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Court awards $2.7M for breach of fuel delivery contract after First Nations BCRs prompted cancellation.
The plaintiff, Wilderness North Air, was awarded a contract by Hydro One Remote Communities Inc. (Remotes) to be the primary vendor for the delivery of diesel fuel by air to five remote First Nations communities.
After the contract was awarded, several First Nations communities issued Band Council Resolutions (BCRs) stating they would only accept fuel delivered by Wasaya Airways, a First Nations-owned airline that had been unsuccessful in the bidding process.
Remotes subsequently cancelled Wilderness's purchase orders for four of the communities and awarded the work to Wasaya and another carrier.
Wilderness sued Remotes for breach of contract and breach of the duty of good faith, and sued Wasaya for inducing breach of contract.
The Superior Court of Justice found that Remotes breached the contract and its duty of good faith, and that Wasaya induced the breach.
Wilderness was awarded $2,718,988 in damages, with Wasaya jointly and severally liable for $856,458.
Costs awarded against plaintiff for improperly obtaining an ex parte certificate of pending litigation.
The court rendered an endorsement on costs following a successful motion by the Estate to set aside an ex parte order for a certificate of pending litigation obtained by the plaintiff.
The plaintiff had obtained the certificate without notice to the Estate, despite the Estate being represented, and without full disclosure of relevant facts, such as the property having already been sold.
The Estate sought partial indemnity costs after the plaintiff consented to setting aside the order.
The court found that while Rule 42.01(3) permits ex parte motions for certificates of pending litigation, professional courtesy and the adversarial system require notice when counsel is on the record, and full disclosure to the court.
The court fixed costs at $2,500.00 in favour of the Estate, payable by the plaintiff.
Motion to enforce settlement dismissed as Minutes of Settlement constituted an unenforceable agreement to agree.
The defendants brought a motion for a declaration that a binding settlement was reached between the parties by Minutes of Settlement dated April 2, 2019.
The plaintiff opposed the motion, arguing the settlement was an unenforceable agreement to agree and that the defendants repudiated the agreement through delay.
The court found that essential terms, such as whether the plaintiff would incur guarantee obligations on becoming a 15% shareholder, were not agreed upon at mediation.
The court concluded the Minutes of Settlement constituted an unenforceable agreement to agree and dismissed the motion.
