Central Land Development Ltd. sold three commercial

building lots to Commercial Builders Ltd. for the sum

of $400,000. As a part of the purchase price, Perros and

Masson, the two principal shareholders of Commercial

Builders Ltd. and the corporation gave Central Land

Development Ltd. a mortgage for $250,000. The

balance of the $400,000 selling price, in the amount of

$150,000 was paid at the time of the purchase.

A year and six months later, Commercial Builders

Ltd., and its two shareholders wished to pay off the

mortgage, and requested Central Land Development

Ltd. to provide them with a pay-out amount. Central

Land Development Ltd. requested its accountant, Hamilton, to calculate the balance owing on the

mortgage. Hamilton calculated the balance owing to be

$172,459. Commercial Builders Ltd. paid the amount

and received a discharge of the mortgage.

Several months later, Central Land Development

Ltd. discovered that the amount calculated by

Hamilton was in error, and the correct balance was in

fact $202,459. Central Land Development requested

payment from Commercial Builders Ltd. of the $30,000

difference, but Commercial Builders Ltd. refused to pay

the amount.

Discuss the issues raised in this case, and the arguments

that might be raised by each of the parties.