Royal Bank of Canada v. W. Got Associates Electric Ltd.

Royal Bank of Canada v. W. Got Associates Electric Ltd.

The creditor (bank) breached the implied contractual obligation to give reasonable notice before enforcing security and seeking a receiver; the bank also misled the court by filing an affidavit lacking candour; consequentially the bank is liable for damages including exemplary damages (trial award of $100,000 upheld); appeal dismissed.

Citation
[1999] 3 SCR 408
Parties
Appellant / Creditor: Royal Bank of Canada; Respondent / Debtor: W. Got & Associates Electric Ltd.; Respondent / President and Personal Guarantor: Donald E. Sanderlin
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
15 October 1999
Procedural Posture
Collection (receivership); Contract and Tort / Appeal to the Supreme Court of Canada — Final Judgment (appeal Dismissed)
Outcome
Appeal dismissed with costs; judgment below upheld.
Legal Topics
Receivership Appointment, Notice to Enforce Security, Conversion, Duty of Candour in Ex Parte Applications, Exemplary Damages
Source Language
English
Contract Tort Equity Receivership Remedies Receivership Appointment Notice to Enforce Security Conversion Duty of Candour in Ex Parte Applications +1 more

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Parties

Royal Bank of Canada

Appellant / Creditor

W. Got & Associates Electric Ltd.

Respondent / Debtor

Donald E. Sanderlin

Respondent / President and Personal Guarantor

Procedural Posture

Collection (receivership); Contract and Tort / Appeal to the Supreme Court of Canada — Final Judgment (appeal Dismissed)

Legal Issues

  1. 1 Whether creditor who calls loan and seeks court‑appointed receiver without reasonable notice breaches its contractual obligations
  2. 2 Whether creditor is liable in tort (conversion) for misleading affidavit and wrongful seizure/liquidation
  3. 3 Whether exemplary (punitive) damages are available and appropriate in commercial/contractual context

Ratio Decidendi

The creditor (bank) breached the implied contractual obligation to give reasonable notice before enforcing security and seeking a receiver; the bank also misled the court by filing an affidavit lacking candour; consequentially the bank is liable for damages including exemplary damages (trial award of $100,000 upheld); appeal dismissed.

Court Disposition

Appeal dismissed with costs; judgment below upheld.

Orders

  • Appeal dismissed with costs.
  • Judgment of trial judge and Court of Appeal holding bank liable for breach of contract affirmed.