The respondent bank extended credit to the appellant company, secured by merchandise.
Upon default, the bank took possession of the merchandise but, unable to find a buyer, gratuitously abandoned it to a third-party lessor.
The bank sued for the balance of the loan, and the appellant cross-demanded for the value of the abandoned goods.
The Supreme Court of Canada held that the bank breached its duty of good faith under the Bank Act by abandoning the property without notifying the debtor or restoring the status quo.
The appeal was allowed, and the bank was ordered to pay the value of the goods as damages.
