T-2736-83
Jacques Beauchamp (Plaintiff)
v.
Coastal Corporation and the Ship Wayward Prin
cess (Defendants)
Trial Division, Reed J.—Toronto, February 27
and 28, 1984.
Practice — Motion to strike pleadings — Motion for order
striking out portion of statement of claim seeking specific
performance and for order releasing ship from arrest —
Plaintiff indicating in writing intention to drop claim for
specific performance but to claim damages — Affidavit evi
dence that plaintiff now intending to pursue specific perform
ance claim — Defendants claiming plaintiff abandoned specif
ic performance claim and therefore Court without jurisdiction
over damages claim alone — Portion of statement of claim
should not be struck if uncertainty whether plaintiffs claim
for specific performance could succeed at trial — Issue wheth
er letter annulling plaintiff's claim for specific performance
not beyond doubt — Argument required on whether initial
election for one means of redress precluding subsequent change
of choice, in absence of material detriment to defendant arising
from change in position — Full examination of whether letter
alone constituting election required — Jurisdiction issue also
requiring full argument — Application dismissed — Federal
Court Rules, C.R.C., c. 663, RR. 406, 419 — Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 22(2)(a).
CASES JUDICIALLY CONSIDERED
REFERRED TO:
Tanenbaum v. Sears, [1972] S.C.R. 67; Dobson v.
Winton & Robbins Ltd., [1959] S.C.R. 775; Visipak Ltd.
v. Deerfield Laminations Ltd., [1973] 1 O.R. 97 (H.C.);
Rothschild et al. v. Custodian of Enemy Property,
[1945] Ex.C.R. 44; Johnson v. Agnew, [1980] A.C. 367
(H.L.); Antares Shipping Corporation v. The Ship
"Capricorn" et al., [1980] 1 S.C.R. 553.
COUNSEL:
T. Bell for plaintiff.
R. G. Newbury for defendants.
SOLICITORS:
T. Bell and Wright & McTaggart, Toronto,
for plaintiff.
R. G. Newbury, Toronto, for defendants.
The following are the reasons for order ren
dered in English by
REED J.: This is a motion for an order striking
out paragraph 10(a) of the plaintiff's statement of
claim and for an order that the ship Wayward
Princess be released from arrest. The motion is
brought either under Rule 419 [Federal Court
Rules, C.R.C., c. 663] which provides for the
striking out of pleadings or, for an order under
Rule 406 stating that the plaintiff has discontinued
his action. I do not think Rule 406 applies in this
case since it does not seem to contemplate a
defendant moving to have a plaintiff's case
discontinued.
Paragraph 10(a) of the plaintiff's statement of
claim, dated November 17, 1983, reads:
The Plaintiff therefore claims:
(a) specific performance of the Agreement between the Plain
tiff and Coastal to sell the Ship to the Plaintiff, requiring
Coastal to furnish the Plaintiff with a legal Bill of Sale of the
Ship in registerable form, free and clear of all encumbrances,
upon payment being made into Court by the Plaintiff of the
purchase money less any amount required to discharge regis
tered encumbrances.
The main issue between the parties is whether
the plaintiff properly tendered, pursuant to the
agreement, in order to compel specific perform
ance of the agreement of purchase and sale. The
ship was subsequently put under warrant of arrest
pending determination of the ownership issue.
It is common ground that the ship in question,
Wayward Princess, is the only asset of the defend
ant and that the defendant is not in a financial
position to be able to post a bail bond to obtain
release of the ship.
The present application arises because of a letter
written to the defendants' solicitors, dated Febru-
ary 2, 1984 by John D. Gregory one of the plain
tiff's solicitors, part of which reads as follows:
Please note that the Plaintiff will not proceed with his claim
for specific performance but will ask the Court for damages
only. Since the person who was going to buy the ship from the
Plaintiff has cancelled his offer, the ship itself could not be of
use to the Plaintiff.
On the hearing of this motion an affidavit
signed by John D. Gregory was filed, in which he
stated:
On Thursday, the 23rd of February, 1984, I spoke by
telephone with Mr. Allan Brock, our instructing solicitor and
the corporate solicitor of the Plaintiff herein, at which time Mr.
Brock advised me and I verily believe:
(a) that he bas recently fully canvassed with the Plaintiff the
Plaintiff's options in respect of his claims for specific perform
ance and damages herein;
(b) that contrary to earlier advice and instructions from the
Plaintiff, he now wishes to pursue his claim for specific
performance of the subject agreement of purchase and sale of
the vessel "WAYWARD PRINCESS";
(c) that, accordingly, the plaintiff is and remains ready, willing
and able to perform his obligations pursuant to the subject
agreement of purchase and sale.
The crux of the defendant's claim is that para
graph 10(a) of the statement of claim should be
struck out because the plaintiff has abandoned his
claim for specific performance. Consequent upon
that he contends that this Court has lost jurisdic
tion since only the plaintiff's alternative claim for
damages would remain, a matter not within this
Court's admiralty jurisdiction and, therefore, the
ship Wayward Princess should be released from
arrest.
In support of his arguments that abandonment
has occurred and that in order to obtain specific
performance the plaintiff must at all times stand
ready and willing to perform the contract counsel
for the defendant cited the decisions in Tanen-
baum v. Sears, [1972] S.C.R. 67 and Dobson v.
Winton & Robbins Ltd., [1959] S.C.R. 775. In
addition he argued that the plaintiff's conduct was
analogous to an attempt to withdraw an admission
of liability found in pleadings. Refer Visipak Ltd.
v. Deerfield Laminations Ltd., [1973] 1 O.R. 97
(H.C.). He also argued that an analogy should be
drawn to the requirements of a Mareva injunction
to justify keeping the ship under arrest.
I do not think the argument by analogy to the
withdrawal of admissions made in pleadings or to
the requirements of a Mareva injunction are help
ful in this case.
I accept the argument made by counsel for the
plaintiff that if there is any uncertainty as to
whether the plaintiff's claim for specific perform
ance could succeed at trial then the relevant por
tion of the statement of claim should not be struck
out. In other words, disputed issues of law should
not be dealt with on a motion under Rule 419. See
Rothschild et al. v. Custodian of Enemy Property,
[1945] Ex.C.R. 44.
It remains to consider whether there is a disput
ed issue of law here or whether the action of the
plaintiff's solicitor in writing to the defendant as
described above so clearly and unequivocally
annuls any claim the plaintiff might make for
specific performance that the issue should not go
to trial.
On the basis of the authorities cited to me by
counsel for the plaintiff I do not think the issue is
so clearly beyond doubt. There is an issue of law
which should be fully canvassed at trial and not
dealt with in a summary fashion on an interlocuto
ry application such as this.
This flows from a number of considerations. In
the first place specific performance is an equitable
remedy and therefore a discretionary one. In the
second place, historically:
... specific performance could be awarded even after a
common law action had been commenced. To prevent multi
plicity of suit and possible double recovery, the practice was to
issue an injunction on the motion of the defendant restraining
the suit at law which had the effect of requiring the plaintiff to
elect. The practice of granting an equitable remedy despite the
plaintiff's action at law may perhaps be explained by the fact
that at one time, a separate action at law was required to
decide the strictly legal issues. This, however, should not
obscure the fact that the court saw it possible to give equitable
relief in certain cases even where the plaintiff had indicated
initially that damages rather than performance was being
sought.
R. J. Sharpe, Injunctions and Specific Perform
ance, 1983, pages 403-404, paragraph 789.
Thirdly, the reasoning of Lord Wilberforce in
Johnson v. Agnew, [1980] A.C. 367 (H.L.), at
page 398, although he did not apply it to the
acceptance of a repudiation of a contract, indicates
that there is an argument to be made on whether
or not an initial election (or option) for one means
of redress should preclude a party later altering
that choice, in the absence of material detriment to
the defendant arising as a result of the change in
position. In addition a full examination should be
made as to whether the letter alone, without any
action taken by the plaintiff to make specific
performance on his part impossible, constitutes an
election.
Also, I would be reluctant to determine the issue
of the jurisdiction of this Court in a case where the
ship is already under arrest, without full argument
on that issue including consideration of the
Supreme Court's decision in Antares Shipping
Corporation v. The Ship "Capricorn" et al.,
[1980] 1 S.C.R. 553 and the wording of paragraph
22(2)(a) of the Federal Court Act [R.S.C. 1970
(2nd Supp.), c. 10].
These issues might very well be canvassed by
way of an application under Rule 474 for a deter
mination of a question of law, providing there is no
dispute between the parties on the facts. But, they
should not be determined in a summary fashion by
way of this interlocutory motion.
Accordingly, the application to strike out para
graph 10(a) of the statement of claim and release
the ship is dismissed.
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.