Atlantic Paper Stock Ltd. et al. v. St. Anne Nackawic Pulp & Paper Co. et al., (1975) 10 N.B.R.(2d) 513 (SCC)

• Judge: Martland, Judson, Ritchie, Spence and Dickson, JJ.
• Court: Supreme Court (Canada)
• Case Date: February 05, 1975
• Jurisdiction: Canada (Federal)
• Citations: (1975), 10 N.B.R.(2d) 513 (SCC);56 DLR (3d) 409;4 NR 539;1975 CanLII 170 (SCC);[1976] 1 SCR 580;10 NBR (2d) 513

Atlantic Paper v. St. Anne Pulp (1975), 10 N.B.R.(2d) 513 (SCC);

    10 R.N.-B.(2e) 513; 4 A.P.R. 513

MLB headnote and full text

Sommaire et texte intégral

Atlantic Paper Stock Ltd. et al. v. St. Anne-Nackawic Pulp and Paper Company et al.

Indexed As: Atlantic Paper Stock Ltd. et al. v. St. Anne Nackawic Pulp & Paper Co. et al.

Répertorié: Atlantic Paper Stock Ltd. et al. v. St. Anne Nackawic Pulp & Paper Co. et al.

Supreme Court of Canada

Martland, Judson, Ritchie, Spence and Dickson, JJ.

April 22, 1975.

Summary:

Résumé:

This case arose out of claims for damages for breach of contract by two sellers of waste paper. A paper mill agreed to purchase from the sellers an annual minimum of 10,000 tons of waste paper for a period of ten years. The agreement of purchase contained a force majeure clause which relieved the paper mill from liability in the event of "the non-availability of markets for pulp or corrugating medium". Due to the failure of available markets, the paper mill after one year refused further shipments of waste paper from the sellers. There was a market for corrugating medium but it was a very competitive market and was not economically attractive to the paper mill because of its high costs of production. The New Brunswick Court of Queen's Bench allowed the action by the sellers for breach of contract and held that the force majeure clause was not a valid defence - see 8 N.B.R.(2d) 216.

On appeal to the New Brunswick Court of Appeal the appeal was allowed and the judgment of the Court of Queen's Bench was set aside - see 8 N.B.R.(2d) 207. The Court of Appeal stated that the words "available market" mean an advantageous or profitable market. Such a market did not exist for the paper mill for the corrugating medium at the time of the breach and the Court of Appeal stated that the paper mill was justified in terminating the contract.

On appeal to the Supreme Court of Canada the appeal was allowed, the judgment of the New Brunswick Court of Appeal was set aside and the judgment of the trial court was restored. The Supreme Court of Canada stated that the words "available market" in a force majeure clause in a commercial contract do not mean an advantageous or profitable market. The Supreme Court of Canada stated that the primary cause of the inability of the paper mill to sell the corrugating medium was the lack of an effective marketing plan for the corrugating medium. The Supreme Court of Canada stated that the conditions existing in the market for corrugating medium did not change substantially from the time that the parties signed the contract until the paper mill terminated the contract. The Supreme Court of Canada stated that an event that operates to discharge a party within the meaning of a force majeure clause must be an event which is beyond reasonable human foresight and skill - see paragraph 4.

Contracts - Topic 2115

Express terms - Force majeure clause - A paper mill agreed to purchase waste paper from the plaintiffs to be used in the production of corrugated medium - The agreement was for ten years and contained a clause which provided for a minimum annual purchase of 10,000 tons of waste paper except in the event of "the non-availability of markets for pulp or corrugating medium" - The paper mill after one year refused further shipments of waste paper due to the failure of available markets - The Supreme Court of Canada held that the plaintiffs were entitled to general and special damages of $108,290.00 - The Supreme Court of Canada stated that the words "available market" do not mean an advantageous or profitable market.

Words and Phrases

Available market - The Supreme Court of Canada discussed the meaning of the words "available market" as found in a force majeure clause in a commercial contract.

Counsel:

Donald M. Gillis, Q.C., and Thomas L. McGloan, Q.C., for the appellants;

John G. Bryden, for the respondent.

This appeal was heard by the Supreme Court of Canada on February 5, 1975. Judgment was delivered by the Supreme Court of Canada on April 22, 1975.

The judgment of the Supreme Court of Canada was delivered by Dickson, J.