Precedent Cases in Canadian Common Law - PowerPoint Presentation

Slide1

Precedent Cases inCanadian Common Law

Douglas Wilhelm Harder,

M.Math

.

Department of Electrical and Computer Engineering

University of WaterlooSlide2

Outline

This talk focuses on case studies which have shaped Canada’s common law

Liability for the tort of negligence

Fundamental breaches and the “true construction” approach

Bid and tender contracts: “Contract A”

Equitability in contracts

Implied terms in contractsSlide3

Liability for the Tort of Negligence

First, we look at three cases which defined liability for the tort of negligence

The seminal case was

Donoghue

v.

Stevenson

The significance of disclaimers was defined in

Bryne

v.

Heller

This was upheld in the Superior Court of Ontario with

Wolverine

v.

Noranda

Slide4

Liability for the Tort of Negligence

Donoghue

v.

Stevenson

, 1932

The friend of the plaintiff, Ms.

Donoghue

, purchased a ginger beer at an establishment

Ms.

Donoghue

drank some of the beer as part of a sundae

Before Ms.

Donoghue’s

friend drank any, a decomposed snail was discovered in the bottle

No contract existed between either Ms.

Donoghue

and the establishment or the manufacturer of the ginger beer (the defendant)

The House of Lords, however, decided that the defendant liable for an unintentional tort of negligence Slide5

Liability for the Tort of Negligence

Hedley

Bryne

v.

Heller & Partners Ltd.

, 1964

Without consideration, the defendant provided advice on the creditworthiness of a client of the plaintiff

No contract existed

The defendant gave a favourable response but stipulated that the response was made “without responsibility”

The client went bankrupt costing the defendant £17,000

Heller’s response was found to be negligent misstatement

Despite no contract, the court found that in their professional capacity, the defendants owed a duty of care to the plaintiff

The

only

mitigating factor was that the misstatement was explicitly given “without responsibility”Slide6

Liability for the Tort of Negligence

Hedley

Bryne

v.

Heller & Partners Ltd.

, 1964

This is a fascinating precedence:

The court created a precedence for the duty of care of professionals with regard to the making of statements even outside the scope of contracts

The only reason the court did not enforce this decision was because of the stipulation of “without responsibility”Slide7

Liability for the Tort of Negligence

Wolverine Tube (Canada) Inc.

v.

Noranda

Metal Industries Ltd. et al.

, 1994

A confirmation of

Bryne

v.

Heller

in Ontario

An environmental consultant prepared an audit and assessment

The report included the statement

This report was prepared...for...

Noranda

, Inc. ... Arthur D. Little accepts no responsibility for damages...suffered by any third party as a result of decisions made or actions taken based on this report.

The report was presented to the plaintiff by

Noranda

as part of a business dealSlide8

Liability for the Tort of Negligence

Wolverine Tube (Canada) Inc.

v.

Noranda

Metal Industries Ltd. et al.

, 1994

The assessment was found to be inaccurate and the plaintiff claimed that the defendant owed them a duty of care

The courts found that the disclaimer was sufficient to isolate the defendant from the damages claimed by the plaintiffSlide9

Fundamental Breach

Next, we will look at the concept of a fundamental breach of a contractSlide10

Fundamental Breach

Harbutt's

Plasticine

Ltd.

v.

Wayne Tank and Pump Co. Ltd.

(1970)

House of Lords

The contract with the defendant had the liability limited to £2300

The methods used by the defendant were “thoroughly” and

“wholly” unsuitable for is purpose

The damage to the plaintiff was £170,000

The court found in favour of the plaintiff that the limited liability

could not be used for such serious breachSlide11

Fundamental Breach

Photo Production Ltd.

v.

Securicor Transport Ltd.

(1980)

House of Lords

Harbutt

v.

Wayne

was minimized with this case

An employee of the defendant started a fire which cost the plaintiff £615,000

This was not seen to be a fundamental breachSlide12

Fundamental Breach

Hunter Engineering Co. Inc.

v.

Syncrude

Canada, Ltd.

(1989)

Ontario High Court of Justice

The defendant supplied gear boxes for the plaintiff which failed shortly after installation

The plaintiff claimed a fundamental breach of contract in an attempt to void a limitation clause

The court applies the “true construction” approach of interpreting the contract and found the contract to be clearly wordedSlide13

Fundamental Breach

Tercon

Contractors Ltd.

v.

British Columbia (Transportation and Highways)

(2010)

This involves a breach of a “Contract A”

Bidding was restricted to six proponents; however, one proponent entered into a joint partnership

The plaintiff asserted this was a fundamental breach

The decision of the Supreme Court of Canada was:

“With respect to the appropriate framework of analysis the doctrine of fundamental breach should be ‘laid to rest’.” 

The court did however, did indicate the exclusion clause was ambiguous and should be construed

contra

proferentem

Slide14

“Contract A”

The request for bids or tenders has with sufficiently large construction projects become so involved that the request itself has become a contract separate from the final construction contractSlide15

“Contract A”

Imperial Glass Ltd.

v.

Consolidated Supplies Ltd.

(1960)

British Columbia Court of Appeals

The

defendant/offeror made a unilateral mistake in a calculation of a price in a contract

The plaintiff/offeree was aware of the mistake but chose to

accept the

contract

The court found there were moral or ethical questions in the conduct of the offeree but the behaviour was not fraudulent

The contractor was not relieved of his obligations Slide16

“Contract A”

Belle River Community Arena Inc.

v.

W.J.C. Kaufmann Co. et al.

(1977)

Ontario

High Court of Justice

The defendant submitted a bid of $641,603 which was $70,000 lower than intended and attempted to withdraw the bid

The plaintiff accepted the bid of the contractor and had to go to the next lowest bidder

The plaintiff sued for the difference

The court held that there was no contract between the plaintiff and the defendantSlide17

“Contract A”

Ron Engineering et al.

v.

The Queen in right of Ontario et al.

(1981)

Supreme Court of Canada

The

defendant submitted a bid of $2,748,000 which was $750,058 lower than intended

The defendant had given a bid deposit cheque of $150,000

The defendant attempted to withdraw from the tendering and to get the bid deposit back

The Supreme Court of Canada found that the tender contract was separate from the bidding contract and the defendant was required to forfeit the bid depositSlide18

Equitability

We look at some questions of equitability in contractsSlide19

Equitability

Conwest

Exploration Co. Ltd. et al.

v.

Letain

(1963)

Supreme Court of Canada

The contract required

that a company must be incorporated by a certain date for a

n

option to be exercised

The optionee (plaintiff) indicated that the

incorporation could

not be

completed on

time and the

optionor

(defendant) implied the date was extended

The court

estopped

the

optionor

from reverting to a strict reading of the contractSlide20

Equitability

John Burrows Ltd.

v.

Subsurface Surveys Ltd. et al.

(1968)

Supreme Court of Canada

The contract required specific monthly interest payments

The contract indicated if a payment is overdue after 10 days, the full principal amount would be immediately due

The plaintiff began to regularly make payments which were more than 10 days late but which were still accepted

Without notification, the defendant reverted to the original terms of the contract and attempted to collect on the principal

The court estopped the defendant from enforcing the strict terms of the contractSlide21

Equitability

Owen Sound Public Library Board

v.

Mial

Developments Ltd. et al.

(1979)

Ontario Court of Appeals

The owner/plaintiff was required honour payment certificates issued by the architect within seven days

The plaintiff requested a document from a subcontractor to be sealed

The defendant agreed but did not obtain the seal until after the seven-day time limit passed

The defendant claimed a breach of contract

The court estopped the defendant from a strict interpretation of the contractSlide22

Implied Terms

Finally, we conclude two cases which define the implied terms of a contractSlide23

Implied Terms

The Moorcock

(1889)

England

A ship was docked and when the tide went out, the ship was damaged

The contract did not have an obligation that the ship would be safe while the ship was moored

The judge found that the safety of the ship was an implied term in the contract

“...

what the law desires to effect by the implication is to give such business efficacy to the transaction as must have been intended at all events by both parties who are business men; not to impose on one side all perils of the transaction, or to emancipate one side from all the chances of failure, but

to make each party promise in law as

much,

at all events as it must have been in the contemplation of both parties that he should be responsible for in respect to those perils or chances

.”Slide24

Implied Terms

TBCSlide25

Outline

This talk reviewed cases from five aspects relevant to professional engineers

Liability for the tort of negligence

Fundamental breaches and the “true construction” approach

Bid and tender contracts: “Contract A”

Equitability in contracts

Implied terms in contractsSlide26

References

[1]

D.L. Marston,

Law for Professional Engineers

, 4

th

Ed., McGraw Hill Ryerson, 2008.

[2]

LexUM

, Judgements of the Supreme Court of Canada,

http://csc.lexum.umontreal.ca/en/

, Faculty of Law, University of Montreal, 2010.Slide27

Copyright and Disclaimer

These slides are Copyright © 2010 by Douglas Wilhelm Harder.

All rights reserved.

These slides are made publicly available on the web for anyone to use

No warranty is given that any information in these slides is correct

The use of these slides in studying for the PPE is fully at your own risk

If you choose to use them, or a part thereof, for a course at another institution, I ask only three things:

That you inform me that you are using the slides,

That you acknowledge my work, and

That you alert me of any mistakes which I made or changes which you make, and allow me the option of incorporating such changes (with an acknowledgment) in my set of slides

Sincerely,

Douglas Wilhelm Harder,

MMath

dwharder@alumni.uwaterloo.ca