Fort Frances, Town of v. Boise Cascade Canada Ltd. et al.

• Jurisdiction: Federal Jurisdiction (Canada)
• Judge: Laskin, C.J.C., Dickson, Beetz, Estey, McIntrye, Chouinard and Lamer, JJ.
• Date: 08 February 1983
• Citation: (1983), 46 N.R. 108 (SCC),[1983] 1 SCR 171,143 DLR (3d) 193,18 ACWS (2d) 134,1983 CanLII 47 (SCC),46 NR 108
• Court: Supreme Court (Canada)

Fort Frances v. Boise Cascade Can. Ltd. (1983), 46 N.R. 108 (SCC)

MLB headnote and full text

Fort Frances, Corporation of the Town of v. Boise Cascade Canada Ltd. et al.; Boise Cascade Canada Ltd. v. Province of Ontario et al. and Attorney General of Canada; Province of Ontario v. Boise Cascade Canada Ltd. et al.

Indexed As: Fort Frances, Town of v. Boise Cascade Canada Ltd. et al.

Supreme Court of Canada

Laskin, C.J.C., Dickson, Beetz, Estey, McIntrye, Chouinard and Lamer, JJ.

February 8, 1983.

Summary:

In 1905 an international pulp and paper company entered an agreement with the Province of Ontario for the construction of a hydroelectric generating facility on the Rainy River on the border between Minnesota and Ontario. The dam had a power generating station at each end and the power generated on the Canadian side was to be used primarily in Canada. The contract provided that 4000 horsepower would be reserved for use on the Canadian side and power was to be supplied to the Ontario Town of Fort Frances at a maximum rate of $14.00 per horsepower. In the early days the Town's demand for power was negligible, but by the 1970's the average energy consumption of the Town exceeded the horsepower produced by the Canadian generators. The company's own requirements far exceeded the facility's capacity. The issue arose of whether and to what extent the company was required under the 1905 contract to provide the Town with power at a price of $14.00 per horsepower. The Ontario High Court in a judgment reported 27 O.R.(2d) 216; 106 D.L.R.(3d) 501; 5 B.L.R. 20, held that the company was required to supply power at the maximum price of $14.00, but was not required to supply all of the Town's power requirements up to the entire output of the Canadian generators. The court held that the Town was entitled only to a reasonable share of the output to be determined by arbitration.

On appeal the Ontario Court of Appeal in a judgment reported in 34 O.R.(2d) 18 affirmed the price and that the Town could not demand all of the Canadian output, but held that both the price and the quantity of power should be determined by the Lieutenant-Governor in Council.

On appeal the Supreme Court of Canada held that the Town was entitled only up to 4000 horsepower per year at $14.00 per horsepower.

Contracts - Topic 7410

Interpretation - General principles - Inconsistent clauses - In 1905 a contract between a pulp and paper company and the Ontario government permitted the company to build a hydroelectric generating station on Rainy River - The Ontario Town of Fort Frances was entitled to power from the development at a certain price - 4000 horsepower was stated to be reserved for Canadian use - By the 1970's the Town's requirements exceeded the facility's production, as did the company's - The Supreme Court of Canada held that the Town was entitled to make up to 4000 horsepower per year at the stated price.

Contracts - Topic 9912

Promissory estoppel - When applicable - Requirement of detrimental reliance - A company agreed to supply electricity to a town in a contract between the company and the Ontario government - The contract was unclear about the amount of power the Town was entitled to - Years later the company stated to the government that the town was entitled to power without restriction of amount - The Town did not rely to its detriment on the statement - The Supreme Court of Canada held that the company was not estopped from claiming a limitation on the town's entitlement - See paragraphs 46 to 49.

Cases Noticed:

British Movietonews Ltd. v. London and District Cinemas Ltd., [1952] A.C. 166, consd. [para. 35].

Staffordshire Area Health Authority, The v. The South Staffordshire Waterworks Company, [1978] 3 All E.R. 769, dist. [para. 36].

Town of Fort Frances v. Fort Frances Pulp and Paper Co. (1925), 28 O.W.N. 402, refd to. [para. 45].

Grosset v. Carter (1880-85), 10 S.C.R. 105, appld. [para. 47].

Conwest Exploration Company Ltd. et al. v. Letain, [1964] S.C.R. 20, appld. [para. 47].

Hughes v. Metropolitan Railway Co. (1877), 2 App. Cas. 439, appld. [para. 47].

John Burrows Ltd. v. Subsurface Surveys Ltd. and Whitecomb, [1968] S.C.R. 607, appld. [para. 48].

Canadian National Railway Co. et al. v. Beatty et al. (1982), 34 O.R.(2d); 128 D.L.R.(3d) 236 (Ont. Div. Ct.), consd. [para. 48].

Pentagon Construction (1968) Co. Ltd. v. United States Fidelity and Guaranty Co. (1977), 77 D.L.R.(3d) 189 (B.C.C.A.), consd. [para. 48].

Counsel:

Royce Frith, Q.C., B.A. Crane, Q.C., and Henry S. Brown, for the appellant Fort Frances;

T.H. Wickett, Q.C., for the appellant the Queen in Right of Ontario;

P.B.C. Pepper, Q.C., and D.J.T. Mungovan, for the respondent Boise Cascade;

E.A. Bowie, Q.C., and Peter Doody, for the intervenant the Attorney General of Canada.

This case was heard on December 13 and 14, 1982, at Ottawa, Ontario, before LASKIN, C.J.C., DICKSON, BEETZ, ESTEY, McINTYRE, CHOUINARD and LAMER, JJ., of the Supreme Court of Canada.

On February 8, 1983, ESTEY, J., delivered the following judgment for the Supreme Court of Canada: