R.E. Lister Ltd. v. Dunlop Canada Ltd.

R.E. Lister Ltd. v. Dunlop Canada Ltd.

Holder of a demand debenture may enforce security only if reasonable notice is given; Dunlop failed to give reasonable notice before seizure and retained possession of goods known to belong to the guarantor, constituting trespass and conversion; appellants are entitled to compensatory and exemplary damages; however the 1972 settlement agreement, entered into with independent legal advice and performed, barred the Listers from attacking the guaranties and settlement, so guaranties were not set aside.

Citation
[1982] 1 SCR 726
Parties
Plaintiff/appellant: Ronald Elwyn Lister Limited; Plaintiff/appellant: Ronald E. Lister; Plaintiff/appellant: Joan C. Lister; Defendant/respondent: Dunlop Canada Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
31 May 1982
Procedural Posture
Contract / Appeal to Supreme Court of Canada (on Appeal From Ontario Court of Appeal)
Outcome
Appeal allowed; trial judgment restored in favour of appellants on wrongful seizure claims; settlement agreement and guaranties not set aside.
Legal Topics
Franchise Agreement, Debenture Enforcement, Personal Guarantee, Reasonable Notice on Demand, Trespass and Conversion, Exemplary Damages, Settlement Agreement, Duress, Negligent Misrepresentation
Source Language
English
Contract Tort Property Equity Franchise Agreement Debenture Enforcement Personal Guarantee Reasonable Notice on Demand +5 more

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Parties

Ronald Elwyn Lister Limited

Plaintiff/appellant

Ronald E. Lister

Plaintiff/appellant

Joan C. Lister

Plaintiff/appellant

Dunlop Canada Limited

Defendant/respondent

Procedural Posture

Contract / Appeal to Supreme Court of Canada (on Appeal From Ontario Court of Appeal)

Legal Issues

  1. 1 Whether holder of debenture may seize assets without giving reasonable notice to debtor
  2. 2 Whether seizure and retention of assets belonging to a third party/guarantor constituted trespass and conversion
  3. 3 Whether statements and conduct of debtor waived right to reasonable notice

Ratio Decidendi

Holder of a demand debenture may enforce security only if reasonable notice is given; Dunlop failed to give reasonable notice before seizure and retained possession of goods known to belong to the guarantor, constituting trespass and conversion; appellants are entitled to compensatory and exemplary damages; however the 1972 settlement agreement, entered into with independent legal advice and performed, barred the Listers from attacking the guaranties and settlement, so guaranties were not set aside.

Court Disposition

Appeal allowed; trial judgment restored in favour of appellants on wrongful seizure claims; settlement agreement and guaranties not set aside.

Orders

  • Appeal allowed
  • Trial judgment restored as to trespass and conversion claims