A forest products company challenged the right of a state-owned electricity distributor to invoke a price adjustment clause in a 1926 power supply contract, arguing that the distributor was not a party to that contract.
The majority held that a 1965 bilateral contract between the distributor and the original contracting party effected a temporally limited assignment of the 1926 contract, with the assigned party's advance consent validly given in the original agreement.
As a result, the distributor was entitled to pass on to the forest products company the taxes and charges levied upon it by provincial legislation as increases in the cost of electricity generated from water power.
The dissent maintained that the trial judge had committed no reviewable error in finding that the 1965 contract created a mandate rather than an assignment, and that the Court of Appeal should not have intervened by analyzing the contract on a theory never advanced at trial.
