THE ENFORCEMENT OF DEMAND DEBENTURES - CONTINUING UNCERTAINTIES
AbstractIn R.E. Lister Ltd v. Dunlop Canada Ltd, the Supreme Court of Canada held that a debtor is entitled to receive reasonable notice before a secured party can enforce a demand debenture. The Supreme Court also made it clear that notice means more than sufficient time to enable the debtor to withdraw money from an existing facility. Since Lister many Canadian courts have wrestled with the question of what amounts to a reasonable time, the Ontario Court of Appeal's decision in Kavcar Investments Ltd. v Aetna Financial Services Ltd. being only the most recent effort. The author argues that the Canadian law remains very uncertain and that Kavcar has substantially added to the uncertainty. He accordingly feels that a statutory solution is now appropriate and he offers some specific proposals.
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