A.V.G. Management Science Ltd. v. Barwell Developments Ltd. et al., (1978) 24 N.R. 554

• Judge: Dickson and Estey, JJ.
• Court: Supreme Court (Canada)
• Case Date: November 21, 1973
• Jurisdiction: Canada (Federal)
• Citations: (1978), 24 N.R. 554

AVG Mgt. Science Ltd. v. Barwell Dev. (1978), 24 N.R. 554. (SCC)

test 12345

MLB headnote

A.V.G. Management Science Ltd. v. Barwell Developments Ltd. et al.

Indexed As: A.V.G. Management Science Ltd. v. Barwell Developments Ltd. et al.

Supreme Court of Canada

Laskin, C.J.C., Ritchie, Spence,

Dickson and Estey, JJ.

December 21, 1978.

Summary:

This case arose out of two agreements for sale of an apartment building. On November 21, 1973, a landowner agreed to sell an apartment building for $495,000. A few days later the landowner mistakenly believed that the buyer breached the agreement for sale and on November 28, 1973 the landowner agreed to sell the same apartment building for $550,000. The first buyer successfully sued the landowner for specific performance of the November 21, 1973 agreement for sale. The second buyer sued the landowner for damages for breach of contract. The Supreme Court of British Columbia allowed the buyer's action for damages which were assessed at $43,628 (if recoverable on ordinary contract principles) but by reason of the rule in Bain v. Fothergill the buyer's damages were limited to $6,628. The buyer appealed to the British Columbia Court of Appeal.

The British Columbia Court of Appeal dismissed the appeal and affirmed the trial court. The buyer appealed to the Supreme Court of Canada.

The Supreme Court of Canada allowed the appeal and set aside the judgments of the British Columbia courts. The Supreme Court of Canada refused to apply the rule in Bain v. Fothergill and awarded the buyer damages of $43,628. The Supreme Court of Canada stated that the rule in Bain v. Fothergill was inapplicable where a seller, having title, has either voluntarily disabled himself from being able to convey or has risked and lost his ability to do so by concurrent dealings with 2 buyers - see paragraph 13. The Supreme Court of Canada referred to the rationale for the rule in Bain v. Fothergill and questioned the application of the rule in Canada (see paragraphs 14 to 33).

Sale of Land - Topic 8759

Remedies of buyer - Damages - Where seller's title defective - Rule in Bain v. Fothergill - On November 21, 1973, a landowner agreed to sell an apartment building for $495,000 - A few days later the landowner mistakenly believed that the buyer breached the agreement for sale and on November 28, 1973 the landowner agreed to sell the same apartment building for $550,000 - The first buyer successfully sued for specific performance of the November 21, 1973 agreement for sale - The second buyer sued the landowner for damages for breach of contract - The Supreme Court of Canada refused to apply the rule in Bain v. Fothergill (which would have limited damages to legal fees and costs of investigating title) and awarded the second buyer damages of $43,628 - The Supreme Court of Canada held that the landowner's conduct in entering into concurrent agreements for sale ousted the rule in Bain v. Fothergill (see paragraph 13) - The Supreme Court of Canada referred to the rationale for the rule and questioned the application of the rule in Canada (see paragraphs 14 to 33).

Cases Noticed:

Bain v. Fothergill (1874), L.R. 7 H.L. 158, dist. [para. 4].

Flureau v. Thornhill (1776), 2 W. Bl. 1078, refd to. [para. 4].

Hopkins v. Grazebrook (1826), 6 B. & C. 31, refd to. [para. 5].

Day v. Singleton, [1899] 2 Ch. 320, refd to. [para. 6].

Goffin v. Houlder (1921), 90 L.J. Ch. 488, refd to. [para. 6].

Wroth v. Tyler, [1973] 1 All E.R. 897, refd to. [para. 7].

A.S.A. Construction Pty. Ltd. v. Iwanov, [1975] 1 N.S.W.L.R. 512, refd to. [para. 10].

Sikes v. Wild (1861), 1 B. & S. 593; (1863), 4 B. & S. 421, refd to. [para. 16].

Ontario Asphalt Block Co. v. Montreuil (1916), 52 S.C.R. 541, refd to. [para. 17].

Lock v. Furze (1866), L.R. 1 C.P. 441, refd to. [para. 18].

McNamara Construction (Western) Ltd. v. The Queen, 13 N.R. 181; [1977] 2 S.C.R. 654, refd to. [para. 22].

Reference re Agricultural Products Marketing Act (1978), 19 N.R. 361; 84 D.L.R.(3d) 257, refd to. [para. 22].

Stephens v. Bannan (1913), 6 Alta. L.R. 418, refd to. [para. 25].

O'Neil v. Drinkle (1908), 8 W.L.R. 937, refd to. [para. 25].

United Trust Co. v. Dominion Stores Ltd., 11 N.R. 97; [1977] 2 S.C.R. 915, refd to. [para. 28].

Statutes Noticed:

Land Registry Act, R.S.B.C. 1960, c. 208, sect. 35, sect. 38 [para. 9].

Authors and Works Noticed:

Di Castri, Canadian Law of Vendor and Purchaser, 2nd Ed. (1976), page 748 [para. 16].

Corbin on Contracts (1964), Vol. 5, s. 1098, page 530 [para. 18]; page 531 [para. 17].

McGregor on Damages, 13th Ed., (1972), page 484 [para. 18].

British Columbia Law Reform Commission Report, (1976) [paras. 6 and 18].

American Law of Property, (1952), Vol. 3, page 169 [para. 19].

Sedgwick on Damages, 9th Ed., (1913), Vol. 3, page 2121 [para. 23].

Counsel:

George K. MacIntosh, for the appellant;

William B. MacAllister, for the respondents.