The bank sued a guarantor for the amount owing under a loan and the guarantor sought to defend the claim by way of set-off or counterclaim. However the guarantee provided for no set off or deduction of amounts claimed to be owed to the guarantor by the lender or any person. This is commonly called a “suspension clause”.
The court held that the bank was entitled to summary judgment and noted that the guarantors were still able to bring their claims, they were merely prevented from holding up payments due under the guarantees while their claims were litigated. The court distinguished those matters that go to the invalidity of the guarantee which are properly pleaded as defences, which was not the case here.