Ontario Civil


Admiralty

SHIPS
Defendant’s actions in reselling vessel to third party was high-handed act

Plaintiff wished to purchase boat from defendants. Offer to purchase was signed by plaintiff and personal defendant who used his own initials without indicating he was acting on behalf of corporate defendant. Offer was conditional on plaintiff being satisfied with inspection and sea trial. Personal defendant had same rights as regards plaintiff’s trade-in vessel. Plaintiff completed inspection and provided acknowledgement of acceptance of vessel. Personal defendant did not conduct inspection or provide acknowledgement. Personal defendant indicated he did not wish to proceed with sale because he was unable to obtain necessary financing. Personal defendant asserted value of trade-in vessel was far less than amount indicated in offer to purchase. Purchase did not close. Vessel was sold to another purchaser for better price two days prior to personal defendant signing rejection of trade-in vessel. Plaintiff sold his trade-in vessel and found comparable vessel to purchase that cost much more. Plaintiff asserted defendants breached contract by failing to conduct inspection and by failing to close purchase and sale due to financing difficulties although such was not condition of contract. Plaintiff asserted that personal defendant signed contracts and not corporate defendant and personal defendant was liable for damages. Personal defendant was owner of corporate defendant. Plaintiff was entitled to damages of $212,536 and to punitive damages of $25,000. There was binding enforceable contract that was breached by defendants. Parties agreed to their bargain and there was offer, acceptance and consideration. Personal defendant did not satisfy condition of inspecting trade-in vessel and to act in good faith in so doing. Contract was not subject to defendant’s financing needs and such provision could not be now imported or implied into contract. Values of vessels were already agreed upon in written contract and only inspection remained. Defendants failed to act pursuant to contract, failed to satisfy condition and did not act reasonably or in good faith. Plaintiff took reasonable steps to mitigate damages. Defendants’ actions in reselling vessel to third party prior to advising plaintiff that contract in defendants’ mind was terminated was high-handed act.

Proulx v. Canadian Cove Inc. (Nov. 3, 2014, Ont. S.C.J., Carole J. Brown J., File No. CV-11-434847) 246 A.C.W.S. (3d) 740.

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