Pirates of the Plains

November 7, 2008 Hull & Hull LLP Litigation Tags: , , , , , 0 Comments

George Webster appealed to the Ontario Court of Appeal from a summary judgment partially dismissing his claim for damages against the estate of Ken Thomson.  Webster v. Thomson, 2008 ONCA 730.

At issue was a painting by the American artist, Charles Russell, "Pirates of the Plains", which had been in the Webster family since 1931. Mr. Russell, who died in 1926, is apparently well known for his paintings of the "Old American West". The painting was very special to Mr. Webster who saw it as a link to his father who had originally acquired the painting. 

On September 29, 1982, Mr. Webster’s mother sold the painting to Mr. Thomson, without Mr. Webster’s knowledge, for $150,000. Mr. Webster asked Mr. Thomson if he could re-acquire the painting. Mr. Thomson proposed that if Mr. Webster sold him a painting he owned by Cornelius Krieghoff, Mr. Thomson would give Mr. Webster the opportunity to purchase the Russell painting after he died at the painting’s appraised market value. This proposal was contained in a letter that Mr. Thomson wrote to Mr. Webster. Mr. Webster accepted.

On August 25, 2003, Mr. Thomson sold the Russell painting for U.S. $5,600,000 without apparent regard to his agreement with Mr. Webster. In 2004, Mr. Webster commenced a legal proceeding against Mr. Thomson. Mr. Webster’s claimed damages for breach of contract in the amount of $4,000,000 and punitive damages in the amount of $10,000,000. After Mr. Thomson died in June 2006, the action was continued against his estate.

In January of 2008, the estate brought a motion for summary judgment to dismiss Mr. Webster’s action. The estate claimed that Mr. Webster’s did not have the means to acquire the painting at the appraised market value upon the death of Mr. Thomson. The estate therefore argued that Mr. Webster suffered no loss even if the sale of the Russell painting prior to Mr. Thomson’s death was a breach of Mr. Webster’s contractual rights. 

The motions judge granted the summary judgment motion on the grounds that Mr. Webster had not proved his damages because he had provided no evidence that he could raise the many millions necessary to purchase the Russell painting. 

However, the Court of Appeal held that the amount of damages was not a proper consideration on a Rule 20 motion. There was no need, as the motion judge thought, for Mr. Webster to prove his damages at this stage of the proceeding. In the court’s view, the motion judge assumed the role of a trial judge which was not proper. 

The court further held that it was a fundamental principle that a person could not benefit from his/her breach of contract. In this case, Mr. Thomson breached an enforceable contract. He could not perform the contract as a result of its breach. As such, Mr. Thomson could not benefit from his breach, which he apparently did based on the motion judge’s findings. This was still another reason why summary judgment was set aside. Everyone is indeed equal before the law. 

Thanks for reading and enjoy the weekend.

Justin

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