The appellant bank granted the corporate respondent a revolving line of credit secured by a floating charge debenture and a personal guarantee.
After the respondent exceeded its credit limit and failed to provide promised additional security, the bank demanded payment and immediately sought a receivership order without providing reasonable notice.
The bank also filed a misleading affidavit to obtain the ex parte receivership order.
The Supreme Court of Canada upheld the lower courts' findings that the bank was liable for breach of contract for failing to provide reasonable notice.
The Court also upheld the trial judge's award of exemplary damages, finding that the bank's conduct seriously affronted the administration of justice.
