201502.06
0

Limitation Periods and Demand Loans

Holders of promissory notes that are payable on demand should review the terms of those notes.  On December 22, 2014 the Appeal Court of British Columbia decided that the limitation period on a lender’s right to sue on a promissory note made prior to the June 01, 2013 that is payable on demand begins to run on the date the loan is made.  The new BC Limitation Act limits this time period to two years but a demand loan is only subject to the limitation once the demand is made. So a promissory note made prior to June 01, 2013 that does not trigger the demand provision on a future event will enable the lender to sue only within six years of making the loan.  If you are a holder of such promissory notes you should consider speaking to a lawyer about your options. To read the complete decision in Kong v. Saunders 2014 BCCA 508 go to http://ow.ly/IDUxG