T-3131-80
Clover Survey & Yachting Co. Ltd. (Plaintiff)
v.
Crown Assets Disposal Corporation and the Queen
(Defendants)
Trial Division, Marceau J.—Ottawa, May 25 and
29, 1981.
Crown — Contracts — Condition in contract for sale of a
crash boat reserved the right of the defendant Corporation to
withdraw any undelivered property from the sale, without
incurring any liability except to refund the amount paid on
account of such property — Subsequent notice of acceptance
of the plaintiffs bid contained a statement that the defendant
Corporation could cancel the contract unless payment was
made in full by a specified date — Whether the defendant
intended to reserve a right of cancellation only in the event that
the purchase price was not paid — Action is dismissed.
ACTION.
COUNSEL:
Pierre Tourigny for plaintiff.
Robert Côté for defendants.
SOLICITORS:
Langlois, Drouin & Associés, Montreal, for
plaintiff.
Deputy Attorney General of Canada for
defendants.
The following is the English version of the
reasons for judgment rendered by
MARCEAU J.: The facts of this case are as
straightforward as the problem raised by them is
clearly defined.
The facts are as follows. On November 13, 1979
the plaintiff, responding to a call for tenders by the
defendant Corporation (the essential purpose of
which is contained in its title), bid on the purchase
of a crash boat (No. 111), the property of Her
Majesty the Queen. Its bid had to be made and
A typographical error was made in the title of the initial
statement of claim, and was still uncorrected at the time of
trial: Cloyer was written instead of Clover. I allowed a verbal
motion by counsel at the start of the hearing for an order
making the necessary correction.
was in fact made subject to formal general terms
and conditions, one of which was as follows:
1. WITHDRAWAL-CROWN ASSETS DISPOSAL CORPORATION
(hereinafter referred to as the "Corporation") reserves the right
to withdraw from the sale any property which has not been
delivered to the Purchaser, without incurring any liability
except to refund to the Purchaser the amount paid on account
of such property.
On November 15, 1979, the plaintiff received from
the defendant, on a form headed "request for
payment", a notice telling it that its bid had been
accepted and that the amount offered was to be
paid by a specified date. The notice contained the
following statement:
Unless payment in full is made by certified cheque, bank draft
or postal money order (on December 14, 1979) the Crown
Assets Disposal Corporation may cancel the contract, reserving
its other remedies.
On December 14, 1979, the plaintiff received a
letter telling it that the boat had been "withdrawn
from sale", that the defendant had taken advan
tage of the "withdrawal clause" in the contract,
and that accordingly the cheque which it had
already sent in payment of the agreed price was
being returned. Plaintiff protested, maintaining
that it was no longer possible to withdraw the sale
of the boat, and claimed delivery. Finally, it
brought this action asking the Court to find that it
was owner of the boat and entitled to take posses
sion of it.
The action in no way turns on the legality or
ambit of the clause in the general terms and
conditions of sale relating to the option of with-
drawal—a clause which appears to fall within the
category of a condition subsequent at common law
(cf. Chitty on Contracts, 24th ed., vol. 1, p. 321,
para. 694; see Highfield Holdings (B.C.) Ltd. v.
Canaveral Investments Ltd. (1979) 11 B.C.L.R.
245) or a resolutory condition in the civil law (cf.
articles 1079 et seq. of the Civil Code of the
Province of Quebec). The action rests squarely on
the contention that the clause was superseded or
altered by the statement inserted in the "request
for payment" (which I have reproduced above), in
which the defendant allegedly signified its inten
tion to reserve a right of cancellation only in the
event that the purchase price was not paid. Thus,
the problem is strictly one of interpretation of a
contract and of determining the intent of the
parties.
The plaintiff's contention, although skilfully
presented by its counsel, appears to me to be
devoid of merit. I simply do not consider that there
is any connection between "the possible withdraw
al clause" in the contract itself and the "statement
regarding cancellation in the event of non-pay
ment" in the acceptance form. While the first
creates a right in favour of the defendant Corpora
tion to withdraw from the agreement at will and
without penalty up to the date of delivery, the
second is strictly concerned with the possible
penalty for a failure by the buyer to make pay
ment before the date indicated. I do not think it is
possible to believe that the defendant intended,
freely and for no reason, to waive the right to
withdraw as long as delivery had not been made—
a right which so far as it was concerned was
manifestly fundamental, and which it had clearly
and formally reserved in the basic contract itself—
merely emphasizing, when it requested payment,
that it was necessary for plaintiff to make the
payment of the amount offered within a specified
time.
In my view, in withdrawing the boat from sale
and thus retroactively rescinding the contract
made at the time the bid was accepted, the defend
ant exercised a right which it had reserved and
which it had not waived. The contract having been
validly and legally rescinded, the plaintiff cannot
claim to possess any right deriving from it. There
is therefore no basis for its claim to recover.
The action is accordingly dismissed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.