National Trust Co. v. Mead, [1990] 5 WWR 455, [1990] 2 SCR 410 -- summary under Disposition

By services, 11 January, 2016

The execution by an individual ("Mead") of an assumption of liability agreement in favour of a mortgage lender ("National Trust"), with Mead thereby being acepted by National Trust as the principal debtor, was found not to entail the novation of the mortgage loan 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." Before so concluding, Wilson J. referred with approval to Canada Permanent Trust Co. v. Neumann (1986), 8 B.C.L.R. (2d) 318 (C.A.), where the following four elements necessary to establish a novation were stipulated:

  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. 248(1) - Disposition
Tagline
assumption of loan did not entail its novation
Words and phrases
novation
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
365490
Extra import data
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