The appellant bank recalled a loan and liquidated the assets of the respondents' family company within three hours, knowing the respondents were negotiating a sale of their shares.
The respondents subsequently sold their shares at a significantly reduced price and sued the bank for the difference.
The Supreme Court of Canada held that while the bank had a contractual right to recall the loan, the sudden liquidation without reasonable notice constituted an abuse of contractual rights.
Although the respondents could not sue under the contract or by lifting the corporate veil, the bank's actions constituted an independent fault under article 1053 of the Civil Code of Lower Canada, making it delictually liable to the shareholders for their direct financial loss.
