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Supreme Court of Canada

Municipal law—Sale of goods—Order placed by appellant company for supply of snow removal equipment as result of negotiations with town officials—Equipment placed at disposal of town in January on trial basis and kept until following May when resolution for its purchase defeated—Dismissal of appellant’s action for price of goods allegedly sold and delivered to town affirmed—Sale of Goods Act, R.S.N.S. 1967, c. 274, s. 20—Towns Act, R.S.N.S. 1967, c. 309.

As a result of negotiations between the secretary-treasurer of the appellant company and two officials of the respondent town for the supply of snow removal equipment, the appellant placed an order for such equipment in November, 1967, and some time after its arrival at the appellant’s garage it

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was used on a trial basis by employees of the town. On January 20, 1968, at the suggestion of the appellant the equipment was moved to the town garage for greater convenience.

On January 25, the appellant addressed to the town a document entitled “Proposal” which contained a quotation for the equipment. This proposal was never accepted by the town nor was it ever approved by the company with which the order had been placed and on whose behalf the proposal was sent. In the town engineer’s report for January it was stated that following the next snow-storm the equipment would be viewed by the street committee and a recommendation would be made to council. However, there were no snow-storms of sufficient consequence to test the equipment during the remainder of the winter. A suggestion made by the engineer in February that the equipment be rented pending the making of a decision as to purchase was rejected by the appellant’s secretary-treasurer. The latter testified that at some time after the 1968 estimates had been prepared in March, his company was still awaiting the council’s decision.

On May 13, 1968, when the equipment was still in the town garage, a resolution to purchase it was defeated in council and within two days the appellant directed its second communication to the town. This took the form of a statement from the appellant itemizing the equipment and stipulating the same price as had been previously quoted. This bill was returned and when an attempt was made to return the equipment the appellant refused to accept it on the ground that it had been purchased by the town. Subsequently, the appellant brought an action against the town for the price of the equipment.

The case was tried before a jury, which gave an affirmative answer to the question as to whether the town had possession of the equipment for a period of time longer than was reasonable, and answers favourable to the appellant were given in reply to other questions. The trial judge found that the answers to the other questions were perverse, but he took the view that there was evidence upon which the jury could have found as they did in respect of the first question. The action was dismissed and, on appeal, the judgment of the trial judge was affirmed. The appellant then appealed to this Court and rested his argument on the finding that the town had possession of the equipment for a period longer than was reasonable.

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Held (Hall and Laskin JJ. dissenting): The appeal should be dismissed.

Per Ritchie, Spence and Pigeon JJ.: Before r. 4 of s. 20 of the Sale of Goods Act, R.S.N.S. 1967, c. 274, could be invoked it was necessary to establish that a contract existed between the appellant and the respondent.

An incorporated town is in a different position at law from a natural person or a limited company. Municipal powers are exercised by the Council, either directly or through a delegation of authority to its officers. The purchase of the snow removal equipment was within the powers of the town if those powers had been exercised by the council. (Towns Act, R.S.N.S. 1967, c. 309, ss. 112 and 171.) The purchase of such equipment was not one of the items with respect to which the town was expressly authorized to make by-laws (s. 221) but the fact that there was no provision for the formality of a by-law in this regard did not mean that no formality whatever was required or that the business of the inhabitants, by whom the town councillors were elected, could be conducted at the whim of individual councillors or town employees. Under s. 27(2) of the Act it was provided that all questions arising in council shall be decided by majority vote of the councillors and the town could not enter into a contract for the purchase of the equipment here in question without taking collective action through the established quorum of its elected representatives.

The appellant’s contention that the circumstances should be treated as evidencing the existence of an executed contract because of the intermittent use of the equipment and its retention in the town’s garage was rejected. As held by the Court below, there must be a contract before it can be said that there is an executed contract and there was no contract here, executed or executory.

The equitable doctrine of acquiescence, which is founded upon there having been a mistake of fact, was not applicable in this case. The appellant did not at any time act on the faith of a mistaken belief that the town had agreed to buy his equipment.

Per Hall and Laskin JJ., dissenting: The present case was one of a unilateral contract, not in the sense of a promise for an act, but rather in the sense of a delivery of goods, with the manifested expectation of payment therefor, under circumstances where previous negotiations, and events subsequent to delivery, supported the conclusion that use and

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retention beyond a reasonable time without any disavowal of a contractural commitment would constitute assent. That assent resulted here in a binding promise to pay and, at the same time, certified to an acceptance of the goods so as to render inapplicable any reliance by the respondent on the Statute of Frauds requirement of a writing, now found in s. 6(1) of the Sale of Goods Act, R.S.N.S. 1967, c. 274.

The respondent was in no different position than would be an individual or private business corporation acting in the same way. In the absence of any imperative statutory limitations respecting the manner in which contracts within its assigned powers were to be concluded, the ordinary principles of contract law applied.

[Waterous Engine Works Co. v. Town of Palmerston (1892), 21 S.C.R. 556; Toronto Electric Light Co. v. City of Toronto (1915), 33 O.L.R. 267; Eastern Securities Co. v. City of Sydney, [1923] 4 D.L.R. 717, applied; Lawford v. Billericay Rural District Council [1903] 1 K.B. 772; East Middlesex District High School Board v. London Board of Education, [1965] 2 O.R. 51; Bernardin v. Municipality of North Dufferin (1891), 19 S.C.R. 581; Willmott v. Barber (1880), 15 Ch. D. 96; Canadian Superior Oil Ltd. et al. v. Paddon-Hughes Development Co. Ltd. et al, [1970] S.C.R. 932; Sohio Petroleum Co. et al. v. Weyburn Security Co. Ltd., [1971] S.C.R. 81, referred to.]

APPEAL from a judgment of the Supreme Court of Nova Scotia, Appeal Division[1], affirming a judgment of Cowan C.J.T.D. dismissing appellant’s action for price of goods allegedly sold and delivered to respondent. Appeal dismissed, Hall and Laskin JJ. dissenting.

H.F. Jackson, Q.C., for the plaintiff, appellant.

D R. Chipman, Q.Ç., for the defendant, respondent.

The judgment of Ritchie, Spence and Pigeon JJ. was delivered by

RITCHIE J.—This is an appeal from a judgment of the Appeal Division of the Supreme Court of

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Nova Scotia affirming a judgment rendered at trial by Chief Justice Cowan dismissing the appellant’s action for the price of certain snow-blowing equipment allegedly sold and delivered by the appellant to the Town of Bridgewater.

The circumstances giving rise to this litigation are fully set forth in the judgment of the learned trial judge and reviewed in some detail in the reasons for judgment rendered by Cooper J.A. on behalf of the Appeal Division, which latter reasons are reported in 8 D.L.R. (3d) 243, 1 N.S.R. (2d) 161, so that it will be unnecessary for me to do more than state what I deem to be the salient facts bearing upon the central question of whether or not the Town of Bridgewater ever entered into any contract, either express or implied, to purchase the machinery in question from the appellant.

The appellant is a body corporate doing business in the Town of Bridgewater from its premises on La Have Street in that town and it is apparent from the evidence of its secretary‑treasurer, Harold Silver, that, from the latter part of 1966 or early 1967, he was seeking on behalf of the appellant to interest the town in the purchase of equipment for removing snow from its sidewalks. In furtherance of this project Mr. Silver entered into discussions with the town engineer and the superintendent of streets of the Town of Bridgewater and ultimately he brought a piece of equipment known as a “Cub Cadet” with a blower to the town and arranged to have a demonstration held in the presence of the mayor, three town councillors, the engineer and the street superintendent, but unfortunately this demonstration failed and the equipment was returned to the appellant. After this Mr. Silver says that he negotiated with the engineer and the street superintendent, as a result of which, on November 17, 1967, his company ordered a tractor, cab, blade and Syms cab and that later a blower was ordered on November 28.

This equipment had all arrived at Silver’s Garage by December 28 at which time there was heavy snow on the ground, and Mr. Silver says that the engineer and street superintendent showed some anxiety to get the machine going but it was not until January 15 that two junior employees of

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the town came to the garage and took the equipment for the purpose of blowing and cleaning the sidewalks. An Anderson plough which had also been ordered did not arrive until January 18 and was not tried out until January 20, until which date all the equipment appears to have been kept at Silver’s Garage for most of the time when it was not in use. One of the town employees says that the equipment was moved to the town garage for greater convenience at the suggestion of Mr. Silver, and this appears to have taken place on or about January 20.

On January 25, Silver’s Garage addressed to the Town of Bridgewater a document entitled “PROPOSAL” which read, in part, as follows:

We are pleased to quote you for acceptance within ten days of this date prices and terms on International motor trucks and equipment described below…

There then follows a description of the equipment above referred to and a quotation of a net total price of $5,700. This document concludes with the following paragraph:

We thank you for the courtesy extended to us and hope to be favoured with your acceptance of this proposal. Your acceptance of this proposal will not be binding upon us until this proposal is approved hereon in writing by one of our district managers, sales managers or branch managers.

Respectfully submitted,

International Harvester Company of Canada
by Silver’s Garage Limited

This proposal was never accepted by the Town of Bridgewater nor was it ever approved in writing by one of the individuals last referred to. Mr. Silver stated that the “PROPOSAL” was in fact a bill for the equipment which he had furnished to the town, but it must be remembered that at this time Mr. Silver had had no dealings with the Town of Bridgewater as such and that he had acted from the outset as the result of conversations with one or two individual councillors, the engineer and the superintendent of works, none of whom either had any authority from the town or purported to exercise it. Under these circum-

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stances it appears to me that Mr. Silver’s contention that the document sent to the town on January 20 was intended to be a bill or was a bill is totally untenable. It was the first communication which the appellant had had with the town, and it did no more than express the hope that the company would be favoured with the town’s acceptance of its proposal to sell the equipment in question.

The purchasing agent of the town, who had no authority with respect to the purchase of the equipment in question, did however, state in his evidence that the town estimates for 1968, which were prepared in the month of March, contained an item under capital expenditures of $5,800 “for some thing like a side walk snow blower” and a sweeper attachment for $1,400, but it was made plain in the evidence of the town clerk that these estimates constituted estimated expenditures and were never considered as committing the town to purchasing the goods therein referred to.

The appellant placed some reliance on the fact that at the meeting of town council held on February 28, “the engineer’s report for the month of January was received by motion of councillors Johnson and Kydd”, but it is pointed out that the only relevant paragraph of that report reads as follows:

That the garage have quoted a price for the purchase of a small tractor, plough and snow blower for purposes of sidewalk ploughing. Following the next snow storm this equipment will be viewed by the street committee and a recommendation made to Council. The dealers for Bobcat and Bombardier are also prepared to send us a machine to try out following the next snow storm.

There were no snow-storms of sufficient consequence to test the equipment during the remainder of the winter of 1968 and no recommendation was ever made to council pursuant to the engineer’s report.

At the time of the regular monthly meeting of the town council on May 13, 1968, when the equipment was still in the town garage, a resolution to purchase it was defeated in council

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and within two days the appellant directed its second communication to the Town of Bridge‑water. This did not take the form of a proposal made on behalf of International Harvester Company of Canada, but rather that of a statement from Silver’s Garage Limited itemizing the equipment and stipulating the same net price of $5,700. The town returned this bill pointing out that the resolution to buy the equipment had been defeated and on May 28 the town clerk sent a notice to the appellant requiring it to forthwith remove its property from the custody of the town.

There are two other small pieces of evidence which appear to me to be of some consequence in determining the issue raised by this appeal. In the first place, in view of Mr. Silver’s insistence that he had sold the equipment to the town no later than January 9, 1968, it is surprising to find him testifying that at some time after the 1968 estimates had been prepared in March, his company was aware that the council had not made up its mind about the matter and he stated “but they seemed to be putting it off for more important things in the Council and we were waiting. Maybe we shouldn’t have waited.” He was asked at the trial:

Q. And that is still your attitude?

A Yes.

Q. You were patiently awaiting their decision, is that it?

A. Yes.

There is one other piece of evidence to which Mr. Justice Cooper referred in the Court below to the effect that some time late in February 1968, the town engineer suggested to Silver that he might consider charging the town rental for the equipment pending the making of a decision as to purchase and the trying out of other equipment. The town engineer was unable to recall the exact words in which Mr. Silver repudiated this suggestion, but he stated: “He said something to the effect of ‘Well, don’t bother with that’ or something”. After the resolution of May 13, the street superintendent, on the instructions of the mayor,

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attempted to return the equipment to Silver’s Garage, but Mr. Silver refused to accept it on the ground that it had been purchased by the town.

The case was tried before a jury which answered the following questions in the manner indicated:

1. Did the Town of Bridgewater have possession of the equipment of Silver’s Garage Limited for a period of time which was longer than was reasonable?

A. Yes.

2. (a) Was an agreement express or implied made between the parties, that is the Town of Bridge-water and Silver’s Garage for the purchase of the equipment in question?

A. Yes, implied due to the length of time the Town of Bridgewater used the equipment in question.

(b) If so, how and when was the agreement made and by whom purporting to act on behalf of the Town of Bridgewater?

A. Due to contact made during this period by Mr. Lusby and Mr. Beck acting for the Town of Bridgewater.

Acting under the authority of Order XXXIV, r. 32 of the Rules of the Supreme Court of Nova Scotia, the learned trial judge found the answers to question 2(a) and 2(b) to be perverse and such that no jury reviewing the evidence as a whole and acting reasonably could have reached, but he took the view that there was evidence upon which the jury could have found as they did in respect of the first question. The authority of the learned trial judge to deal as he did with questions 2(a) and 2(b) was not questioned before this Court and the appellant rested his argument on the finding which remains outstanding to the effect that the town had possession of the equipment for a period of time which was longer than was reasonable.

The appellant’s main argument in this regard is to the effect that by virtue of the provisions of Rule 4 of s. 20 of the Sale of Goods Act, R.S.N.S. 1967, c. 274, the jury’s answer to question 1 is to be treated as a finding that the property in the

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equipment in question had passed to the Town of Bridgewater. The relevant provisions of s. 20 read as follows:

20. Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer:

Rule 4. When goods are delivered to the buyer on approval, or “on sale or return”, or other similar terms, the property therein passes to the buyer,

(b) if he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is a question of fact.

In my view the provisions of this rule are limited in their application to the determination of the time when the property passes to the buyer under a contract or agreement of sale “on approval or ‘on sale or return’ or other similar terms”. Before this rule can be invoked it must, in my opinion, be shown that such a contract or agreement in fact existed between the appellant and the Town of Bridgewater and, as will hereafter appear, I take the view that this could only be established if it could be shown that the town, acting through a resolution of its council, accepted the proposal made by Silver’s Garage Ltd. on January 25, 1968, or that the town council gave authority to the town engineer or the assistant town engineer or any one or more members of council to enter into such an agreement on its behalf.

Bridgewater is an incorporated town and as such is subject to the Towns Act, R.S.N.S. 1967, c. 309 (hereinafter referred to as the Act) so that it is a public statutory corporation comprised of the inhabitants of the town and governed by the town council consisting of a mayor and not less than six councillors who are elected by the inhabitants with the statutory authority to exercise the powers conferred upon the town by the Act. (See ss. 3, 7 and 19(1) of the Act.)

It appears to me to be important at the outset to appreciate that an incorporated town, subject

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to the Act, is in a different position at law from a natural person or a limited company; the inhabitants constitute the corporation (see s. 3) and the powers conferred on it by the Legislature are required to be exercised by its elected governors (i.e. the council) in the manner prescribed by the Act. In this latter regard, I would adopt as applicable to towns under the Towns Act the succinct passage found in 14 C.E.D. (Ont. 2nd), p. 413, where it is said:

All municipal powers, rights and duties are exercised, enforced or discharged by the council, either directly, or by such officers and servants as receive their authority, either by delegation from it or directly from the Legislature.

There is no doubt in my mind that the purchase of the snow-blowing equipment here in question was within the powers of the town if those powers had been exercised by the council thereof. In this regard, s. 112 of the Act reads:

112. The council shall exclusively have power to vote, rate, collect, receive, appropriate and pay all sums of money required by the town for the following purposes, that is to say:

(ab) the making of all other expenditures incurred in the due execution of the powers and duties vested in or imposed upon the town, its mayor, council or officers, by this or any other Act of the Legislature;…

I think it important to note also the provisions of s. 171 of the Act which deals particularly with snow removal from sidewalks and provides that:

171. The town council may at the expense of the town make provision for clearing away the snow and ice from the sidewalks, gutters, thoroughfares, or public places, in such portions of the town as the council by resolution designates.

The purchase of snow removal equipment is not one of the items with respect to which the town is expressly authorized to make by-laws (see s. 221) but the fact that there is no provision for the formality of a by-law in this regard does not mean that no formality whatever is required or that the business of the inhabitants, by whom the town councillors are elected, can be conducted at the whim of individual councillors or town em-

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ployees. Under s. 27(2) of the Act it is provided that all questions arising in council shall be decided by majority vote of the councillors and, as I have indicated, the town could not enter into a contract for the purchase of the equipment here in question without taking collective action through the established quorum of its elected representatives.

As there must, generally speaking, be some affirmative action, evidenced by a majority vote of the council members, in order to commit the town to any legal obligation, it seems to me to follow that the council’s failure to act at all in a given situation cannot be regarded as having had the effect of changing the legal position of the town. It follows therefore, in my view, that the council cannot be taken to have exercised the town’s power to purchase a piece of equipment simply because that equipment was allowed to remain on town property at the behest of the vendor without any affirmative action being taken to remove it.

I do not suggest that every stock item of equipment required by the town should be the subject of a separate resolution, but in the present case it is made plain that the town has delegated such authority to its purchasing agent, Lawrence Selig. There is no question as to the extent or propriety of the town giving such authority for the day-to-day discharge of its business, but it is made clear in Mr. Selig’s own evidence that the snow removal equipment here in question was beyond his authority and that he had no authority from the council to make any such purchase.

The case of Waterous Engine Works Co. v. Town of Palmerston[2], was one in which a fire engine was ordered by the municipal corporation and although a contract was signed for its construction and the engine was delivered to the town for testing, it was nevertheless held that notwithstanding the fact that the town had kept the engine in the town hall for a month, it could not, in the absence of a by-law as required by the Ontario Municipal Act, be said that the contract

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was completed by acceptance and the manufacturer’s claim for the price of the engine accordingly failed. This case bears many similarities to the present one, and it is pertinent to note that in this Court Mr. Justice Strong, affirming the judgment at trial and on appeal, held that the contract was executory and found that “Under the circumstances the result is inevitable that there never was any contract legally binding on the municipality respecting the purchase of this fire engine.”

There is a line of cases relied on by the appellant, to which reference was made in the reasons for judgment of the learned trial judge, where municipal corporations were required to act through by-law or to execute their contracts under seal and where it was held that contracts which had been approved by resolution of the municipal council and which had been fully performed by the other contracting party, were enforceable notwithstanding the absence of the seal or by-law. In all these cases, however, as the learned Chief Justice pointed out, there was a resolution of the council approving the contract and it was only the formality of the seal or by-law that was lacking. (See Lawford v. Billericay Rural District Council[3]; East Middlesex District High School Board v. London Board of Education[4]; and the case of Bernardin v. Municipality of North Dufferin[5], where Gwynne J. made a full review of a number of other such cases.)

After having read a great many of the authorities, I am satisfied that where a municipal corporation has entered into a contract by resolution of its council, the absence of the formality of a by-law or an agreement under seal is not necessarily fatal to the claim of the other contracting party if he has performed his part of the contract and the corporation has accepted the benefit of it.

In the present case there is no resolution of council authorizing this contract nor any indication that the council acted collectively in any way in relation to the purchase of the equipment in question.

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In relation to the plaintiff’s contention that the present circumstances should be treated as evidencing the existence of an executed contract because of the intermittent use of the equipment for cleaning sidewalks and its retention in the town’s garage, I adopt the view succinctly expressed by Mr. Justice Cooper in the course of the reasons for judgment which he delivered on behalf of the Court of Appeal where he said:

In short, there must be a contract before it can be said that there is an executed contract and there is no contract here, executed or executory.

It has also been suggested in support of this appeal that the outstanding finding of the jury that the town had possession of the equipment for longer than was reasonable is to be treated as meaning that the town, as a bailee became converted into a purchaser because it failed to return the equipment or reject the offer sooner. This argument amounts to a contention that the town, by acquiescing in the equipment remaining in its garage, is to be taken as having accepted the appellant’s offer and that its silence is to be taken as assent. In the absence of any express contract to purchase the equipment, the town would have had a legal right to pass the resolution of May 13, 1968, and to require the appellant to remove its property from the town garage forthwith unless this right can be said to have been defeated on the ground that the town had accepted the appellant’s offer by silent acquiescence, but in order to support this latter argument it must, in my view, be shown that the appellant mistakenly believed that the goods had in fact been accepted by the town.

The case of Toronto Electric Light Co. v. City of Toronto[6], was one in which the electric light company, acting under statutory authority, was authorized to construct works for the distribution of electricity through the streets of certain cities, towns and municipalities “subject to such agreement in respect thereof as shall be made between the company and the said municipalities respectively and under and subject to any by-law or by-laws of the councils of the said municipalities.” The electric light company, apparently acting with

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the acquiescence of certain officials of the city, but without any agreement evidenced by resolution or otherwise with the city itself, had erected certain poles and other works in the city streets which the city sought to remove. The electric light company, notwithstanding the absence of any express assent by the city, alleged that the city had acquiesced in the erection of the electrical works and at trial Middleton J.[7] granted an order restraining the city from removing the company’s poles from certain of its streets. On appeal the defence of estoppel by acquiescence was dealt with by Meredith C.J.O. in one short paragraph where he said at p. 285:

Now, in order to raise an estoppel the person who sets it up must have been mistaken as to his own legal rights and must have expended money or done some act on the faith of his mistaken belief; and the person against whom the estoppel is set up must have known of his own rights and of the other person’s mistaken belief, and must have encouraged him in his expenditure of money or other act, either directly or by abstaining from asserting his legal right…

The authority cited for this proposition is the article on “Acquiescence” in Halsbury’s Laws of England which is now to be found in the 3rd edition, vol. 14 at pp. 638 and 639 and which in turn is based in large measure on the well-known case of Willmott v. Barber[8], where Mr. Justice Fry observed, at p. 101: “The equitable doctrine of acquiescence is founded upon there having been a mistake of fact.”

In the course of the reasons for judgment rendered by Hodgins J.A. in the Toronto Electric Light Co. case, supra, he quotes the very full discussion of the elements or requisites of the doctrine of acquiescence which is to be found in Mr. Justice Fry’s decision, but as this quotation was fully set forth and approved by a unanimous judgment of this Court in Canadian Superior Oil Ltd. et al. v. Paddon-Hughes Development Co. Ltd. et al.[9], and as it was again quoted at length in the

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reasons for judgment delivered on behalf of this Court in Sohio Petroleum Co. et al. v. Weyburn Security Co. Ltd.[10], I do not think that I need to repeat it.

In the present case, in my opinion, the appellant did not at any time act on the faith of a mistaken belief that the town had agreed to buy his equipment. The equipment was taken to the town garage at the suggestion made by Harry Silver on behalf of the appellant and the appellant at all times knew that it could not be sold until a resolution authorizing its sale had been passed by the town council.

I agree with Mr. Justice Cooper when he says (8 D.L.R. (3d) at p. 259):

Apart from what I have already stated, it appears to me that the appellant well understood that the council had to resolve to buy the snow removal equipment before he had a sale. It was suggested to him by the town engineer that he charge rent for the equipment but he rejected that suggestion. It is a reasonable inference that he did so in the hope and expectation of making a sale and was throughout awaiting a decision by the council. As he said in cross-examination “so we figured it was just a matter of them making their minds up” and I have already quoted the question put to him by counsel for the town—“You were patiently awaiting their decision. Is that it?” and the answer “Yes”.

No question of acquiescence can in my opinion arise under such circumstances.

Like Mr. Justice Cooper, I would adopt the statement made by Mr. Justice Rogers in Eastern Securities Co. v. City of Sydney[11], where he says:

Nor am I satisfied that the contract was ratified by the council. The Minutes afford no evidence in this respect and corporate action cannot be based on approval of individual members not acting collectively through the established quorum. The City Clerk stated this occasion was the first one the Finance Committee was ever authorised to sell bonds and he adds, I note with satisfaction, “it is generally done by the council, in open council.” Municipal corporations are the delegates of govern-

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ment to perform the duties and exercise the functions imposed by statute upon them as trustees for the inhabitants of a defined locality and as I have already stated individuals dealing with them must at their peril ascertain that the statutory body which assumes to delegate important functions involving the exercise of discretion to committees or persons has in fact the power so to delegate and that the particular person dealt with is acting pursuant to due authority so lawfully delegated. In the absence of full argument on these points I content myself with expressing very grave doubt as to whether for these further reasons the contract is enforceable. Other considerations apply to business and private corporations and it takes at times very slight circumstances to bring into play the doctrines of acquiescence and estoppel in order to validate acts of those who profess to act for such corporations in excess of the conferred authority, but these doctrines in the nature of things can seldom have application in the case of public bodies whose powers are in the public interests deliberately circumscribed.

While this statement was not strictly necessary to the decision of the case before him which was determined on the doctrine of ultra vires, nevertheless I am, like Mr. Justice Cooper, satisfied that the language employed by Mr. Justice Rogers is directly applicable to the circumstances disclosed by the evidence in the present case.

If the appellant had brought action on the basis that the town was under an obligation to pay on a rental basis or if it had sued for damage done to the equipment by wear and tear while it was being used on the town’s streets, different considerations might have applied, but the appellant here has not claimed either for rental or for any damage to his equipment while being tested on the town streets. The claim is limited to the price of goods and equipment sold and delivered to the town and, as I have indicated, I am of opinion that this claim is not substantiated by the evidence.

For these reasons I would dismiss this appeal with costs.

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The judgment of Hall and Laskin JJ. was delivered by

LASKIN J. (dissenting)—I take a view of this case different from that of the Courts below and different from that reflected in the answer of the jury to the last of the questions put to them. Indeed, it appears to me that the last answer, to the effect that Messrs. Lusby and Beck, the town engineer and town superintendent of works respectively, were the persons who contracted on behalf of the town, was responsible for the turn that the case took both in the reasons of Cowan C.J.T.D. and of Cooper J.A. for the Nova Scotia Appeal Division.[12]

The issue in this appeal is simply whether the respondent town was a purchaser of the appellant’s snow-plowing equipment or whether it remained, at the most, simply a bailee. Counsel for the respondent summed up his position pithily by stating that the town was “a trier, not a buyer”, and that it was entitled to return the equipment after giving it the trial that it did. The judgments in the Courts below proceeded on the basis of a need to find an authorized request to the appellant to supply the snow-plowing equipment for purchase by the town or, failing that, of the need to find a resolution of the town council accepting the equipment. It was in connection with these questions that considerable argument was lavished and attention given in the judgments below to Rule 4 of s. 20 of the Sale of Goods Act, R.S.N.S. 1967, c. 274. In this Court, counsel for the appellant also sought to found himself on Rule 4 of s. 20, but on a construction thereof not accepted by the Nova Scotia Courts.

I do not consider it necessary to deal with Rule 4 of s. 20, nor do I need to consider whether a contract arose through a previous authorized request to the appellant to provide the equipment for the town’s use in the winter months of 1968. The one finding of the jury that survived

[Page 595]

the trial judge’s conclusion of perversity was that the town had retained the snow removal equipment for an unreasonable length of time. This is germane to the theory upon which I would dispose of the appeal. Although that theory is not one that was clearly urged in argument, there is no dispute about the facts upon which I rely, nor is there any difficulty in reconciling my view of the case with the pleadings.

Briefly, there were negotiations between officials of the town and the appellant through the last months of 1967 for the supply of motorized equipment for sidewalk snow removal to replace the horse and plough that had hitherto been in use. The town council was aware of these negotiations in which it was made clear to the appellant that the town wished to give its equipment a trial as well as to try out other equipment. The appellant ordered the equipment and put it at the disposal of the town in January 1968. The town used it and kept it until May 13, 1968, when a formal resolution for its purchase was defeated. This litigation ensued.

On January 25, 1968, the appellant sent to the town a printed document headed “Proposal” which itemized the pieces of equipment and showed the prices totalling $5,700. It was probably intended as an invoice but was not less than an offer to the town to sell the equipment which was then in use by the town. I draw no conclusion adverse to either the appellant or the respondent from the printed statement in the document that “We are pleased to quote you, for acceptance within ten days from this date”, etc. The evidence plainly shows that the appellant had a continuing intention, before and after the aforesaid offer, to sell the equipment and the town officials and members of the council knew this.

The report of the town engineer to the council dated February 6, 1968, included the following paragraph under the heading “Sidewalk Snow Blowing”:

Silver’s Garage have quoted a price for the purchase of a small tractor, plow and snow blower for purposes of sidewalk plowing. Following the next

[Page 596]

snow storm, this equipment will be viewed by the Street Committee and a recommendation made to Council. The dealers for Bobcat and Bombardier are also prepared to send us a machine to try out following the next snow storm.

The minutes of council at its meeting of February 12, 1968, show that upon motion the report was received. As matters then stood, the appellant had supplied the equipment for trial, had submitted a price for acceptance and awaited the decision of council on whether his offer would be accepted or rejected. Evidence of the appellant’s secretary-treasurer, the moving figure in the situation, was that he was kept “dangling” (my word, not his) when he made inquiries of a councillor who told him the matter had gone as far as inclusion in the estimates. In this same portion of testimony, which referred to what he had said on discovery, he also affirmed a statement that “We figured it was just a matter of them making their minds up”; and, again, “We were waiting. Maybe we shouldn’t have waited”. Of course, this shows that the appellant knew that at that time there had been no favourable response to its offer but it goes no farther than that. Unfortunately, the date of this incident was not fixed in the evidence and counsel could not give any assistance on the point. It is probable that the witness was referring to a period in March, 1968, which was when (according to the evidence of the town purchasing agent) the estimates for 1968 were prepared.

Despite the adverse assessment of one witness, a newly elected councillor, the balance of the evidence was that the equipment was suitable for its purpose. There was no quarrel with the reasonableness of the price. A suggestion was made to the appellant by the town engineer in February 1968, that it charge rent for the use of the equipment, but the appellant did not go along with the suggestion.

The general principle that a person cannot foist a contract upon another without his consent is not challenged in this appeal. But it is my opinion that the facts illustrate a situation, however rare it may be, where silence of an offeree amounts to assent. From the time of the delivery of the

[Page 597]

equipment to the town, it was a bailee thereof, with the right to return it within a reasonable time or otherwise make manifest that it would not be a buyer. If it did neither its position would be as indicated in the following extract from I Williston on Contracts, 3rd ed., 1957, No. 91, pp. 319-21:

Generally speaking, an offeree need make no reply to offers, and his silence and inaction cannot be construed as an assent to the offer, but the relations between the parties or other circumstances may have been such as to have justified the offeror in expecting a reply, and, therefore, in assuming that silence indicates assent to his proposal. Such cases may be thus classified:

(1) Where the offeree with reasonable opportunity to reject offered goods or services takes the benefit of them under circumstances which would indicate to a reasonable man that they were offered with the expectation of compensation…

The present case is one of a unilateral contract, not in the sense of a promise for an act, but rather in the sense of a delivery of goods, with the manifested expectation of payment therefor, under circumstances where previous negotiations, and events subsequent to delivery, support the conclusion that use and retention beyond a reasonable time without any disavowal of a contractual commitment would constitute assent. That assent resulted here in a binding promise to pay and, at the same time, certified to an acceptance of the goods so as to render inapplicable any reliance by the respondent on the Statute of Frauds requirement of a writing, now found in s. 6 (1) of the Sale of Goods Act, R.S.N.S. 1967, c. 274.

There is no escape from contractual liability in the present case merely because the respondent is a municipal corporation. For reasons set out below, I do not have to consider how far any statutory prohibitions on its capacity to contract would preclude the conclusion to which I would

[Page 598]

come, nor how far any statutory formalities referable to contractual undertakings would be preclusive.

Three things are plain from the Towns Act, R.S.N.S. 1967, c. 309, which governs the respondent’s capacity and powers. First, s. 3 (2) declares it to be “capable of suing and being sued in its corporate name and of purchasing, acquiring and holding… all kinds of real and personal property for the use of the town”. This is reinforced by s. 19 (2) which empowers a town to make and carry out any contract within its powers. Second, the streets and sidewalks in a town are, under s. 145, vested in the town and are under the control of its council. By s. 171 the town council is empowered at the town’s expense to make provision for clearing away snow and ice from its sidewalks and thoroughfares. Third, the Towns Act does not prescribe any particular formalities which must be satisfied before a town can become contractually bound in a matter within its powers. Cases such as John Mackay and Company v. City of Toronto[13] and Waterous Engine Works Co. v. Town of Palmerston[14], where a by-law was imperative, under applicable legislation, for the exercise of municipal powers, are hence inapplicable. The Towns Act does not even prescribe a writing, and it was not contended that there is any surviving common law requirement of a sealed instrument, at least not in a case like the present one where the municipality has enjoyed the benefit of the goods for which payment is sought.

In this connection, I do not think that there is anything in Lawford v. Billericay Rural District Council[15] that militates against the conclusion to which I would come. It is not, of course, binding and is distinguishable on its facts; but, in so far as it reflects any principle it is one of liberalization, away from the common law formalism that previously attached to statutory corporations.

[Page 599]

The short distance between that case and the present one, under their respective facts, is manifest in the observation of Vaughan Williams L.J. at p. 783 that “a contract to pay has been implied, after consideration executed and benefit accepted, in a variety of cases in which there has been no contract under seal”. The same view is more expansively expressed in Dillon, Municipal Corporations, 5th ed., 1911, No. 794, p. 1187.

The respondent is in no different position in this case than would be an individual or a private business corporation acting in the same way. The fact that the respondent would ordinarily proceed by resolution does not preclude the informal assumption of an obligation which was the result of the conduct already alluded to. In the absence of any imperative statutory limitations (and there are not even any directory provisions) respecting the manner in which contracts within its assigned powers are to be concluded, the ordinary principles of contract law apply.

I would, on the foregoing grounds, allow this appeal with costs, set aside the judgments below, and enter judgment for the appellant for $5,700. It did not claim interest in its pleading, nor was any claim made therefor in argument in this Court. The appellant should also have its costs of the proceedings in the Nova Scotia Courts. Since the result of the judgment herein is to affirm title to the equipment in the town, an order should go for its delivery to the respondent.

Appeal dismissed with costs, HALL and LASKIN JJ. dissenting.

Solicitor for the plaintiff, appellant: Harold F. Jackson, Halifax.

Solicitor for the defendant, respondent: David R. Chipman, Halifax.

 



[1] (1969), 8 D.L.R. (3d), 1 N.S.R. (2d) 161.

[2] (1892), 21 S.C.R. 556.

[3] [1903] 1 K.B. 772.

[4] [1965] 2 O.R. 51.

[5] (1891), 19 S.C.R. 581.

[6] (1915), 33 O.L.R. 267.

[7] (1914), 31 O.L.R. 387.

[8] (1880), 15 Ch. D. 96.

[9] [1970] S.C.R. 932 at p. 938, 12 D.L.R. (3d) 247.

[10] [1971] S.C.R. 81, 13 D.L.R. (3d) 340.

[11] [1923] 4 D.L.R. 717 at 721.

[12] (1969), 8 D.L.R. (3d) 243, 1 N.S.R. (2d) 161.

[13] [1920] A.C. 208.

[14] (1892), 21 S.C.R. 556.

[15] [1903] 1 K.B. 772.

 

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