Court headnote

Hanson v. Cameron
Collection
Supreme Court Judgments
Date
1948-10-05
Report
[1949] SCR 101
Judges
Rinfret, Thibaudeau; Rand, Ivan Cleveland; Kellock, Roy Lindsay; Estey, James Wilfred; Locke, Charles Holland
On appeal from
British Columbia
Subjects
Contract
Decision Content
Supreme Court of Canada
Hanson v. Cameron, [1949] S.C.R. 101
Date: 1948-10-05
Ole Hanson (Plaintiff) Appellant;
and
Bertha Cameron (Defendant) Respondent.
1948: April 29,30, May 3; 1948: October 5.
Present: Rinfret C.J. and Rand, Kellock, Estey and Locke JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA
Contracts—Logging agreement provided time of essence—Default waived—Whether Court may declare contract subsisting and decree specific performance—Whether interest in land vests in holder of special timber license under Forest Act, 1912, B.C., c. 17 and/or his assignee.
The respondent, the holder of a special timber license issued under the provisions of the Forest Act, 1912, Statutes of B.C., c. 17, by an agreement under seal dated May 15, 1941, agreed to sell to the appellant all the merchantable timber upon the lands covered by such license. The appellant agreed to "log and/or pay for" not less than 4,000,000 feet board measure each year during the term of the agreement and to log the lands clean of all merchantable timber not later than May 15, 1945. The stipulated stumpage was to be paid on all timber out and removed from the lands based on government scale in the boom as and when the logs were sold. It was agreed that if default were made by the purchaser, the vendor might by notice in writing demand such default be remedied, and should default continue for 30 days, terminate the agreement. Time was declared to be of the essence. The appellant did not log or pay for the stipulated quantity of timber in any of the first three years but respondent accepted payment for the quantity cut without protest. On April 13, 1945, however, the respondent gave notice of default and of her intention on continued default for 30 days to cancel the agreement. The appellant then tendered a sum sufficient to pay stumpage upon the merchantable timber remaining upon the limits based on a cruise made prior to the date of the agreement. This was refused and the appellant then paid the money into court and sued for specific performance.
Held: by the majority of the court, Locke J. expressing no opinion, that the parties by their conduct having waived the provision making time of the essence, the agreement should be declared subsisting and specific performance decreed, and the matter referred to the trial court to fix a reasonable time for performance.
(The principle laid down in Kilmer v. B. C. Orchards, [1913] A.C. 319 as explained in Steedman v. Drinkle, [1916] 1 A.C. 275 at 280 applied.)
Held: That the effect of the agreement was to create an interest in land. (McPherson v. Temiskaming Lumber Co. [1913] A.C. 145, followed.)
Per, Locke J., that the respondent acquired an interest in the land under the license and the appellant under the agreement, and neither such interest nor the agreement itself would ipso facto terminate if there were default either in cutting the timber, or alternatively, in making the payments within the time stipulated. Per, Locke J., that the parties should be held to have contemplated that if the purchaser elected to pay for any part of the timber not logged prior to May 15, 1945, the quantities would be ascertained by cruising and the judgment at the trial, directing a reference to the registrar to ascertain the amount standing or not removed following which the balance owing if any would be payable, should be restored.
APPEAL from the judgment of the Court of Appeal for British Columbia, [1], reversing (Sydney Smith J.A., dissenting), the judgment of Coady J. at the trial.
Alfred Bull K.C. for the appellant.
J.W. deB. Farris K.C. for the respondent.
The judgment of the Chief Justice and Kellock J. was delivered by:
KELLOCK J.:—Under the provisions of paragraph 6 of the agreement between the parties the appellant covenanted to commence putting logs in the water not later than August 15, 1941, and thereafter to "log and/or pay for" not less than 4,000,000 feet "each and every year during the term" of the agreement, subject to acts of God, strikes, breakdowns, fire or other causes beyond his control, and to log continuously the said lands and premises clean of all accessible and merchantable timber "not later than the 15th day of May, 1945". By the provisions of paragraph 28 time was expressly declared to be of the essence of the agreement and it was further provided that if the respondent should at any time "grant" any extension of time for the payment of any stumpage or other monies, such extension should not operate as a waiver on the part of the respondent of the provision as to time. The effect of the agreement as a whole was to create in the appellant an interest in land; McPherson v. Temiskaming, [2].
Until the early part of 1945 the parties paid no attention to the times fixed by the provisions of paragraph 6. The appellant logged considerably less than 4,000,000 feet per year, payment being made only for what had been logged and these payments were accepted by the respondent as and when made without any complaint. There was no request on the part of the appellant at any time for any extension of time and no "grant" of any extension by the respondent. The parties simply paid no attention to time so far as obligation to perform the contract was concerned. On April 13, 1945, however, the respondent served a notice purporting to be under the provisions of paragraph 26 of the agreement. Two grounds of default were alleged, as to one of which the learned trial judge has found there was no foundation in fact. The other ground specified was that the appellant had not "as agreed logged 4,000,000 feet during each year of the agreement". Under the agreement the appellant was not obliged to log 4,000,000 feet but to log and pay for that quantity or to pay for the quantity without having done the actual logging. I therefore agree with Robertson J.A., in the court below [3] in thinking that the notice was ineffective on the ground of its failure to specify a default within the terms of the agreement. I do not accept the argument advanced by Mr. Farris that the words "as agreed" are to be taken as meaning that the appellant had not paid for 4,000,000 feet and that the notice therefore meant that the appellant had not logged or paid for that quantity.
It is contended on behalf of the appellant that by reason of the non-observance by both parties of the provisions as to time provided by paragraph 6, time ceased to be of the essence. In Kilmer v. British Columbia Orchards [4], the respondent company had sold land for a price to be paid in instalments at specified dates with a forfeiture clause in default of punctual payment, time being declared to be of the essence. The first instalment was duly paid on the execution of the agreement but the second instalment and interest were not paid on the day fixed, and a new day for payment was set. Default being made the company refused to complete and brought action for a declaration that the agreement was at an end. The purchaser counter-claimed for specific performance. It was held that the action failed and specific performance was granted. As explained in Steedman v. Drinkle [5], the Privy Council reached its decision on the ground that when the vendor had submitted to postponement of the date of payment it could not "any longer" insist that time was of the essence and the provision for forfeiture was considered as a penalty against which equity would relieve. It is true that in Kilmer's case there was in question default with respect to one instalment only and the question as to the effect of the postponement of one payment on the right of the vendor to insist on the provision as to time with respect to later instalments was not raised.
In Steedman's case Viscount Haldane in the course of his discussion of Kilmer's case said at page 280:
As time was declared to be of the essence of the agreement, this could only have been decreed if their Lordships were of opinion that the stipulation as to time had ceased to be applicable.
Lower down on the same page he said what has already been quoted, in part, that:
*** when the company had submitted to postpone the date of payment they could not any longer insist that time was of the essence.
In Barclay v. Messenger [6], Sir George Jessel referred at page 354 to the conflicting views of Lord Cranworth, the Vice-Chancellor, and Lord Romilly, the Master of the Rolls, in Parkin v. Thorold. The judgment of the former is reported in 2 Sim., 1, and of the latter in 16 Beavin, 59. Sir George Jessel said:
There was no actual decision as to the effect of the so-called waiver upon the original contract, but the Vice-Chancellor had expressed an opinion that the mere giving of time, where time was of the essence of the contract, would have no effect except by extending the time; and the Master of the Rolls thought that having once extended the time, you had destroyed the essentiality of the condition altogether.
He went on to quote the comment of Lord St. Leonards upon the view of Lord Romilly as follows:
*** but the opinion of the Vice-Chancellor on the voluntary extension of the time seems to be right, for it can hardly be contended that if time be of the essence of the contract, an extension of it by one party for the convenience of the other can be considered operative beyond the further day named.
Sir George Jessel continues:
It appears to me plain that a mere extension of time, and nothing more, is only a waiver to the extent of substituting the extended time for the original time, and not an utter destruction of the essential character of the time.
This view, however, has not been accepted by the Privy Council in Steedman's case which, on the contrary, is in conformity with the view of Lord Romilly to the extent that an extension of time with respect to a particular instalment destroys the essentiality of time with respect to that instalment at least. In Southby v. Hutt [7], Lord Cottenham, L.C., said at page 621:
The abstract of title was not delivered within the twenty-one days so that no question arises as to the time specified in these conditions of sale.
The authors of the 8th Edition of Dart at page 436 express the view that:
*** it is conceived that a waiver of time as respects matters (such as the delivery of the abstract, etc.,) which must precede completion, would, in general, amount to a waiver of the time (if any) fixed for completion. So, a vendor who receives and entertains the purchaser's requisitions, delivered after the time specified, waives his right (unless expressly reserved) to insist on the conditions as to time; and, as a general rule, either party relying on time being essential as a defence to an action for specific performance, should take the point promptly.
In Boyd v. Richards [8], Middleton J.A., acted on a similar view and granted specific performance. In Korman v. Abramson [9], Rose J., as he then was, reached a contrary conclusion but without any analysis of the authorities. I find myself unable to accept the view of Rose J. In my opinion on the present state of the authorities the expressions from the judgment in Steedman's case which I have cited should be taken in a general sense, unless and until the Privy Council should rule otherwise.
I therefore think that the conduct of the parties in the present case was such as to make the provision for complete logging by May 15, 1945, no longer of the essence of the contract. I would allow the appeal and refer the matter to the trial court to fix a reasonable time for the performance of the contract in view of all the circumstances, including the bringing of action and the injunction granted therein which affected due performance of the contract by the appellant. The appellant should have his costs throughout.
RAND J.:—By a contract under seal entered into on May 15, 1941 the appellant, as purchaser and the respondent, the owner of a timber license covering certain lands on Cracroft Island, British Columbia, as vendor, agreed to buy and sell "all the accessible merchantable timber" on the lands, subject to the conditions of the license and the terms of the contract. The purchaser was given "full right, liberty and authority" to enter upon the lands and "to fell, buck and carry away all timber thereon"; "and was to pay stumpage upon timber cut and removed from the lands as the purchase price thereof" at the rate of $2.00 a thousand feet board measure for cedar and 90c for all other varieties, based on the official scaling, as and when the logs should be sold. A down payment of $500 was to be made and an additional $1.00 for each thousand on the first 1,500,000 feet, to serve as a deposit of $2,000 to be applied against the last 2,000,000 feet removed. Logs were to remain the property of the vendor until paid for, but the purchaser was free to sell in the ordinary course of business.
The purchaser covenanted that he would commence putting logs in the water not later than August 15, 1941 and would "thereafter log and/or pay for not less than 4,000,000 feet board measure, British Columbia log scale, each and every year during the term of this agreement, subject to the acts of God, strikes, breakdowns, fire, or other causes beyond the control of the purchaser", and would "log continuously the said lands and premises clean of all accessible and merchantable timber" not later than the 15th day of May, 1945. A proviso entitled him to shut down logging operations for such time as the price of camp run cedar logs should be below the price of $11 a thousand feet, but they should be reopened and continued so soon as the market price should reach $11. Any excess in the footage produced in any year could be applied to a shortage in subsequent years.
The purchaser was to provide for the scaling in the booms at Cracroft Island if practicable; otherwise at the point of delivery of the booms. The scale bills were to be delivered to the agent of the purchaser in Vancouver who was to sell the logs and pay the stumpage price to the vendor, to whom copies of the bills were to be furnished.
The vendor was to be kept informed of the course of operations, to have the right at all reasonable times to examine the logging records and camp scale, and "to enter upon the said lands for the purpose of inspecting and surveying the said timber".
The purchaser was to take precautions against fire. Any timber destroyed by this cause through his negligence was to be paid for as soon as the quantity had been determined by an official survey. Any timber damaged by fire was either to be logged or paid for as and when the quantity should be similarly ascertained. In case of loss during transportation or before scaling, the amount was to be determined by a comparison with the next two previous booms scaled in the booming ground.
Then two clauses, 25 and 26, dealt with power to terminate. Under the first, on default in the payment of any moneys "strictly on the days and times and in the manner specified", or in respect of any of the "covenants, stipulations or agreements", and failure to remedy the breach within thirty days after notice in writing, the purchaser was forthwith to "cease to have the right to cut or remove any further timber from the said lands and logging operations shall immediately cease and the purchaser shall not be entitled to sell, remove, pledge or otherwise dispose of any timber or logs cut from the said lands or any part thereof." A receiver might be appointed by the vendor who would be "entitled to take possession of the said lands and premises".
Clause 26 declared that if default in any of the "covenants, provisos, terms or stipulations" should continue for thirty days after written notice, specifying the default and the vendor's "intention to cancel this agreement", the agreement should be void and of no effect and the vendor should be at liberty to sell "the said lands and premises and logs" for her own use and benefit. In such event, the purchaser was to deliver up possession of the lands but would have no claim against the vendor who was to be deemed to be the owner and entitled to the possession of all the logs or products which at the time of the default had not been sold.
Finally, time was expressly declared to be of the essence in respect of "all payments to be made and all conditions, provisos and stipulations to be observed and performed".
The purchaser at once entered upon the operation. The land was a rough area suitable only for timber, but apparently not unusually difficult for logging purposes in that section of the Province. A main logging road with half a dozen bridges was built at a cost of approximately $15,000 and houses and works put on the lands brought the total initial outlay near $25,000. The quantity logged and sold in the first contract year was 328,000 feet; for the second year, 2,249,760 feet; for the third, 1,798,757 feet; and to May 15, 1945, 1,400,239 feet, making a total for the four years of 5,776,979 feet. On the last date there were between 1,500,000 and 2,000,000 feet of logs cut and lying on the lands. Thereafter and until June, 1947, the quantity scaled amounted to 3,354,594 feet. Operations were continued until the judgment of the Court of Appeal in March, 1948, but the quantity logged or scaled does not appear.
The evidence indicated that from the commencement the purchaser had trouble in getting and keeping workmen. A normal logging crew would be about sixteen men, but only for two short periods was that number reached. There was difficulty also in obtaining repairs to equipment. But it is clear that the purchaser was a competent logger and had carried out the work efficiently.
Although for the first three years the minimum of 4,000,000 feet had been neither logged nor paid for, no complaint was made by the vendor. The stumpage during those years and up to January, 1945 was paid in the regular way upon the sale of the timber and was accepted without demur.
Early in April, 1945, the husband of the vendor, acting for his wife, a few days after intimating to the purchaser's agent for the first time his dissatisfaction with the operations, met the purchaser and the agent and informed them of the vendor's intention to cancel. The purchaser at once by letter declared his willingness to pay in cash the entire stumpage on the basis of a cruise of the lands made in 1933 which the trial judge found had been the general basis in the negotiations and according to which there was then on the land approximately 16,350,000 feet of lumber, and to pay any additional stumpage the completed operations might show to be owing. This offer was rejected and on April 13, the following notice was given:—
Pursuant to the terms of an agreement dated the 15th day of May, 1941, between BERTHA CAMERON as Vendor and yourself as Purchaser you have made default in the covenants, provisos, terms, conditions or stipulations of the said agreement in the following respects, namely:
1. You have not as agreed logged 4,000,000 feet board measure, British Columbia log scale in each and every year during the term of the said agreement including the year 1944.
2. You have not logged continuously nor clean the said lands and premises of all accessible and merchantable timber, as you went along. If such default shall continue for a period of thirty days after notice shall have been given to you it is my intention to cancel the said agreement and in accordance with the terms of the said agreement the same shall be void and of no effect.
During those thirty days, letters passed between solicitors and on the 13th of May there was tendered to the vendor the sum of $15,276.05, representing the calculation of stumpage then remaining unpaid according to the 1933 cruise, amounting to $15,705.50, plus 10 per cent, less the $2,000 then being held by the vendor. The tender was refused and a writ issued on the following day claiming specific performance and other relief, and bringing into Court the sum of $13,705.50, representing the outstanding stumpage, $15,705.50 less the same $2,000. This was accompanied by a declaration of willingness by the purchaser to bear the cost of a cruise to ascertain the exact balance of stumpage.
The trial judge, finding that there had been no default as claimed in the second paragraph of the notice, held the first, construed by him to be limited to default up to May 15, 1944, had been cured by the tender and offer; he therefore decreed as claimed and referred it to the District Registrar to ascertain the amount, if any, to which the defendant might be entitled by way of further payment for the accessible merchantable timber.
On appeal this judgment was reversed [10], the action ordered to be dismissed, and judgment on the counterclaim entered for damages for trespass and for logs cut or removed from the lands after May 15, 1945. Sloan C.J., assuming erroneously that the question of the validity of the notice had not been raised in the Court below, held the default could not be cured by a tender of money, and that the trial judge in effect rewrote the contract by substituting for the ascertainment of the price by scaling, an estimation by cruising. Robertson J.A., while finding the notice defective in treating the obligation of the purchaser to be that of logging merely without the alternative mode of payment, and because of the reference to the year 1944-45, not yet elapsed, was of the opinion that no property interest arose until the timber had been cut and removed, and that the real sale was of such logs only as the purchaser might cut and remove before May 15, 1945. Smith J.A. dissented and would have affirmed the trial judgment. He held the provision regarding time to have been waived and the parties to have been remitted to the ordinary rules of equity relating to that factor.
The license had originally issued in 1913 and came under the provisions of the Forest Act of 1912, which made it transferable and renewable from year to year while there should be on the land merchantable timber in sufficient quantity to make it commercially valuable. By section 18, there was vested in the holder "all rights of property whatsoever in all trees, timber and lumber cut within the limits of the license during the term thereof, whether the trees, timber and lumber are cut by the authority of the licensee or by any other person with or without his consent." He could seize any such trees or timber in the hands of an unauthorized person and also "institute any action against any wrongful possessor or trespasser and to prosecute all trespassers and all offenders to punishment, and to recover damages (if any)." These powers, together with the right of perpetual renewal, undoubtedly create an interest in the land: McPherson v. Temiskaming Lumber Company [11]; and it was the beneficial interest in them, including, as between the parties, the right of possession, which when realized would exhaust the license, that was conferred on the purchaser: the retention of the legal title to the license and the logs was only for security purposes. The purchaser therefore likewise acquired an interest in land.
I agree with Robertson J.A. that the notice given was defective. The first item alleging failure to log does not specify a default under the contract; and the reference to the year 1944, by its ambiguity, strikes it likewise with a fatal infirmity; and the second item was found against the respondent.
I think, also, with Smith J.A., that the provision as to time was waived. It was purely formal. The indulgence to be given to the purchaser through delay in strikes and other causes beyond his control as well as the specific right to cease operations pending the adjustment of the price of cedar show beyond doubt that time was not in fact of the essence; and the acceptance in each of three years of less than one-third of the stumpage the contract called for and the affirmation of the contract up to January, 1945, relieve the Court from the coercive effect of the formal stipulation: Steedman v. Drinkle [12]. Even, then, had the notice of cancellation been effective, the Court would be free to apply its ordinary rules as to time and relief from forfeiture in specific performance.
In the covenant to "log and/or pay for" not less than the minimum in each year, the word "pay" must be taken as a supplementary mode of performance in payment, though incapable by itself of being definitive, which the purchaser had the right to employ. And on its further requirement to log the land "clean" not later than May 15, 1945, two observations are to be made: taking the word "log" to extend to removal from the lands, the obligation does not include payment: and since the purchaser may pay in each year, he may do so in the last year, which implies that the logging may not be completed although in fact fully paid for.
The right to enter and remove was subject, as to the vendor, "to the payment of the stumpage and other moneys as hereinafter set forth", but to no other provision. Apart altogether from any right of removal attached by law, this is a power coupled with an interest or a license annexed to a title and in the absence of qualification is irrevocable. Nowhere in the contract is that right of removal rendered controllable or conditioned except under the forfeiture clauses by notice, in the absence of which the right continues in full efficacy; but as security against delay in realizing the value of all the timber, which was the primary object of the vendor, were the obligation to log and the power to terminate.
The amount offered by the purchaser on the threat of cancellation, greater than any sum then due, the vendor was bound to accept under the minimum clause and the promise for the balance was what the contract itself provided. Acceptance of it would have left only a small quantity of logs unpaid for. It is pertinent to the time for paying this balance, that the counterclaim, which the Court of Appeal has allowed, was not delivered until approximately eighteen months after the commencement of the action, during which time the purchaser continued operations. Although there was the tender and later money brought into Court, from the first interview in April to the present appeal he has asserted his readiness and willingness in this somewhat involved situation to do whatever was incumbent upon him as a condition of the equitable relief sought. I agree that the Court cannot substitute a cruise of standing timber for the scaling of logs in boom to ascertain the total price; and the purchaser must perform substantially the entire obligation assumed by him: from this it follows that he must fulfil the covenant to log the lands clean within such time as under all the circumstances would be just and equitable.
I would, therefore, allow the appeal and direct the following judgment:—
1. Declare the contract to be subsisting.
2. Declare the money in Court, subject to the payment of costs, to be payable out to the respondent to apply on the purchase price as from the date of payment in.
3. Restrain the respondent from interfering with the logging operations or from taking any further action on the contract otherwise than as allowed herein before such date to be fixed by the trial Court for the completion of the logging and it is referred back to that Court for such purpose.
4. The foregoing to be without prejudice to any claim for damages on the covenant to log or pay the minimum in each year and to complete in four years, to be made on a reference or by action.
5. Liberty to apply.
The appellant should have his costs throughout.
ESTEY J.:—The appellant asks specific performance of an agreement under which he purchased from the respondent all the accessible merchantable timber situated upon Timber License No. 11943 being Lot 532, Range 1, Coast District, B.C.
The agreement, dated May 15, 1941, was subject to the conditions contained in the license from the Crown and to the appellant paying all rents, royalties, taxes and fire protection fund charges. It provided that appellant would pay as the purchase price thereof stumpage as follows:
For all cedar logs, at the rate of two dollars ($2.00) per thousand feet board measure,
For all other species of timber, at the rate of ninety cents ($.90) per thousand feet board measure. The learned trial judge found that the agreement was made upon the basis of the Eustace Smith cruise of the premises, made in November 1933, which disclosed a total of 18,511,000 board feet of accessible merchantable timber. Since then and prior to this agreement, 2,124,275 board feet had been logged by a third party, leaving 16,386,725 board feet upon the premises.
Paragraph six of the said agreement reads:
6. The Purchaser covenants and agrees with the Vendor that he will commence putting logs in the water not later than the fifteenth day of August, 1941, and will thereafter log and/or pay for not less than Four Million feet board measure British Columbia log scale, each and every year during the term of this agreement, subject to the acts of God, strikes, break-downs, fire, or other causes beyond the control of the Purchaser, and will log continuously the said lands and premises clean of all accessible and merchantable timber as hereinbefore defined not later than the fifteenth day of May, 1945. PROVIDED ALWAYS that the Purchaser shall be entitled to shut down his logging operations for such time as the price of camp run Cedar logs shall be below the price of Eleven Dollars ($11.00) per thousand feet board measure British Columbia log scale on the Vancouver market, according to the British Columbia Loggers' Association price, but shall re-open and continue logging so soon as the market price thereof shall reach the sum of Eleven Dollars ($11.00).
Notwithstanding the foregoing provisions that the appellant would commence putting logs in the water not later than August 15, 1941, log and/or pay for not less than 4,000,000 feet in each year and log continuously, he had logged up to April 15, 1945, but 5,776,979 board feet and paid the purchase price therefor to the respondent in the sum of $9,383.26.
This $9,383.26 was paid in relatively small amounts as the timber was scaled and sold during the currency of this agreement so that when, on April 13, 1945, the respondent gave her notice of cancellation all the lumber logged had been paid for in full and she had also the deposit of $500 and the additional deposit of $1,500. These deposits were required under the terms of the agreement and to be applied on account of the purchase price or stumpage as hereinafter set out.
These payments covering the purchase price of the timber logged were accepted, and while inquiries as to why more was not being logged were made from time to time, there was never a complaint until the respondent's husband, who acted as her agent throughout, in April 1945 (the exact date is not disclosed) told the appellant that as he had not fulfilled his obligations under the agreement, he (the husband) expected to receive instructions to give notice terminating the agreement.
On the same date, and as a result of that interview, the appellant wrote the respondent in part:
I do refer you to clause 6 of the agreement which provides for deferment of payments for reasons including causes beyond my control, and it would be a very simple matter for me to establish that the difficulties of labour, equipment, etc., has made it impossible for me to log these limits any faster than I have done.
And he further pointed out that on two occasions he was required by the Government Forestry Department to discontinue operations because of danger of fire. Then, after making reference to his investment in roads and other expenditures, he stated:
I write to inform you that I have made arrangements to provide for payment in full of the timber which you have sold to me by the 15th of May next, and thus, irrespective of the difficulties of this operation, you will be paid as you contemplated.
He further stated that he proposed to tender the full amount due on May 15th and "If, as and when the scale bills establish that there is more timber logged from the property than the 16,000,000 feet anticipated, I undertake to pay for any such excess timber at the contract rate."
The respondent's solicitor acknowledged the letter under date of April 13, 1945, stating that under the terms of the agreement he was giving the notice of cancellation and that in any event, the agreement would terminate on the 15th of May, 1945, when logging operations by the appellant must cease and the respondent would take possession. In fact the respondent gave notice of cancellation on April 13, 1945, which reads:
Pursuant to the terms of an agreement dated the 15th day of May, 1941, between Bertha Cameron as Vendor and yourself as Purchaser you have made default in the covenants, provisos, terms, conditions or stipulations of the said agreement in the following respects, namely:
1. You have not as agreed logged 4,000,000 feet board measure, British Columbia log scale in each and every year during the term of the said agreement including the year 1944.
2. You have not logged continuously nor clean the said lands and premises of all accessible and merchantable timber, as you went along. If such default shall continue for a period of thirty days after notice shall have been given to you it is my intention to cancel the said agreement and in accordance with the terms of the said agreement the same shall be void and of no effect.
Dated at Vancouver, British Columbia, this 13th day of April, A.D.
1945.
Bertha Cameron
This notice, as held by Mr. Justice Robertson, was ineffective in that there was no covenant in the agreement to log 4,000,000 feet board measure per year but rather to log and/or pay for 4,000,000 feet board measure, and in respect to the second default that was found in fact not to exist by the learned trial Judge.
The respondent in her statement of defence alleges a further default in that the appellant had not logged the said lands and premises clean of all accessible and merchantable timber by the 15th of May, 1945.
The foregoing indicates that the appellant realized his default and because of the thirty-day period he could only remedy that default by making payment under the alternative method of performance provided under paragraph six. The giving of the foregoing notice was followed by interviews and correspondence throughout which the appellant offered to pay or make such settlement as would remedy his default. Nothing came of this effort and on May 11, 1945, the appellant's solicitor wrote explaining his proposed tender of $15,276.05 and concluded:
We wish to make it clear past doubt that Mr. Hanson is ready, able and willing to satisfy any proper claim Mrs. Cameron has under the agreement of May 15, 1941.
The tender of the said sum of $15,276.05 was made on May 12, 1945, within the thirty-day period fixed by the notice of April 13th, and was refused. This sum of $15,276.05 was computed by accepting the figures of the Eustace Smith cruise deducting the amounts logged, leaving 10,609,746 board feet divided as follows:
Cedar
5,506,116 feet
@ $2.00 per M.
$11,112.23
Other Species
5,103,630 feet
@ .90 per M.
4,593.27
$15,705.50
Then he added 10 per cent as an allowance for any error in favour of the respondent in the said cruise and deducted the deposits in the sum of $2,000. This action was commenced on May 14, 1945, asking inter alia a declaration that the agreement is valid and subsisting, for specific performance thereof, an injunction restraining the respondent from interfering and paying into Court the sum of $13,705.50 with an undertaking to pay the cost of a cruise and of any additional amount found to be thereby owing.
The respondent pleaded default on the part of the appellant in that (a) he did not log and/or pay for not less than 4,000,000 board feet in each year; (b) he did not log the premises continuously and clean of all merchantable timber by May 1945; (c) he did not log the premises clean of all merchantable timber as he proceeded and because of which the value of the said lands and timber had been impaired and decreased; and further that time was expressly of the essence in respect of all payments, conditions and provisos; and that respondent gave notice of cancellation dated April 13th, terminating the agreement, and that, in any event the agreement terminated by virtue of its terms by April 1945; that, under all the circumstances, the appellant was not entitled to relief from forfeiture. The respondent also counterclaimed asking a declaration that the said agreement was null and void, an injunction restraining the plaintiff from further cutting and removing the timber, and for possession of the said lands and premises and damages.
The learned trial Judge found that, under the circumstances, the appellant had not made a default under his covenant to log continuously and clean, but did find that the appellant had made default in that he did not log and/or pay for 4,000,000 board feet in each year. The evidence supports these findings of facts. Therefore the essential issues are whether the appellant had under the terms of the agreement the right to remedy his default, and if so, did he by his tender and payment in Court effect that remedy.
This is an executory agreement of sale of timber with a covenant that the logging should be completed within a specified period rather than a sale subject to a condition that the logging should be completed in a specified time. The vendor might in such a case be entitled to damages but no evidence was here adduced and the learned trial Judge stated "no such claim for damages is before me for consideration."
The provisions of this agreement indicate that the parties contemplated, subject to the contingencies therein provided for, including causes beyond the control of the appellant and the price of cedar falling below $11 per thousand feet, continuous logging operations on the part of the appellant. If, however, in any year he should not log 4,000,000 board feet, then after allowing for any excess in a previous year, his obligation was to make up the difference by a payment in cash.
The appellant had paid the deposits as aforesaid, and commenced his logging operations on or before the 15th day of August, 1941. He logged very little the first year, a little more the second year, and had in fact, when the notice of cancellation was served, logged about one-third of the estimated accessible and merchantable timber, and had made the payments thereto from time to time throughout the currency of this agreement.
The parties, by paragraph twenty-eight, provided "Time is expressly declared and stipulated to be of the essence of this agreement in respect of all payments to be made and all conditions, provisos and stipulations to be observed and performed."
Courts of Equity, which look at the substance as distinguished from the letter of agreements, no doubt exercise an extensive jurisdiction which enables them to decree specific performance in cases where justice requires it, even though literal terms of stipulations as to time have not been observed. But they never exercise this jurisdiction where the parties have expressly intimated in their agreement that it is not to apply by providing that time is to be of the essence of their bargain. If, indeed, the parties, having originally so provided, have expressly or by implication waived the provision made, the jurisdiction will again attach. Viscount Haldane, Steedman v. Drinkle, [1916] 1 A.C. 275 at p. 2

Court headnote

Hanson v. Cameron Collection Supreme Court Judgments Date 1948-10-05 Report [1949] SCR 101 Judges Rinfret, Thibaudeau; Rand, Ivan Cleveland; Kellock, Roy Lindsay; Estey, James Wilfred; Locke, Charles Holland On appeal from British Columbia Subjects Contract Decision Content Supreme Court of Canada Hanson v. Cameron, [1949] S.C.R. 101 Date: 1948-10-05 Ole Hanson (Plaintiff) Appellant; and Bertha Cameron (Defendant) Respondent. 1948: April 29,30, May 3; 1948: October 5. Present: Rinfret C.J. and Rand, Kellock, Estey and Locke JJ. ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA Contracts—Logging agreement provided time of essence—Default waived—Whether Court may declare contract subsisting and decree specific performance—Whether interest in land vests in holder of special timber license under Forest Act, 1912, B.C., c. 17 and/or his assignee. The respondent, the holder of a special timber license issued under the provisions of the Forest Act, 1912, Statutes of B.C., c. 17, by an agreement under seal dated May 15, 1941, agreed to sell to the appellant all the merchantable timber upon the lands covered by such license. The appellant agreed to "log and/or pay for" not less than 4,000,000 feet board measure each year during the term of the agreement and to log the lands clean of all merchantable timber not later than May 15, 1945. The stipulated stumpage was to be paid on all timber out and removed from the lands based on government scale in the boom as and when the logs were sold. It was agreed that if default were made by the purchaser, the vendor might by notice in writing demand such default be remedied, and should default continue for 30 days, terminate the agreement. Time was declared to be of the essence. The appellant did not log or pay for the stipulated quantity of timber in any of the first three years but respondent accepted payment for the quantity cut without protest. On April 13, 1945, however, the respondent gave notice of default and of her intention on continued default for 30 days to cancel the agreement. The appellant then tendered a sum sufficient to pay stumpage upon the merchantable timber remaining upon the limits based on a cruise made prior to the date of the agreement. This was refused and the appellant then paid the money into court and sued for specific performance. Held: by the majority of the court, Locke J. expressing no opinion, that the parties by their conduct having waived the provision making time of the essence, the agreement should be declared subsisting and specific performance decreed, and the matter referred to the trial court to fix a reasonable time for performance. (The principle laid down in Kilmer v. B. C. Orchards, [1913] A.C. 319 as explained in Steedman v. Drinkle, [1916] 1 A.C. 275 at 280 applied.) Held: That the effect of the agreement was to create an interest in land. (McPherson v. Temiskaming Lumber Co. [1913] A.C. 145, followed.) Per, Locke J., that the respondent acquired an interest in the land under the license and the appellant under the agreement, and neither such interest nor the agreement itself would ipso facto terminate if there were default either in cutting the timber, or alternatively, in making the payments within the time stipulated. Per, Locke J., that the parties should be held to have contemplated that if the purchaser elected to pay for any part of the timber not logged prior to May 15, 1945, the quantities would be ascertained by cruising and the judgment at the trial, directing a reference to the registrar to ascertain the amount standing or not removed following which the balance owing if any would be payable, should be restored. APPEAL from the judgment of the Court of Appeal for British Columbia, [1], reversing (Sydney Smith J.A., dissenting), the judgment of Coady J. at the trial. Alfred Bull K.C. for the appellant. J.W. deB. Farris K.C. for the respondent. The judgment of the Chief Justice and Kellock J. was delivered by: KELLOCK J.:—Under the provisions of paragraph 6 of the agreement between the parties the appellant covenanted to commence putting logs in the water not later than August 15, 1941, and thereafter to "log and/or pay for" not less than 4,000,000 feet "each and every year during the term" of the agreement, subject to acts of God, strikes, breakdowns, fire or other causes beyond his control, and to log continuously the said lands and premises clean of all accessible and merchantable timber "not later than the 15th day of May, 1945". By the provisions of paragraph 28 time was expressly declared to be of the essence of the agreement and it was further provided that if the respondent should at any time "grant" any extension of time for the payment of any stumpage or other monies, such extension should not operate as a waiver on the part of the respondent of the provision as to time. The effect of the agreement as a whole was to create in the appellant an interest in land; McPherson v. Temiskaming, [2]. Until the early part of 1945 the parties paid no attention to the times fixed by the provisions of paragraph 6. The appellant logged considerably less than 4,000,000 feet per year, payment being made only for what had been logged and these payments were accepted by the respondent as and when made without any complaint. There was no request on the part of the appellant at any time for any extension of time and no "grant" of any extension by the respondent. The parties simply paid no attention to time so far as obligation to perform the contract was concerned. On April 13, 1945, however, the respondent served a notice purporting to be under the provisions of paragraph 26 of the agreement. Two grounds of default were alleged, as to one of which the learned trial judge has found there was no foundation in fact. The other ground specified was that the appellant had not "as agreed logged 4,000,000 feet during each year of the agreement". Under the agreement the appellant was not obliged to log 4,000,000 feet but to log and pay for that quantity or to pay for the quantity without having done the actual logging. I therefore agree with Robertson J.A., in the court below [3] in thinking that the notice was ineffective on the ground of its failure to specify a default within the terms of the agreement. I do not accept the argument advanced by Mr. Farris that the words "as agreed" are to be taken as meaning that the appellant had not paid for 4,000,000 feet and that the notice therefore meant that the appellant had not logged or paid for that quantity. It is contended on behalf of the appellant that by reason of the non-observance by both parties of the provisions as to time provided by paragraph 6, time ceased to be of the essence. In Kilmer v. British Columbia Orchards [4], the respondent company had sold land for a price to be paid in instalments at specified dates with a forfeiture clause in default of punctual payment, time being declared to be of the essence. The first instalment was duly paid on the execution of the agreement but the second instalment and interest were not paid on the day fixed, and a new day for payment was set. Default being made the company refused to complete and brought action for a declaration that the agreement was at an end. The purchaser counter-claimed for specific performance. It was held that the action failed and specific performance was granted. As explained in Steedman v. Drinkle [5], the Privy Council reached its decision on the ground that when the vendor had submitted to postponement of the date of payment it could not "any longer" insist that time was of the essence and the provision for forfeiture was considered as a penalty against which equity would relieve. It is true that in Kilmer's case there was in question default with respect to one instalment only and the question as to the effect of the postponement of one payment on the right of the vendor to insist on the provision as to time with respect to later instalments was not raised. In Steedman's case Viscount Haldane in the course of his discussion of Kilmer's case said at page 280: As time was declared to be of the essence of the agreement, this could only have been decreed if their Lordships were of opinion that the stipulation as to time had ceased to be applicable. Lower down on the same page he said what has already been quoted, in part, that: *** when the company had submitted to postpone the date of payment they could not any longer insist that time was of the essence. In Barclay v. Messenger [6], Sir George Jessel referred at page 354 to the conflicting views of Lord Cranworth, the Vice-Chancellor, and Lord Romilly, the Master of the Rolls, in Parkin v. Thorold. The judgment of the former is reported in 2 Sim., 1, and of the latter in 16 Beavin, 59. Sir George Jessel said: There was no actual decision as to the effect of the so-called waiver upon the original contract, but the Vice-Chancellor had expressed an opinion that the mere giving of time, where time was of the essence of the contract, would have no effect except by extending the time; and the Master of the Rolls thought that having once extended the time, you had destroyed the essentiality of the condition altogether. He went on to quote the comment of Lord St. Leonards upon the view of Lord Romilly as follows: *** but the opinion of the Vice-Chancellor on the voluntary extension of the time seems to be right, for it can hardly be contended that if time be of the essence of the contract, an extension of it by one party for the convenience of the other can be considered operative beyond the further day named. Sir George Jessel continues: It appears to me plain that a mere extension of time, and nothing more, is only a waiver to the extent of substituting the extended time for the original time, and not an utter destruction of the essential character of the time. This view, however, has not been accepted by the Privy Council in Steedman's case which, on the contrary, is in conformity with the view of Lord Romilly to the extent that an extension of time with respect to a particular instalment destroys the essentiality of time with respect to that instalment at least. In Southby v. Hutt [7], Lord Cottenham, L.C., said at page 621: The abstract of title was not delivered within the twenty-one days so that no question arises as to the time specified in these conditions of sale. The authors of the 8th Edition of Dart at page 436 express the view that: *** it is conceived that a waiver of time as respects matters (such as the delivery of the abstract, etc.,) which must precede completion, would, in general, amount to a waiver of the time (if any) fixed for completion. So, a vendor who receives and entertains the purchaser's requisitions, delivered after the time specified, waives his right (unless expressly reserved) to insist on the conditions as to time; and, as a general rule, either party relying on time being essential as a defence to an action for specific performance, should take the point promptly. In Boyd v. Richards [8], Middleton J.A., acted on a similar view and granted specific performance. In Korman v. Abramson [9], Rose J., as he then was, reached a contrary conclusion but without any analysis of the authorities. I find myself unable to accept the view of Rose J. In my opinion on the present state of the authorities the expressions from the judgment in Steedman's case which I have cited should be taken in a general sense, unless and until the Privy Council should rule otherwise. I therefore think that the conduct of the parties in the present case was such as to make the provision for complete logging by May 15, 1945, no longer of the essence of the contract. I would allow the appeal and refer the matter to the trial court to fix a reasonable time for the performance of the contract in view of all the circumstances, including the bringing of action and the injunction granted therein which affected due performance of the contract by the appellant. The appellant should have his costs throughout. RAND J.:—By a contract under seal entered into on May 15, 1941 the appellant, as purchaser and the respondent, the owner of a timber license covering certain lands on Cracroft Island, British Columbia, as vendor, agreed to buy and sell "all the accessible merchantable timber" on the lands, subject to the conditions of the license and the terms of the contract. The purchaser was given "full right, liberty and authority" to enter upon the lands and "to fell, buck and carry away all timber thereon"; "and was to pay stumpage upon timber cut and removed from the lands as the purchase price thereof" at the rate of $2.00 a thousand feet board measure for cedar and 90c for all other varieties, based on the official scaling, as and when the logs should be sold. A down payment of $500 was to be made and an additional $1.00 for each thousand on the first 1,500,000 feet, to serve as a deposit of $2,000 to be applied against the last 2,000,000 feet removed. Logs were to remain the property of the vendor until paid for, but the purchaser was free to sell in the ordinary course of business. The purchaser covenanted that he would commence putting logs in the water not later than August 15, 1941 and would "thereafter log and/or pay for not less than 4,000,000 feet board measure, British Columbia log scale, each and every year during the term of this agreement, subject to the acts of God, strikes, breakdowns, fire, or other causes beyond the control of the purchaser", and would "log continuously the said lands and premises clean of all accessible and merchantable timber" not later than the 15th day of May, 1945. A proviso entitled him to shut down logging operations for such time as the price of camp run cedar logs should be below the price of $11 a thousand feet, but they should be reopened and continued so soon as the market price should reach $11. Any excess in the footage produced in any year could be applied to a shortage in subsequent years. The purchaser was to provide for the scaling in the booms at Cracroft Island if practicable; otherwise at the point of delivery of the booms. The scale bills were to be delivered to the agent of the purchaser in Vancouver who was to sell the logs and pay the stumpage price to the vendor, to whom copies of the bills were to be furnished. The vendor was to be kept informed of the course of operations, to have the right at all reasonable times to examine the logging records and camp scale, and "to enter upon the said lands for the purpose of inspecting and surveying the said timber". The purchaser was to take precautions against fire. Any timber destroyed by this cause through his negligence was to be paid for as soon as the quantity had been determined by an official survey. Any timber damaged by fire was either to be logged or paid for as and when the quantity should be similarly ascertained. In case of loss during transportation or before scaling, the amount was to be determined by a comparison with the next two previous booms scaled in the booming ground. Then two clauses, 25 and 26, dealt with power to terminate. Under the first, on default in the payment of any moneys "strictly on the days and times and in the manner specified", or in respect of any of the "covenants, stipulations or agreements", and failure to remedy the breach within thirty days after notice in writing, the purchaser was forthwith to "cease to have the right to cut or remove any further timber from the said lands and logging operations shall immediately cease and the purchaser shall not be entitled to sell, remove, pledge or otherwise dispose of any timber or logs cut from the said lands or any part thereof." A receiver might be appointed by the vendor who would be "entitled to take possession of the said lands and premises". Clause 26 declared that if default in any of the "covenants, provisos, terms or stipulations" should continue for thirty days after written notice, specifying the default and the vendor's "intention to cancel this agreement", the agreement should be void and of no effect and the vendor should be at liberty to sell "the said lands and premises and logs" for her own use and benefit. In such event, the purchaser was to deliver up possession of the lands but would have no claim against the vendor who was to be deemed to be the owner and entitled to the possession of all the logs or products which at the time of the default had not been sold. Finally, time was expressly declared to be of the essence in respect of "all payments to be made and all conditions, provisos and stipulations to be observed and performed". The purchaser at once entered upon the operation. The land was a rough area suitable only for timber, but apparently not unusually difficult for logging purposes in that section of the Province. A main logging road with half a dozen bridges was built at a cost of approximately $15,000 and houses and works put on the lands brought the total initial outlay near $25,000. The quantity logged and sold in the first contract year was 328,000 feet; for the second year, 2,249,760 feet; for the third, 1,798,757 feet; and to May 15, 1945, 1,400,239 feet, making a total for the four years of 5,776,979 feet. On the last date there were between 1,500,000 and 2,000,000 feet of logs cut and lying on the lands. Thereafter and until June, 1947, the quantity scaled amounted to 3,354,594 feet. Operations were continued until the judgment of the Court of Appeal in March, 1948, but the quantity logged or scaled does not appear. The evidence indicated that from the commencement the purchaser had trouble in getting and keeping workmen. A normal logging crew would be about sixteen men, but only for two short periods was that number reached. There was difficulty also in obtaining repairs to equipment. But it is clear that the purchaser was a competent logger and had carried out the work efficiently. Although for the first three years the minimum of 4,000,000 feet had been neither logged nor paid for, no complaint was made by the vendor. The stumpage during those years and up to January, 1945 was paid in the regular way upon the sale of the timber and was accepted without demur. Early in April, 1945, the husband of the vendor, acting for his wife, a few days after intimating to the purchaser's agent for the first time his dissatisfaction with the operations, met the purchaser and the agent and informed them of the vendor's intention to cancel. The purchaser at once by letter declared his willingness to pay in cash the entire stumpage on the basis of a cruise of the lands made in 1933 which the trial judge found had been the general basis in the negotiations and according to which there was then on the land approximately 16,350,000 feet of lumber, and to pay any additional stumpage the completed operations might show to be owing. This offer was rejected and on April 13, the following notice was given:— Pursuant to the terms of an agreement dated the 15th day of May, 1941, between BERTHA CAMERON as Vendor and yourself as Purchaser you have made default in the covenants, provisos, terms, conditions or stipulations of the said agreement in the following respects, namely: 1. You have not as agreed logged 4,000,000 feet board measure, British Columbia log scale in each and every year during the term of the said agreement including the year 1944. 2. You have not logged continuously nor clean the said lands and premises of all accessible and merchantable timber, as you went along. If such default shall continue for a period of thirty days after notice shall have been given to you it is my intention to cancel the said agreement and in accordance with the terms of the said agreement the same shall be void and of no effect. During those thirty days, letters passed between solicitors and on the 13th of May there was tendered to the vendor the sum of $15,276.05, representing the calculation of stumpage then remaining unpaid according to the 1933 cruise, amounting to $15,705.50, plus 10 per cent, less the $2,000 then being held by the vendor. The tender was refused and a writ issued on the following day claiming specific performance and other relief, and bringing into Court the sum of $13,705.50, representing the outstanding stumpage, $15,705.50 less the same $2,000. This was accompanied by a declaration of willingness by the purchaser to bear the cost of a cruise to ascertain the exact balance of stumpage. The trial judge, finding that there had been no default as claimed in the second paragraph of the notice, held the first, construed by him to be limited to default up to May 15, 1944, had been cured by the tender and offer; he therefore decreed as claimed and referred it to the District Registrar to ascertain the amount, if any, to which the defendant might be entitled by way of further payment for the accessible merchantable timber. On appeal this judgment was reversed [10], the action ordered to be dismissed, and judgment on the counterclaim entered for damages for trespass and for logs cut or removed from the lands after May 15, 1945. Sloan C.J., assuming erroneously that the question of the validity of the notice had not been raised in the Court below, held the default could not be cured by a tender of money, and that the trial judge in effect rewrote the contract by substituting for the ascertainment of the price by scaling, an estimation by cruising. Robertson J.A., while finding the notice defective in treating the obligation of the purchaser to be that of logging merely without the alternative mode of payment, and because of the reference to the year 1944-45, not yet elapsed, was of the opinion that no property interest arose until the timber had been cut and removed, and that the real sale was of such logs only as the purchaser might cut and remove before May 15, 1945. Smith J.A. dissented and would have affirmed the trial judgment. He held the provision regarding time to have been waived and the parties to have been remitted to the ordinary rules of equity relating to that factor. The license had originally issued in 1913 and came under the provisions of the Forest Act of 1912, which made it transferable and renewable from year to year while there should be on the land merchantable timber in sufficient quantity to make it commercially valuable. By section 18, there was vested in the holder "all rights of property whatsoever in all trees, timber and lumber cut within the limits of the license during the term thereof, whether the trees, timber and lumber are cut by the authority of the licensee or by any other person with or without his consent." He could seize any such trees or timber in the hands of an unauthorized person and also "institute any action against any wrongful possessor or trespasser and to prosecute all trespassers and all offenders to punishment, and to recover damages (if any)." These powers, together with the right of perpetual renewal, undoubtedly create an interest in the land: McPherson v. Temiskaming Lumber Company [11]; and it was the beneficial interest in them, including, as between the parties, the right of possession, which when realized would exhaust the license, that was conferred on the purchaser: the retention of the legal title to the license and the logs was only for security purposes. The purchaser therefore likewise acquired an interest in land. I agree with Robertson J.A. that the notice given was defective. The first item alleging failure to log does not specify a default under the contract; and the reference to the year 1944, by its ambiguity, strikes it likewise with a fatal infirmity; and the second item was found against the respondent. I think, also, with Smith J.A., that the provision as to time was waived. It was purely formal. The indulgence to be given to the purchaser through delay in strikes and other causes beyond his control as well as the specific right to cease operations pending the adjustment of the price of cedar show beyond doubt that time was not in fact of the essence; and the acceptance in each of three years of less than one-third of the stumpage the contract called for and the affirmation of the contract up to January, 1945, relieve the Court from the coercive effect of the formal stipulation: Steedman v. Drinkle [12]. Even, then, had the notice of cancellation been effective, the Court would be free to apply its ordinary rules as to time and relief from forfeiture in specific performance. In the covenant to "log and/or pay for" not less than the minimum in each year, the word "pay" must be taken as a supplementary mode of performance in payment, though incapable by itself of being definitive, which the purchaser had the right to employ. And on its further requirement to log the land "clean" not later than May 15, 1945, two observations are to be made: taking the word "log" to extend to removal from the lands, the obligation does not include payment: and since the purchaser may pay in each year, he may do so in the last year, which implies that the logging may not be completed although in fact fully paid for. The right to enter and remove was subject, as to the vendor, "to the payment of the stumpage and other moneys as hereinafter set forth", but to no other provision. Apart altogether from any right of removal attached by law, this is a power coupled with an interest or a license annexed to a title and in the absence of qualification is irrevocable. Nowhere in the contract is that right of removal rendered controllable or conditioned except under the forfeiture clauses by notice, in the absence of which the right continues in full efficacy; but as security against delay in realizing the value of all the timber, which was the primary object of the vendor, were the obligation to log and the power to terminate. The amount offered by the purchaser on the threat of cancellation, greater than any sum then due, the vendor was bound to accept under the minimum clause and the promise for the balance was what the contract itself provided. Acceptance of it would have left only a small quantity of logs unpaid for. It is pertinent to the time for paying this balance, that the counterclaim, which the Court of Appeal has allowed, was not delivered until approximately eighteen months after the commencement of the action, during which time the purchaser continued operations. Although there was the tender and later money brought into Court, from the first interview in April to the present appeal he has asserted his readiness and willingness in this somewhat involved situation to do whatever was incumbent upon him as a condition of the equitable relief sought. I agree that the Court cannot substitute a cruise of standing timber for the scaling of logs in boom to ascertain the total price; and the purchaser must perform substantially the entire obligation assumed by him: from this it follows that he must fulfil the covenant to log the lands clean within such time as under all the circumstances would be just and equitable. I would, therefore, allow the appeal and direct the following judgment:— 1. Declare the contract to be subsisting. 2. Declare the money in Court, subject to the payment of costs, to be payable out to the respondent to apply on the purchase price as from the date of payment in. 3. Restrain the respondent from interfering with the logging operations or from taking any further action on the contract otherwise than as allowed herein before such date to be fixed by the trial Court for the completion of the logging and it is referred back to that Court for such purpose. 4. The foregoing to be without prejudice to any claim for damages on the covenant to log or pay the minimum in each year and to complete in four years, to be made on a reference or by action. 5. Liberty to apply. The appellant should have his costs throughout. ESTEY J.:—The appellant asks specific performance of an agreement under which he purchased from the respondent all the accessible merchantable timber situated upon Timber License No. 11943 being Lot 532, Range 1, Coast District, B.C. The agreement, dated May 15, 1941, was subject to the conditions contained in the license from the Crown and to the appellant paying all rents, royalties, taxes and fire protection fund charges. It provided that appellant would pay as the purchase price thereof stumpage as follows: For all cedar logs, at the rate of two dollars ($2.00) per thousand feet board measure, For all other species of timber, at the rate of ninety cents ($.90) per thousand feet board measure. The learned trial judge found that the agreement was made upon the basis of the Eustace Smith cruise of the premises, made in November 1933, which disclosed a total of 18,511,000 board feet of accessible merchantable timber. Since then and prior to this agreement, 2,124,275 board feet had been logged by a third party, leaving 16,386,725 board feet upon the premises. Paragraph six of the said agreement reads: 6. The Purchaser covenants and agrees with the Vendor that he will commence putting logs in the water not later than the fifteenth day of August, 1941, and will thereafter log and/or pay for not less than Four Million feet board measure British Columbia log scale, each and every year during the term of this agreement, subject to the acts of God, strikes, break-downs, fire, or other causes beyond the control of the Purchaser, and will log continuously the said lands and premises clean of all accessible and merchantable timber as hereinbefore defined not later than the fifteenth day of May, 1945. PROVIDED ALWAYS that the Purchaser shall be entitled to shut down his logging operations for such time as the price of camp run Cedar logs shall be below the price of Eleven Dollars ($11.00) per thousand feet board measure British Columbia log scale on the Vancouver market, according to the British Columbia Loggers' Association price, but shall re-open and continue logging so soon as the market price thereof shall reach the sum of Eleven Dollars ($11.00). Notwithstanding the foregoing provisions that the appellant would commence putting logs in the water not later than August 15, 1941, log and/or pay for not less than 4,000,000 feet in each year and log continuously, he had logged up to April 15, 1945, but 5,776,979 board feet and paid the purchase price therefor to the respondent in the sum of $9,383.26. This $9,383.26 was paid in relatively small amounts as the timber was scaled and sold during the currency of this agreement so that when, on April 13, 1945, the respondent gave her notice of cancellation all the lumber logged had been paid for in full and she had also the deposit of $500 and the additional deposit of $1,500. These deposits were required under the terms of the agreement and to be applied on account of the purchase price or stumpage as hereinafter set out. These payments covering the purchase price of the timber logged were accepted, and while inquiries as to why more was not being logged were made from time to time, there was never a complaint until the respondent's husband, who acted as her agent throughout, in April 1945 (the exact date is not disclosed) told the appellant that as he had not fulfilled his obligations under the agreement, he (the husband) expected to receive instructions to give notice terminating the agreement. On the same date, and as a result of that interview, the appellant wrote the respondent in part: I do refer you to clause 6 of the agreement which provides for deferment of payments for reasons including causes beyond my control, and it would be a very simple matter for me to establish that the difficulties of labour, equipment, etc., has made it impossible for me to log these limits any faster than I have done. And he further pointed out that on two occasions he was required by the Government Forestry Department to discontinue operations because of danger of fire. Then, after making reference to his investment in roads and other expenditures, he stated: I write to inform you that I have made arrangements to provide for payment in full of the timber which you have sold to me by the 15th of May next, and thus, irrespective of the difficulties of this operation, you will be paid as you contemplated. He further stated that he proposed to tender the full amount due on May 15th and "If, as and when the scale bills establish that there is more timber logged from the property than the 16,000,000 feet anticipated, I undertake to pay for any such excess timber at the contract rate." The respondent's solicitor acknowledged the letter under date of April 13, 1945, stating that under the terms of the agreement he was giving the notice of cancellation and that in any event, the agreement would terminate on the 15th of May, 1945, when logging operations by the appellant must cease and the respondent would take possession. In fact the respondent gave notice of cancellation on April 13, 1945, which reads: Pursuant to the terms of an agreement dated the 15th day of May, 1941, between Bertha Cameron as Vendor and yourself as Purchaser you have made default in the covenants, provisos, terms, conditions or stipulations of the said agreement in the following respects, namely: 1. You have not as agreed logged 4,000,000 feet board measure, British Columbia log scale in each and every year during the term of the said agreement including the year 1944. 2. You have not logged continuously nor clean the said lands and premises of all accessible and merchantable timber, as you went along. If such default shall continue for a period of thirty days after notice shall have been given to you it is my intention to cancel the said agreement and in accordance with the terms of the said agreement the same shall be void and of no effect. Dated at Vancouver, British Columbia, this 13th day of April, A.D. 1945. Bertha Cameron This notice, as held by Mr. Justice Robertson, was ineffective in that there was no covenant in the agreement to log 4,000,000 feet board measure per year but rather to log and/or pay for 4,000,000 feet board measure, and in respect to the second default that was found in fact not to exist by the learned trial Judge. The respondent in her statement of defence alleges a further default in that the appellant had not logged the said lands and premises clean of all accessible and merchantable timber by the 15th of May, 1945. The foregoing indicates that the appellant realized his default and because of the thirty-day period he could only remedy that default by making payment under the alternative method of performance provided under paragraph six. The giving of the foregoing notice was followed by interviews and correspondence throughout which the appellant offered to pay or make such settlement as would remedy his default. Nothing came of this effort and on May 11, 1945, the appellant's solicitor wrote explaining his proposed tender of $15,276.05 and concluded: We wish to make it clear past doubt that Mr. Hanson is ready, able and willing to satisfy any proper claim Mrs. Cameron has under the agreement of May 15, 1941. The tender of the said sum of $15,276.05 was made on May 12, 1945, within the thirty-day period fixed by the notice of April 13th, and was refused. This sum of $15,276.05 was computed by accepting the figures of the Eustace Smith cruise deducting the amounts logged, leaving 10,609,746 board feet divided as follows: Cedar 5,506,116 feet @ $2.00 per M. $11,112.23 Other Species 5,103,630 feet @ .90 per M. 4,593.27 $15,705.50 Then he added 10 per cent as an allowance for any error in favour of the respondent in the said cruise and deducted the deposits in the sum of $2,000. This action was commenced on May 14, 1945, asking inter alia a declaration that the agreement is valid and subsisting, for specific performance thereof, an injunction restraining the respondent from interfering and paying into Court the sum of $13,705.50 with an undertaking to pay the cost of a cruise and of any additional amount found to be thereby owing. The respondent pleaded default on the part of the appellant in that (a) he did not log and/or pay for not less than 4,000,000 board feet in each year; (b) he did not log the premises continuously and clean of all merchantable timber by May 1945; (c) he did not log the premises clean of all merchantable timber as he proceeded and because of which the value of the said lands and timber had been impaired and decreased; and further that time was expressly of the essence in respect of all payments, conditions and provisos; and that respondent gave notice of cancellation dated April 13th, terminating the agreement, and that, in any event the agreement terminated by virtue of its terms by April 1945; that, under all the circumstances, the appellant was not entitled to relief from forfeiture. The respondent also counterclaimed asking a declaration that the said agreement was null and void, an injunction restraining the plaintiff from further cutting and removing the timber, and for possession of the said lands and premises and damages. The learned trial Judge found that, under the circumstances, the appellant had not made a default under his covenant to log continuously and clean, but did find that the appellant had made default in that he did not log and/or pay for 4,000,000 board feet in each year. The evidence supports these findings of facts. Therefore the essential issues are whether the appellant had under the terms of the agreement the right to remedy his default, and if so, did he by his tender and payment in Court effect that remedy. This is an executory agreement of sale of timber with a covenant that the logging should be completed within a specified period rather than a sale subject to a condition that the logging should be completed in a specified time. The vendor might in such a case be entitled to damages but no evidence was here adduced and the learned trial Judge stated "no such claim for damages is before me for consideration." The provisions of this agreement indicate that the parties contemplated, subject to the contingencies therein provided for, including causes beyond the control of the appellant and the price of cedar falling below $11 per thousand feet, continuous logging operations on the part of the appellant. If, however, in any year he should not log 4,000,000 board feet, then after allowing for any excess in a previous year, his obligation was to make up the difference by a payment in cash. The appellant had paid the deposits as aforesaid, and commenced his logging operations on or before the 15th day of August, 1941. He logged very little the first year, a little more the second year, and had in fact, when the notice of cancellation was served, logged about one-third of the estimated accessible and merchantable timber, and had made the payments thereto from time to time throughout the currency of this agreement. The parties, by paragraph twenty-eight, provided "Time is expressly declared and stipulated to be of the essence of this agreement in respect of all payments to be made and all conditions, provisos and stipulations to be observed and performed." Courts of Equity, which look at the substance as distinguished from the letter of agreements, no doubt exercise an extensive jurisdiction which enables them to decree specific performance in cases where justice requires it, even though literal terms of stipulations as to time have not been observed. But they never exercise this jurisdiction where the parties have expressly intimated in their agreement that it is not to apply by providing that time is to be of the essence of their bargain. If, indeed, the parties, having originally so provided, have expressly or by implication waived the provision made, the jurisdiction will again attach. Viscount Haldane, Steedman v. Drinkle, [1916] 1 A.C. 275 at p. 2

Hanson v. Cameron

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Full judgment (source text)

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Hanson v. Cameron

Court headnote

Full judgment (source text)

Hadley v Baxendale

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Hadley v Baxendale

Sattva Capital Corp v Creston Moly Corp

Exam & revision prep