Lottery Winner Loan Case Sets Precedent, B.C. Court Reforms Centuries-Old Consideration Doctrine

In its May 18, 2018 decision, Rosas v. Toca (Rosas), the British Columbia Court of Appeal (Court of Appeal) permitted a contract to be varied without the exchange of fresh consideration. If adopted more broadly, Rosas may have wide-ranging implications.

BACKGROUND

In January 2007, the plaintiff won over C$4-million in the lottery. After depositing the proceeds, she loaned C$600,000 for one year to the defendants to help them buy a home.

Every year, the plaintiff asked for full repayment and every year, the defendants said they could not repay the loan, but would do so "next year". From 2008 to 2013, the plaintiff accepted those assurances without requiring any compensation. However, in July 2014, the plaintiff brought an action against the defendants for the seven-year overdue C$600,000 loan. The defendants responded that the entire amount was a gift, or otherwise that the claim was barred by the six-year limitation period under British Columbia's former Limitati