BenchPress.

• Date: 01 January 2019
• Author: Mitchell, Teresa

The Supreme Court of Canada has released a number of interesting cases over the last few months. This issue of BenchPress will look at four of them. Two are of national significance, and two reveal the profoundly personal situations that cause Canadians to access the justice system

A Deal is a Deal

The provinces of Quebec and Newfoundland and Labrador have been fighting over the terms of the Churchill Falls hydroelectric plant since they first contracted to build and operate it in 1969. The deal allowed Hydro-Quebec to buy electricity at a fixed rate for the 65-year duration of the contract, in return for promising to buy the electricity whether it needed it or not. After the contract was completed, the market price of electricity dropped well below the price set in the contract. Hydro- Quebec now buys electricity from Churchill Falls and sells it for a substantial profit. Newfoundland and Labrador asked the Court for an order allowing it to renegotiate the contract and adjust the price of the electricity. The Supreme Court of Canada rejected the appeal. The majority ruled that Hydro-Quebec did not have a duty to renegotiate the contract once it was clear that it was receiving an unanticipated, substantial profit. The Court concluded that it could not change the contents of the contract, require the parties to renegotiate it, or to share its benefits. It stated that the doctrine of unforeseeability, which could allow for a contract to be renegotiated if its terms become excessively onerous for one party, did not apply in this case. The doctrine is not a part of the Quebec Civil Code, and, in any event, the circumstances of this case did not allow for its limited use. The Court also dismissed suggestion that Hydro-Quebec was under obligations of good faith and equity to renegotiate. The Court wrote: "Hydro-Quebec is not breaching its duty of good faith in exercising its right to purchase electricity from Churchill...