Wood et al. v. Advanced Systems Technology Inc. et al., (2007) 325 N.B.R.(2d) 123 (TD)

• Judge: Baird, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: October 03, 2007
• Jurisdiction: New Brunswick
• Citations: (2007), 325 N.B.R.(2d) 123 (TD);2008 NBQB 155

Wood v. Advanced Systems Tech. (2007), 325 N.B.R.(2d) 123 (TD);

    325 R.N.-B.(2e) 123; 836 A.P.R. 123

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Temp. Cite: [2008] N.B.R.(2d) TBEd. JA.017

Renvoi temp.: [2008] N.B.R.(2d) TBEd. JA.017

Terry Wood and Glacier Software Inc. (plaintiffs) v. Advanced Systems Technology Inc. (defendant) and David MacDonald (third party)

(2008 NBQB 155; 2008 NBBR 155)

Indexed As: Wood et al. v. Advanced Systems Technology Inc. et al.

Répertorié: Wood et al. v. Advanced Systems Technology Inc. et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Miramichi

Baird, J.

December 7, 2007.

Summary:

Résumé:

The plaintiffs sued the defendant for, inter alia, breach of contract. The plaintiffs alleged that the defendant made an oral agreement to purchase the corporate plaintiff. The defendant denied the claim and counterclaimed seeking indemnity from the individual plaintiff in the amount of $13,118.

The New Brunswick Court of Queen's Bench, Trial Division, dismissed the action and the counterclaim.

Contracts - Topic 1444

Formation of contract - Agreements which are not contracts - Agreements to agree - Wood and his software company (Glacier) sued the defendant for, inter alia, breach of contract - They alleged that the defendant made an oral agreement to purchase Glacier over the telephone - Soon after the call, Wood transferred all of Glacier's physical assets to a defendant including chairs, desks, the original copies of computer programs, etc. - The defendant immediately started modifying Glacier products - Wood signed an employment contract, a non-competition agreement on Glacier's behalf and later an indemnity agreement - The parties also entered into a Memorandum of Understanding (MOU) which stated that it was non-binding - The New Brunswick Court of Queen's Bench, Trial Division, dismissed the action - There was no enforceable contract between the parties - There was a "contract to contract" which was later frustrated when it was discovered that Glacier did not have the copyright to one of its products and had sold the other product in the United States without proper security features and in a defective condition - The completion of the deal was contingent on the defendant conducting due diligence - The parties contemplated that a formal written document would be drafted and signed - The MOU was non-binding and contingent - The doctrine or part performance did not apply as an agreement to purchase shares was not one of the types of contracts that the Statute of Frauds required to be reduced to writing - See paragraphs 67 to 115.

Contracts - Topic 1586

Formation of contract - Consent - Duress - Defence of - When available - Wood and his software company (Glacier) sued the defendant for, inter alia, breach of contract - They alleged that the defendant made an oral agreement to purchase Glacier over the telephone - The defendant denied the claim and counterclaimed seeking indemnity pursuant to an indemnity agreement signed by Wood - Wood argued that the indemnity agreement was invalid because he signed it under duress and undue influence - He alleged that, at that time, his company was run "into the ground", he had a lot of debt, and he felt that he had no choice but to sign the document - The New Brunswick Court of Queen's Bench, Trial Division, dismissed the action finding that there was no contract - The court held that the indemnity agreement was binding and that the claim of duress or undue influence was unsupported - The counterclaim was dismissed on other grounds - See paragraphs 127 to 134.

Contracts - Topic 8008

Statute of Frauds - Part performance - When available - [See Contracts - Topic 1444 ].

Fraud and Misrepresentation - Topic 603

Undue influence - General principles - What constitutes undue influence - [See Contracts - Topic 1586 ].

Contrats - Cote 1444

Formation du contrat - Ententes qui ne sont pas des contrats - Entente pour s'entendre - [Voir Contracts - Topic 1444 ].

Contrats - Cote 1586

Fomation du contrat - Consentement - Défense de contrainte - Conditions d'ouverture - [Voir Contracts - Topic 1586 ].

Contrats - Cote 8008

Loi relative aux preuves littérales - Exécution partielle - Applicabilité - [Voir Contracts - Topic 8008 ].

Fraude et assertion inexacte - Cote 603

Abus d'influence - Principes généraux - Éléments constitutifs - [Voir Fraud and Misrepresentation - Topic 603 ].

Cases Noticed:

Faryna v. Chorny, [1952] 2 D.L.R. 354; 1951 CarswellBC 133 (C.A.), refd to. [para. 84].

Singh et al. v. Bains, [2007] B.C.T.C. Uned. 834; 2007 CarswellBC 2845 (S.C.), refd to. [para. 85].

MacDonald v. Brighter Mechanical Ltd., 2006 CarswellBC 3526, refd to. [para. 85].

Pavecare Industries (1989) Ltd. et al. v. Blue Chip Investments Inc. et al. (2000), 230 N.B.R.(2d) 375; 593 A.P.R. 375 (C.A.), refd to. [para. 88].

MacInnes v. Leaman (1975), 12 N.B.R.(2d) 414; 10 A.P.R. 414 (C.A.), refd to. [para. 96].

Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69; 206 N.R. 299; 157 N.S.R.(2d) 81; 462 A.P.R. 81; 142 D.L.R.(4th) 230, refd to. [para. 97].

Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 53 O.A.C. 314; 79 D.L.R.(4th) 97 (C.A.), refd to. [para. 99].

Dominion Stores Ltd. v. United Trust Co. et al. (1973), 42 D.L.R.(3d) 523 (Ont. H.C.), [1977] 2 S.C.R. 915; 11 N.R. 97, refd to. [para. 100].

Winn v. Bull (1877), 7 Ch. D. 29, refd to. [para. 101].

Von Hatzfeldt-Wildenburg v. Alexander, [1912] 1 Ch. 284, refd to. [para. 102].

Baker v. Smith (2002), 207 N.S.R.(2d) 63; 649 A.P.R. 63 (C.A.), refd to. [para. 104].

Higgins v. Naugler et al. (1994), 133 N.S.R.(2d) 167; 380 A.P.R. 167 (S.C.), refd to. [para. 105].

Pride v. 1546300 Ontario Ltd. et al., [2006] O.T.C. Uned. E83; 2006 CarswellOnt 8772 (S.C.), refd to. [para. 115].

Bowlay Logging Ltd. v. Domtar Ltd. (1982), 37 B.C.L.R. 195; 135 D.L.R.(3d) 179 (C.A.), refd to. [para. 123].

Pacific Playground Holdings Ltd. v. Endeavor Developments Ltd. et al., [2002] B.C.T.C. 1491; 2002 BCSC 1491, refd to. [para. 125].

Great Lite Electric Ltd. v. VCI Controls Ltd. (1995), 158 N.B.R.(2d) 22; 406 A.P.R. 22 (C.A.), refd to. [para. 131].

Hosford v. Hosford (2002), 246 N.B.R.(2d) 108; 638 A.P.R. 108; 2002 CanLII 15934 (Fam. Div.), refd to. [para. 132].

Comeau v. Saint John Regional Hospital et al. (2001), 244 N.B.R.(2d) 201; 634 A.P.R. 201; 2001 NBCA 113, refd to. [para. 150].

Williams et al. v. Saint John (City), New Brunswick and Chubb Industries Ltd. (1985), 66 N.B.R.(2d) 10; 169 A.P.R. 10 (C.A.), refd to. [para. 151].

Bishop v. Carleton Co-operative Ltd. (1996), 176 N.B.R.(2d) 206; 447 A.P.R. 206; 21 C.C.E.L.(2d) 1 (C.A.), refd to. [para. 152].

Counsel:

Avocats:

Randy Maillet, for the plaintiffs;

Britt Dysart and Kelly McLaughlin, for the defendants.

This action and counterclaim was heard on September 18 to 21, 24 to 28, and October 3, 2007, before Baird, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Miramichi, who delivered the following judgment on December 7, 2007.