advice regardless (para. 10). That is not licence for casual practice on the guarantor’s side, but it confirms the certificate does real work for a lender relying on it.

What to do differently at the drafting desk

• Put operational safeguards in the instrument, or in a signed side letter that states in terms that the guarantee is not effective until they are in place. An entire agreement clause paired with a “no other conditions” clause is a wall, and comfort given in a meeting will not get over it.
• Watch the sequencing. The guarantee bound Mr. Harvey the day he signed; the safeguards were administrative tasks that lagged a month. Where a client’s protection depends on a step someone else has to take, exposure should not begin until that step is confirmed — hold the executed guarantee in escrow, or condition effectiveness on written confirmation.
• “Standard form, cannot be changed” is a negotiating position, not a legal fact. If the lender genuinely will not amend, the remaining options are a side letter with teeth, a lower cap, or no deal.
• Tell the client that silence is evidence. Months of not complaining, and accepting a cheque that breached the very control he had bargained for, formed part of the record that sank the argument.
• Plead the theory you intend to run. Mr. Harvey advanced a different negligence theory on appeal, based on the one-month delay and a failure to monitor cheques. It had not been pleaded, and the court declined to fault the motion judge for not addressing an argument that was never before her (paras. 27–29).

The short version

Saidani does not change the law of guarantees. It is a clean illustration of a rule most transactional lawyers already know and most clients quietly discount: the document is the deal. If the client’s comfort depends on something the lender has promised to do, that promise belongs on the page, and its performance belongs in the effectiveness condition.