Federal Court Decisions

Date: 20010423

Docket: T-2356-93

                                                           Neutral Citation: 2001 FCT 369

BETWEEN:

                                EAGLE TRADES LIMITED

                                                                                         PLAINTIFF

                                                 - and -

                              HER MAJESTY THE QUEEN

                                                                                     DEFENDANT

                              REASONS FOR JUDGMENT

CAMPBELL J.

Let the attached transcript of my Reasons for Judgment delivered orally from the Bench on March 6, 2001, at St. John's, Newfoundland, now edited, be filed to comply with section 51 of the Federal Court Act.

« Douglas R. Campbell »

Judge

Ottawa, Ontario

THE COURT:

The subject matter of the present action is a dispute respecting plumbing services to be provided by the Plaintiff to the Defendant. ^[1] I find that the plain meaning of the words of the standing offer contract are to be accepted in resolving this dispute. On these words, I find that the contract between the Plaintiff and Defendant is nothing more then an offer of service by the Plaintiff, between September 1991 and September 1993, at a certain price when called upon, to provide plumbing services on the Defendant's non-housing buildings in the greater St. John's area. The words of the contract specify that the Defendant is not obliged to exclusively call upon the Plaintiff when work needs to be done, but does provide an agreement to "normally call" on the Plaintiff.

I find that prior to April 20, 1992, the value of the work provided to the Plaintiff, under the "normally call" provision, was reasonable and not in breach of any agreement. Thus, I find that the work provided to Saunder's Plumbing during this period, is unclaimable by the Plaintiff. However, as I have found in the course of the trial, after April 20, 1992, on the basis of a collateral agreement between the parties, a first right of refusal was provided to the Plaintiff. Under this collateral agreement, read together with the standing offer contract, I find the Plaintiff is owed for work on which it was not provided a first right of refusal, being an amount based on the gross figure of $8,596.38. With respect to the claim of general damages for breach of contract, for the payment of extra help hired and a vehicle purchased by the Plaintiff to, apparently, meet it's obligations under the contract, I dismiss this claim. I find that Mr. Walsh, on behalf of the Plaintiff, made a vastly unrealistic assessment of the value of the contract, in his mind being worth $400,000.00.

Given the following factors, I find that Mr. Walsh's expectations were erroneous and wholly his responsibility. First: I accept the Defendant's evidence that within the electronic tendering process used in respect of the contract in the present case, it would be understood by those tendering, and, indeed, by the Plaintiff, that the value of the contract would be less then $60,000.00. Second: The Plaintiff itself, through Mr. Walsh, valued the agreement, being the standing offer contract, at $51,000.00 on the basis of 1,500 hours of work; I find that within the evidence, there is no concrete reason provided to believe that the contract would have been of greater value. Indeed, when no work was provided to the Plaintiff within 3 months of entering into the agreement, Mr. Walsh knew or ought to have known, that his estimate was wholly unrealistic. In addition, the evidence from the Plaintiff's own witness, being the firm accountant, establishes that the men hired and the vehicle purchased were constantly in use on other of the Plaintiff's jobs when no work was being done for the Defendant. On this basis, I find that Mr. Walsh was wrong, and very much on his own, when he made the decision to purchase a van and hire extra help to service the contract. I find, therefore, that no responsibility flows to the Defendant for this decision.

With respect to the amount the Plaintiff is entitled to as damages for breach of the collateral agreement of first right of refusal, I agree with the Defendant's argument that it is only the profit lost on this work which is claimable. According to Mr. Walsh, his profit on the work would be between 40 to 50 percent. I find that 45 percent of the value of the lost services, being $8,596.38, is claimable as specific damages for breach of the collateral agreement. Thus, allowing an award to the Plaintiff in the sum of $3,868.37 under this head of damages. I find no other damages capable of founding an award. Therefore, with respect to costs, after considering this matter carefully, I am unable to award costs in the cause.

Taking all matters into consideration, and in particular, the problems faced by the Plaintiff in proving this case, I award costs in a sum proportionate to the success achieved. Therefore, I fix costs at the sum of $5,000.00. Thus, in this action, I give judgment to the Plaintiff, against the Defendant, in the amount of $3,868.37, and costs are awarded to the Plaintiff in the amount of $5,000.00.

In addition, I find that the date upon which the damages arose is the date upon which the pre-judgment interest should be calculated, being from April 20th, 1992.    Accordingly, I award the Plaintiff pre-judgment interest in the amount of $2,000.00.

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