Lovell v. Canada
A-20-90
Décary J.A.
25/2/93
30 pp.
Damages -- Appeal from Trial Division judgment ((1989) 90 D.T.C. 6116) regarding seizure on February 5, 1990 and judicial sale by Minister of National Revenue, for failure to pay taxes, of land located in province of Quebec and held in undivided co-ownership by debtor Smith and respondent Lovell -- Writ and minutes of seizure served on debtor Smith but not on respondent Lovell, who owed no taxes to Crown -- Land sold on July 11, 1984 to other respondent (Turchetta) for $15,894 in sheriff's sale made without Lovell's knowledge -- Latter sued Crown to vacate seizure and sale of land and claimed damages -- Turchetta filed counterclaim and also claimed damages from Crown -- Trial Judge allowed Lovell's action in part and Turchetta's counterclaim -- Crown appealed from judgment, saying Lovell's claim for damages prescribed -- Lovell's argument sale should be vacated in its entirety properly dismissed by Trial Judge -- Crown had no duty to first obtain division of land-Entirely legal for Crown to attach Smith's portion and have it sold by Court -- Lovell only had necessary legal interest to challenge part of sale affecting his own share -- Trial Judge could only conclude judicial sale of Lovell's undivided share invalid -- Solution to question of partial invalidation of sale to be found in Civil Code of Lower Canada -- Under Civil Code, art. 1518, eviction can be only partial even in case of judicial sale-Lovell's cross-appeal to vacate sale in its entirety dismissed -- On recovery of damages, Crown's liability admitted -- Lovell's action for damages against Crown can only be quasi-delictual in nature -- No legal connection between Lovell and Crown other than latter's fault in seizing and selling immovable property -- Instant case governed by Quebec rules of law regarding prescription-Action for delictual liability prescribed after two years (Civil Code, art. 2261(2)) and starting-point of prescription time right of action arises -- Final wrongful act occurred at latest on July 11, 1984, date of sheriff's sale -- Action brought on February 22, 1988, well beyond two-year deadline -- Trial Judge erred in finding Lovell did not learn of seizure until December 24, 1986 -- Lovell lacked diligence as he should have solved mystery in 1981, or at latest by end of 1985 -- Action to recover damages brought in 1988 therefore prescribed -- Crown disputed decision of Trial Judge to award, in addition to half selling price, half difference between selling price and present value of land -- Remedy covered by Civil Code, art. 1587 on forced sales separate and apart from remedy created in art. 1586 and allows recovery of damages other than those awarded under art. 1586 -- Party to whom property awarded treated as buyer for purposes of arts. 1586 and 1587-Prosecuting creditor distinct from debtor and not subject to same obligations -- Under Civil Code, art. 1531, warranty against latent defects not applicable in sales under process of execution: buyer purchases at own risk -- As to warranty against eviction, has action only for price paid and for interest and costs -- Other action preserved by art. 1587 delictual action which buyer can bring against prosecuting creditor in event of fault by latter -- Trial Judge erred in allowing Turchetta to claim additional value of half land from which evicted -- Amount of damages victim entitled to claim comprises what is immediate and direct consequence of wrongful act -- Courts and scholarly commentary have established damage must be "direct" and "certain" -- Damage will cease to be direct when victim discovers wrongful act and does not try to minimize injury he will sustain -- Through Crown's wrongful act Turchetta sustained loss and entitled to be reimbursed for half selling price and half taxes paid since sale -- Situation different as to additional value of which allegedly deprived -- Loss of land's additional value had no qualitatively sufficient causal relationship with wrongful act committed -- Appeal allowed in part, trial judgment varied -- Civil Code of Lower Canada, arts. 1056, 1073, 1074, 1075, 1511, 1514, 1518, 1586, 1587, 1591, 2232, 2261.