Revisiting the Lowest Intermediate Balance Rule: A Case Comment

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Abstract

"16 The Court found that the investors had not received any monies from Base Finance for the investments that they made in September 2015.17 Although an RBC Bank Statement for the month of September made it possible to easily and clearly trace the investors' monies in the Bank Account,18 there was shortfall in the Bank Account. [...]the Court had to decide on how to allocate the losses among the various investors.19 (c)Allocation of Losses The ABQB reviewed the methods for distributing the funds and allocating the losses in the Bank Account to the investors. [...]as a matter of fairness, justice, and fundamental principles of property law, a latter contributor cannot logically be forced to share the burden of withdrawals that were made before the latter contributor ever contributed to the account, unless there was an intention to share as co-owners . . [...]LIBR provides all the beneficiaries with a logical solution that allows them to offset their losses. The parties will go back to the date of the opening of the Bank Account.39 In agreement with the Boughner decision,40 Yamauchi's J. dictum suggests that LIBR is the "general rule"41 in Canada, unless the parties have agreed to another method of distribution or the rule is unworkable. [...]the ABQB was correct in applying LIBR in the Easy Loan42 decision. 3.EASY LOAN CORPORATION v. WISEMAN, 2017 In the case of Easy Loan Corp. v. Wiseman,43 one of the investors44 and the Receiver in the Base Finance Ltd. pyramid scheme appealed the decision of Yamauchi J. to the Alberta Court of Appeal.
Original languageEnglish
Pages (from-to)91-101
JournalBanking and Finance Law Review
Volume33
Issue number1
Publication statusPublished - 2017
Externally publishedYes

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