Hill Estate v. Chevron Standard Ltd. et al., (1991) 74 Man.R.(2d) 162 (QB)

• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: August 15, 1991
• Jurisdiction: Manitoba
• Citations: (1991), 74 Man.R.(2d) 162 (QB)

Hill Estate v. Chevron Standard (1991), 74 Man.R.(2d) 162 (QB)

MLB headnote and full text

Gladys Demars of the Postal District of Westhope, in the State of North Dakota, one of the United States of America, Housewife, as Administratrix of the Estate and Effects of William Jennings Hill, formerly of the Postal District of Westhope, in the State of North Dakota, one of the United States of America, retired farmer, deceased (plaintiff) v. Chevron Standard Limited and Chevron Standard Resources Limited (defendants)

(Suit No. 47/83)

Indexed As: Hill Estate v. Chevron Standard Ltd. et al.

Manitoba Court of Queen's Bench

Brandon Centre

Oliphant, A.C.J.

August 15, 1991.

Summary:

A daughter, as administratrix of her late father's estate, sought various relief based on the allegation that her father was mentally incompetent at the time he executed a power of attorney. The estate sought a declaration that the power of attorney was null and void, as well as a petroleum and natural gas lease executed under it. The estate also sought a declaration that the administratrix in her representative capacity was entitled to all the oil, petroleum and natural gas obtained under the lease. The estate also sought an injunc­tion, an accounting, damages and costs.

The Manitoba Court of Queen's Bench dismissed the action in its entirety.

Contracts - Topic 750

Parties - Capacity - Persons of unsound mind and drunkards - General - The Manitoba Court of Queen's Bench stated that a contract for value entered into by a person who is not mentally competent is merely voidable - The onus of proving mental incapacity rests on the person alleging same - See paragraphs 78 to 79.

Contracts - Topic 757

Parties - Capacity - Persons of unsound mind and drunkards - Fairness of contract - [See Contracts - Topic 3586 ].

Contracts - Topic 759

Parties - Capacity - Persons of unsound mind and drunkards - Ratification of contract - The Manitoba Court of Queen's Bench discussed the ratification of a con­tract entered into by a mentally incompe­tent person after that person's recovery, or by the personal representative of that person or by the administrator of that person's estate as their agent - See para­graphs 91 to 101.

Contracts - Topic 3586

Performance or breach - Inability to per­form - Lack of capacity - The Manitoba Court of Queen's Bench stated that a con­tract is binding on a person who is not mentally competent at the time of the making of the contract unless that person can demonstrate (in addition to proving the mental incompetence), that the other party to the contract knew or ought to have known of the mental incompetence - Even if a party to a contract knows of the men­tal incompetence of another party to the contract, the contract is valid if it is shown to be fair and reasonable - Where there is knowledge by one party to a contract of the mental incompetence of the other party, there is a presumption of unfair dealing between the parties; that presump­tion is, however, rebuttable - If the pre­sumption is rebutted, the contract is valid and binding upon the mentally incompetent person - See paragraphs 85 to 90.

Courts - Topic 105

Stare decisis - Authority of judicial deci­sions - English, American and foreign authorities - Australian authorities - The Manitoba Court of Queen's Bench held that it was not bound by a decision, how­ever persuasive, of the High Court of Australia - See paragraph 82.

Estoppel - Topic 1

Nature of estoppel - The Manitoba Court of Queen's Bench referred to a definition of estoppel - The court further states that estoppel can be the result of a representa­tion; of conduct, whether commission or omission; of standing by silently when something should be said; by delay or by acquiescence - See paragraphs 104, 108.

Estoppel - Topic 3

When available - The Manitoba Court of Queen's Bench stated that estoppel should be received with caution and applied with care - The conduct of both the party to be estopped and the party setting up the estoppel must be examined before deciding whether it is equitable to allow the estoppel - See paragraphs 105 to 106.

Estoppel - Topic 1161

Estoppel in pais (by conduct) - Represen­tation by conduct - Acquiescence - The Manitoba Court of Queen's Bench set out the five criteria necessary to establish estoppel by acquiescence - See paragraph 109.

Evidence - Topic 2401

Presumptions - Specific presumptions - Inference from failure to call available evidence - The Manitoba Court of Queen's Bench stated that an adverse inference may by drawn where a party fails to call evi­dence on a matter in issue - However, the drawing of that inference need not necess­arily be the result of the failure to call evidence - That is for the discretion of the trial judge - See paragraph 112.

Cases Noticed:

Peters v. Rocher (1982), 15 Man.R.(2d) 168 (Q.B.), refd to. [para. 78].

McLaughlin v. Daily Telegraph Newspaper Co. Ltd., [1904] 1 C.L.R. 243 (Aust. H.C.), not folld. [para. 80].

Daily Telegraph Newspaper Company Limited v. McLaughlin, [1904] A.C. 776 (P.C.), refd to. [para. 81].

Dexter v. Hall, [1872] 15 Wall. 9 (U.S. Sup. Ct.), refd to. [para. 83].

United States of America v. Manny (1981), 645 F. 2d 163, refd to. [para. 84].

Imperial Loan Company Limited v. Stone, [1892] 1 Q.B. 599 (C.A.), refd to. [para. 85].

Bank of Nova Scotia v. Kelly (1973), 5 Nfld. & P.E.I.R. 1; 41 D.L.R.(3d) 273 (P.E.I.S.C.), not appld. [para. 85].

Walker v. Cusack (1982), 16 Man.R.(2d) 114 (Q.B.), agreed with [para. 86].

Kerr v. Town of Petrolia (1921), 51 O.L.R. 74; 64 D.L.R. 689 (Ont. S.C.), refd to. [para. 92].

Grenkow v. Merrill Lynch Royal Securities Limited et al. (1983), 23 Man.R.(2d) 54 (Q.B.), refd to. [para. 97].

Crown Manufacturers Ltd. v. Texas Refinery Corp. of Canada Limited (No. 595) (1984), 31 Sask.R. 266 (Q.B.), appld. [para. 99].

O'Flaherty v. British Acceptance Corp. Ltd. (1965), 50 W.W.R.(N.S.) 485 (B.C.S.C.), refd to. [para. 107].

Willmott v. Barber (1880), 15 Ch. D. 96, refd to. [para. 110].

Voyager Petroleums Ltd. v. Vanguard Petroleums Ltd. (1983), 47 A.R. 1; 149 D.L.R.(3d) 417 (C.A.), refd to. [para. 110].

Authors and Works Noticed:

Canadian Encyclopedic Digest (Western)(3rd Ed. 1982), vol. 11B, p. 41, para. 2 [para. 104].

Coutts, J.A., Contracts of Mental Incom­petents, Law Society of Upper Canada Special Lectures, Part I (1953) 49, p. 65 [para. 91].

Counsel:

John S. Lamont and Catherine E. Carlson, for the plaintiff;

R.J. Handlon and R.F. Peters, for the de­fendants.

This action was heard before Oliphant, A.C.J., of the Manitoba Court of Queen's Bench, Brandon Centre, whose decision was delivered on August 15, 1991.