Hunt River Camps/Air Northland Ltd. v. Canamera Geological Ltd., (1998) 168 Nfld. & P.E.I.R. 207 (NFCA)

• Judge: O'Neill, Steele and Green, JJ.A.
• Court: Court of Appeal (Newfoundland)
• Case Date: February 13, 1998
• Jurisdiction: Newfoundland and Labrador
• Citations: (1998), 168 Nfld. & P.E.I.R. 207 (NFCA)

Hunt River v. Canamera (1998), 168 Nfld. & P.E.I.R. 207 (NFCA);

    517 A.P.R. 207

MLB headnote and full text

Temp. Cite: [1998] Nfld. & P.E.I.R. TBEd. DE.010

Canamera Geological Ltd. (appellant) v. Hunt River Camps/Air Northland Ltd. (respondent)

(97/17)

Indexed As: Hunt River Camps/Air Northland Ltd. v. Canamera Geological Ltd.

Newfoundland Supreme Court

Court of Appeal

O'Neill, Steele and Green, JJ.A.

November 24, 1998.

Summary:

The Newfoundland Supreme Court, Trial Division, in a decision reported at [1997] Nfld. & P.E.I.R. Uned. 1, ordered the defen­dant to pay the plaintiff the amount due under a stand-by contract for a rental of an aircraft ($160,000), less $16,163.21 for revenue earned by the plaintiff through third party use of the aircraft. The defendant appealed, arguing that the communications between the parties never reached the degree of certainty required to constitute a legally enforceable contract. Alternatively, the de-fendant argued that if there was a valid con­tract, the trial judge erred in not finding that the plaintiff breached its obligations under the contract and in not finding that the amount recoverable should be reduced to reflect the level of the plaintiff's expenses and also by virtue of the requirement of mitigation. The plaintiff acknowledged that the correct amount to be deducted from the $160,000 was $18,715.80 rather than $16,163.21.

The Newfoundland Court of Appeal, O'Neill, J.A., dissenting, dismissed the appeal, but varied the trial judgment to award the plaintiff $141,284.20, being the contract price of $160,000 less $18,715.80 for revenue earned by the plaintiff.

Contracts - Topic 1465

Formation of contract - Intention - Inten­tion to create a legal relationship - [See first Contracts - Topic 5643 ].

Contracts - Topic 1508

Formation of contract - Consensus or agreement - Intention - Inference of - From conduct - The Newfoundland Court of Appeal stated that "the fact that the parties have performed some of their puta­tive obligations will often make it unrealis­tic to argue that a contract did not come into existence" - See paragraph 32.

Contracts - Topic 2065

Terms - Implied terms - To achieve busi­ness efficacy - [See first - Contracts - Topic 5643 ].

Contracts - Topic 3523

Performance or breach - Breach - What constitutes a breach - The trial judge found that there was a valid contract between the parties for the rental of a Beaver aircraft from the plaintiff by the defendant - The trial judge rejected the defendant's argu­ment that the plaintiff was in breach of the agreement because it failed to have the plane which it purchased for the contract fully inspected and licensed by the contrac­tual starting date - The Newfoundland Court of Appeal affirmed the decision - The contract was not for a particular plane, the plaintiff had arranged to have another plane available and, in any event, the defendant had not requested use of the plane during the relevant period - Further, the defendant had not treated the failure to have the particular plane available as an act of repudiation and its continued deal­ings with the plaintiff constituted a waiver of any breach that might have existed - See paragraphs 35 to 39.

Contracts - Topic 3664

Performance or breach - Repudiation - What constitutes repudiation - The trial judge ordered the defendant to pay the plaintiff the amount due under a stand-by contract for a rental of an aircraft ($160,000), less $16,163.21 for revenue earned by the plaintiff through third party use of the aircraft - The defendant only used the aircraft for three days in the two month contract period and never made any payments to the plaintiff - On appeal, the defendant argued that the amount recover­able by the plaintiff should be reduced to reflect the plaintiff's alleged failure to mitigate - The Newfoundland Court of Appeal rejected the argument - The plain­tiff was not required to treat the defen­dant's silence as a repudiation of the con­tract and as the defendant had not estab­lished an act of anticipatory repudiation, the issue of mitigation did not arise - See paragraphs 51 to 65.

Contracts - Topic 3730

Performance or breach - Fundamental breach - What constitutes a fundamental breach - [See Contracts - Topic 3523 ].

Contracts - Topic 3739

Performance or breach - Fundamental breach - Waiver of breach or affirmation of contract - [See Contracts - Topic 3523 ].

Contracts - Topic 4021

Remedies for breach - Damages - General - The trial judge ordered the defendant to pay the plaintiff the amount due under a stand-by contract for a rental of an aircraft ($160,000), less $16,163.21 for revenue earned by the plaintiff through third party use of the aircraft - The defendant had only used the aircraft for three days during the two month contract period - On appeal, the defendant argued that the court should reduce the amount to which the plaintiff was entitled under the contract to take account of the fact that the plaintiff did not have to use the plane for most of the con­tract period and did not have to incur costs of operation, i.e., the plaintiff should only be awarded its reasonably expected level of profit - The Newfoundland Court of Appeal rejected the argument - The trial judge was correct in treating the claim as one for the balance due under a contract and not as one involving calculation of damages - See paragraphs 45 to 50.

Contracts - Topic 5643

Unenforceable contracts - Uncertainty and vagueness - Uncertainty - The Newfound­land Court of Appeal stated that "the court will attempt to give meaning to what the parties tried to do once it is satisfied that the parties intended to make an agreement ... Included within the means of giving effect to the parties' contractual intent is the technique of implying terms to flesh out the agreement in order to give it busi­ness efficacy, thereby ensuring its commer­cial purpose will be achieved. It is only if the uncertainty cannot be resolved by the use of implied terms or other suitable techniques that the court will be driven to throw up its hands and conclude that the purported 'agreement' is void for uncer­tainty" - See paragraphs 28 to 29.

Contracts - Topic 5643

Unenforceable contracts - Uncertainty and vagueness - Uncertainty - The defendant company engaged Goudie to expedite certain matters for it in Labrador, including arranging for an aircraft - The plaintiff provided Goudie with the following quote "Beaver rental per month based on twenty flying days; $4,000 per day X 20 days equals $80,000 a month ... This price includes pilot, fuel, oil and maintenance. Only other expense would be pilot's expenses away from base" Goudie relayed the quotation to the defendant - The defen­dant responded "This will confirm my agreement to the following, as per your communication ... Rental of a single engine Beaver aircraft for two months beginning June 15, 1995 ... I trust this is all you need to finalize the details of the agreement" - Goudie provided the defen­dant's response to the plaintiff - Based on the plaintiff's quote and the defendant's response, the trial judge found that there was a valid rental contract which was not void for uncertainty - The Newfoundland Court of Appeal affirmed the decision - See paragraphs 21 to 34.

Damages - Topic 1036

Mitigation - In contract - General - [See Contracts - Topic 3664 ].

Damages - Topic 5713

Contracts - Breach of contract - Loss of profits - [See Contracts - Topic 4021 ].

Damages - Topic 5721

Contracts - Breach of contract - Measure of damages - General - [See Contracts - Topic 4021 ].

Practice - Topic 9012

Appeals - Restrictions on argument on appeal - Issues or points not previously raised - [See Practice - Topic 9164 ].

Practice - Topic 9164

Appeals - Cross-appeals - Filing of - Effect of failure to file - The trial judge ordered the defendant to pay the plaintiff the amount due under a stand-by contract for a rental of an aircraft ($160,000), less $16,163.21 for revenue earned by the plaintiff through third party use of the aircraft - The defendant appealed - On the appeal, the plaintiff argued that the trial judge erred in deducting the $16,163.21 from the $160,000 - The plaintiff had not filed a cross-appeal on the point - The Newfoundland Court of Appeal held that it would not be appropriate to deal with the merits of the issue raised by the plaintiff where not only was no notice of cross-appeal filed, but the submission was not made in the plaintiff's written argument and was raised for the first time during oral argument - See paragraphs 40 to 44.

Practice - Topic 9255

Appeals - Judgments by appeal court - Scope of jurisdiction - Rule 57.20(2) of the Supreme Court Rules provided that "The powers of the court may be exercised in respect of all or any part of the order, decision or proceedings appealed from, notwithstanding that the notice of appeal states that part only of the order or deci­sion is complained of, and may be exer­cised in favour of all or any of the parties or other persons interested in the appeal although they have not complained of the order or decision appealed from" - The Newfoundland Court of Appeal stated that it did not follow that the court should necessarily exercise the power in a given case and that the court should be guided by the justice of the situation judged not only from a substantive, but also a procedural, point of view - See paragraphs 42 to 43.

Cases Noticed:

Imperial Oil Ltd. v. Young et al. (1998), 167 Nfld. & P.E.I.R. 280; 513 A.P.R. 280 (Nfld. C.A.), refd to. [para. 25].

Imperial Oil Ltd. v. C & G Holdings Ltd., Gardiner and Neville (1986), 58 Nfld. & P.E.I.R. 326; 174 A.P.R. 326 (Nfld. T.D.), affd. (1989), 78 Nfld. & P.E.I.R. 1; 244 A.P.R. 1 (Nfld. C.A.), refd to. [para. 27].

Canada Square Corp. v. Versafood Ser­vices Ltd. (1981), 130 D.L.R.(3d) 205 (Ont. C.A.), refd to. [para. 28].

Dot Development Ltd. v. Fowler et al. (1980), 118 D.L.R.(3d) 371 (B.C.S.C.), refd to. [para. 29].

Wild Rose Properties Ltd. v. Latam (1985), 59 A.R. 95 (C.A.), refd to. [para. 29].

Ward v. Workers' Com­pensation Review Division (Nfld.) (1997), 155 Nfld. & P.E.I.R. 178; 481 A.P.R. 178; 151 D.L.R.(4th) 764 (Nfld. C.A.), refd to. [para. 42].

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; 5 N.R. 99; [1975] 5 W.W.R. 575; 57 D.L.R.(3d) 386, refd to. [para. 52].

White and Carter (Councils) Ltd. v. Mc­Gregor, [1962] A.C. 413 (H.L.), refd to. [para. 65].

Baud Corp. N.V. v. Brook, [1979] 1 S.C.R. 633; 23 N.R. 181; 12 A.R. 271; [1978] 6 W.W.R. 301; 89 D.L.R.(3d) 1, refd to. [para. 65].

Asamera Oil Corp. Ltd. v. Sea Oil and General Corp. - see Baud Corp. N.V. v. Brook.

Big Sweeper Building Maintenance Ltd. v. Canadian Forest Products Ltd. (1991), 2 B.C.A.C. 36; 5 W.A.C. 36; 82 D.L.R.(4th) 593 (C.A.), refd to. [para. 148].

Statutes Noticed:

Rules of Court (Nfld.), Supreme Court Rules, rule 57.20(2) [para. 42].

Authors and Works Noticed:

Fridman, Gerald Henry Louis, The Law of Contract (3rd Ed. 1994), p. 776 [para. 143].

Counsel:

Joseph Hutchings, for the appellant;

Raymond Whalen, for the respondent.

This appeal was heard on February 13, 1998, before O'Neill, Steele and Green, JJ.A., of the Newfoundland Court of Appeal. The judgment of the Court of Appeal was rendered on November 24, 1998, including the following opinions:

Green, J.A. (Steele, J.A., concurring) - see paragraphs 1 to 67;

O'Neill, J.A., dissenting - see paragraphs 68 to 152.