Alvin's Auto Service Ltd. v. Clew Holdings Ltd. et al., (1997) 157 Sask.R. 278 (QB)

• Judge: Baynton, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: June 23, 1997
• Jurisdiction: Saskatchewan
• Citations: (1997), 157 Sask.R. 278 (QB)

Alvin's Auto v. Clew Holdings Ltd. (1997), 157 Sask.R. 278 (QB)

MLB headnote and full text

Temp. Cite: [1997] Sask.R. TBEd. AU.007

Alvin's Auto Service Ltd. of North Battleford, Saskatchewan (plaintiff) v. Clew Holdings Ltd. and Federal Business Development Bank with head office at Montreal, Quebec, and a regional office in Saskatoon, Saskatchewan (defendants)

(1991 Q.B. No. 556)

Indexed As: Alvin's Auto Service Ltd. v. Clew Holdings Ltd. et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Battleford

Baynton, J.

June 23, 1997.

Summary:

The Bank held a mortgage on a commer­cial building. The owner defaulted on the mortgage, instructed the Bank to find a buyer and agreed to co-operate in disposing of the building. Alvin's Auto Service negoti­ated an agreement with the Bank to purchase the building. The property was sold to another buyer at a higher price. Alvin's sued the Bank for damages. The Bank alleged that it lacked the authority to make the sale.

The Saskatchewan Court of Queen's Bench held that the Bank had implied authority to negotiate on behalf of the property owner. The court allowed the action against the Bank on the basis of breach of warranty of authority and negligent misrepresentation and awarded $39,000 in damages.

Agency - Topic 5047

Relations between agent and third parties - On warranty of authority - Breach of warranty - The Bank held a mortgage on a commercial building - The owner defaulted on the mortgage, instructed the Bank to find a buyer and agreed to co-operate in disposing of the building - Alvin's Auto Service negotiated a purchase agreement with the Bank - The property was sold to another buyer at a higher price - Alvin's sued the Bank for damages - The Bank alleged that it lacked the auth­ority to make the sale - The Saskatchewan Court of Queen's Bench discussed the law of breach of warranty of authority - See paragraphs 23 to 27 - The court held that the Bank had implied authority to negoti­ate on behalf of the property owner and that it breached its warranty of authority.

Agency - Topic 5048

Relations between agent and third parties - On warranty of authority - Breach of warranty - Damages - The Bank held a mortgage on a commercial building - The owner defaulted on the mortgage, instructed the Bank to find a buyer and agreed to co-operate in disposing of the building - Alvin's Auto Service negotiated an agreement with the Bank to purchase the building for $170,000 - The property was sold to another buyer for $294,000, but with numerous conditions - Alvin's pur­chased and renovated another property and sued the Bank for damages - The Saskatchewan Court of Queen's Bench allowed the action on the basis of breach of warranty of authority and negligent misrepresentation - The court discussed the measure of damages for each cause of action and held that, in either case, Alvin's damages were $39,000 - See paragraphs 41 to 45, 64 to 82.

Contracts - Topic 666

Parties - Capacity - Contracts by repre­sentative of party - Warranty of authority - Breach of - [See Agency - Topic 5047 ].

Fraud and Misrepresentation - Topic 2508

Misrepresentation - Negligent misrepre­sentation - The Bank held a mortgage on a commercial building - The owner defaulted on the mortgage, instructed the Bank to find a buyer and agreed to co-operate in disposing of the building - Alvin's Auto Service negotiated a purchase agreement with the Bank - The property was sold to another buyer at a higher price - Alvin's sued the Bank for damages - The Bank alleged that it lacked the auth­ority to make the sale - The Saskatchewan Court of Queen's Bench discussed the law of negligent misrepresentation - See para­graphs 28 to 40 - The court held that the Bank was liable on the basis of breach of warranty of authority and negligent mis­representation.

Sale of Land - Topic 1014

The contract - Parties - Agents - War­ranty of authority - [See Agency - Topic 5047 ].

Sale of Land - Topic 8757

Remedies of purchaser - Damages - Breach of warranty or false representation - [See Agency - Topic 5048 ].

Sale of Land - Topic 8758

Remedies of purchaser - Damages - Neg­ligent misrepresentation - [See Agency - Topic 5048 ].

Sale of Land - Topic 8774

Remedies of purchaser - Damages - Measure of - [See Agency - Topic 5048 ].

Cases Noticed:

Collen v. Wright (1857), 120 E.R. 241, refd to. [para. 25].

Delta Construction Co. v. Lidstone and Piercey (1979), 29 Nfld. & P.E.I.R. 70; 82 A.P.R. 70; 96 D.L.R.(3d) 457 (Nfld. T.D.), dist. [para. 27].

Salter v. Cormie et al., [1994] 3 W.W.R. 283; 145 A.R. 288; 55 W.A.C. 288 (C.A.), refd to. [para. 27].

Duncan v. Beck (1914), 7 Sask. L.R. 163 (S.C.), refd to. [para. 27]

Masecar v. McKenzie and Son et al. (1924), 18 Sask. L.R. 321 (C.A.), refd to. [para. 27].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1963] 2 All E.R. 575 (H.L.), refd to. [para. 28].

Rainbow Industrial Caterers Ltd. et al. v. Canadian National Railway Co. et al., [1991] 2 S.C.R. 3; 126 N.R. 354; 3 B.C.A.C. 1; 7 W.A.C. 1, refd to. [para. 28].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, appld. [para. 28].

Auto Concrete Curb Ltd. v. South Nation River Conservation Authority et al., [1993] 3 S.C.R. 201; 157 N.R. 232; 65 O.A.C. 195, refd to. [para. 28].

Edgeworth Construction Ltd. v. Lea (N.D.) & Associates Ltd. et al., [1993] 3 S.C.R. 206; 157 N.R. 241; 32 B.C.A.C. 221; 53 W.A.C. 221, refd to. [para. 28].

Carman Construction Ltd. v. Canadian Pacific Railway Co. and CP Rail, [1982] 1 S.C.R. 958; 42 N.R. 147, refd to. [para. 32].

Carman Construction Ltd. v. Canadian Pacific Railway Co. and CP Rail (1981), 33 O.R.(2d) 472 (C.A.), affd. [1982] 1 S.C.R. 958; 42 N.R. 147, refd to. [para. 32].

Koch v. Nelson Lumber Co. (1980), 2 Sask.R. 303 (C.A.), refd to. [para. 35].

Affleck Estate v. Tenneco Canada Inc. et al. (1990), 83 Sask.R. 241 (C.A.), refd to. [para. 38].

Ivo v. Halabura (1990), 85 Sask.R. 147 (Q.B.), refd to. [para. 38].

Lessner, Smith and Stetson v. Wright and Bell (1979), 26 N.B.R.(2d) 35; 55 A.P.R. 35 (Q.B.), refd to. [para. 38].

Revelstoke Credit Union v. Miller (1984), 28 C.C.L.T. 17 (B.C.S.C.), refd to. [para. 40].

Grand Restaurants of Canada Ltd. v. Toronto (City) (1981), 32 O.R.(2d) 757 (H.C.), affd. (1982), 39 O.R.(2d) 752 (C.A.), refd to. [para. 40].

Chuzar Restaurants Ltd. v. Grand Restaur­ants of Canada Ltd. - see Grand Res­taurants of Canada Ltd. v. Toronto (City).

Kopec v. Pyret and Borys, [1987] 3 W.W.R. 449; 55 Sask.R. 172 (C.A.), refd to. [para. 41].

D'Amato et al. v. Badger et al., [1996] 2 S.C.R. 1071; 199 N.R. 341; 79 B.C.A.C. 110; 129 W.A.C. 110, refd to. [para. 44].

Roncata et al. v. Caverly (1991), 53 O.A.C. 367; 84 D.L.R.(4th) 303 (C.A.), refd to. [para. 45].

Peacock v. Wilkinson et al. (1914), 7 Sask. L.R. 259 (C.A.), affd. (1915), 51 S.C.R. 319, dist. [para. 59].

Cook v. Williams (1897), 14 T.L.R. 31 (C.A.), dist. [para. 60].

Salvesen & Co. v. Rederi Aktiebolaget Nordstjernan, [1905] A.C. 302, dist. [para. 60].

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415; 197 N.R. 379; 91 O.A.C. 379, dist. [para. 66].

Noonan et al. v. Roe et al. (1971), 21 D.L.R.(3d) 102 (B.C.S.C.), refd to. [para. 80].

Wickberg v. Shatsky et al. (1969), 4 D.L.R.(3d) 560 (B.C.S.C.), dist. [para. 81].

Authors and Works Noticed:

Bowstead on Agency (13th Ed. 1968), pp. 387 [para. 81]; 397 [para. 23].

Bowstead on Agency (14th Ed. 1976), p. 386 [para. 41].

Canadian Encyclopedic Digest (West.)(3rd Ed. 1991), vol. 1, s. 377 [para. 24]; vol. 2, pp. 154 [para. 42]; 251 [para. 43].

Di Castri, Victor, The Law of Vendor and Purchaser (1989), vol. 3, pp. 18 to 28, ss. 922 [para. 80]; 926 [para. 42]; 927A [para. 75].

Feldthusen, B., Economic Negligence (2nd Ed. 1989), pp. 44, 45 [para. 36]; 67 [para. 37]; 81 [para. 36]; 125 to 127 [para. 39].

Halsbury's Laws of England (4th Ed. 1976), vol. 1(2), para. 172 [para. 22].

Remedies in Tort, vol. 2, c. 16, p. 42 [para. 43].

Counsel:

R.G. Cawood, Q.C., for the plaintiff, Alvin's Auto Service Ltd.;

K.M.T. Prisciak, for the defendant, Federal Business Development Bank.

This action was heard by Baynton, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Battleford, who delivered the following judgment on June 23, 1997.