Private loan arrangements lead to more than their fair share of
litigation proceedings. Their disputes often require the courts to
apply long-standing legal principles to informal loan documentation
and verbal loan arrangements where the decisions can have
significant ramifications when applied to institutional borrowers
and lenders.
In Rosas1, the British Columbia Court of
Appeal examined a series of informal amendments to loan
arrangements, specifically numerous extensions of the repayment
date of a private loan extended by one friend to another pursuant
to a verbal loan agreement.
Fortunately for the lender, the Court did not allow a borrower
who had requested repeated extensions of the repayment date to
allege that the lender's claim for recovery of the loan was
statute-barred under British Columbia's limitations
legislation2 because the lender had indulged the
borrower's requests for extensions. The Court also rejected the
Borrower's claim that the extensions
