In a recent decision enforcing a bank loan and guarantee (Royal Bank v Edna Granite & Marble Inc), the court provided a reminder that conversations with clients of financial institutions should be recorded in a manner that is clear and intelligible to outsiders, including the court. The defendants had defaulted on their bank loan, but came to an agreement with the bank with respect to repayment. In summarizing the terms of that agreement, Justice Morgan noted the following:
The conversations between the Bank’s collection officers and the Defendants were memorialized in a series of notes to file written by the collection officers. Unfortunately, the collection officers were extremely abbreviated and cryptic in the way they composed these notes. Reading them, I cannot help but wonder what they thought they were accomplishing by writing notes to file in this way. They certainly did themselves and their employer no favor by saving the extra 5 minutes it might have taken to use full sentences so that a subsequent reader of their notes might have a chance of following their train of thought. […]
In addition to this reminder that records of client communications should be clear and easy to understand, the court also confirmed that provisions in loan and guarantee agreements that require the borrower to pay costs on a full indemnity basis are enforceable, and the court has no discretion in fixing costs in the face of such contractual terms.