Prince Albert Pulp Co. Ltd. et al. v. The Foundation Company of Canada, Ltd., [1977] 1 S.C.R. 200 (1976)

Extract

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Prince Albert Pulp Co. Ltd. et al. v. The Foundation Company of Canada, Ltd., [1977] 1 S.C.R. 200 (1976)

Supreme Court of Canada

Prince Albert Pulp Co. Ltd. et al. v. The Foundation Company of Canada, Ltd., [1977] 1 S.C.R. 200

Date: 1976-02-25

Prince Albert Pulp Company Ltd. and Parsons & Whittemore Pulpmills Inc. (Defendants) Appellants;

and

The Foundation Company of Canada, Limited (Plaintiff) Respondent.

1975: November 12, 13; 1976: February 25.

Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR SASKATCHEWAN.

Contracts-Contract for erection of pulpmill-Certificate given to contractor establishing that work completed-Subsequent claim for damages for cost of correcting construction defects not precluded.

Interest-Improper withholding of just debt under cost plus contract-Applicable rate of interest equivalent to bank borrowing rate of contractor.

In an action involving the performance of the respondent company (Foundation) under a cost plus contract for the construction and erection of a pulpmill, the trial judge gave judgment in favour of Foundation for the amount of $1,997,749.61 and awarded a lien on the mill property of the first appellant (PAPCO). He allowed $200,000 on the counterclaim of the second appellant (P & W Pulpmills) as a set-off against the $1,997,749.61. The appellants' appeal to the Court of Appeal for Saskatchewan was dismissed by unanimous decision. An appeal to this Court was dismissed following the submissions made on behalf of the appellants.

What remained to be considered was Foundation's cross-appeal on two points: 1. Whether the award ...

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