Telford v. Holt, (1987) 78 N.R. 321 (SCC)

JudgeDickson, C.J.C., Estey, McIntyre, Wilson and Le Dain, JJ.
CourtSupreme Court (Canada)
Case DateSeptember 17, 1987
JurisdictionCanada (Federal)
Citations(1987), 78 N.R. 321 (SCC);78 NR 321;54 Alta LR (2d) 193;[1987] SCJ No 53 (QL);41 DLR (4th) 385;[1987] CarswellAlta 188;81 AR 385;21 CPC (2d) 1;[1987] 6 WWR 385;1987 CanLII 18 (SCC);JE 87-1005;[1987] 2 SCR 193;[1987] ACS no 53;46 RPR 234;37 BLR 241

Telford v. Holt (1987), 78 N.R. 321 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

.........................

Richard K. Telford and Margaret S. Telford v. Isaac B. Holt and Edith May Holt

Indexed As: Telford v. Holt

Supreme Court of Canada

Dickson, C.J.C., Estey, McIntyre, Wilson and Le Dain, JJ.

September 17, 1987.

Summary:

The Telfords and Canadian Stanley swapped equally valued parcels of land. Telford was to pay $115,000.00 plus a $150,000.00 mortgage; Canadian Stanley was to pay $165,000.00 plus a $100,000.00 mortgage. Each mortgage required the payment of $50,000.00 plus interest on July 31, 1981 and January 1, 1982. The Telford mortgage required the additional payment of $50,000.00 plus interest on January 31, 1981. On September 26, 1980, Canadian Stanley assigned the Telford mortgage to the Holts, without notice to the Telfords. The Telfords were unsuccessful in tendering the January 31, 1981 payment. In March 1981, the Holts commenced an action for the overdue payment plus the remaining two payments, invoking the acceleration clause in the Telford mortgage. The action was the Telfords' first notice of the assignment. The Telfords counterclaimed for a discharge of the mortgage upon payment of the January 31, 1981 payment, claiming the final two payments under each mortgage should be set off against each other.

The Alberta Court of Queen's Bench allowed the Holts' action and dismissed the Telford's counter-claim. The trial judge held that there was no agreed or statutory right to set- off, where s. 41(1) of the Law of Property Act precluded any enforceable debt against the Telfords. The Telfords appealed.

The Alberta Court of Appeal, Kerans, J.A., dissenting, in a judgment reported, [1985] 4 W.W.R. 573; 37 Alta. L.R. 399, dismissed the appeal. The court held that set-off was not available where the debt owed by the Telfords under the agreement for sale was unenforceable under s. 41(1) of the Law of Property Act. The Telfords appealed.

The Supreme Court of Canada allowed the appeal. The court agreed that there was no agreement to set-off and no set-off at law, because the assignment of the mortgage destroyed the required mutuality of the debts. However, the court held that the Telfords were entitled to set-off in equity, because the debts arose out of closely connected contracts. The court also stated that s. 41(1) of the Law of Property Act did not make the Telfords' debt unenforceable; s. 41(1) merely precluded one type of remedy (personal judgment on the covenant).

Mortgages - Topic 5405

Mortgage actions - Action on the covenant - Prohibition against - Law of Property Act, R.S.A. 1980, c. L-8, s. 41(1) - Section 41(1) precluded an action on the personal covenant against a personal mortgagor - The Supreme Court of Canada stated that "section 41 does not create an unenforceable debt. Section 41 does not extinguish or satisfy the debt. It merely precludes the remedy by way of a personal judgment against the mortgagor on the covenant. The mortgagee may still pursue the remedy of foreclosure" - See paragraph 40.

Practice - Topic 1845

Pleadings - Counter-claim and set-off - Set-off - Mutuality - Requirement of - The Telfords and Canadian swapped lands of equal value - The Telfords were paid $165,000. and were given back a $100,000. mortgage - Canadian was paid $115,000 and was given back a $150,000 mortgage - Both mortgages require payment of $50,000 plus interest on July 31, 1981 and January 31, 1982 - The additional $50,000 under the Telford mortgage was due on January 31, 1981 - Canadian assigned the Telford mortgage to the Holts without notice to the Telfords - When the Telfords did not make the January 31, 1981 payment, the Holts sued for the entire $150,000 owing under the mortgage pursuant to the acceleration clause - The Telfords counter-claimed for a discharge of the mortgage upon payment of the $50,000 plus interest, claiming that the remaining two payments under both mortgages, identical as to amount and time, should be set-off against each other - The Supreme Court of Canada affirmed that there could be no set-off at law, because the assignment of the mortgage debt destroyed the required mutuality of the two debts - See paragraphs 22 to 25.

Practice - Topic 1846

Pleadings - Counter-claim and setoff - Set-off - Legal set-off v. equitable set-off - The Supreme Court of Canada stated that statutory set-off, or set-off at law, required that both obligations be debts and that there be mutuality of debts - Equitable set-off was available where there was a claim for a liquidated or unliquidated sum, where there has been an assignment and where there was no mutuality of debts - See paragraphs 22 to 26.

Practice - Topic 1850

Pleadings - Counter-claim and setoff - Set-off - Equitable set-off - Against assignee of debt - The Telfords and Canadian swapped lands of equal value - The Telfords were paid $165,000 and were given back a $100,000 mortgage - Canadian was paid $115,000 and was given back a $150,000 mortgage - Both mortgages required payment of $50,000 plus interest on July 31, 1981 and January 31, 1982 - The additional $50,000 under the Telford mortgage was due on January 31, 1981 - Canadian assigned the Telford mortgage to the Holts without notice to the Telfords - When the Telfords did not make the January 31, 1981 payment, the Holts sued for the entire $150,000 owing under the mortgage pursuant to the acceleration clause - The Telfords counter-claimed for a discharge of the mortgage upon payment of the $50,000 plus interest, claiming that the remaining two payments under both mortgages, identical as to amount and time, should be set-off against each other - The Supreme Court of Canada held that equitable set-off was available - The court stated that a debt arising out of the same contract or closely inter-related contracts may be set-off against the assignee even if the debt accrues due after the notice of the assignment - The court held that the two mortgage debts were closely connected and met the requirements for an equitable set-off - See paragraphs 26 to 37.

Cases Noticed:

Renner v. Racz, [1972] 1 W.W.R. 109, refd to. [para. 16].

Edmonton Airport Hotel Co. v. Credit Foncier Franco-Canadian, [1965] S.C.R. 441, dist. [para. 17].

Freeman v. Lomas (1851), 9 Hare 109, refd to. [para. 19].

Atlantic Acceptance Corp. v. Burns & Dutton Construction (1962) Ltd.. [1971] 1 W.W.R. 84 (Alta. C.A.), refd to. [para. 23].

C.I.B.C. v. Tuckerr Indust Inc., [1983] 5 W.W.R. 602 (B.C.C.A.), refd to. [para. 24].

Royal Trust v. Holden (1915), 22 D.L.R. 660 (B.C.C.A.), refd to. [para. 25].

Coba Industries Ltd. v. Millie's Holdings (Canada) Ltd. and Tsang, [1985] 6 W.W.R. 14 (B.C.C.A.), refd to. [para. 25].

Aboussafy v. Abacus Cities Ltd., [1981] 4 W.W.R. 660; 29 A.R. 607 (C.A.), refd. to [para. 26].

Watson v. Mid Wales Railway Co. (1867), L.R. 2 C.P. 593, consd. [para. 27].

Smith v. Parkes (1852), 16 Beav. 115, refd to. [para. 27].

Newfoundland (Government of) v. Newfoundland Railway Co. (1888), 13 App. Cas. 199 (P.C.), appld. [para. 28].

In re Pintp Leite and Nephews, [1929] 1 Ch. 221, consd. [para. 29].

Business Computers Ltd. v. Anglo-African Leasing Ltd., [1977] 1 W.L.R. 578 (Ch. D.), consd. [para. 30].

Canadian Admiral Corp. v. L.F. Dommerich & Co., [1964] S.C.R. 238, consd. [para. 31].

Hanak v. Green, [1958] 2 Q.B. 9; [1958] 2 W.L.R. 755; [1958] 2 All E.R. 141, refd to. [para. 35].

Statutes Noticed:

Land Titles Act, R.S.A. 1980, c. L-5, sect. 150(1), sect. 150(2) [para. 37].

Law of Property Act, R.S.A. 1980, c. L-8, sect. 41(1), sect. 43(1) [para. 38].

Insolvent Debtors Relief Act (Imp.), 2 Geo. 2, c. 22 [para. 22].

Set-off Act (Imp.), 8 Geo. 2, c. 24 [para. 22].

Rules of Court (Alta.), rule 93 [para. 23].

Supreme Court of Judicature Act, Rules promulgated under (U.K. 1873), 36 and 37 Vict., c. 66, sect. 199.3 [para. 22].

Authors and Works Noticed:

Halsbury's Laws of England (4th Ed.), vol. 42, para. 421 [para. 24].

Counsel:

D.E. Jermyn, for the appellants;

James P. Low, for the respondents.

This appeal was heard on February 27 and March 2, 1987, before Dickson, C.J.C., Estey, McIntyre, Wilson and Le Dain, JJ., of the Supreme Court of Canada.

On September 17, 1987, Wilson, J., delivered the following judgment for the Supreme Court of Canada.

To continue reading

Request your trial
387 practice notes
  • Chandos Construction Ltd. v. Deloitte Restructuring Inc., 2020 SCC 25
    • Canada
    • Supreme Court (Canada)
    • October 2, 2020
    ...Watkins v. Olafson, [1989] 2 S.C.R. 750; Borland’s Trustee v. Steel Brothers & Co., Limited, [1901] 1 Ch. 279; Holt v. Telford, [1987] 2 S.C.R. 193. By Côté J. (dissenting) A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12, [2014] 1 S.C.R. 177; Sattva Capital Corp. v. Creston ......
  • Court Of Appeal Summaries (January 25 ' 29, 2021)
    • Canada
    • Mondaq Canada
    • February 2, 2021
    ...ONCA 197, Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, Telford v. Holt, [1987] 2 S.C.R. 193, Caisse populaire Desjardins de l'Est de Drummond v. Canada, 2009 SCC 29 facts: Pursuant to an asset purchase agreement (the "APA") date......
  • Court Of Appeal Summaries (July 4 ' 8, 2022)
    • Canada
    • Mondaq Canada
    • July 12, 2022
    ...[1985] 1 S.C.R. 662 (S.C.C.), Singularis Holdings Ltd. v. Daiwa Capital Markets Europe Ltd., [2019] UKSC 50, Holt v. Telford, [1987] 2 S.C.R. 193, Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., 2020 BCCA 130, Transamerica Life Insurance Co. of Canada v. Canada Life Assur......
  • Court Of Appeal Summaries (August 30 ' September 3, 2021)
    • Canada
    • Mondaq Canada
    • September 7, 2021
    ...Co., [1970] O.J. No. 1534 (C.A.), Univar Canada Ltd. v. Pax-All Manufacturing Inc., 2008 CanLII 44741 (Ont. S.C.),Telford v. Holt [(1987), 41 D.L.R. (4th) 385, Algoma Steel Inc. v. Union Gas Ltd., [2003] O.J. No. 71 (C.A.), 1324789 Ontario Inc. v. Marshall, 2019 ONSC 517, Heliotrope v. 1324......
  • Request a trial to view additional results
356 cases
  • Chandos Construction Ltd. v. Deloitte Restructuring Inc., 2020 SCC 25
    • Canada
    • Supreme Court (Canada)
    • October 2, 2020
    ...Watkins v. Olafson, [1989] 2 S.C.R. 750; Borland’s Trustee v. Steel Brothers & Co., Limited, [1901] 1 Ch. 279; Holt v. Telford, [1987] 2 S.C.R. 193. By Côté J. (dissenting) A.I. Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12, [2014] 1 S.C.R. 177; Sattva Capital Corp. v. Creston ......
  • Coulombe v. Sabatier, [2006] A.R. Uned. 543
    • Canada
    • Court of Queen's Bench of Alberta (Canada)
    • August 17, 2006
    ...2001 ABQB 914). 70. Holt (Isaac B.) et al. v. Telford (Richard K.) et al. , [September 17, 1987] 2 S.C.R. 193, 54 Alta. L.R. (2nd) 193, 78 N.R. 321, 21 C.P.C. (2nd) 1, [1987] 6 W.W.R. 385, 46 R.P.R. 234, 81 A.R. 385, 41 D.L.R. (4th) 385, 37 B.L.R. 241, [1987] S.C.J. No. 53, 1987 CarswellAlt......
  • Husky Oil Operations Ltd. v. Minister of National Revenue et al., (1995) 188 N.R. 1 (SCC)
    • Canada
    • Canada (Federal) Supreme Court (Canada)
    • October 19, 1995
    ...to. [para. 158]. Vapor Canada Ltd. et al. v. MacDonald, [1977] 2 S.C.R. 134 ; 7 N.R. 477 , refd to. [para. 167]. Telford v. Holt, [1987] 2 S.C.R. 193; 78 N.R. 321 ; 81 A.R. 385 ; 54 Alta. L.R.(2d) 193 ; 21 C.P.C.(2d) 1 ; 46 R.P.R. 234 ; 41 D.L.R.(4th) 385 ; 37 B.L.R. 241 , refd to.......
  • Wilson v. Fotsch,
    • Canada
    • Court of Appeal (British Columbia)
    • May 10, 2010
    ...refd to. [para. 58]. Shannon v. Gidden (1999), 129 B.C.A.C. 257; 210 W.A.C. 257; 1999 BCCA 539, refd to. [para. 66]. Telford v. Holt, [1987] 2 S.C.R. 193; 78 N.R. 321; 81 A.R. 385; [1987] 6 W.W.R. 383; 54 Alta. L.R.(2d) 193; 21 C.P.C.(2d) 1; 46 R.P.R. 234; 41 D.L.R.(4th) 385; 37 B.L.R. 241,......
  • Request a trial to view additional results
8 firm's commentaries
  • Court Of Appeal Summaries (January 25 ' 29, 2021)
    • Canada
    • Mondaq Canada
    • February 2, 2021
    ...ONCA 197, Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, BCE Inc. v. 1976 Debentureholders, 2008 SCC 69, Telford v. Holt, [1987] 2 S.C.R. 193, Caisse populaire Desjardins de l'Est de Drummond v. Canada, 2009 SCC 29 facts: Pursuant to an asset purchase agreement (the "APA") date......
  • Court Of Appeal Summaries (July 4 ' 8, 2022)
    • Canada
    • Mondaq Canada
    • July 12, 2022
    ...[1985] 1 S.C.R. 662 (S.C.C.), Singularis Holdings Ltd. v. Daiwa Capital Markets Europe Ltd., [2019] UKSC 50, Holt v. Telford, [1987] 2 S.C.R. 193, Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., 2020 BCCA 130, Transamerica Life Insurance Co. of Canada v. Canada Life Assur......
  • Court Of Appeal Summaries (August 30 ' September 3, 2021)
    • Canada
    • Mondaq Canada
    • September 7, 2021
    ...Co., [1970] O.J. No. 1534 (C.A.), Univar Canada Ltd. v. Pax-All Manufacturing Inc., 2008 CanLII 44741 (Ont. S.C.),Telford v. Holt [(1987), 41 D.L.R. (4th) 385, Algoma Steel Inc. v. Union Gas Ltd., [2003] O.J. No. 71 (C.A.), 1324789 Ontario Inc. v. Marshall, 2019 ONSC 517, Heliotrope v. 1324......
  • Court Of Appeal Summaries (August 30 ' September 3, 2021)
    • Canada
    • Mondaq Canada
    • September 7, 2021
    ...Co., [1970] O.J. No. 1534 (C.A.), Univar Canada Ltd. v. Pax-All Manufacturing Inc., 2008 CanLII 44741 (Ont. S.C.),Telford v. Holt [(1987), 41 D.L.R. (4th) 385, Algoma Steel Inc. v. Union Gas Ltd., [2003] O.J. No. 71 (C.A.), 1324789 Ontario Inc. v. Marshall, 2019 ONSC 517, Heliotrope v. 1324......
  • Request a trial to view additional results
14 books & journal articles
  • Table of cases
    • Canada
    • Irwin Books Bankruptcy and Insolvency Law. Second Edition Part Four
    • June 19, 2015
    ...149 Ted Leroy Trucking Ltd v Century Services Inc, 2010 BCCA 223 .................... 149 Telford v Holt, [1987] 2 SCR 193, 41 DLR (4th) 385, [1987] SCJ No 53 .............101 Temple City Housing Inc, Re (2007), 42 CBR (5th) 274, [2008] 2 CTC 61, 2007 CarswellAlta 1806 (QB) ......................
  • Property of the Bankrupt
    • Canada
    • Irwin Books Bankruptcy and Insolvency Law. Second Edition Part One
    • June 19, 2015
    ...Ltd (1970), 14 CBR (NS) 301 (Ont HCJ). 107 Northern Electric Co v Auto Service Co (1961), 2 CBR (NS) 218 (Nfld SC). 108 Telford v Holt , [1987] 2 SCR 193. BA NKRUPTCY AND INSOLVENCY LAW 102 to assert equitable set-off, it is neither necessary nor sufficient that the two claims arise out of ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT