Kilmer v British Columbia Orchard Lands Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1913 |
| Date | 1913 |
| Year | 1913 |
| Court | Privy Council |
Relief against Forfeiture - Default in Payment of an Instalment of Purchase-money - Time of the Essence of the Contract - Specific Performance decreed.
An agreement for sale by the respondent company of lands in British Columbia for a price to be paid in instalments at specified dates contained a clause of forfeiture both of the agreement and of all payments of past instalments of purchase-money in case of default of punctual payment of any one instalment; and time was declared to be of the essence of the agreement. Default having been made, the company sued to enforce the forfeiture; the appellant paid into Court the instalment due and counterclaimed for specific performance:—
Held, that by the law of British Columbia as well as by English law the condition of forfeiture was in the nature of a penalty from which the appellant was entitled to be relieved on payment of the purchase-money due.
APPEAL from a judgment of the Court of Appeal (April 2, 1912) reversing by a majority a judgment of the Supreme Court (September 14, 1911).
The respondent company, under the circumstances stated in their Lordships' judgment of default by the appellant in payment of an instalment of purchase-money, sued on August 1, 1910, for a declaration that their agreement of sale to the appellant of the lands in suit, dated December 14, 1909, was null and void. The appellant counterclaimed for specific performance and when the case came on for trial obtained leave to pay into Court the amount due to the company.
The trial judge dismissed the action and decreed specific performance on the counter-claim, relieving the appellant from any forfeiture or penalties incurred, on the authority of In re Dagenham (Thames) Dock Co., Ex parte HulseF1 and Cornwall v. Henson.F2
The Court of Appeal (Macdonald C.J. and Irving J.A., Galliher J.A. dissenting) declared the agreement null and void. They held that the respondents were entitled to avail themselves of the express provision in the agreement making time the essence of the bargain, and that there was no ground on which the Court could grant relief against the forfeiture.
Buckmaster, K.C., and Walter Burt, for the appellant, contended that the forfeiture clause in the agreement for sale was in the nature of a penalty and that relief ought to be granted against its enforcement. The circumstances rendered its enforcement inequitable, for the appellant had been in possession of the lands bought and had spent various sums of money in their improvement with the knowledge and consent of the respondents. In any event he should be held entitled to a lien for the moneys so spent. Even if the forfeiture clause was intended to be operative according to the letter it was too late for the respondents to rely upon it and try to enforce it, for they had already negotiated one extension of the time of payment and agreed to it, thereby leading the appellant to believe that their strict rights would not be enforced. As they had submitted to postpone the day of enforcing payment they were no longer entitled to say that time was of the essence of the contract. The rigid date having been altered they were not entitled to say that the substituted date was rigid to the extent of being unalterable. Reference was made to In re Dagenham (Thames) Dock Co., Ex parte HulseF1, Cornwall v. HensonF2, and Barclay v. Messenger.F3
[LORD MACNAGHTEN referred to Clydebank Engineering Co. v. Don Jose Ramos Yzquierdo y Castaneda.F4]
See Hughes v. Metropolitan Ry. Co.F5, La Belle v. O'ConnorF6, and In re a Debtor.F7
E. P. Davis, K.C., and Malcolm Macnaghten, for the respondents, contended that the Court of Appeal was right in enforcing the stipulated forfeiture and that no grounds for relief had been...
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Starside Properties Ltd v Mustapha
...relief against forfeiture was granted in relation to a contract to purchase land, and this wasfollowed by the Privy Council in Kilmer -v- British Columbia (1913 A.C. p. 15 Chandleas-Chandless -v- Nicholson (1942 2 K.B. p. 321) related, as Judge Fife stressed, to relief from forfeiture for......
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Stockloser v Johnson
...extra time were given, for otherwise there was no object in allowing them a further chance of completing the contract. Kilmer v. British Columbia Orchard Lands Limited (1913 Appeal Cases, page 319) was another case in which similar relief was given to a purchaser who was in default but desi......
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Cavendish Square Holding BV v Talal El Makdessi; ParkingEye Ltd v Beavis
...exception is in In re Dagenham (Thames) Dock Co; Ex p Hulse (1873) LR 8 Ch App 1022 (followed by the Privy Council in Kilmer v British Columbia Orchard Lands Ltd [1913] AC 319), where the Court of Appeal granted a purchaser, who had been in possession for five years and carried out improv......
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...In re Dagenham (Thames) Dock Co; Ex parte Hulse 135 and, upon one interpretation, the decision of the Privy Council in Kilmer v British Columbia Orchard Lands Ltd 136. These decisions were sometimes viewed in Australia as having preserved the right of equity to give relief which remained av......