DATE: 20041201

DOCKET: C39496

COURT OF APPEAL FOR ONTARIO

RE:

BENSURO HOLDINGS INC. (Plaintiff/Respondent) – and – AVENOR INC. (Defendant/Appellant)

BEFORE:

GOUDGE, SHARPE and GILLESE JJ.A.

COUNSEL:

Peter J. Stanford

for the appellant

Paul J. Pape

for the respondent

HEARD:

November 23, 2004

On appeal from the judgment of Justice Albert J. Roy of the Superior Court of Justice dated January 8, 2003.

E N D O R S E M E N T

[1] Although the legal analysis in the reasons of the trial judge leaves a great deal to be desired, we have come to the conclusion that the interests of justice require that we do our best to take his factual findings and apply the correct law to those findings.

[2] There is no appeal from the finding that there was a binding contract. In our view, it was open on the evidence for the trial judge to conclude that the manner in which the appellant dealt with the respondent’s request regarding the disposal of the pile of unmarketable mulch was unreasonable. It would certainly have been preferable had the trial judge clearly identified the precise nature of the contractual breach. However, the trial judge did find that the appellant’s unreasonable refusal to allow the pile to be moved to permit the respondent to continue with its work impeded the respondent from going any further with its work. In our view, such action constituted a breach of an implied term in the contract that neither party would unreasonably frustrate performance by the other.

[3] As the respondent quite properly conceded, the trial judge’s analysis of damages was, to say the least, thin. However, we have concluded that the assessment he made can be supported on the evidence and that it would not be in the interests of justice to order a new trial on that issue. The trial judge found, in effect, that while the respondent would not have made any profit on this contract, the respondent would have been able to recoup its costs and minimize any loss on the contract. This represented a drastic reduction in the damages claimed. In our view, the damages awarded by the trial judge are sustainable on the basis of the evidence relating to the income the respondent expected to earn from the contract and the financial records demonstrating the losses the respondent incurred.

[4] The respondent abandoned all aspects of the cross-appeal except those related to the 30% allocation of responsibility for any loss to the respondent. We agree with the submission that the trial judge’s contributory negligence analysis was misplaced in law. This was an action in contract, not tort, and there was no suggestion of negligence. However, the 30% reduction in damages is supportable on the basis of causation. We refer here to the trial judge’s finding that the respondent was, in part, the author of its own misfortune by failing to separate pulp from mulch. We uphold the 30% reduction in damages, on the basis that 30% of the damages were thereby caused by the actions of the respondent.

[5] The respondent is entitled to its costs of the appeal fixed at $30,000 inclusive of disbursements and GST.

[6] For these reasons, both the appeal and the cross-appeal are dismissed.

“S.T. Goudge J.A.”

“Robert J. Sharpe J.A.”

“E.E. Gillese J.A.”