S-244 Holdings Ltd. v. Seymour Building Systems Ltd., (1994) 41 B.C.A.C. 272 (CA)

• Judge: McEachern, C.J.B.C., Hutcheon and Cumming, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: November 26, 1993
• Jurisdiction: British Columbia
• Citations: (1994), 41 B.C.A.C. 272 (CA)

S-244 Holdings v. Seymour Building (1994), 41 B.C.A.C. 272 (CA);

    66 W.A.C. 272

MLB headnote and full text

S-244 Holdings Ltd. (appellant) v. Seymour Building Systems Ltd. (respondent)

(CA015457)

Indexed As: S-244 Holdings Ltd. v. Seymour Building Systems Ltd.

British Columbia Court of Appeal

McEachern, C.J.B.C., Hutcheon and Cumming, JJ.A.

March 18, 1994.

Summary:

The plaintiff prime contractor on a townhouse project sued the defendant sub­contractor for the difference between the cost of work on all units in the project and the contract price. The subcontractor, who quit the project after only Phase I was com­pleted, claimed for the value of the work done based on quantum meruit. The trial judge dismissed the claim of the prime contractor and allowed the subcontractor's claim for work done. The prime contractor appealed.

The British Columbia Court of Appeal dismissed the appeal.

Contracts - Topic 4183

Remedies for breach - Rescission - When available - General - The British Colum­bia Court of Appeal stated that historically the remedy of rescission was not available after the execution of a contract except in cases where there was fraud, error in sub­stantialibus or complete failure of con­sideration - Now, however, the remedies of rescission and for damages for misrep­resentation were available even after the execution of a contract - The court held that execution or performance of a contract was a relevant, but not decisive, factor to be considered when deciding whether the remedy of rescission should be denied because of the plaintiff's undue delay in seeking a remedy or because rescission might affect third parties, or would other­wise be inequitable - See paragraphs 15 to 16, 23.

Contracts - Topic 4194

Remedies for breach - Rescission - Grounds - Innocent misrepresentation - The British Columbia Court of Appeal stated that the remedy for innocent mis­representation was rescission of the con­tract - See paragraph 14.

Contracts - Topic 4194

Remedies for breach - Rescission - Grounds - Innocent misrepresentation - A subcontractor engaged by the prime con­tractor to do the stucco exterior finish on a townhouse project bid on only Phase I of the project, whereas the prime contractor thought the bid was for the entire project -The prime contractor did not see the bid price as being out of line and granted the entire work to the subcontractor - The British Columbia Court of Appeal affirmed that the subcontractor was induced to enter the contract by an innocent misrepresenta­tion by the prime contractor - The court affirmed that the appropriate remedy was rescission of the contract, with the subcon­tractor being allowed the value of the work done on the project on a quantum meruit basis.

Cases Noticed:

Redgrave v. Hurd, [1881-5] All E.R. Rep. 77; 20 Ch. D. 1 (C.A.), refd to. [para. 13].

MacKenzie v. Royal Bank, [1934] 4 D.L.R. 1 (P.C.), refd to. [para. 16].

Royal Bank of Canada v. Hale (1961), 30 D.L.R.(2d) 138 (B.C.S.C.), refd to. [para. 16].

Senanayake v. Cheng, [1965] 3 W.L.R. 715 (P.C.), refd to. [para. 16].

Bauer v. Bank of Montreal (1980), 32 N.R. 191; 110 D.L.R.(3d) 424 (S.C.C.), refd to. [para. 16].

Bank of Montreal v. Murphy (1985), 6 B.C.L.R.(2d) 169 (C.A.), refd to. [para. 16].

Ennis v. Klassen (1990), 66 Man.R.(2d) 117; 70 D.L.R.(4th) 321 (C.A.), refd to. [para. 16].

Solle v. Butcher, [1950] 1 K.B. 677 (C.A.), refd to. [para. 17].

Leaf v. International Galleries, [1950] 1 All E.R. 693 (C.A.), refd to. [para. 18].

Long v. Lloyd, [1958] 2 All E.R. 402; [1958] 1 W.L.R. 753 (C.A.), refd to. [para. 18].

Dusik v. Newton (1985), 62 B.C.L.R. 1 (C.A.), refd to. [para. 25].

Bank of Montreal v. Murphy (1985), 6 B.C.L.R.(2d) 169 (C.A.), refd to. [para. 25].

Authors and Works Noticed:

Law of Contracts (3rd Ed. 1993), generally [para. 22].

Counsel:

J. Leathley, for the appellant;

R. Ellard, for the respondent.

This appeal was heard in Vancouver, British Columbia, on November 26, 1993, before McEachern, C.J.B.C., Hutcheon and Cumming, JJ.A., of the British Columbia Court of Appeal. The decision of the court was delivered by Cumming, J.A., on March 18, 1994.