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

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Harvela Investments Ltd. v Royal Trust of Canada (CI) Ltd. is a legal case decided by the House of Lords in 1986.


The Royal Trust Company 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 invalid.


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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