Berliz v. Charter Oil Co., (1975) 6 N.R. 68 (SCC)

• Judge: Martland, Judson, Ritchie, Spence and Dickson, JJ.
• Court: Supreme Court (Canada)
• Case Date: May 22, 1975
• Jurisdiction: Canada (Federal)
• Citations: (1975), 6 N.R. 68 (SCC)

Berliz v. Charter Oil Co. (1975), 6 N.R. 68 (SCC)

MLB headnote and full text

Berliz v. Charter Oil Co. Ltd.

Indexed As: Berliz v. Charter Oil Co.

Supreme Court of Canada

Martland, Judson, Ritchie, Spence and Dickson, JJ.

May 22, 1975.

Summary:

This case arose out of a claim for $1,668,000 for damages for breach of contract. The plaintiff was employed by the defendant company. In April 1963, the plaintiff became president of the defendant company. In June 1964, the company granted to the plaintiff an option on 80,000 of its shares at $2.00 per share. In June 1967 the company's shares were traded on the American Stock Exchange at approximately $3.50 per share. In June 1967 the plaintiff exercised his option to purchase the 80,000 shares at $2.00 per share. The 80,000 shares could only be issued by the company to the plaintiff with the approval of the Securities and Exchange Commission. The plaintiff terminated his employment with the company in November 1967 and in December 1967 the company agreed to use its best efforts to acquire approval from the Securities and Exchange Commission for the issue of the 80,000 shares. In March 1969 the company was suspended by the American Stock Exchange and its shares were delisted. At the time of the trial of the action in October, 1971 the company's shares were being traded at approximately $5.00 per share. The 80,000 shares were never issued to the plaintiff because the company did not apply for approval from the Securities and Exchange Commission. The company did not apply for approval from the Securities and Exchange Commission because of advice of counsel that approval could not be obtained given the circumstances of the company. The trial court found as a fact that such approval could not be obtained by the company. The trial court held that the defendant company breached its obligation to the plaintiff to apply to the Securities and Exchange Commission for approval to issue the 80,000 shares. However, because such approval could not have been obtained the trial court held that the plaintiff was entitled only to nominal damages of $1,000. The judgment of the trial court is set out below - see paragraphs 31 to 79.

On appeal to the Alberta Court of Appeal the appeal was dismissed and the judgment of the trial court was affirmed - see paragraphs 3 to 30.

On appeal to the Supreme Court of Canada the appeal was dismissed and the judgment of the Alberta Court of Appeal was affirmed - see paragraphs 1 and 2.

Damages - Topic 1202

Nominal damages for breach of contract - The plaintiff claimed $1,668,000.00 for damages for breach of a share purchase agreement - The plaintiff was granted an option by the defendant company to purchase 80,000 shares of the company at $2.00 per share - The plaintiff exercised the option to purchase at a time when the shares were traded at approximately $3.50 per share on the American Stock Exchange - The shares subsequently traded at a high of $21.00 per share but within several months of the high the company was suspended and its shares were delisted by the American Stock Exchange - The issue of the 80,000 shares to the plaintiff required prior approval from the Securities and Exchange Commission for which the company agreed to apply - The company did not apply for such approval because of advice of counsel that such approval could not be obtained given the circumstances of the company - The trial court found as a fact that such approval could not be obtained by the company - The Supreme Court of Canada affirmed the Alberta Court of Appeal which held that the company was liable for nominal damages of $1,000 for a breach by the company of its undertaking to apply to the Securities and Exchange Commission for approval to issue the 80,000 shares to the plaintiff.

Cases Noticed:

Sheffield District Railway Company v. Great Central Railway Company, 27 T.L.R. 451, folld. [para. 15](19.

Simpson v. Sir W.R. Clayton, Bart. 8 L.J.C.P. 59, folld. [para. 15].

Hontestroom (Owners) v. Sagaporack (Owners), [1927] A.C. 37, folld. [para. 23].

Powell and Wife v. Streatham Manor Nursing Home, [1935] A.C. 243, folld. [para. 23].

Kinkel et al. v. Hyman, [1939] S.C.R. 364, folld. [para. 25].

R. v. Arnold, 75 W.W.R. 201, folld. [para. 42].

Archer v. William, 175 E.R. 11, dist. [para. 44].

Kinkel v. Hayman and Porcupine United Gold Mines, [1939] S.C.R. 364, folld. [para. 46].

Albrecht v. Imperial Oil Limited, 21 W.W.R. 561, dist. [para. 52].

Provincial Trust v. Wagner Oils, 11 W.W.R. 371, dist. [para. 52].

Elgin Loan and Savings Co. et al. v. National Trust Company, 7 O.L.R. 1, dist. [para. 53].

Michael v. Hart and Co., [1901] 2 K.B. 867, dist. [para. 53].

Brady v. Morgan, 1967, 2 O.R. 680, dist. [para. 53].

McNeil v. Fultz (1906), 38 S.C.R. 198, dist. [para. 53].

Frost's case reported in 77 E.R. 190, not folld. [para. 77].

Baker v. Happ et al. (US 1944), 54 N.E. Rep. 123, not folld. [para. 77].

Prudential Trust v. Wagner Oils (1954), 11 W.W.R. 371, folld. [para. 78].

Albrecht v. Imperial Oil (1957), 21 W.W.R. 560, folld. [para. 78].

Counsel:

Robert S. Dinkel, Q.C., for the appellant;

J.C. Major, Q.C. and H.M. Kay, for the respondent.

This appeal was heard by the Supreme Court of Canada on May 22, 1975. Judgment was delivered orally by the Supreme Court of Canada on May 22, 1975.

The judgment of the Supreme Court of Canada was delivered orally by MARTLAND, J.