App. Div. 1919

Risler

V.

Alberta

Newspapers
Ltd.

Beck, J.

the necessity of coming to the Court and asking for leave to so proceed; whether he shall be allowed to proceed or not is a question for the discretion of the Court. It is difficult, no doubt, to see why the clear and precise provisions of s. 163 [211] should be read as if a distress were a 'proceeding' within s. 87 [142], but the Court is now bound by the decision and the many subsequent cases which have followed it."

The decisions following In re Exhall Coal Mining Company, 4 De. G.J. & S. 377, will be found listed in Kant's Index of Cases Judicially Noticed; Talbot & Fort's Index of Cases Judicially Noticed and in the prefatory note to the reprint of the case in 46 E.R. 964.

The Canadian, as well as the English, cases will be found collected in Mitchell's most useful work on Canadian Commercial Corporations, pp. 1476 et seq.

The Canadian cases follow the English decisions. The Canadian Act, being taken from the English Act, it must be interpreted in the light of the long-standing English decisions upon it recognized at the time of its adoption certainly if they are still recognized as binding.

The effect of the various decisions is that sec. 23 does not make every attachment, sequestration, distress or execution. against the assets of a company void after the making of a winding-up order, but only that every such process "put in force" thereafter is void and that even the putting of it in force is "void," only if leave to put it in force under sec. 22 has not been obtained. "Void" therefore has not the sense of absolutely void in all circumstances, and it is to be noticed. that the Canadian Act is less emphatic than the English Act in which the words are "void to all intents."

In Re Lake Winnipeg Transportation Lumber Trading Co.; Paulson's Claim (1891) 7 Man. R. 602, Taylor, C.J. gave leave to employees of a company which was being wound up to sue for their wages for the express purpose of their ultimately recovering against the directors under a provision similar to that contained in our Companies Ordinance.

In Pukulski v. Jardine; Perryman v. Jardine (1912) 3 O.W.N. 1172, 21 O.W.R. 893, 26 O.L.R. 323, 5 D.L.R. 242,

an Ontario Divisional Court consisting of Boyd, C., Middleton and Latchford, JJ. held that the plaintiffs who had been employees of a company in liquidation of which the defendant had been director during their employment within the restricted time mentioned in The Companies Act were rightly held liable against the objection that the sheriffs' return to the execution against the company that it was unsatisfied could not properly have been made in the circumstances. The Court however said:

"[The sheriff] could discover nothing to be seized up to the 29th September; and this is the information which is communicated by his return. That return is not a proceeding against the insolvent company, within the meaning of the Act. This sheriff's 'return' of the execution is merely an intimation that it has not been and cannot be 'put in force,' and that it is and has proved to be abortive. [Per Boyd, C.]

"Then does the Dominion Act quoted prevent the making of the return after the winding-up? I think clearly not. That statute aims at the ratable distribution of the assets of the company among its creditors; and so the winding-up supersedes the executions and prevents the creditor from further prosecuting his execution against the assets of the company. The Sheriff would then be justified in returning the execution unsatisfied. He is not by the Ontario Act required to make a return nulla bona; and I think it would be sufficient if he made a special return stating: 'I return the writ unsatisfied, because I am unable to take the assets of the company within my bailiwick in execution, by reason of the making of an order under the Dominion Winding-up Act for the winding-up of the company.' This cannot be regarded as a 'proceeding with the writ against the company' which is the thing prohibited by the statute [sec. 22]. The Ontario statute, which imposes this liability upon the directors of the company, seeks to protect them from vexatious proceedings while the company has assets to which the creditor may resort. As soon as these assets are withdrawn from and rendered unavailable to the process. of the wage-earner, and the Sheriff certifies that there are no assets which he can take, the obstacle is removed and the

App. Div. 1919

Risler

V. Alberta Newspapers

Ltd.

Beck, J.

App. Div.

1919

Risler

V.

Alberta Newspapers

Ltd.

Beck, J.

wage-earner is free to enforce his remedy." [Per Middleton, J.]

The provision of The Ontario Companies Act referred to in the last-mentioned case (7 Edw. VII. [1907] ch. 34, sec. 94) differs in my opinion in no substantial respect from the corresponding provision of our Companies Ordinance, sec. 54, though some one or more of my colleagues think there is a difference in sense between the words of the former: "and the amount due on such execution shall be the amount recoverable with costs against the directors" and the words of the latter: "and the amount unsatisfied on said execution shall be the amount recoverable with costs from the directors."

I entirely agree with the Ontario decision to which I have specially referred. It is authority justifying leave to the plaintiff to proceed to judgment and execution and authorizing without leave a return by the sheriff that, by reason of the winding-up order, the execution is unsatisfied, and thereupon justifying proceedings under sec. 54 of The Companies Ordinance against the directors (as to which reference may be made to Guenard v. Coe et al, 7 Alta. L.R. 245, 6 W.W.R. 922, 28 W.L.R. 250, 17 D.L.R. 47).

In the event of such an action it may be that in some special circumstances the Court might no doubt stay it until it should be ascertained what amount of dividend would be paid by the liquidator in the winding-up proceedings on account of the plaintiff's claim so that the director should be called upon to pay only the deficit; but, apart from the suggested temporary hardship upon the director, there would be no difficulty in working out protection for the director; for upon payment he would be entitled to be subrogated to the plaintiff's right as a creditor in the winding-up proceedings whether the creditor had himself filed his claim or had left the director to file either a final or contingent claim. I concur with the restrictions which the Chief Justice would place upon the plaintiff."

In the result therefore for the reasons I have indicated I would affirm the order of the Master with costs of the proceedings before Hyndman, J. and this decision.

SIMMONS, J. Concurred with Beck, J.

MCCARTHY, J. concurred with Harvey, C.J.

App. Div. 1919

Appeal dismissed with costs.

Risler

V.

GARNET V. ALBERTA NEWSPAPERS LIMITED

The judgment herein followed the judgment in the case of Risler v. Alberta Newspapers Limited.

Alberta Newspapers Ltd.

Garnet

V. Alberta

Newspapers

Ltd.

W. T. D. Lathwell, solicitor for plaintiff, respondent, Risler. McCarthy. J. Short, Ross, Selwood, Shaw & Mayhood, solicitors for

plaintiff, respondent, Garnet.

Lougheed, Bennett & Co., solicitors for defendant, appel

lant.

[APPELLATE DIVISION]

WRIGHT ET AL (Plaintiffs) Respondents

V. WEEKS (Defendant) Appellant

Sale of Land-Agreement for-Rescission-Misrepresentation-Laches as Defence-Sale of Chattels "Complicated" with Agreement for Sale of Land.

In an action by a purchaser for the rescission, on the ground of misrepresentation, of a sale of land, delay, laches or acquiescence do not per se constitute a defence. "The only legal consequence of the representee's inaction is, either to furnish some evidence, with other facts, in support of a plea of knowledge or affirmation, against himself, or to give scope for the intervention of the jus tertii, or of the plea of inability to make specific restitution to the representor; but where the inaction, for however long a period it extends, is not sufficient to constitute such evidence, or where, notwithstanding the lapse of time, no innocent person has in fact acquired rights or interests under the contracts sought to be set aside, and the property to be restored to the representor, as the condition of rescission, can be so restored in the same plight as that in which it was received, the delay, laches, or so-called 'acquiescence' goes for nothing" (the law as set down in Bower's Actionable Misrepresen tation, pp. 282-3 adopted).

Where an agreement for the sale of lands is "complicated" with one for the sale of chattels thereon and the former is rescinded on the ground of misrepresentation, the plaintiff is entitled to have the latter agreement rescinded also, even though it was not made until after the agreement for the land was concluded (Holliday v. Lockwood, [1917] 2 Ch. 47, 86 L.J. Ch. 556).

1919

May 5

App. Div.

1919

Wright et al

V.

Weeks

'Beck, J.

A false representation inducing a sale of farm lands that the lands were free from weeds held to be material and to entitle the purchaser to rescission.

Appeal by defendant from a judgment by Simmons, J. in an action to set aside a sale of farm lands and a subsequent sale of chattels on the farm on the ground of fraudulent misrepresentation, and, in the alternative, for damages. Appeal dismissed with costs.

The appeal was heard by HARVEY, C.J., Stuart, BECK and MCCARTHY, JJ.

W. F. W. Lent, K.C., for defendant, appellant.

A. A. McGillivray, K.C. and W. J. Millican, for plaintiff, respondent.

May 5, 1919.

The judgment of the Court was delivered by.

Cur, adv. vult.

BECK, J.-This is an appeal by the defendant from the judgment at the trial by Simmons, J.

The action was to set aside a sale of farm lands and a subsequent sale of chattels on the farm on the ground of fraudulent misrepresentation, and, in the alternative, for damages. Several grounds of misrepresentation were set up.

One of the grounds alleged with respect to the sale of the lands was that except for a few thistles the lands were entirely free from weeds. The trial Judge in the course of his reasons for judgment said as follows:

"Dealing first with the land contract it is of some importance that the plaintiffs were farmers and that they made a somewhat complete examination of the farm before deciding to purchase.

"They allege, however, that the defendant had ingratiated himself in their confidence to such an extent that they relied absolutely upon his good faith in regard.to the representations made by him. The relations between the parties immediately prior to the negotiations give colour to this. The defendant was in khaki and an employee of the registrar, engaged in work in connection with The Military Service Act, 1917, when he met the plaintiffs at the Empire Hotel in Calgary.