National Trust Co. v. Mead, [1990] 5 WWR 455, [1990] 2 SCR 410 -- summary under Subsection 80(1)

By services, 28 November, 2015

The assumption of a mortgage was found not to entail its novation in light inter alia of a clause in the original mortgage which provided that no "dealing by the Mortgagee with the owner of the equity of redemption of the Mortgage Premises shall in any way affect or prejudice the rights of the Mortgagee against the Mortgagor ... for the payment of the money secured by this Mortgage." Wilson J. also discussed the following four-part test for determining whether a novation has occurred (p. 472):

  1. The new debtor must assume the complete liability.
  2. The creditor must accept the new debtor as a principal debtor and not as an agent or guarantor.
  3. The creditor must accept the new contract in full satisfaction and substitution for the old contract.
  4. The new contract must be made with the consent of the old debtor.
Topics and taglines
Topic
Income Tax Act - s. 80(1)
Tagline
tests for novation
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
338884
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