Category: Contracts Page 11 of 12

Case considered: Equitable Trust Company v Lougheed Block Inc., 2012 ABCA 87

This judgment is one of several arising as a result of foreclosure proceedings taken with respect to the historic Lougheed Building at 604 – 1 Street S.W. in Calgary. In this March 2012 decision by the Court of Appeal the focus is on the security deposits that the former owner of the building had converted to its own use. Because neither the foreclosing mortgage company – Equitable Trust Company – nor the court-approved purchaser of the building – the aptly named 604 – 1 Street S.W. Inc. – received the tenants’ security deposits from the former owner/landlord, the issue was a classic in commercial law, a “battle of innocents.” Who would be out the more than $340,000 in security deposits, the mortgagee or the purchaser? The Chambers judge, R.G. Stevens, had let the loss lie where it fell, on the purchaser who would become the landlord to whom the tenants would look for their security deposits. A unanimous Court of Appeal – Madam Justice Marina Paperny, Mr. Justice J.D. Bruce McDonald and Mr. Justice Brian O’Ferrall – allowed the purchaser’s appeal and shifted the loss to the foreclosing mortgagee. While many of the grounds for allowing the appeal were based on the particular terms of the specific contract of purchase and sale between these individual parties, some of the grounds are more generalizable and therefore of broader interest.

Damages for Mental Distress in Breach of Contract

By Jassmine Girgis

On September 24, 2010

In Contracts

PDF version: Damages for Mental Distress in Breach of Contract

Case considered: J.O. v. Strathcona-Tweedsmuir School, 2010 ABQB 559

In J.O. v. Strathcona-Tweedsmuir School, the court awarded the plaintiff damages for mental distress arising from breach of contract. The facts of this case can be found in Alice Woolley’s recent ABlawg post.

The contract in question was one between the student, J.O., and the school. Ultimately, the court grounded its decision on the breach of contract in administrative fairness, finding that, based on the Private Schools Regulation (Alta. Reg. 190/2000) and on case law, the duty of fairness was an implied term of the contract. Having determined that the procedure followed by the school “fell considerably short of meeting [the school’s] duty of fairness” (para. 34), the school was in breach of its contract. The court awarded the plaintiff damages in the amount of one school year’s tuition for breach of the contract of instruction, and in an interesting move, also granted her contractual damages for mental distress, arising from her expulsion.

A curious cocktail – the mixed application of the law of contracts and administrative law to universities

By Alice Woolley

On July 17, 2009

In Administrative Law, Contracts

Cases Considered: Rittenhouse-Carlson v. Portage College 2009 ABQB 342

PDF version: A curious cocktail – the mixed application of the law of contracts and administrative law to universities

Jane Rittenhouse-Carlson brought an action against Portage College alleging breach of contract and tortious conduct by the College. The alleged misconduct centered on the College’s decision to withdraw Ms. Rittenhouse-Carlson from the Health Care Aide program after she failed a practicum. Ms. Rittenhouse-Carlson alleged that she had been treated unfairly in the handling of the practicum, the assessment of it and as a result of the College’s failure to arrange an appropriate second practicum opportunity.

The perils of selling the same property twice (with an aside on styles of appellate decision-making)

By Jonnette Watson Hamilton

On June 9, 2009

In Appellate Practice, Contracts, Property

Case considered: Castledowns Law Office Management Ltd. v. FastTrack Technologies Inc., 2009 ABCA 148

PDF version: The perils of selling the same property twice (with an aside on styles of appellate decision-making)

This was a dispute between two purchasers of the same piece of commercial real estate in Edmonton, the Vienna Building at 7708-104 Street. The vendor, 1131102 Alberta Ltd, sold the property first to FastTrack Technologies Inc. (FastTrack). That agreement was conditional upon the vendor’s lawyer’s approval. The vendor also entered into a second or back-up agreement with Castledowns Law Office Management Ltd. (Castledowns). The back-up agreement with Castledowns was conditional on “satisfactory confirmation of termination” of the FastTrack agreement. The resolution of the dispute turned on the interpretation to be given those words. This was the issue on which the dissent of Mr. Justice Frans Slatter parted ways with the majority judgment of Madam Justice Carole Conrad, concurred in by Mr. Justice Clifton O’Brien. Was it enough if the vendor could legally terminate the agreement with FastTrack and did so? Or did FastTrack have to ratify any purported termination by the vendor? This contract interpretation issue is perhaps less interesting than the fact that neither the majority nor the dissenting judgment engage with the other on that or any other issue. This style of appellate decision-making has been called “uncooperative” in the empirical literature that examines why justices decide as they do. (See, e.g., Benjamin Alarie and Andrew Green, “Charter Decisions in the McLachlin Era: Consensus and Ideology at the Supreme Court of Canada.”) The label “uncooperative” is not necessarily intended to be pejorative, depending on the reason for the lack of cooperation. Some judges value independence as the best method for achieving internally consistent reasoned decisions. Some Chief Justices encourage certain styles of interaction in the preparation of judgments. Sometimes, however, the lack of cooperation is due to ideological or personal differences. It usually takes a very large number of judgments before the reason becomes clear, with ideological or personal constraints on cooperation tending to lead to more plurality and dissenting judgments.

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Terminating a Long Term Gas Sales Contract on Account of a Material Adverse Change: The Continuing Fallout from the Collapse of the Enron Empire

By Nigel Bankes

On January 31, 2009

In Contracts, Natural Resources, Oil & Gas

Cases Considered: Marathon Canada Ltd v. Enron Canada Ltd, 2008 ABQB 408;
Marathon Canada Ltd v. Enron Canada Ltd, 2009 ABCA 31.

PDF Version: Terminating a long term gas sales contract on account of a material adverse change: the continuing fallout from the collapse of the Enron Empire

The Court of Appeal, in a memorandum of judgement authored by Justices Ellen Picard, Peter Costigan and Jack Watson, has affirmed the decision at trial of Justice Terence McMahon of the Alberta Court of Queen’s Bench. Justice McMahon held that Marathon Canada had lawfully terminated a natural gas purchase contract with Enron Canada. Marathon chose to terminate when Enron Canada’s US parent (Enron Corp) fell into serious financial difficulties. Both courts also held that: (1) Marathon was entitled to recover $560,000 damages for natural gas that it had delivered prior to contract termination, but that, (2) Enron Canada was not entitled to recover liquidated damages of some $126 million based on a counter-claim of wrongful termination and the estimated\guesstimated present value of Marathon’s future deliveries at the contract price.

Category: Contracts Page 11 of 12

Who Bears the Loss for Converted Security Deposits?

Damages for Mental Distress in Breach of Contract

A curious cocktail – the mixed application of the law of contracts and administrative law to universities

The perils of selling the same property twice (with an aside on styles of appellate decision-making)

Terminating a Long Term Gas Sales Contract on Account of a Material Adverse Change: The Continuing Fallout from the Collapse of the Enron Empire