Lindsay Kenney Partner Tim Goepel has helped BC lottery winner Enone Rosas win a B.C. Court of Appeal case that will allow her to recover a $600,000 loan from a friend who refused to repay the debt. Rosas was denied repayment when the case was first heard by the B.C. Supreme Court in 2016. Now, the B.C. Court of Appeal has broken ground with new law that will allow Rosas to finally recover the decade old debt.
After winning $4.1 million in the lottery in 2007, Enone Rosas lent her friend, Hermenisabel Toca, $600,000 so she and her husband could purchase a home. Each year when Rosas tried to collect on the debt, Toca told her she would repay her the next year. In 2014, Toca still had not repaid the money, so Rosas started a lawsuit against her former friend. Toca claimed the $600,000 was a gift, not a loan, and that she was not required to repay it.
The case went to trial in September 2016 where a B.C. Supreme Court judge found that while there was ample evidence that the money was a loan and not a gift, the debt was not collectible because the two parties never signed a formal contract, and the lawsuit commenced by Rosas was started too late to force repayment.
Toca promised to pay back the loan in one year. Under the law, Rosas would have a window of 6 years, called a limitation period, to bring a lawsuit to force repayment. The judge found that Toca’s subsequent promises to repay were not enforceable as Rosas never received consideration from Toca, that being something given by Toca to Rosas in exchange her agreement to extend the repayment date. The Court found that just promising to repay the debt did not count as consideration, as Toca was already under an obligation to repay from the original contract. The Court found that this promise alone was not enough to extend the time limit. As such, Rosa’s claim was dismissed for being past the limitation date by 7 months.
Rosas decided to appeal the decision and retained Tim Goepel, a Partner with Lindsay Kenney LLP, to represent her at the Court of Appeal. Goepel successfully appealed the case on the grounds that there was a valid enforceable agreement to extend the date of repayment, and that the action was commenced within the time limit. In a lengthy decision, Chief Justice Robert Bauman and the Court of Appeal broke new legal ground by deciding that a promise between parties can be an enforceable variation to an existing contract.
Toca asked for numerous extensions to the repayment date, which led to Rosas delaying collection year after year. Goepel argued that that each of those extensions should be enforceable, which would push the deadline to collect under the limitation period further back. The Court of Appeal found that the law needed to change to protect the legitimate expectations of the parties, because leaving the law in its current stated would lead to injustice.
The modifications to the contract to extend the date for repayment were found to be enforceable, and as such, the limitation period only started running from the last promise to repay. Based on this new law, Rosas’ lawsuit to recover her money fell well within the limitation period.