McGILL LAW JOURNAL
[Vol. 26
Property Passing under a Void Contract –
Minor Difficulties
At first sight it is absurd to countenance that property can pass
under a contract declared void by statute. Nevertheless, when a
contract is declared illegal because it infringes a statutory norm,
this does not preclude the possibility that property may pass if the
subject-matter of the contract involves the sale or hire of goods.1
Similarly, an infant purchasing non-necessary goods on credit may
in certain circumstances find that the property has passed, not-
withstanding legislative provisions that such transactions are ab-
solutely void.2 A recent Canadian decision in this murky area of law
illustrates the need for unambiguous legislation on the effects of
such transactions. Merely to reduce the number of persons who
may be classified as infants or minors (by snipping away at the age
of majority) will not solve this problemY
In Prokopetz v. Richardson’s Marina Ltd4 MacDonald J., in
the British Columbia Supreme Court, considered whether property
could pass under a contract by an infant to purchase non-necessary
goods. Prokopetz was employed as a part-time general labourer by
the defendants for a period of two years. He was seventeen years
old when he quit this employment.5 During the two-year period
Prokopetz was treated quite indulgently by his employer. He was
permitted to use the marina’s facilities to build a boat and, what
is more important, to purchase materials on credit. It was estimated
that on leaving the defendant’s employ Prokopetz’s credit account
totalled more than twelve thousand dollars. Prokopetz took the
‘Sajan Singh v. Sardara Ali [1960] A.C. 167 (P.C.). Substantial objections
to this doctrine are raised in Cheshire and Fifoot, Law of Contract, 9th ed.
(1976), 346-9. Property can also pass even if delivery of the goods has not
taken place: Belvoir Finance Co. Ltd v. Stapleton [1970] All E.R. 664 (C.A.).
2See, generally, Cheshire and Fifoot, supra, note 1, 413-7; Treitel, The
Law of Contract, 5th ed. (1979), 423-9; Hartwig, Infants’ Contracts in English
Law: with Commonwealth and European Comparisons (1964) 15 Int’l Comp.
L.Q. 780. The Canadian position is discussed by Percy, The Present Law of
Infants’ Contracts (1975) 53 Can. Bar Rev. 1.
3Despite the Report of the Committee on the Age of Majority (1967) (Latey
Report), Cmnd 3342, no substantive law reforms have been enacted in
English law.
4 (1979) 93 D.L.R.. (3d) 442 (B.C.S.C.).
5The age of majority in British Columbia is nineteen years: Age of
Majority Act, S.B.C. 1970, c. 2, s. 2(1)(a).
1980]
COMMENTS – COMMENTAIRES
vessel with him but it broke down, and so he left it with a third
party. Richardson’s Marina learned the whereabouts of the vessel
and, as unpaid vendors, seized valuable equipment, including mate-
rials purchased from the defendants which had not been paid for.
The defendants also seized material that Prokopetz had purchased
from the defendants and paid for, as well as goods purchased from
third parties. Prokopetz sued the defendants in trespass and con-
version.
The defendants pleaded that as unpaid vendors they could re-
possess goods in exercise of an equitable lien. Although this plea
would have substantially deflected the action, as the bulk of the
property seized was sold on credit by the defendants, MacDonald J.,
ruled that no such lien could arise.’ The defendants also sought to
plead that no property in the goods could pass to the plaintiff by
reason of his infancy. Section 2 of the Infants Act declares:
All contracts, whether by specialty or by simple contract, entered into
by infants for the repayment of money lent or to be lent, or for goods
supplied or to be supplied (other than contracts for necessaries), and
all accounts stated with infants, are absolutely void; but this enact-
ment shall not invalidate any contract into which an infant may, by any
existing or future Statute, or by the rules of common law or equity,
enter, except such as now by law are voidable. 7
Under English law the effects of section 1 of the Infants Relief
Act,8 which is substantially the same as section 2 of the B.C. Act,
have been considered unfortunate, and it has been suggested that
the phrase “absolutely void” should not be given a literal inter-
pretation.9 It is argued that these unfortunate consequences are
illustrated by hypothetical situations which would preclude an
infant from enforcing the contract, or would prevent a third party
who, bona fide, purchases goods from an infant from resisting
an action in trover or detinue brought by the original owner. Judi-
cial authority in England also favours the view that title to non-
necessary goods may pass by delivery to the infant purchaser.10
6Foll’g Transport & General Credit Corp. v. Morgan [1939] 1 Ch. 531; see
Sale of Goods Act, R.S.B.C. 1960, c. 344, s. 47.
7R.S.B.C. 1960, c. 193.
8 37 & 38 Vict., c. 62.
9See Cheshire and Fifoot, supra, note 1, 415-7; Treitel, supra, note 2,
424 6; Waddams, The Law of Contracts (1977), 408-13. The discussion between
(1957) 73 L.Q.R. 194, The Infants
Treitel (The Infants, Relief Act, 1874
Relief Act, 1874 – A Short Rebutter (1958) 74 L.Q.R. 104) and Atiyah (The
Infants’ Relief Act, 1874 –
A Reply (1958) 74 L.Q.R. 97) should also be
examined. See also Latt v. Booth (1852) 3 Car. & K. 292; 175 E.R. 560.
‘o Stocks v. Wilson [1913] 2 K.B. 235, 246 per Lush J.; Watts v. Seymour
[1967] 2 Q.B. 647.
McGILL LAW JOURNAL
[Vol. 26
As Treitel has observed,”
the argument which suggests that
property can pass under a contract of this nature does a great in-
justice to the statutory provisions in question which, no matter
how undesirable, are unequivocal. Nonetheless, in Prokopetz Mac-
Donald J. seems to have considered a literal interpretation desir-
able, for, after refusing to follow the English authorities, 2 he con-
cluded:
s. 2 of the Infants Act ought to be interpreted in a way that gives
full effect to the words “absolutely void”. This difference in interpreta-
tion will, in the case at bar, diminish the protection given the infant
in that he will not obtain title to the goods covered by the void
transaction.13
MacDonald J. was prepared, however, to consider that the plain-
tiff was entitled to recover in relation to goods seized by the de-
fendants which Prokopetz had purchased from the defendant and
third parties. Prokopetz was said to have spent some two thousand
dollars but that his accounts with the defendant and third parties
were fifteen thousand dollars in arrears. Because of section 2, of
course, the creditors would not be able to recover. Nevertheless
Prokopetz was permitted to recover one
in
damages.
thousand dollars
The implications of this decision are considerable. First, the
English and Canadian courts have reached quite incompatible con-
clusions on the words “absolutely void” in their respective statutes.
This will no doubt prejudice the innocent third party who un-
wittingly purchases goods from an infant purchaser who himself
has obtained the goods on credit. It is perhaps undesirable to
return to the strict caveat emptor position at a time when the
movement away from the doctrine seems virtually complete.
Second, the reasoning in Prokopetz is internally inconsistent.
If a contract for the sale of goods is made with an infant, its en-
forceability should depend on the nature of the goods sold. If the
goods are necessaries, this indicates that the contract is advanta-
geous to the infant. Mere items of luxury should not be classified
as necessaries and a motor boat would fall into this category.
Section 2 of the Infants Act does not provide that in contracts for
non-necessary goods title shall pass if consideration moves from
the infant: the statute declares that “all contracts … for goods
Rebutter, supra, note 9, 106.
“Treitel, The Infants’ Relief Act, 1874, supra, note 9, 200 and A Short
12Supra, note 10.
13 Supra, note 4, 448-9 [italics added].
19801
COMMENTS – COMMENTAIRES
supplied or to be supplied … (other than contracts for necessaries)
… are absolutely void”. Thus, MacDonald 3. should not have
permitted recovery for those goods obtained by Prokopetz which
he had paid for. The Act says nothing about the infant purchaser
obtaining property in the goods when the infant pays the purchase
price. Thus, under English law an action in tort will depend on
whether the goods have been delivered to the infant: in British
Columbia the success of an action will depend on whether the con-
sideration has been paid by the infant.
While it is easy to point out the flaws in this judgement, it is
also necessary to note that MacDonald J. prevented an infant
plaintiff from suing in tort and recovering damages in circum-
stances that would clearly be unjust. If property passed on delivery
the infant would recover damages, yet he could not be sued in
contract or in tort 4 for the contract price, or even for a reasonable
sum. One possible remedy would be to permit the adult to set-off
the amount of the debt which he himself cannot recover, against the
damages recoverable by the infant, or indeed, to stop the infant
from pleading the statute and permit an action for the contract
price. Such judicial solutions, while flirted with by certain judges, 5
should perhaps be incorporated into statutory provisions dealing
not only with the legal status of the agreement but also the con-
,sequences of such an abortive bargain. The difficulties inherent in
this area of contract law cannot be resolved merely by characteriz-
ing the status of the contract involved as valid, void or voidable.
Robert W. Clark*
14Even if guilty of deceit: R. Leslie, Ltd v. Shiell [1914] 3 K.B. 607.
15 See Savage v. Foster (1723) 9 Mod. 35, 88 E.R. 299 (K.B.); Levene v.
Brougham (1909) 25 T.L.R. 265 (C.A.); Phillips v. Gunnell [1953] C.L.Y. 1759
(Cty Ct); McBride v. Appleton [1946] O.R. 17 (C.A.).
* Of the Faculty of Law, University College, Dublin.
