Taylor et al. v. Scurry-Rainbow Oil (Sask.) Ltd. et al., (1998) 170 Sask.R. 222 (QB)

• Judge: Gerein, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: August 19, 1998
• Jurisdiction: Saskatchewan
• Citations: (1998), 170 Sask.R. 222 (QB)

Taylor v. Scurry-Rainbow Oil Ltd. (1998), 170 Sask.R. 222 (QB)

MLB headnote and full text

Temp. Cite: [1998] Sask.R. TBEd. AU.039

Harry Ernest Taylor and Maxx Petroleum Ltd. (plaintiffs/defendants by counterclaim) v. Scurry-Rainbow Oil (Sask.) Ltd. (defendant) and Canco Oil Gas Ltd. (defendant) and Tarragon Oil and Gas Limited (defendant/plaintiff by counterclaim)

(1994 Q.B. No. 2112)

Indexed As: Taylor et al. v. Scurry-Rainbow Oil (Sask.) Ltd. et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Regina

Gerein, J.

August 19, 1998.

Summary:

The plaintiffs sued for a declaration that a certain mineral lease was void because it breached the rule against perpetuities. The defendant Tarragon counterclaimed against the plaintiff Maxx for breach of confiden­tiality. Tarragon sought an accounting and damages.

The Saskatchewan Court of Queen's Bench allowed the action and the counterclaim.

Equity - Topic 3902

Fiduciary or confidential relationships - Breach of confidence - What constitutes - Tarragon held a mineral lease on Taylor's land - Maxx was interested in the minerals covered by Tarragon's lease - Maxx pro­posed a farmout agreement but needed to check Tarragon's title - Tarragon allowed Maxx to examine its lease - The lease turned out to be void because it offended the rule against perpetuities - Maxx was then granted a mineral lease by Taylor - However, Tarragon had anticipated that if there were any problems with the title, Maxx would join with Tarragon in seeking a resolution - Tarragon sued Maxx for breach of confidence - The Saskatchewan Court of Queen's Bench allowed the action where the information disclosed by Tarra­gon was confidential, was communicated in confidence and was misused by Maxx - The court declared a trust with an ac­count­ing and an award for damages - See para­graphs 14 to 18, 62 to 70.

Equity - Topic 3904

Fiduciary or confidential relationships - Breach of confidence - Elements of action for - [See Equity - Topic 3902 ].

Equity - Topic 3905

Fiduciary or confidential relationships - Breach of confidence - Remedies - Dam­ages - [See Equity - Topic 3902 ].

Equity - Topic 3907

Fiduciary or confidential relationships - Breach of confidence - Remedies - Account of profits - [See Equity - Topic 3902 ].

Perpetuities - Topic 501

Rule against perpetuities - General prin­ciples - General - The Saskatchewan Court of Queen's Bench discussed the law per­taining to the rule against perpetuities and its application - See paragraphs 19 to 29.

Perpetuities - Topic 503

Rule against perpetuities - General prin­ciples - Purpose of rule - The Saskatchewan Court of Queen's Bench stated: "The rule against perpetuities is grounded in public policy and seeks to avoid attempts to tie up land for unduly long periods of time" - The court declined to abolish the rule or suspend its operation as to oil and gas leases or even just in respect of the specific lease that was judi­cially challenged here - See paragraphs 50 to 56.

Perpetuities - Topic 708

Rule against perpetuities - Application of rule in general - Contingent interests - In 1949, a landowner granted a drilling lease to Imperial Oil Ltd. - In 1950, the same landowner granted a mineral lease to Free­holders Oil Co. in the following terms: "Upon and until the event of the termina­tion, cancellation, avoidance or expiration of the said drilling lease ... the grantor doth hereby grant and lease unto the grantee all the mines, minerals and mineral rights ... to have and to enjoy for a term of ninety-nine (99) years from the date here­of ..." - The Saskatchewan Court of Queen's Bench held that the 1950 lease created a future or contingent interest in the minerals located within the landowner's lands and declared it void because it offended the rule against perpetuities - See paragraphs 35 to 49, 70.

Trusts - Topic 2308

Constructive trusts - General principles - Circumstances when imposed - [See Equity - Topic 3902 ].

Trusts - Topic 2344

Constructive trusts - Basis for imposition - Breach of confidence or fiduciary rela­tionship - [See Equity - Topic 3902 ].

Cases Noticed:

Lasby Estate, Re, [1985] 1 W.W.R. 489; 37 Sask.R. 193 (Q.B.), refd to. [para. 24].

British Columbia Hydro & Power Author­ity v. Gregory Manufacturing Ltd. et al. (1978), 93 D.L.R.(3d) 503 (B.C.S.C.), consd. [para. 25].

Wells v. Blain et al., [1927] 1 D.L.R. 687 (Sask. C.A.), refd to. [para. 25].

Wardle v. Manitoba Farm Loans Associ­ation (1954), 13 W.W.R.(N.S.) 49 (Man. C.A.), refd to. [para. 25].

Peveto v. Starkey (1982), 645 S.W.2d 770 (Texas S.C.), consd. [para. 26].

Saskatchewan Minerals v. Keyes, [1972] S.C.R. 703, refd to. [para. 36].

Canco Oil and Gas Ltd. v. Saskatchewan, [1991] 4 W.W.R. 316; 89 Sask.R. 37 (Sask. Q.B.), refd to. [para. 36].

Scurry-Rainbow Oil Ltd. et al. v. Gallo­way Estate, [1993] 4 W.W.R. 454; 138 A.R. 321 (Q.B.), refd to. [para. 36].

Govier, Deceased, Re (1950), 66 T.L.R. 1042, refd to. [para. 41].

Irving Industries (Irving Wire Products Division) Ltd. et al. v. Canadian Long Island Petroleums Ltd. and Sadim Oil & Gas Co., [1975] 2 S.C.R. 715; 3 N.R. 430, consd. [para. 50].

Duke of Norfolk's Case, Re (1682), 3 Chan. Cas. 1; 22 E.R. (Chan.) 931, refd to. [para. 51].

Porto Seguro Companhia De Seguros Gerais v. Belcan S.A. et al., [1997] 3 S.C.R. 1278; 220 N.R. 321, consd. [para. 51].

Canadian Export Gas & Oil Ltd. v. Flegal and Flegal, [1978] 1 W.W.R. 185; 9 A.R. 105 (T.D.), refd to. [para. 58].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14; 35 E.T.R. 1; 44 B.L.R. 1, appld. [para. 62].

Authors and Works Noticed:

Anger and Honsberger, The Law of Real Property (2nd Ed. 1985), pp. 354, 364 [para. 24]; 435, 441 [para. 21]; 466 [para. 23].

Black's Law Dictionary (5th Ed. 1979) [paras. 39, 57].

Halsbury's Laws of England (2nd Ed. 1940), vol. 10, p. 258, s. 324 [para. 25].

Morris and Leach, The Rule Against Per­petuities (2nd Ed. 1962), p. 1 [para. 21].

Random House Dictionary of the English Language (2nd Ed. 1987) [para. 38].

Saskatchewan, Law Reform Commission, Report (June 3, 1987), generally [para. 52].

Shorter Oxford English Dictionary (3rd Ed. 1944) (1987 Reissue) [para. 38].

Simes, Lewis M., Handbook of the Law of Future Interests (2nd Ed. 1966), p. 186 [para. 24].

Webster's Third New International Dic­tionary (1964) [para. 39].

Ziff, Bruce, Principles of Property Law (1993), p. 174 [para. 24].

Counsel:

J.S. Ehmann and K.D. Boyd, for the plain­tiffs;

B.J. Scherman and D.G. Gerecke, for the defendants.

This action was heard by Gerein, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Regina, who delivered the following judgment on August 19, 1998.