The appellant trust company sought to foreclose on a mortgage given by the respondent company.
The mortgage was used to finance the purchase of the respondent company's own shares by three individuals.
The Supreme Court of Canada held that the mortgage was void and unenforceable because it violated s. 96(5) of the Nova Scotia Companies Act, which prohibits a company from giving financial assistance in connection with the purchase of its own shares.
The appeal was dismissed and the cross-appeal allowed.
