Can a clause in a mortgage agreement be used to change the terms of the loan to a co-covenantor without the consent of the guarantors?
British Columbia, Canada
The following excerpt is from Vancouver City Savings Credit Union In Trust v. Cawker, 2004 BCCA 160 (CanLII):
In Manulife Bank of Canada v. Conlin, 1996 CanLII 182 (SCC), [1996] 3 S.C.R. 415 (S.C.C.) comparable clauses in the mortgage agreement there, as found in clauses 25 and 26 here, were found to be ineffective against co-covenantors when the principal loan was renewed with material alterations of the terms of the contract of debt without the consent of the guarantors.
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