Meco Electric Inc. v. Lawrence, [1977] 2 SCR 264

Supreme Court of Canada

Meco Electric Inc. v. Lawrence, [1977] 2 S.C.R. 264

Date: 1976-02-25

Meco Electric (1960) Inc. (Plaintiff) Appellant;

and

Peter A. Lawrence, ès qualités (Intervenant) Respondent,

and

Hôtel de Lasalle (1965) Inc. and Hôtel Président Inc. (Defendants)

and

Registrar for the Registry Office of the Registry Division of Montreal (Mis en cause)

1976: January 29; 1976: February 25.

Present: Laskin C.J. and Judson, Pigeon, Dickson and de Grandpré JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Sale—Resolutory clause—Contractor’s privilege—Obligation signed by the seller not constituting a renunciation—Question of fact.

The facts of this appeal are similar to those of Stendel v. Moidel et al. (supra, p. 256). Appellant is an electrical contractor who lost his privilege as a result of the cancellation of the sale obtained by the seller, represented by respondent as trustee, under the terms of the resolutory clause. Like the general contractor in Stendel, appellant had agreed with the new purchaser of the immovable, Hôtel Président Inc., to perform certain work. The seller, Caplan, used his influence and credit to hasten completion of the work as much as possible. In particular, he wrote a letter to Meco in which he undertook jointly and severally with the debtor to repay the sum represented by the privilege. The Court of Appeal of Quebec upheld the cancellation of the privilege ordered by the Superior Court. Hence the appeal to this Court.

Held: The appeal should be dismissed.

The Court cannot accept appellant’s contention that Caplan’s letter is more favourable to appellant than the note in question in Stendel. Neither the joint and several obligation expressed in the letter nor the promise contained in the note is capable in itself or removing Caplan’s priority interest in the building. Moreover, the Quebec courts unanimously held that the record con-

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tained no evidence of a tacit renunciation on Caplan’s part of the ordinary effects of cancellation of the sale, namely the annihilation of all privileges caused to encumber the immovable by the purchaser. There are no grounds for intervention by this Court.

APPEAL from a decision of the Court of Appeal of Quebec, affirming a judgment of the Superior Court ordering the cancellation of a privilege. Appeal dismissed.

Donald W. Seal, Q.C., and Léonard E. Siedman, for the appellant.

Alexander S. Konigsberg and Julius H. Grey, for the respondent.

The judgment of the Court was delivered by

DE GRANDPRÉ J.—In my view, there is no substantive difference between the question raised by this appeal and the one answered today by this Court in Stendel v. Moidel and Lawrence[1].

Appellant is an electrical contractor who registered a privilege for the sum of $45,051.63 on January 25, 1967. As the general contractor, he contracted with the new purchaser of the immovable, Hôtel Président Inc., to perform various types of work, which he did under the very eyes of the seller Caplan (respondent Lawrence was trustee of the Caplan interests), who used his influence and credit to hasten completion of the work as much as possible. By his action, he is seeking inter alia recognition of his privilege, notwithstanding the cancellation of the sale obtained by the seller under the terms of a resolutory clause.

The Quebec courts refused to allow his action. Appellant submits that they erred, principally by failing to give sufficient weight to a letter written by Caplan to Meco on November 11, 1966:

In virtue of a letter dated the 14th July 1966 from Greenspoon, Freedlander, Plachta & Kryton, Architects which was subsequently followed by a work order dated the 29th July 1966 signed by the said firm, as well as by Mr. I. Kugiel of the LaSalle Hotel, you entered into an Agreement for the supply and installation of a complete indoor substation at the said hotel, the whole for a price

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Of FORTY-TWO THOUSAND AND TWENTY DOLLARS ($42,020.00), including special delivery charges.

Subsequently, you invoiced various smaller charges totalling THREE THOUSAND AND THIRTY-ONE DOLLARS AND SIXTY-THREE CENTS ($3,031.63).

I understand that of the total amount of FORTY-FIVE THOUSAND AND FIFTY-ONE DOLLARS AND SIXTY-THREE CENTS ($45,051.63) the sum of TWENTY THOUSAND SIX HUNDRED AND EIGHTY DOLLARS AND THREE CENTS ($20,680.03) is presently due and unpaid, while the balance of work and materials remains, for reasons well known to me, still to be supplied.

This will confirm our verbal understanding to the effect that you will proceed with all due diligence to complete this work, and that in consideration thereof, I will be bound jointly and severally with the debtor for the payment of the said full sum of FORTY-FIVE THOUSAND AND FIFTY-ONE DOLLARS AND SIXTY-THREE CENTS ($45,051.63); it is nevertheless understood, that you will not require payment of the said sum prior to the 25th January 1967.

In appellant’s view, this letter is much more favourable to his case than the note in question in Stendel.

I cannot share this opinion. Neither the joint and several obligation expressed in the letter nor the promise contained in the note is capable in itself of removing Caplan’s priority interest in the building. Moreover, the Quebec courts unanimously held that the record contained no evidence of a tacit renunciation on Caplan’s part of the ordinary effects of cancellation of the sale, namely the annihilation of all privileges caused to encumber the immovable by the purchaser. I see no grounds for intervention.

For these reasons and those expressed in Stendel, I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Tinkoff, Seal, Shaposnick & Moscowitz, Montréal.

Solicitors for the respondent: Lapointe, Rosen-stein, White, Lemaître-Auger & Konigsberg, Montréal.