Lewis-Choi Enterprises Ltd. v. Western Glove Works Ltd., (1993) 121 N.S.R.(2d) 1 (TD)

• Judge: Saunders, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: February 24, 1993
• Jurisdiction: Nova Scotia
• Citations: (1993), 121 N.S.R.(2d) 1 (TD)

Lewis-Choi Ent. v. Glove Works (1993), 121 N.S.R.(2d) 1 (TD);

  335 A.P.R. 1

MLB headnote and full text

Lewis-Choi Enterprises Limited (plaintiff) v. Western Glove Works Limited (defendant)

(S.H. No. 71217)

Indexed As: Lewis-Choi Enterprises Ltd. v. Western Glove Works Ltd.

Nova Scotia Supreme Court

Trial Division

Saunders, J.

March 23, 1993.

Summary:

The plaintiff sued the defendant for com­missions allegedly owing under a written agency contract. The defendant sought re­scission of the contract on the basis of neg­ligent or fraudulent misrepresentation, or waiver or estoppel.

The Nova Scotia Supreme Court, Trial Division, dismissed the plaintiff's applica­tion. The defendant was induced to contract based on misrepresentations by the defend­ant, accordingly, the defendant was entitled to rescind the contract. The court provisionally assessed damages.

Estoppel - Topic 1156

By conduct - Representation by conduct - Silence or standing by - The plaintiff operated as the defendant's sales agent until 1982 under a verbal agreement, when a written contract was executed, changing the amount of commissions payable - The defendant continued to calculate commis­sions as it always had - The plaintiff sued for unpaid commissions - The defendant claimed the plaintiff was estopped from challenging the calculation of commissions where it did not complain until 1987 - The Nova Scotia Supreme Court, Trial Division, held that estoppel did not apply - The plaintiff persistently and continually complained and there was no basis for the defendant's belief that the plaintiff gave up its right to challenge the manner in which commissions were calculated - See para­graphs 78 to 94.

Evidence - Topic 6325

Parole evidence - Integration of legal act - Conditions and collateral agreements - The plaintiff was the defendant's sales agent under a verbal agreement - A writ­ten agreement was executed - The de­fendant claimed the written agreement was not intended to govern their entire rela­tionship; that their contract was partly written and partly verbal - The Nova Scotia Supreme Court, Trial Division, allowed all extrinsic evidence to determine the actual bargain struck - The court stated that the parties intended their con­tractual relationship to be entirely written - The court rejected parol evidence led to establish a distinct oral contract collateral to the main written contract, because it would be entirely inconsistent with and would contradict the written agreement - See paragraphs 24 to 32.

Fraud and Misrepresentation - Topic 6

Fraudulent misrepresentation (deceit) - What constitutes - The plaintiff acted for years as the defendant's sales agent under a verbal agreement - In 1982 the plaintiff induced the defendant to execute a written agency contract, on the basis that a written contract was required by the National Garment Salesmen's Association as a condition precedent to the agent's partici­pation in trade shows in the Atlantic prov­inces - The Nova Scotia Supreme Court, Trial Division, stated that the defendant failed to prove fraudulent misrepresenta­tion - There was no evidence of deliberate or dishonest misrepresentation of the facts without belief in the truthfulness of what the plaintiff was saying - The defendant failed to prove there was no such Associ­ation policy and the absence of such policy could not be inferred from the plaintiff's testimony - See paragraphs 58 to 71.

Fraud and Misrepresentation - Topic 51

Fraudulent misrepresentation (deceit) - Elements - The Nova Scotia Supreme Court, Trial Division, stated that a party seeking to prove fraudulent misrepresenta­tion had to establish "(1) that the represen­tations complained of were made by the wrongdoer to the victim; (2) that the rep­resentations were false in fact; (3) that the wrongdoer, when making the statements, either knew that they were false or made them recklessly without knowing whether they were false or true; and (4) that the victim was thereby induced to enter into the contract in question." - The court stated that the party alleging fraudulent misrepresentation had the burden of prov­ing it on a balance of probabilities, but requiring a higher degree of probability commensurate with the severity of the accusation and its consequences - See paragraphs 69 to 70.

Fraud and Misrepresentation - Topic 2703

Misrepresentation - What constitutes - Falsity - The plaintiff acted for years as the defendant's sales agent under a verbal agreement - In 1982 the plaintiff induced the defendant to execute a written agency contract, on the basis that a written con­tract was required by the National Garment Salesmen's Association as a condition precedent to the agent's participation in trade shows in the Atlantic provinces - A written contract was not in fact required - The plaintiff knew this but did not tell the defendant - The Nova Scotia Supreme Court, Trial Division, held that the de­fendant was entitled to rescind the agency contract on the basis of misrepresentation - See paragraphs 72 to 77.

Cases Noticed:

J. Evans and Son Ltd. v. Andrea Merzario Ltd., [1976] 2 All E.R. 930 (C.A.), refd to. [para. 27].

Carman Construction Ltd. v. Canadian Pacific Railway Co. and C.P. Rail (1982), 42 N.R. 147; 136 D.L.R.(3d) 193 (S.C.C.), refd to. [para. 31].

Bauer v. Bank of Montreal (1980), 32 N.R. 191; 110 D.L.R.(3d) 424 (S.C.C.), refd to. [para. 31].

United Shoe Machinery Co. v. Brunet, [1909] A.C. 330 (P.C.), refd to. [para. 69].

Hanes v. Wawanesa Mutual Insurance Co., [1963] S.C.R. 154, refd to. [para. 70].

Holland v. Marsh and McLennan Ltd. (1979), 29 N.S.R.(2d) 622; 45 A.P.R. 622 (T.D.), refd to. [para. 70].

Short v. Guardian Insurance Co. of Canada (1984), 62 N.S.R.(2d) 1; 136 A.P.R. 1 (C.A.), refd to. [para. 70].

Dalton Cartage Co. v. Continental Insur­ance Co. and St. Paul Fire and Marine Insurance Co. (1982), 40 N.R. 135; 131 D.L.R.(3d) 559 (S.C.C.), refd to. [para. 70].

Blatch v. Archer (1774), 1 Cowp. 63, refd to. [para. 70].

Parna et al. v. G and S Properties Ltd. et al., [1971] S.C.R. 306, refd to. [para. 71].

Derry et al. v. Peek (1889), 14 App. Cas. 337 (H.L.), refd to. [para. 71].

Amalgamated Investment and Property Co. v. Texas Commerce Internation Bank Ltd., [1981] 3 All E.R. 577, refd to. [para. 83].

Pizzo v. Crory, Laws and Charterhouse Equities Ltd. et al. (1986), 71 N.S.R.(2d) 419; 171 A.P.R. 419 (T.D.), refd to. [para. 84].

Hughes v. Metropolitan Railway Co. (1877), 2 App. Cas. 439, refd to. [para. 84].

John Burrows Ltd. v. Subsurface Surveys Ltd., [1968] S.C.R. 607; 68 D.L.R.(2d) 354, refd to. [para. 92].

Atlantic Steel Buildings Ltd. v. Cayman Group et al. (1982), 50 N.S.R.(2d) 609; 98 A.P.R. 609 (C.A.), refd to. [para. 93].

Schuler (L) AG v. Wickman Machine Tool Sales Ltd., [1974] A.C. 235, refd to. [para. 104].

Authors and Works Noticed:

Chitty on Contracts (26th Ed. 1989), p. 150, para. 210 [para. 82].

Fridman, G.H.L., The Law of Contract, ch. 8 [para. 66].

Halsbury's Laws of England, vol. 16, p. 930, para. 1070 [para. 83].

Lewison, Interpretation of Contracts (1989), generally [para. 24].

Norton on Deeds (2nd Ed. 1928), p. 50 [para. 104].

Sopinka and Lederman, The Law of Evi­dence in Civil Cases, p. 535 [para. 70].

Counsel:

Jonathan C.K. Stobie and Richard South­cott (A/C), for the plaintiff;

R.A. Cluney, Q.C., and Christopher C. Robinson, for the defendant.

This action was heard on December 7-10, 1992, and January 27-29 and February 24, 1993, at Halifax, N.S., before Saunders, J., of the Nova Scotia Supreme Court, Trial Division, who delivered the following judg­ment on March 23, 1993.