2017 MBCA 3, 2017 MBCA 3

IN THE COURT OF APPEAL OF MANITOBA Coram: Mr. Justice Michel A. Monnin Mr. Justice Alan D. MacInnes Mr. Justice Christopher J. Mainella BETWEEN: HARBANS SINGH TAKHAR ) J. D. Soper ) for the Appellant (Plaintiff) Respondent ) ) D. E. Silver- and - ) for the Respondent ) RAJ SINGH MAAN ) Appeal heard and ) Decision pronounced: (Defendant) Appellant ) January 3, 2017 On appeal from 2016 MBQB 11, 325 ManR (2d) 87 MAINELLA JA (for the Court): [1] The defendant appeals a judgment in the amount of $467,465.08, plus post-judgment interest and costs.

The appealturns on the trial judge’s findings of fact which cannot be reversed absent demonstration of palpable and overriding error (see Housen vNikolaisen, 2002 SCC 33 at para 10, [2002] 2 SCR 235). At the hearing of the appeal, it was dismissed with reasons to follow. Theseare those reasons. [2] The factual background is set out in the trial judge’s reasons. In brief, the defendant convinced the plaintiff to make aloan to the operator of a lumber mill in British Columbia. The plaintiff agreed provided that the defendant guaranteed the loan.

Subsequently, the defendant executed a written guarantee in the presence of the plaintiff’s solicitor after declining a desire forindependent legal advice.

The debtor defaulted and the plaintiff sought to enforce the guarantee. [3] The defendant argues that the trial judge erred in finding that he had not met his onus to establish that the loanagreement was materially altered without his consent, thereby making his guarantee unenforceable (see Bank of Montreal v Wilder, (SCC), [1986] 2 SCR 551 at para 25; Manulife Bank of Canada v Conlin, (SCC), [1996] 3 SCR 415 at para2; and Rose v Aftenberger et al, (ON CA), [1970] 1 OR 547 at 555 (CA)).

He says that he was told by the plaintiff thatthe loan would be secured by a first mortgage on the lumber-mill property and the first-charge priority was a condition of his guarantee. He also submits that the plaintiff’s solicitor changed the interest rate in the loan documents from 12 per cent per annum to 14 per cent perannum after he signed the guarantee. [4] On the question of the relevance of the secured-priority position to the guarantee, the title records in evidenceconfirmed that a lender other than the plaintiff had always held the first mortgage on the lumber-mill property.

When the lumber-milloperator did a refinancing, the priorities were not changed; the plaintiff again took a second charge. The claims from the defendant as towhat he was told about the plaintiff’s secured-priority position and its importance to him in signing the guarantee rested on hiscredibility. His assertions were undermined by the facts that there were no documents to support them and that they were not raised inhis statement of defence, but were made for the first time only at the commencement of trial, 11 years after the guarantee was signed.

Also noteworthy is that, in thorough reasons, the trial judge made strong credibility findings against the defendant.

He concluded thatthe defendant was “[p]repared to take whatever position he could in an effort to avoid his responsibility under the guarantee” (at para53). [5] In contrast, the trial judge believed the solicitor’s evidence that he made a drafting error as to the interest rate for theloan, which he corrected on the promissory note in his own handwriting, and then fully explained the terms of loan to the defendantbefore the guarantee was executed, making the harmless error entirely irrelevant to the enforceability of the guarantee. [6] In our view, there was evidence before the trial judge that entitled him to make the findings of fact that he reached.

These findings, in large part, turned on his assessment of the credibility of the witnesses. Findings of credibility cannot be lightlyinterfered with on appeal and we see no obvious error in the trial judge’s conclusions to overturn them (see Permaform Plastics Ltd et alv London & Midland General Insurance Co et al (1996), (MB CA), 110 ManR (2d) 260 at paras 39-47 (CA)). Wealso have not been otherwise persuaded that the trial judge committed a palpable and overriding error in his decision.

[ 7 ] In the result, the appeal is dismissed with costs. JA JA JA