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page 102

5.7 CANADIAN CASES

5.7.1 Alkok v. Grymek

Location: Canada

Court:

Year: 1968

Importance: a quantum meruit award for damages

Details:

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.

Some of the subcontractors had not been paid, there were defects, and the work was delayed.

As a result the owner terminated the contract, and hired replacement contractors.

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).

5.7.2 Amber Size & Chemical Co. Ltd. v. Menzel

Location: ?

Court:

Year: ?

Importance: sets principle for trade secret protection

Details:

In a ruling the court stated - ex-employees should not divulge secrets given in confidence (this may only be implied), or take advantage financially.

The four test questions were,

-was there some secret process known and used.

-did the employee know that it was a secret.

-did the employee know the secret.

-has the knowledge been misused since leaving the company.

5.7.3 Application of Erickson/Massey

Location: British Columbia

Court:

Year: 1971

Importance: an example of a lien for design-supervise services.

Details:

page 103

An architect had prepared plans.

He had applied to a court for a lien. This was refused.

He then supervised the construction of the building.

In appeal the lien was granted.

5.7.4 Armbro Materials and Construction Ltd. v. 230056 Investments Limited et. al.

Location: Ontario

Court:

Year: 1975

Importance: an example where a lien was allowed for an engineer.

Details:

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 plans were approved, but financial constraints halted the project.

The engineer applied for a lien.

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.

5.7.5 Attorney-General of Canada v. Libling et. al.

Location: Ontario

Court:

Year: 1980

Importance: the limitation period for starting an action was challenged

Details:

There were roof design problems.

Attempts had been made to correct problems with the roof.

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.

The court heard all of the details but decided not to extend deadline.

5.7.6 Bahamaconsult Ltd. v. Kellogg Salada Canada Ltd.

Location: Ontario

Court:

Year: 1976

Importance: an example of a letter of intent

page 104

Details:

A letter of intent about stock shares was issued.

This letter discussed a sale of shares, and indicated that transfer of the shares, and finalizing of the sale were all that was left.

Disagreement resulted in the sale not going through.

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.

5.7.7 Beaufort Realties (1964) Inc. and Belcourt Construction (Ottawa) Limited and Chomeday Aluminum Co. Ltd.

Location: Canada

Court:

Year: 1980

Importance: another example of a fundamental breach

Details:

A contractor had failed to pay a subcontractor.

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.

This was upheld in the supreme court.

5.7.8 Belle River Community Arena Inc. v. W.J.C. Kaufmann Co. et. al.

Location: Ontario

Court:

Year: 1977

Importance: a unilateral mistake was upheld

Details:

The contractor had prepared a bid and incorrectly transferred a figure lowering the bid by $70,000 to $641,603.

The irrevocable bid was submitted under seal.

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 ele-

page 105

ment in the decision.

5.7.9 Bethlehem Steel Corporation v. St. Lawrence Seaway Authority

Location: Canada Court:

Year: 1977

Importance: economic losses can only be claimed if some physical damage has occurred Details:

A ship ran into a bridge over a canal. The bridge was destroyed and the canal was obstructed for several days.

In a lawsuit the ship owner was found negligent, and paid damages to the court.

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.

5.7.10 Brennan Paving Co. Ltd. v. Oshawa

Location: Ontario

Court:

Year: 1953

Importance: an example of an engineer given the power to certify

Details:

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.

5.7.11 British Reinforced Concrete Engineering Co. Limited v. Lind

Location: England Court:

Year: ?

Importance: the company owns the patent when it is within the scope of the employees work Details:

• The court ruled that the employer owned a design because the draughtsman was instructed to do the design.

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