COURT OF APPEAL FOR ONTARIO

DATE: 20040726

DOCKET: C39606

RE: NIAGARA FALLS HYDRO‑ELECTRIC COMMISSION (Plaintiff/Respondent) – and – VINCOR INTERNATIONAL INC. (Defendant/Appellant)

BEFORE: CATZMAN, GILLESE and LANG JJ.A.

COUNSEL: Joseph Dallal and Katharine A. King for the appellant Alan H. Mark for the respondent

HEARD: July 22, 2004

On appeal from the judgment of Justice M. Paul Forestell of the Superior Court of Justice dated February 11, 2003.

E N D O R S E M E N T

Released Orally: July 22, 2004

[1] The respondent utility mistakenly underbilled the appellant for its electrical consumption during the period January 1998 to February 1999. The respondent obtained judgment for the full amount of the underbilling from Forestell J. in a judgment dated February 11, 2003. The appellant asks this court to set aside that judgment on the basis that the trial judge erred in finding that there was no evidence to support its estoppel defence.

[2] In our view, the trial judge correctly concluded that there was no evidence that the appellant suffered the required element of detriment as a consequence of the respondent’s erroneous billings. While it would have been preferable if the trial judge had given reasons for that conclusion, we are of the view it was warranted for the following reasons.

[3] The evidence is that the unexpected profits that the appellant realised due to the undercharging were used for “discretionary spending”. “Discretionary spending”, as explained by the appellant, refers to funds used to reinvest in the business. Specifically, the discretionary spending in question was done to “reinvest in the business in things that were nice to do or we want to do, to help move the business forward”. (See transcript p. 26.) The evidence did not demonstrate what items the discretionary spending was actually spent on.

[4] In our view, it cannot be said that reinvestment in a business invariably leaves the appellant in a worse position that it would otherwise have been. Thus, we cannot assume that the appellant has met its burden to show detriment simply by showing use of the “windfall” funds for discretionary spending.

[5] The appellant also alleges adverse consequences if it were made to repay the amounts in question in that it would have to report lower profits and it would have to reduce the amount available for discretionary spending, as it did in fiscal year 2000.

[6] In our view, neither of those consequences amounts to detriment that can be relied upon for the purposes of estoppel. Shareholder expectations of profit are just that -- expectations. And, as mentioned above, discretionary spending as described by the witness for the appellant is a reinvestment in the company. The fact that there may be less money for future reinvestment in the company because of higher spending for such purposes in the past does not constitute a detriment in the legal sense. This is not like General Dairies Ltd. v. Maritime Electric Co. Ltd., [1935] S.C.R. 519, for example, where the injured party, based on the utility’s representation, paid a higher price for the cream than it would otherwise have paid and could not later recover any excess amounts so paid. In General Dairies, the lost sums were paid to a third party and were not recoverable. In the case at bar, the sums in question were retained in the company for its own benefit.

[7] Accordingly, the appeal is dismissed with costs fixed at $9,000, inclusive of GST and disbursements.

“M.A. Catzman J.A.”

“E.E. Gillese J.A.”

“Susan Lang J.A.”