Westwood-Westply Ltd. v. Cundy

Westwood-Westply Ltd. v. Cundy

The agreement effected a novation as to $20,000; there was no total failure of consideration because the plaintiff continued ordinary business and only withheld further credit when three post-dated cheques were dishonoured indicating Four Square's inability to pay; thus the plaintiff was justified in refusing further credit and could recover the unpaid balance from the defendant. Judgment at trial restored.

Citation
[1965] SCR 586
Parties
Plaintiff/appellant: Weldwood-Westply Limited; Defendant/respondent: Douglas N. Cundy
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
6 April 1965
Procedural Posture
Contract / Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta
Outcome
Appeal allowed; judgment of trial court restored.
Legal Topics
Novation, Failure of Consideration, Condition Precedent, Creditor's Right to Withhold Credit, Novation of Part of a Debt
Source Language
English
Contract Commercial Law Novation Failure of Consideration Condition Precedent Creditor's Right to Withhold Credit Novation of Part of a Debt

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 4 Authorities cited 6 Party arguments 2 Amounts and remedies 6
Sign in to unlock

Parties

Weldwood-Westply Limited

Plaintiff/appellant

Douglas N. Cundy

Defendant/respondent

Procedural Posture

Contract / Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta

Legal Issues

  1. 1 Whether the agreement constituted a valid novation extinguishing part of the original debtor's liability
  2. 2 Whether there was a total failure of consideration because the plaintiff failed to continue to do business with the original debtor as alleged
  3. 3 Whether the plaintiff was justified in withholding further credit after dishonour of post-dated cheques

Ratio Decidendi

The agreement effected a novation as to $20,000; there was no total failure of consideration because the plaintiff continued ordinary business and only withheld further credit when three post-dated cheques were dishonoured indicating Four Square's inability to pay; thus the plaintiff was justified in refusing further credit and could recover the unpaid balance from the defendant. Judgment at trial restored.

Court Disposition

Appeal allowed; judgment of trial court restored.

Orders

  • Appeal allowed
  • Judgment of Kirby J. restored