Chaulk v. Fairview Constr., (1977) 14 Nfld. & P.E.I.R. 13 (NFCA)

JudgeMorgan, Gushue, JJ.A., and Mahoney, J.
CourtNewfoundland Court of Appeal
Case DateJune 03, 1977
JurisdictionNewfoundland and Labrador
Citations(1977), 14 Nfld. & P.E.I.R. 13 (NFCA)

Chaulk v. Fairview Constr. (1977), 14 Nfld. & P.E.I.R. 13 (NFCA);

    33 A.P.R. 13

MLB headnote and full text

Chaulk v. Fairview Construction Limited

Indexed As: Chaulk v. Fairview Construction Ltd.

Newfoundland Supreme Court

Court of Appeal

Morgan, Gushue, JJ.A., and Mahoney, J.

June 3, 1977.

Summary:

This case arose out of a claim by the purchaser to specific performance of an agreement for the sale of three duplexes. The seller agreed to construct and convey to the purchaser five duplexes. Two of the duplexes were completed and conveyed to the purchaser without incident. The purchaser immediately resold the buildings at a substantial profit. As a result, the seller became unwilling to complete the sale of the remaining three buildings and did not begin to construct them. The seller repudiated the agreement for sale on the ostensible ground that the purchaser failed to notify the seller that the necessary financing had been arranged. The purchaser brought an action for specific performance of the agreement for sale against the seller.

The Newfoundland Supreme Court in an unreported judgment allowed the plaintiff's action and ordered specific performance. The seller appealed.

The Newfoundland Court of Appeal allowed the appeal in part, set aside the order for specific performance and awarded the purchaser damages for the seller's breach.

Contracts - Topic 3663

Performance or breach - Repudiation - Conditions precedent - Willingness to complete - The Newfoundland Court of Appeal held that one party to a contract should not be able to rely on the default of the other party and repudiate the contract between them unless he himself can show that he was ready, willing and able to meet his own obligations under that contract - See paragraphs 14 to 16.

Estoppel - Topic 1163

Estoppel by conduct - Representation by conduct - Practice or course of conduct - The seller agreed to construct and convey to the purchaser five income properties - The agreement for sale contained a financing clause, which did not impose a time limit for obtaining financing or provide that notification about financing must be given to the seller - Two properties were conveyed to the purchaser without incident or notice about financing to the seller - The seller then became unwilling to complete and repudiated the agreement for sale on the ground that the purchaser failed to notify the seller that financing had been arranged for the remaining three properties - The Newfoundland Court of Appeal allowed the purchaser's action for damages for breach of the agreement for sale and held that there was no breach by the purchaser of the financing clause - The Court of Appeal held that the seller, having accepted a certain procedure on the sale of the first two properties, could not insist on a different procedure for the balance of the contract - See paragraph 12.

Sale of Land - Topic 6038

Completion - Conditions precedent - Condition respecting financing to be arranged - An agreement for sale of five income properties was "subject to financing" in a specific amount, but no time limit for obtaining financing and no notification respecting financing to the seller was stipulated - After the sales of two of the properties were completed without incident or notice of financing to the seller, the seller became unwilling to complete and repudiated the agreement for sale on the ground that the purchaser failed to notify the seller that financing had been arranged - The Newfoundland Court of Appeal found that neither party doubted that financing would be obtained and that in the circumstances the seller could not claim that the purchaser was in breach of the financing provision - See paragraphs 10 to 13.

Sale of Land - Topic 8755

Remedies of purchaser - Damages - Damages in lieu of specific performance - The seller refused to complete the sale of three duplexes - The duplexes were not distinctive in design or location - The purchaser wanted them for investment or resale only - The Newfoundland Court of Appeal held that damages was an adequate remedy and set aside an order for specific performance of the agreement for sale - See paragraphs 17 to 20.

Cases Noticed:

Turney v. Zhilka, [1959] S.C.R. 578, appld. [para. 11].

Jones v. Barkley (1781), 2 Doug. 684, appld. [para. 15].

Wallace v. Hesslein, 29 S.C.R. 171, appld. [para. 15].

Adderly v. Dixon (1824), 15 M. & St. 607, appld. [para. 18].

Counsel:

Derek Lewis, Q.C., for the plaintiff-respondent;

Derek Green, for the defendant-appellant.

This case was heard on April 12, 1977, at St. John's, Newfoundland, before MORGAN, GUSHUE, JJ.A., and MAHONEY, J., of the Newfoundland Supreme Court, Court of Appeal.

On June 3, 1977, GUSHUE, J.A., delivered the following judgment for the Court of Appeal:

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