Harvela Investments Ltd v Royal Trust of Canada (CI) Ltd

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The Royal Trust Co. owned shares in a company, and invited bids for them. Harvela bid $2,175,000 and Sir Leonard Outerbridge bid

"$2,100,000 or $101,000 in excess of any other offer… expressed as a fixed monetary amount, whichever is higher."

The Royal Trust accepted Sir Leonard's bid as being $2,276,000. Harvela sued for breach of contract, saying a referential bid was invalid. The Court of Appeal held in favour of The Royal Trust, that expressing a fixed amount made the referential bid valid.


The House of Lords unanimously reversed the Court of Appeal's decision. Lord Templeman gave a lucid judgment, pointing especially to South Hetton Coal Co. v. Haswell, Shotton and Easington Coal and Coke Co. [1898] 1 Ch. 465 where Sir Nathaniel Lindley MR had dealt with referential bids already (233-4).

Lord Diplock died three months after giving his judgment (11 July 1985), aged 78. He put his opinion in the following way.

Lord Bridge said that the referential bid can only be ascertained in amount after the deadline has fallen for all bids to come in.

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