T-2736-83
Jacques Beauchamp (Plaintiff)
v.
Coastal Corporation and the Ship Wayward Prin
cess (Defendants)
Trial Division, Strayer J.—Toronto, March 19;
Ottawa, March 26, 1984.
Practice — Pursuant to contract to buy defendant ship,
plaintiff tendered purchase price — Defendant corporation
unable or unwilling to complete transaction — Plaintiff claim
ing specific performance or damages — Ship arrested —
Defendants filing confession of judgment in favour of plaintiff
for specific performance — Defendants tendering documents to
complete sale, but plaintiff not having funds — Plaintiff now
moving for judgment for damages and for continued arrest of
ship — Plaintiff opposing judgment for specific performance
and insisting on right to elect for damages — Plaintiff entitled
to plead in alternative — Plaintiff entitled to elect for dam
ages if specific performance not carried out — Defendants'
application for judgment for specific performance dismissed
— Plaintiff cannot elect for damages and later seek specific
performance because election for damages amounting to
repudiation of contract which cannot later be revived to sustain
claim for specific performance — Plaintiff's present applica
tion for judgment for damages indicating repudiation of con
tract — Plaintiff not entitled to judgment for damages because
defendants filed confession of judgment for specific perform
ance — R. 405 providing defendant may enter confession of
judgment for part of plaintiff's claim — R. 405(3) providing
confession not evidence against party making it — Trial of
action required and arrest continuing automatically — Feder
al Court Rules, C.R.C., c. 663, R. 405(1),(3).
Jurisdiction — Federal Court Trial Division — Maritime
law — Defendants arguing action for damages for breach of
contract for sale of ship not within Court's jurisdiction over
admiralty matters — Action properly under s. 22(2)(a) Federal
Court Act giving Trial Division jurisdiction with respect to any
claim arising out of claim as to title, possession or ownership
of ship — Any matter described in s. 22 involves maritime law
which is law of Canada and within Federal Court's jurisdiction
— Action also matter necessarily incidental to exercise of
Parliament's jurisdiction over navigation and shipping and
thus proper subject of law of Canada — Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 22(2)(a).
CASES JUDICIALLY CONSIDERED
REFERRED TO:
Antares Shipping Corporation v. The Ship "Capricorn",
et al., [1980] 1 S.C.R. 553; (1979), 111 D.L.R. (3d) 289;
Tropwood A.G. et al. v. Atlantic Lines & Navigation
Company, Inc., [1979] 2 S.C.R. 157; Dobson v. Winton
and Robbins Limited, [1959] S.C.R. 775; Widrig v.
Strazer et al., [1964] S.C.R. 376; Johnson et al. v.
Agnew, [1980] A.C. 367 (H.L.).
COUNSEL:
D. Thomas H. Bell for plaintiff.
R. Geoffrey Newbury for defendants.
SOLICITORS:
Wright & McTaggart, Toronto, for plaintiff.
R. Geoffrey Newbury, Toronto, for defend
ants.
The following are the reasons for order ren
dered in English by
STRAYER J.:
Facts
This is an application by the plaintiff for dam
ages, costs, a reference to determine damages, and
other incidental relief.
The parties entered into a contract on Novem-
ber 8, 1983, whereby the plaintiff was to purchase,
for the sum of $475,000, the ship Wayward Prin
cess. The closing date was November 16, 1983. On
that date the plaintiff tendered the purchase price
but the defendant Corporation was unable or
unwilling to complete the transaction at that time.
The next day, November 17, 1983, the plaintiff
commenced this action seeking specific perform
ance of the contract or, in the alternative, damages
for breach of contract in the amount of $600,000
with interest from November 16.
On November 18 the ship was arrested in
Toronto and so remains.
On February 2, 1984 the plaintiff served the
defendants with a notice of application to the
Court for a trial date. The same day the plaintiff's
solicitor advised the defendants' solicitor that the
plaintiff would no longer proceed with his claim
for specific performance. The defendants on Feb-
ruary 15 applied to the Court for an order releas
ing the Wayward Princess and striking out para
graph 10(a) of the statement of claim wherein the
plaintiff had sought specific performance. This
motion was adjourned until February 27, appar
ently in order for the plaintiff's solicitor to seek
instructions. When the motion was heard by Reed
J. the plaintiff took the position that he now
wished to preserve his claim for specific perform
ance. His counsel strongly resisted the striking out
of the claim for this relief and, on February 28,
1984 Reed J. dismissed the motion to strike and
for release of the ship.
Following this decision the defendants on March
7 filed a confession of judgment "in favour of the
Plaintiff, Jacques Beauchamp, for specific
performance, as claimed in the Statement of
Claim". The same day they filed a notice of
motion for judgment to be entered against them
selves, in favour of the plaintiff, for specific
performance. Their solicitors that day also advised
the plaintiff's solicitors that they would on March
9 tender to the latter the documents required to
complete the purchase and sale. Such documents
were presented on March 9 but apparently the
plaintiffs solicitors did not have funds from their
client to complete the sale. No evidence was pre
sented to me to show that the tender was other
than complete as to its documentation.
The plaintiff in turn on March 15 launched this
motion for a judgment in his favour for damages
as claimed in paragraph 10(b) of the statement of
claim, and for the continued arrest of the ship or
some equivalent security. Both motions were heard
together by me on March 19. At that time the
plaintiff opposed judgment being entered in his
favour for specific performance and insisted
instead on his right to elect for damages. The
defendants contended that the plaintiff was now
rejecting specific performance and had elected for
a remedy which the Federal Court has no jurisdic
tion to give, damages for breach of contract of sale
of a ship not being within admiralty jurisdiction.
I will deal at this stage with the issues concern
ing the rights of action that are available as this
may be relevant as to the continuing validity of the
arrest.
Conclusions
I have reached the following conclusions.
1. I accept that the plaintiff is entitled to plead
in the alternative as he has done, seeking either
specific performance or damages. See Dobson v.
Winton and Robbins Limited, [1959] S.C.R.
775; Widrig v. Strazer et al., [1964] S.C.R.
376; Johnson et al. v. Agnew, [1980] A.C. 367
(H.L.).
2. I also accept that plaintiff is entitled, though
he may have pursued specific performance even
as far as obtaining judgment for that remedy, to
elect later instead for damages if specific
performance has in fact not been carried out.
(See the cases cited above.) The election is his
and a defendant cannot force him to choose
specific performance alone as the defendants
have tried to do here. For that reason I am
dismissing the defendants' application that a
judgment for specific performance be entered
against them.
3. I have found no authority, however, for the
converse proposition that a plaintiff may first
elect damages and then later seek specific
performance, and I do not think it is sound law.
The reason one may first elect specific perform
ance and later elect damages is that specific
performance is based on the continued existence
of the contract. So specific performance having
failed, the plaintiff can at that time repudiate
the contract and seek damages instead. But if he
has first clearly elected for damages, in my view
he cannot later claim specific performance
because the election for damages amounts to a
repudiation of the contract which cannot later
be revived to sustain a claim for specific
performance. As explained in Sharpe, Injunc-
tions and Specific Performance (1983), para
graphs 776-777:
Where the promisee decides to claim damages, he is said
to "accept the breach". His election is to treat the contract
as having been broken at the point of breach and in effect, to
discharge the promisor from any further contractual obliga
tion other than to pay damages.
The accepted position is that subsequent insistence upon
specific performance is inconsistent with the acceptance of
the promisor's breach. The effect of acceptance, or the
assertion of a damages claim, is to discharge both parties
from further performance, and hence, specific performance
is no longer possible.
I have concluded therefore that while the
defendants cannot force the plaintiff here to
accept specific performance, the plaintiff has by
opposing a judgment in his favour for specific
performance and by applying at the same time
for judgment for damages has in the clearest
possible way indicated that he has chosen to
treat the contract as repudiated by a fundamen
tal breach.
The only remedy left to him is damages. Even
if this were not the position at law, this would be
an obvious case for the equitable discretion to be
exercised against a grant of specific perform
ance.
4. While the plaintiff contends that he is now
entitled to a judgment for damages because of
the confession of judgment filed by the defend
ants on March 7, I do not agree. The confession
of judgment was with respect to an order for
specific performance. Rule 405 [Federal Court
Rules, C.R.C., c. 663] says that a defendant
may enter a confession of judgment "for a part
or the whole of the plaintiff's claim". The
defendants here have offered a confession of
judgment of the claim in paragraph 10(a) of the
statement of claim, but not of that in paragraph
10(b). The plaintiff has not accepted it. By Rule
405(3) the confession is not evidence against the
party making it. Therefore the plaintiff cannot
rely on it in any way in order to obtain a
judgment for damages.
5. I have concluded that the plaintiff can, how
ever, proceed with his action in this Court for
damages. It was contended that by virtue of the
Federal Court Act [R.S.C. 1970 (2nd Supp.), c.
10] and the Constitution this Court has no
jurisdiction to deal with such a claim for breach
of contract for the sale of a ship. Unfortunately
this aspect of the matter was not argued at
length or exhaustively. I have concluded that
such a claim comes within paragraph 22(2)(a)
of the Federal Court Act which says that the
Trial Division has jurisdiction
22....
(2) ... with respect to any claim or question arising out of
one or more of the following:
(a) any claim as to title, possession or ownership of a ship
... or with respect to the proceeds of sale of a ship .. .
When this Court can order the arrest of a ship
because of a dispute over a contract for pur
chase of the ship, and can order specific
performance of such a contract (see e.g.,
Antares Shipping Corporation v. The Ship
"Capricorn", et al. [[1980] 1 S.C.R. 553];
(1979), 111 D.L.R. (3d) 289, it surely can give
an alternative or additional remedy with respect
to the same parties, the same ship, the same
contract, and the same breach. In the words of
paragraph 22(2)(a) of the Act, this must be a
"claim or question arising out of" a "claim as to
title, possession, or ownership". In general, it is
settled law that any matter described in
section 22 of the Federal Court Act involves
maritime law which is a law of Canada and thus
a basis for the exercise of jurisdiction of this
Court. (See the Antares case supra; Tropwood
A.G. et al. v. Atlantic Lines & Navigation Com
pany, Inc., [1979] 2 S.C.R. 157.) This is also a
matter necessarily incidental to the exercise of
Parliament's jurisdiction over navigation and
shipping and is thus a proper subject of a "law
of Canada". Any other conclusion would lead to
great inconvenience which, if not unknown in
our constitutional jurisprudence, should never
theless be avoided if possible.
6. Judgment therefore cannot be obtained with
out a trial as matters now stand. The arrest will
automatically continue and it remains for the
parties to make such arrangements as they can
agree upon with respect thereto, or to come back
to the Court for a further order in that respect
after they have further considered their respec
tive positions.
7. Given the divided success in these motions
and the bizarre pattern of events that have led to
them, no costs should be awarded.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.