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3.10 CANADIAN CASES
3.10.1 Alkok v. Grymek
Importance: a quantum meruit award for damages
A construction contract was formed and it was agreed that certain payments would be made at various dates in the project, as an architect certified work, and that subcontractors had been paid.
In the resulting lawsuit the court found that the contractor had not violated the essential terms of the contract. This did not warrant a discharge, and the contractor received an award for work done (quantum meruit).
3.10.2 Amber Size & Chemical Co. Ltd. v. Menzel
Importance: sets principle for trade secret protection
In a ruling the court stated - ex-employees should not divulge secrets given in confidence (this may only be implied), or take advantage financially.
3.10.3 Application of Erickson/Massey
Importance: an example of a lien for design-supervise services.
3.10.4 Armbro Materials and Construction Ltd. v. 230056 Investments Limited et. al.
Importance: an example where a lien was allowed for an engineer.
An engineer had prepared plans for subdivision roads, sewers, and water mains, with the condition that the plans had to be approved by local officials. The contract also called for supervision.
The court granted the lien saying that the plans were tied to the land, and constituted an improvement. This was differentiated from architects plans that are somewhat independent of the land.
3.10.5 Attorney-General of Canada v. Libling et. al.
Importance: the limitation period for starting an action was challenged
The engineer that had designed the part of the roof in question had not been contacted about the problem for 11 years, and no longer had his records.
3.10.6 Bahamaconsult Ltd. v. Kellogg Salada Canada Ltd.
Importance: an example of a letter of intent
This letter discussed a sale of shares, and indicated that transfer of the shares, and finalizing of the sale were all that was left.
In a lower court this letter of intent was upheld as a contract, but a higher appeal overturned the decision and ruled that certain elements were missing.
3.10.7 Beaufort Realties (1964) Inc. and Belcourt Construction (Ottawa) Limited and Chomeday Aluminum Co. Ltd.
Importance: another example of a fundamental breach
In court the contract was shown to have a clause that waived the subcontractors right to apply a lien.
The court ruled that the failure to pay was a fundamental breach, and that the subcontractor would not be held to the lien waver.
3.10.8 Belle River Community Arena Inc. v. W.J.C. Kaufmann Co. et. al.
Importance: a unilateral mistake was upheld
The contractor had prepared a bid and incorrectly transferred a figure lowering the bid by $70,000 to $641,603.
Upon discovering the mistake there was an attempt to withdraw the bid. Both sides acknowledged there was an error, but he was not allowed to withdraw the bid.
When the plaintiff who had asked for the bids found out about the mistake, he attempted to accept the bid.
When unable to accept the bid, another subcontractor was contracted and the original contractor sued for the difference in bids.
The court rejected the suit saying that the motives of the plaintiff were less than honorable. And, the plaintiff had not formally accepted the contractors bid by returning it.
The court also pointed out that trying to profit by the mistake of another was a key element in the decision.
3.10.9 Bethlehem Steel Corporation v. St. Lawrence Seaway Authority
Importance: economic losses can only be claimed if some physical damage has occurred
A ship ran into a bridge over a canal. The bridge was destroyed and the canal was obstructed for several days.
Two claims for damages were rejected. One being a request for lost profits for a ship. Another being the cost of shipping product across land to Toronto for subsequent shipping. Both were rejected because they were purely economic losses.
3.10.10 Brennan Paving Co. Ltd. v. Oshawa
Importance: an example of an engineer given the power to certify
An engineer was contracted for a construction project. One of the duties was to certify payment certificates.
The court concluded that the certificates are valid if the engineer has acted in an independent and judicial manner.
3.10.11 British Reinforced Concrete Engineering Co. Limited v. Lind
Importance: the company owns the patent when it is within the scope of the employees work
The court ruled that the employer owned a design because the draughtsman was instructed to do the design.
3.10.12 Brown & Huston Ltd. v. The Corporation of the City of York et. al.
Importance: engineers may be liable for negligence in report preparation
Consulting engineers had been hired to prepared a soils and ground-water-level report, but had neglected to include some important information.
A contractor was then hired to construct an underground pumping station. The contractor was required by the contract to personally examine the site for conditions to be encountered during construction.
Based on the incomplete report, the contractor did not expect a water problem, and underbid on the job.
The court determined that the contractor was 25% negligent in not requesting the missing information.
3.10.13 Calax Construction Inc. v. Lepofsky
Importance: an example of the legal capacity to contract based on licenses
An unlicensed building contractor was unable to enforce a contract because without the license they did not have the legal capacity to enter into the contract.
3.10.14 Calgary v. Northern Construction Company Division of Morrison-Knudsen Company Inc. et. al.
Importance: a case that was not allowed a dismissal for unilateral mistake
The court chose not to apply the unilateral mistake principle because the contract had been accepted and there was no deposit forfeit escape clause.
3.10.15 City of Kamloops v. Nielsen et. al.
Importance: the supreme court upheld [Sparham Souter] and rejected [Pirelli]
The building inspector noticed the deficient foundations and issued a stop work order. This order was ignored and the building inspector did not enforce it.
2 years after the stop work order had been issued the house was finished and sold (an occupancy permit was never issued).
It was found that the city was 25% liable and the builder 75% liable for damages (costs involved with repair of the house, etc.).
Part of this case involved the limitation date. The court upheld the [Sparham Souter] case and rejected Pirelli.
3.10.16 Conwest Exploration Co. Ltd. et. al. v. Letain
Importance: the application of equitable estoppel to allow a gratuitous promise.
It became obvious that the tests would not be complete by the expiry date, and the owner implied that an extension would be allowed. (In effect this was a gratuitous promise).
The supreme court agreed that enforcing the original contract strictly would be inequitable, therefore the contract was "estopped", effectively allowing the extension, even though there was no consideration.
3.10.17 Corporation of District of Surrey v. Carrol-Hatch et. al.
Importance: an example of concurrent tort-feasor
The engineers dug two shallow test pits and recommended deep soils tests to the architects. The architect rejected the recommendation and the engineers submitted a soils report to the owner based on the shallow test pits.
The architect was found 60% liable, and the engineer 40% because they had failed to inform the owner that more soils tests were required.
3.10.18 Croft Construction Co. v. Terminal Construction Company
Importance: an engineers power to certify binding amounts, even with mistakes
A construction contract stated that an engineer would calculate the values of payments to the contractor.
The court ruled that the engineers figures would stand (even with mistakes) as long as there was no fraud or bad faith on the engineers part.
3.10.19 Dabous v. Zuliani et. al.
Importance: negligence in inspection can lead to liability
A second similar chimney was installed and covered over before inspection. The architect did not ask to have the chimney exposed for inspection.
3.10.20 Davis Contractors Ltd. v. Fareham Urban District Council
Importance: a failed bid for discharge by frustration
After 56 houses were built the contractor determined that the labor shortage was great enough to prevent completion.
In the resulting suit against the contractor the court ruled that although the contractor overlooked the labor shortage and as a result is in an unfortunate situation, but of his own making. Therefore it refused to discharge the contract on the grounds of frustration.
3.10.21 Demers et. al. v. Dufresne Engineering et. al.
Importance: an engineer has a duty to direct contractors when obvious problems exist
An engineer was able to see the construction method, but did not comment. His representative did add a small amount of vertical reinforcement.
In the resulting court case the engineer was assumed to have approved the method by remaining silent. There was also implied consent because of the reinforcement added.
3.10.22 Derry & Peek
Importance: contract was rescinded because of fraudulent misrepresentation
Fraudulent misrepresentation is defined as, made "(1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false."
3.10.23 Dominion Chain Co. Ltd. v. Eastern Construction Co. Ltd. et. al.
Importance: makes an engineer liable for negligence without a limit, also an example of joint and several liability
The owner sued, but the judge found the contractor was exempted by a clause in the contractors contract.
- an engineer is "responsible if he does or omits to do his professional undertakings with an ordinary and reasonable degree of care and skill," (Marston, pg.29)
- an engineer "ought not to undertake the work if it cannot succeed, and he should know whether it will or not." (Marston, pg.29)
- liability is "not limited to the amount of remuneration which under the agreement the architect or engineer was to receive, but are measured by the actual loss occasioned..." (Marston, pg.30)
In the ruling the judge ruled that the fault for the damages were 25% the engineer and 75% the contractor (not liable). But, because the engineer was the only one left in the suit that he would be responsible for 100% of the damages.
A court of appeal released the contractor because they were not joint tort-feasors. But, the court of appeal did state they could be liable in tort and contract.
The supreme court also relieved the contractor of responsibility, based on contractual obligations alone.
3.10.24 Donoghue v. Stevenson
Importance: makes a manufacturer responsible to the eventual consumer of the product
a bottle of ginger beer containing a decomposed snail was consumed, leading to an illness. This bottle of ginger beer was not purchased by the consumer, but was given to him by a friend. He Sued.
The court rules that even though there was not privity of contract between the plaintiff and the defendant, a duty of care was owed to the plaintiff.
3.10.25 Dutton v. Bognor United Building Co. Ltd.
Importance: established the responsibility of employers for employee actions - vicarious liability
A contractor built a foundation for a house. The foundation was on top of a rubbish deposit, and should have been deeper.
As required by local by-laws, a building inspector was to approve the construction after appropriate inspection. The inspector did not object to the improper foundation.
After the house was in use, and had been resold, the foundation settled and the house was severely damaged.
3.10.26 Englewood Plumbing & Gas Fitting Ltd. v. Northgate Development Ltd. et. al.
Importance: allowed a lien for design work
3.10.27 Fairbanks Soap Co. Ltd. Sheppard
Importance: an example of substantial compliance
A contractor supplied and installed equipment, but there were a few small defects (fixed at a small cost).
The resulting lawsuit lead to a decision that the contractor had substantially complied and should be paid for work and materials supplied.
3.10.28 Fern Brand Waxes Ltd. v. Pearl
Importance: the distinct nature of a corporation disappears when being used fraudulently
the defendant, a director, officer and accountant of the corporation had made an authorized transfer of funds.
these funds were used as a loan by the corporation as a loan to two other companies controlled by the director.
some of the loaned money was used to buy shares in the corporation. (The court ruled this inappropriate).
The court rules that the 2 other corporations had been used as instruments of the director, that the director had breached his trust, and that the companies could not shield his personal conduct.
3.10.29 Ford Homes Ltd. v. Draft Masonry (York) Co. Ltd.
Importance: an example of an implied term
a construction contract included the supply and installation of two staircases, but neglected to include a requirement that they meet the Building Code.
A representative of the company visited the site, but turned down an offer to review architectural plans, which specified a minimum clearance.
The final staircase did not meet the minimum clearance in the building code, and was ordered replaced.
The resulting lawsuit found that if the Building Code was not mentioned in the contract and the staircase was improperly designed thus being illegal, it would make the contract for an illegal action, therefore by implication the staircase would have to conform to the building code.
3.10.30 General Electric Company, Limited v. Fada Radio, Limited
Importance: indicates patents must be novel and have use
Basically stated that there must be some creative content, no matter how small. This includes alterations. They also focus on the concept of an improvement.
3.10.31 GeorgeHo Lem v. Barotto Sports Ltd. and Ponsness-Warren Inc.
Importance: a manufacturer can be held liable if the consumer is not adequately warned about dangerous uses of a product
Lem bought a machine for reloading used shotgun shells. The machine had clear instructions on how to load the shells. He also received personal instructions on the machine.
When using the machine Lem did not follow instructions, and as a result produced some dangerous shells.
One of the shells caused Lem's gun to burst, causing personal injury, and as a result he brought a lawsuit against the manufacturer and distributor.
The court found that a high standard of care to prevent misuse was present, and found Lem fully responsible for his own injuries.
3.10.32 Grant Smith & Co. v. The King
Importance: fraudulent engineers certificates are set aside
3.10.33 Hadley v. Baxendale
Importance: established principle of remedies for damages
The resulting delay meant that the mill was inoperative for a prolonged period and business was lost. As a result the courier was sued.
The court said that the lack of notice about the urgency meant that the term for urgency had never been part of the "contract", and therefore could not have been breached.
The court also said that if there had been a breach of the contract, then the mill owner would have been due any losses that might have reasonably been expected at the start of the contract.
3.10.34 Halverson Inc. v. Robert McLellan & Co. et. al.
Importance: ruling that a contract overrides a tort
3.10.35 Harbutt's Plasticine Ltd. v. Wayne Tank and Pump Co. Ltd.
Importance: an example of fundamental breach
A contract was prepared for the design and construction of storage tanks for stearine wax. Liabilities were limited to 2,300 pounds (approx $5,000).
A plastic pipeline to carry the wax was wrapped with a heating element to allow the wax to flow in a liquid state.
When put into use the pipe warped, cracked and ruptured. Wax spilled on the floor and ignited. The resulting fire destroyed the factory.
The judge ruled that the design was so unsuitable that the contract was breached, and the liability limit did not apply. The damages awarded were 170,000 pounds.
3.10.36 Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd.
Importance: this allows professionals to be sued for negligently given advice
Byrne asked a bank to look into the credit status of another company that they were doing business with.
Heller reported that their financial position was favorable, but also stated that their advice was "without responsibility".
3.10.37 Imperial Glass Ltd. vs. Consolidated Supplies Ltd.
Importance: an unsuccessful attempt to argue for a unilateral mistake
During bid preparation an incorrect figure had been used for certain material suppliers, entirely because of mistakes by the bidder.
3.10.38 Jackson et. al. v. Drury Construction Co. Ltd.
Importance: an example of a tort of nuisance
3.10.39 John Burrows Ltd. v. Subsurface Surveys Ltd. et. al.
Importance: an example where equitable estoppel was disallowed
"FOR VALUE RECEIVED Subsurface Surveys Ltd. promises to pay John Burrows Ltd. or order at the Royal Bank of Canada the sum of forty-two Thousand Dollars ($42,000.00) in nine (9) years and ten (10) months from April 1st, 1963, payable monthly on the first day of May, 1963, and on the first day of each and every month thereafter until payment, provided that the maker may pay on account of principal from time to time the whole or any portion thereof upon giving thirty (30) days' notice of intention prior to such payment.
In Default of payment of any interest payment or installment for a period of ten (10) days after the same became due the whole amount payable under this note is to become immediately due.
One interest payment was 36 days late (the parties had fallen out of favor with each other) and it was decided to call in the notice using the default clause, and Subsurface Surveys Ltd. was notified.
In a resulting lawsuit it was claimed that the previous late payments were an implied modification of the contract and that an equitable estoppel was warranted.
The court ruled that the indulgences taken by the plaintiff in making late payments were not evidence that the defendant intended to negotiate new contractual terms.
3.10.40 Junior Books Ltd. v. Veitchi Co. Ltd.
Importance: claims for economic loss may be extended to those with no contracts
Although the installer was a subcontractor (note no contract existed between them) the court found that he had a duty of care to provide skillful work. As a result the court found him liable for economic losses, and any repair costs.
3.10.41 Kamlee Construction Ltd. v. Town of Oakville
Importance: an example of an engineers power of certification
An engineer was contracted for a construction project. The construction contract stated that the engineer had the final decision on the interpretation of the specifications and the quality of work.
During the work the contractor disagreed with one of the engineers decisions, and the relationship between the partys was reduced to petty bickering.
In the resulting lawsuit the court ruled that the engineers decisions would stand, provided he acted in a judicial manner and without influence from the owner.
3.10.42 Kidd v. Mississauga Hydro-Electric Commission et. al.
Importance: an example of an engineers duty of care when preparing estimates
When done, the engineer realized that the $14,447 for support staff was much higher than the $5,000 allowed in the estimate.
In a lawsuit to recover the difference the court ruled against the engineer stating that the work was entered into based on the estimate (there were also no disclaimers given). And, the result was so far out of line that it implied the engineer had not properly estimated.
3.10.43 Kocotis v. D'Angelo
Importance: improper licences can set aside a contract because of legality
An electrician had done work and supplied materials. But, against local bylaws did not hold the required electrical contractors licence.
The judge stated that the purpose of the license was supposed to maintain quality on larger projects, and that by not having a license the electrician was clearly not legally capable of entering into the contract.
3.10.44 Lambert v. Lastoplex Chemicals Co. Limited et. al.
Importance: the high standard of care requires that all users are assumed to be idiots
He read the labels before starting. These 3 labels indicated repeatedly that, among other horrible things, the product should be kept away from flames, fire, heat or cigarettes. Ventilation was also listed as essential.
Lambert was using the sealant in his basement when a pilot light in an adjoining room started an explosion and a fire in an open can of sealant.
In the resulting lawsuit another can of sealer made by a competitor had a warning label that also mentioned pilot lamps and more.
The court ruled that the chemical company did not provide sufficient warning and that they were liable. It was also noted that even though the engineer ought to have known of the danger, the chemical company could not count on this.
3.10.45 MacMillan Bloedel Ltd. v. Foundation Co.
Importance: limits of recoverable economic loss
The court indicated that the negligence was evident, but the "economic loss" would have been paid anyway. With no other evidence of loss, the case was dismissed.
3.10.46 Markland Associates Ltd. v. Lohnes
Importance: an example of implied contract terms
3.10.47 Metropolitan Water Board v. Dick, Kerr and Company, Limited
Importance: a discharge by frustration
The water board wanted the contract resumed (as indicated in a force majeure clause) with the delay included.
The case was taken to court, and the ruling was that the contract was different than the one entered into and as a result gave a discharge by frustration.
3.10.48 Monticchio v. Torcema Construction Ltd. et. al.
Importance: departed from previous decisions that voided contracts because of lack of licenses made contract illegal
The judge ruled that while a license was required for the contracting work, it was not required for supply of materials. Therefore the supplier was reimbursed for the materials supplied.
3.10.49 The Moorcock
Importance: established implied terms in contracts
The court decided in favor of the defense (dock owner) in the ruling that there was an implied term in the contract that the boat would have been safe at low tide.
3.10.50 Murray v. Sperry Rand Corporation et. al.
Importance: an example of fundamental breach
The court ruled that the supplier has fundamentally not met the obligations of the contract, and because of the fundamental breach it could not be protected by the exemption clause.
3.10.51 Mutual Finance Co. Ltd. v. John Wetton & Sons Ltd.
Importance: a contract can be revoked because of duress
3.10.52 Nedco Ltd. v. Clark et. al.
Importance: the corporate identity is not absolute and can be partially lifted
The court was asked to restrict picketing at Nedco because the two companies were separate entities.
The court rules that Northern both owned and dominated Nedco, making it effectively part of Northern, and in these certain circumstances, the companies would be treated the same and picketing would be allowed.
3.10.53 Newman et. al. v. Conair Aviation Ltd. et. al.
Importance: an example of a tort of nuisance
3.10.54 Northwestern Mutual Insurance Co. v. J.T.O'Bryan & Co.
Importance: employees can be held liable in tort suits
The Northwestern Mutual Insurance Co. had routinely asked that one of its agents delete a risk from a policy.
3.10.55 J. Nunes Diamonds Ltd. v. Dominion Electric Protection Co.
Importance: draws a line between tort and contract liability
3.10.56 Owen Sound Public Library Board v. Mial Developments Ltd. et. al.
Importance: application of "equitable estoppel" for accepted late payments
A construction contract was made that required payments needed to be made by the owner within 5 days of an architects certificate specifying the value of payment.
The contract also stated that if not paid within 7 days, the contractor could terminate the contract.
Instead of making one payment promptly, the owner requested the corporate seal of a subcontractor affixed to a document that supports the architects certificate.
The contractor did not give the sealed document to the owner, and as a result was not paid within the allowed period.
In the resulting suit the court maintained that the contractor had implicitly lead the owner to believe that the due date (including the termination clause) had been extended. Therefore an "equitable estoppel" of the clause was granted.
3.10.57 Permutit Co. v. Borrowman
Importance: a tangible (demonstrable) idea is required for a patent
The court said that an idea must be reduced to a definite and useful form before it can be patented.
3.10.58 Photo Production Ltd. v. Securicor Transport Ltd.
Importance: an example of a failed fundamental breach (rejected the concept of fundamental breach)
In the resulting lawsuit it was noticed that the security contract contained a clause that specifically exempted liability for (among other things) an employee that negligently starts a fire.
The court ruled that the exemption clause reasonably predicted the potential loss, and that there was no fundamental breach.
3.10.59 Pigott Construction Co. Ltd. v. W.J. Crowe Ltd.
Importance: refers to precedents of implied terms in contracts and a breach of a warranty (non-essential) term as grounds for damages, not termination.
A construction contract was made, including some minor terms requesting expeditious work, and to provide heat during winter.
The plaintiff argued that the two minor conditions had not been satisfied, and so the contract should be discharged.
The court said that the breaches had not prevented substantial performance, and therefore are not a reason to discharge the contract, but are grounds for payment of damages.
The court also stated that they would not imply terms into a contract unless it was obvious they should be there.
3.10.60 Pirelli General Cable Works Ltd. v. Oscar Faber and Partners
Importance: reverses the precedent set in [Sparham Souter]
An inner lining of a new material was used. The material was not suitable and cracks developed and the chimney had to be replaced.
They stated that the period of limitation started from the date the damage occurred. They said that legislation is required, and that the Sparham-Souter decision may lead to unfairly long limitation periods.
3.10.61 Pym v. Campbell
Importance: parol evidence rule exception
Two individuals had agreed that invention ownership rights would be purchased, but an unwritten condition was that it would be approved by two engineers first.
The judge ruled that because of the condition, the contract had never been entered into, effectively sidestepping the parol evidence rule.
3.10.62 The Queen et. al. v. Commercial Credit Corp. Ltd.
Importance: example of mail/courier for a contract and governing law
An offer of conditional sale was prepared by Commercial Credit as an agent to the parties in the contract.
Commercial Credit attempted to apply the Installment Payments Contract Act of Nova Scotia, but this was disallowed because the contract was made outside the province.
3.10.63 Ramsay and Penno v. The King
Importance: recognizes mistakes as separate from negligence
the statement said that engineers are "not infallible, nor is perfection expected, and the most that can be required of them is the exercise of reasonable care and prudence in light of scientific knowledge at the time, of which they should be aware..." (Marston, pg. 30)
3.10.64 Regina v. Margison and Associates, Limited
Importance: recognizes the legal overlap of engineers and architects duties
In reviewing the acts the court found too much overlap to distinguish between the duties of the engineers and the architects.
3.10.65 Rex v. Bentall
Importance: an engineer can be convicted for doing architectural work
3.10.66 Rivtow Marine Ltd. v. Washington Iron Works et. al.
Importance: economic losses caused by a defective product can be recovered
An identical crane manufactured by Washington had been used in a similar situation before, and it had collapsed. An investigation determined that there were structural defects in the crane Rivtow had chartered that were similar to those in the crane that had collapsed.
The defendants were previously aware that design problems left the cranes prone to cracking, but they did not warn the plaintiff or attempt repairs.
As a result of the failure to warn, the defendants were found liable for economic losses while the crane was being repaired.
3.10.67 Robert Simpson Co. Ltd. v. Foundation Co.
Importance: upheld the time of action principle of [Sparham Souter]
Some ceiling anchors were negligently designed, manufactured and installed. These were also misrepresented as adequate.
More than 6 years after the work the problems were detected, therefore the court was asked to consider the limitation from the detection of damages.
A lower court rejected the Sparham Souter principle, but a higher court heard an appeal that accepted the limitation period started when the damage was detected.
3.10.68 Ron Engineering et. al. v. The Queen in right of Ontario et. al.
Importance: an example of the unilateral mistake principle
An hour before the tenders were opened the contractor informed the commission, and also sent a telegram to the commission which arrived the following morning to tell them of the error.
An appeal lead to a successful overturn allowing the contract to be dismissed because of a unilateral mistake.
The supreme court held the position that the construction contract could be overturned, but the tender contract meant that the deposit had to be forfeit, as described in a forfeit clause.
3.10.69 Royal British Bank v. Turquand
Importance: Only the appropriate officials in a company have the capacity to contract
A corporation must observe contracts if the contracts were entered into normally, by a normally authorized employee/official, and the corporations records are in order.
3.10.70 Salomon v. Salomon & Co. Ltd.
Importance: recognition of a corporation as a distinct entity
the shareholders were Salomon and his family. Salomon was the majority shareholder, having received shares as part of his payment for the business, as well as debentures constituting security.
eventually the business became insolvent and was sued - Salomon claimed he should be satisfied ahead of the unsecured creditors by holding a secured debenture.
In the court of appeal the corporation was viewed as a scheme only for limiting liability, and putting Salomon ahead of the creditors.
But, the House of Lords upheld Salomon's corporation as properly formed, and a distinct entity, with no evidence of deception or fraud.
3.10.71 Schewebel v. Telekes
Importance: an example of the contract overriding tort
The court ruled that the relationship between the two was contractual and thus the limitation is counted from the date of the breach or duty, and not discovery.
3.10.72 Sealand of the Pacific Ltd. v. R.C. McHaffie Ltd. et. al.
Importance: an example of a contract over a tort
3.10.73 Sparham Souter et. al. v. Town & Country Developments (Essex) Ltd. et. al.
Importance: sets the start of the limitation period to when damage occurred
The guideline is that the damage is said to have occurred when it should be obvious or detected by a reasonable level of skill or diligence.
This decision was later overturned by a higher court, but it was used as the basis for other decisions. [XXXX]
3.10.74 Sutcliffe v. Thackrah et. al.
Importance: negligently prepared certificates make the certifier liable
The court ruled that the architect had a duty of care when preparing certificates. And, if an overpayment was made without just cause, the architect was liable. The only just reason for overpayment would be the architect acting as arbiter.
3.10.75 Swanson Construction Company Ltd. v. Government of Manitoba; Dominion Structural Steel Ltd., Third Party
Importance: an example of a failed bid for discharge by frustration
In court the contractor argued that the delay should constitute grounds for a discharge by frustration.
The court did not discharge the contract saying that the delay was an event that might be reasonably expected during construction, and should have been considered in the bid.
3.10.76 Re Thomas Hackett
Importance: the decision of an arbitrator can be overturned when improper
3.10.77 Township ofMcKillop v. Pidgeon and Foley
Importance: a contract was rescinded for innocent misrepresentation
The court concluded that the estimate was grossly in error (more than allowable by a disclaimer clause) and that because of the error, the contractor had entered into the contract.
3.10.78 Trident Construction Ltd. v. W.L. Wardrop and Assoc. et. al.
Importance: Hedley Byrne decision applied to engineering, improperly prepared drawings and specifications leave an engineer liable
A contractor (no contract existed between the engineer and contractor) was to build the plant based on the engineers design.
The contractor found the design unsuitable as a result the contractor brought a lawsuit against the engineer for his losses.
The engineer was found liable for the design because he owed a duty of care to the contractor that would eventually build the plant.
The judge specifically noted that contractors are so pressed for time preparing tenders that they could not be expected to check the engineers designs.
3.10.79 Unit Farm Concrete Products Ltd. v. Eckerlea Acres Ltd. et. al.; Canama Contracting Ltd. vs. Huffman et. al.
Importance: an engineer can be liable for advice given without a fee
In the past the contractor had used advice given by an engineer working for the government to assist farmers with plans.
The contractor discussed the plans for the barn on the phone, and dropped the set on the engineers desk. The two did not meet, but he superficially reviewed the set and wrote a note "Good set of plans. I like the detail. Wish I could spend that amount of time on each project. Keep up the good work." The engineer and the contractor never met to review the plans for the barn.
The court rules against the engineer (and Crown) noting that "good plans" was an implied approval and that the plans had been properly reviewed. There was also recognition that the contractor had been asking for advice.
3.10.80 Viscount Machine and Tool Ltd. v. Clarke
Importance: example of a limitation from the date of discovery
3.10.81 Willard's Chocolates Ltd. v. Bardsley
Importance: an employee may use an employers time and equipment to create an invention, but the employee owns the patent unless stated otherwise in the contract
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