40. A lessor shall provide to the Minister, before June 1 in each year, a detailed report on all capital leases outstanding with that lessor as at March 31 in the year of the report, including the following information for each capital lease registered with the Minister in accordance with these Regulations:
(a) the registration number assigned to the capital lease by the Minister;
(b) the lessee’s name; and
(c) the outstanding balance of the capital lease as at March 31 in that year.
41. If the lessor does not provide a report in accordance with section 40, the Minister is not liable after the day on which the report was due, for any loss sustained as a result of a lessee’s default on a capital lease for which the information specified in any of paragraphs 40(a) to (c) was not provided.
42. For the purposes of these Regulations and subject to section 21, the outstanding balance of a capital lease becomes due and payable and the lessee is in default as of the day on which the lessee fails to comply with any material condition of the capital lease.
PROCEDURE ON DEFAULT
43. (1) If a lessee is in default under section 42, and the default has not been corrected to the satisfaction of the lessor, the lessor shall give the lessee notice of the default in writing and demand that the lessee comply with the condition of the capital lease within the period specified in the notice.
(2) If the lessee fails to comply with the condition within the period specified, the lessor shall formally demand payment of the outstanding balance of a capital lease within the period specified in the demand.
(3) If the outstanding balance of a capital lease is not paid within the period specified, the lessor shall take any of the following measures to minimize the loss sustained as a result of a lessee’s default on the capital lease or that will maximize the amount recovered:
(a) collect the outstanding balance of the capital lease;
(b) fully realize any security, guarantee or suretyship;
(c) realize on any insurance policy under which the lessor is the beneficiary;
(d) fully implement a compromise settlement with the lessee or with a guarantor or surety or any other person on behalf of the lessee, guarantor or surety; and
(e) subject to subsection (4), take legal proceedings, including the enforcement of any resulting judgment, if the estimated cost of the proceedings does not exceed the estimated amount that may be recovered.
(4) If the lessee is a sole proprietor or a partnership, the lessor may execute a judgment by realizing on the assets of the sole proprietor or partners, other than the assets of the small business in respect of which the capital lease is entered into, in an amount no greater than the aggregate of
(a) 25% of the total financing amount of the capital lease,
(b) interest on the judgment,
(c) taxed costs for, or incidental to, the legal proceedings against the lessee, and
(d) legal fees and disbursements, other than costs referred to in paragraph (c), and other costs incurred by the lessor for services rendered by persons other than the lessor’s employees for the purpose of legal proceedings against the lessee.
- SOR/2006-272, s. 7(F).
- Date modified: