The appellant lent the respondent money to purchase a condominium, secured by a hypothec.
The respondent defaulted, and the appellant sought to take the property in payment.
Under art. 2778 of the Civil Code of Québec, a creditor must obtain court authorization to take property in payment if the debtor has discharged one-half or more of the obligation secured by the hypothec.
The Supreme Court of Canada held that the 'obligation secured by the hypothec' includes both capital and interest.
Because the respondent had paid more than half of the combined capital and interest, the appellant was required to obtain judicial authorization.
The appeal was dismissed.
