Fraser Jewellers (1982) Ltd. v. Dominion Electric Protection Co. et al., (1997) 101 O.A.C. 56 (CA)

• Judge: Robins, Osborne and Abella, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 10, 1997
• Jurisdiction: Ontario
• Citations: (1997), 101 O.A.C. 56 (CA);1997 CanLII 4452 (ON CA);34 OR (3d) 1;148 DLR (4th) 496;32 BLR (2d) 1;35 CCLT (2d) 298;[1997] OJ No 2359 (QL);101 OAC 56;71 ACWS (3d) 871

Fraser Jewellers v. Dominion Electric (1997), 101 O.A.C. 56 (CA)

MLB headnote and full text

Temp. Cite: [1997] O.A.C. TBEd. JN.032

Fraser Jewellers (1982) Ltd. (plaintiff/respondent) v. Dominion Electric Protection Co. and Ian Wright and Donald Lang (defendants/appellant)

(C14470)

Indexed As: Fraser Jewellers (1982) Ltd. v. Dominion Electric Protection Co. et al.

Ontario Court of Appeal

Robins, Osborne and Abella, JJ.A.

June 10, 1997.

Summary:

Fraser, a retail jeweller, contracted with Dominion Electric Protection Co. (ADT), a security protection firm, to install and moni­tor an alarm system. Fraser was robbed and sued ADT for damages alleging that ADT negligently delayed contacting the police after a hold-up alarm signal was activated. ADT contended, inter alia, that if it was liable, a clause in the parties' agreement limited its liability to a sum not exceeding its annual service charge ($890). The trial judge held that ADT was not entitled to rely on the clause to limit its liability and awarded Fraser the full amount of the loss ($50,000). ADT appealed.

The Ontario Court of Appeal allowed the appeal in part, holding that ADT could rely on the clause limiting its liability.

Contracts - Topic 2122

Terms - Express terms - Exclusionary clauses - Bars - Fraser Jewellers was robbed and sued ADT, a security protec­tion firm, for dam­ages alleging that ADT negligently delayed contacting the police after an alarm signal was activated - The trial judge held, inter alia, that ADT was not entitled to rely on an exclusionary clause in the parties' agre­ement which limited ADT's liability because ADT's failure to promptly respond to the signal constituted a fundamental breach of the parties' agreement - The Ontario Court of Appeal held that ADT could rely on the exclusionary clause stating that the breach was not funda­mental as Fraser was not deprived of substantially the whole benefit of the contract - Except for this event which occurred some two years after the contract was agreed to, the con­tract was performed properly and without complaint - See paragraphs 19 to 27.

Contracts - Topic 2122

Terms - Express terms - Exclusionary clauses - Bars - Fraser Jewellers was robbed and sued ADT, a security protec­tion firm, for dam­ages alleging that ADT negligently delayed contacting the police after an alarm signal was activated - The trial judge held that an exclusionary clause in the parties' agre­ement was unfair, un­reasonable or uncon­scionable because, inter alia, the agreement was not read by Fraser's owner - The Ontario Court of Appeal held that ADT could rely on the exclusionary clause stating that "... in the absence of fraud or mis­representation, a person is bound by an agreement to which he has put his signa­ture whether he has read its contents or chosen to leave them unread ... A busi­nessman executing an agreement on behalf of a company must be presumed to be aware of its terms and to have intended that the company would be bound by them" - See paragraphs 29, 30.

Contracts - Topic 2122

Terms - Express terms - Exclusionary clauses - Bars - Fraser Jewellers was robbed and sued ADT, a secu­rity protec­tion firm, for dam­ages alleging that ADT negligently delayed contacting the police after an alarm signal was acti­vated - The trial judge held that an exclusionary clause in the parties' agree­ment was unfair, un­reasonable or un­con­scionable because, inter alia, the part­ies' agreement was on a standard pre-printed form and was not negotiated - The Ontario Court of Appeal held that ADT could rely on the exclu­sionary clause stating that the fact that the clause was in a standard pre-printed form and was not a subject of negotiations was not sufficient to vitiate the clause - See para­graphs 29 to 30.

Contracts - Topic 2122

Terms - Express terms - Exclusionary clauses - Bars - Fraser Jewellers was robbed and sued ADT, a security protec­tion firm, for dam­ages alleging that ADT negligently delayed contacting the police after an alarm signal was activated - The trial judge held that an exclusionary clause in the parties' agre­ement was unfair, un­reasonable or uncon­scionable because, inter alia, the clause was not brought to Fraser's owner's atten­tion - The Ontario Court of Appeal held that ADT could rely on the exclusionary clause stating that the con­tract was printed on essentially one page, the limitation provi­sion was high­lighted in bold block letters, the language was clear and unam­biguous and nothing was done to mislead a reader - Had Fras­er's owner perused the contract, he would have been aware of the limitation and there was no special rela­tionship exis­ting between the parties that imposed an obli­gation on ADT to bring the clause to the specific attention of Fraser - See para­graphs 29, 31 to 33.

Contracts - Topic 2122

Terms - Express terms - Exclusionary clauses - Bars - Fraser Jewellers was robbed and sued ADT, a secu­rity protec­tion firm, for dam­ages alleging that ADT negligently delayed contacting the police after an alarm signal was acti­vated - The trial judge held that an exclusionary clause in the parties' agr­ee­ment was unfair, un­rea­sonable or uncon­scionable because, inter alia, there was an inequality of bar­gaining power between the parties - The Ontario Court of Appeal held that ADT could rely on the exclu­sionary clause stating that "... the fact that the parties may have different bar­gaining power does not in itself render an agree­ment unconscion­able or unen­f­orceable ... The question is not whether there is an inequality of bar­gaining power. Rather, the question is whether there was an abuse of the bar­gaining power ... there is no evi­dence of any such abuse" - See paragraphs 29, 34, 35.

Contracts - Topic 2122

Terms - Express terms - Exclusionary clauses - Bars - Fraser Jewellers was robbed and sued ADT, a security protec­tion firm, for dam­ages alleging that ADT negligently delayed contacting the police after an alarm signal was activated - The trial judge held that the terms of an exclusionary clause in the parties' agree­ment were so unusual in nature or so unfair or uncon­scionable that their en­forcement would constitute an unaccepta­ble commer­cial practice - The Ontario Court of Ap­peal held that ADT could rely on the exclu­sionary clause stating that given the potential value of the prop­erty kept on a customer's premises, and the many ways in which a loss may be in­curred, the ratio­nale under­lying this type of limitation clause was apparent and made sound com­mercial sense - The exemption clause was not unusual - Clauses limiting a security company's liability for acts arising out of its own negligence appeared to be a com­mon feature of commercial relations of this type - See paragraphs 29, 36 to 41.

Contracts - Topic 3730

Performance or breach - Fundamental breach - What constitutes - [See first Contracts - Topic 2122 ].

Contracts - Topic 3735

Performance or breach - Fundamental breach - Effect of exclusionary clause - [See all Contracts - Topic 2122 ].

Cases Noticed:

Syncrude Canada Ltd. v. Hunter Engineer­ing Co. and Allis-Chalmers Canada Ltd. et al., [1989] 1 S.C.R. 426; 92 N.R. 1, refd to. [para. 19].

Hunter Engineering Co. v. Syncrude Canada Ltd. - see Syncrude Canada Ltd. v. Hunter Engineering Co. and Allis-Chalmers Canada Ltd. et al.

Photo Production Ltd. v. Securior Trans­port Ltd., [1980] A.C. 827 (H.L.), refd to. [para. 24].

Linton (B.G.) Construction Ltd. v. Canadian National Railway Co., [1975] 2 S.C.R. 678; 3 N.R. 151, refd to. [para. 26].

L'Estrange v. Graucob (F.) Ltd., [1934] 2 K.B. 394, refd to. [para. 30].

Craven v. Strand Holidays (Can.) Ltd. (1982), 40 O.R.(2d) 186 (C.A.), refd to. [para. 30].

Karroll v. Silver Star Mountain Resorts Ltd. (1988), 33 B.C.L.R.(2d) 160 (S.C.), refd to. [para. 33].

Nunes (J.) Diamonds Ltd. v. Dominion Electric Protection Co., [1972] S.C.R. 769, appld. [para. 39].

Thomas (D.) Furs Ltd. v. Wackenhut of Canada Ltd., [1989] O.J. No. 1758 (Dist. Ct.), refd to. [para. 41].

Marmac Credit Jewellers Ltd. v. Dominion Electric Protection Company (1978), 3 B.L.R. 144 (Ont. H.C.), refd to. [para. 41].

Loeb Inc. v. Bomar Security and Investi­gations Ltd., [1993] O.J. No. 109 (Gen. Div.), refd to. [para. 41].

Authors and Works Noticed:

Cheshire, Fifoot and Furmston, The Law of Contract (13th Ed. 1996), p. 168 [para. 30].

Liability of Persons Furnish­ing, Installing, or Servicing Burglary or Fire Alarm System for Burglary or Fire Loss (An­notated) (1985), 37 A.L.R. 4th 47, gen­erally [para. 41].

Waddams, Stephen M., The Law of Con­tracts (3rd Ed. 1993), p. 323 [para. 28].

Counsel:

Paul J. Martin, for the appellant;

Michael R. Salhany, for the respondent.

This appeal was heard on January 7, 1997, before Robins, Osborne and Abella, JJ.A., of the Ontario Court of Appeal.

On June 10, 1997, Robins, J.A., released the following decision for the court.