Alwest Neon Signs Ltd. v. Henze, (1989) 105 A.R. 343 (CA)

• Judge: Bracco, Hetherington and Stratton, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: December 14, 1989
• Citations: (1989), 105 A.R. 343 (CA)

Alwest Neon Signs Ltd. v. Henze (1989), 105 A.R. 343 (CA)

MLB headnote and full text

Alwest Neon Signs Ltd. (plaintiff/respondent) v. Valerie Henze, and Valerie Henze operating under the style and cause of Feather Bed and Bath, and Valerie Henze operating under the style and cause of Heritage Bed and Bath (defendants/appellants)

(Appeal No. 10789)

Indexed As: Alwest Neon Signs Ltd. v. Henze

Alberta Court of Appeal

Bracco, Hetherington and Stratton, JJ.A.

December 14, 1989.

Summary:

Henze contracted with Alwest to rent two neon signs designed and installed by Alwest. Henze was unsatisfied with the signs and refused to make the rental payments. Alwest sued Henze for the accelerated amount of rent owing over the rental term.

The Alberta Court of Queen's Bench, in a judgment not reported in this series of reports, allowed the action. Henze appealed, submitting, inter alia, that accelerated payments were an unenforceable penalty.

The Alberta Court of Appeal dismissed the appeal. The court affirmed that the accelerated amount was a genuine pre-estimate of damages, not a penalty. The court held that where the acceleration clause provided for amortization costs, s. 2(2)(h) of the Judgment Interest Act precluded an award of prejudgment interest.

Damages - Topic 1103

Liquidated damages - Penalty - What constitutes - Henze rented two neon signs designed, built and installed by Alwest - The rental agreement provided that if Henze breached the agreement the balance of rental payments due over the term of the rental were accelerated and due immediately as a genuine pre-estimate of damages - The Alberta Court of Appeal affirmed that the acceleration clause was a genuine pre-estimate of damages and not a penalty clause - The court rejected Henze's claim that Alwest was entitled only to the cost of the signs plus a reasonable profit.

Interest - Topic 5523

As damages (prejudgment interest) - Bars - Agreement on interest - Section 2(2)(h) of the Judgment Interest Act precluded an award of interest under the Act where the parties had an agreement on the issue of interest - A plaintiff successfully sued for the accelerated balance of rental payments - The balance included an amount for amortization costs - The Alberta Court of Appeal held that s. 2(2)(h) precluded an award of prejudgment interest under the Act, where the provision for amortization costs was an agreement respecting interest.

Statutes Noticed:

Judgment Interest Act, S.A. 1984, c. J-0.5, sect. 2(2)(h) [para. 6].

Counsel:

K.D. Tighe, for the respondent;

B.J. Halliday, for the appellants.

This appeal was heard on December 1, 1989, before Bracco, Hetherington and Stratton, JJ.A., of the Alberta Court of Appeal.

On December 14, 1989, Bracco, J.A., delivered the following memorandum of judgment for the court.