COURT OF APPEAL FOR ONTARIO

CITATION: Hydro Hawkesbury v. ABB Inc., 2020 ONCA 53

DATE: 20200128

DOCKET: C67238

Hoy A.C.J.O., Doherty J.A. and Marrocco A.C.J. (ad hoc)

BETWEEN

Hydro Hawkesbury

Plaintiff

and

ABB Inc. and Pioneer Transformers Ltd.

Defendants (Appellant/Respondent)

Tara L. Lemke, for the appellant

Jacqueline Horvat and Alexandria Chun, for the respondent

Heard and released orally: January 16, 2020

On appeal from the order of Justice Robert Pelletier of the Superior Court of Justice, dated June 26, 2019, with reasons reported at 2019 ONSC 3930.

REASONS FOR DECISION

[1] The appellant appeals the motion judge’s stay of crossclaims between it and its co-defendant, the respondent ABB AB. In its crossclaims against ABB, the appellant seeks consequential damages arising as a result of a defective tap changer manufactured by ABB, supplied to the appellant, and included in a transformer the appellant sold to Hydro Hawkesbury. The transformer failed because of the defective tap changer and the motion judge granted Hydro Hawkesbury summary judgment against the appellant for breach of contract.

[2] The appellants also appealed from that judgment, and we have provided separate reasons for dismissing that appeal.

[3] After granting Hydro Hawkesbury’s motion for summary judgment against the appellant, the motion judge stayed the crossclaims because he found that the standard terms and conditions referred to as “Orgalime” applied to ABB’s supply of the tap changer to the appellant. Those terms included clauses requiring that disputes between the appellant and ABB are to be resolved under the Rules of Arbitration of the International Chamber of Commerce and clauses governing substantive law, and – most significantly – excluding liability for consequential loss.

[4] On appeal, the appellant argues that the motion judge erred in concluding that Orgalime applied. Relying on Tilden Rent-a-Car Co. v. Clendenning, 1978 CanLII 1446 (ON CA), 18 O.R. (2d) 601, the appellant argues that ABB was required to specifically bring these clauses in Orgalime to its attention and failed to do so.

[5] The motion judge considered Tilden and concluded that “proper notice and tacit acceptance of the General Conditions were present when [the appellant] accepted the terms of the tap changer’s delivery by ABB”: at para. 14. We are not persuaded that there is any basis to interfere with his conclusion.

[6] We agree with the motion judge that this case is different from Tilden. This is not a case where the signing party could not reasonably have been expected to read the contract before signing it. As the motion judge noted at paras. 8-10, the appellant was a “fairly sophisticated corporate consumer” and the Orgalime terms and conditions, which were readily available, were specifically referred to in two documents creating the contractual relationship between the appellant and ABB. The two documents were dated two weeks apart and the appellant confirmed the second document three days after receiving it. In the circumstances of this case, a “fairly sophisticated corporate consumer” doing business with a foreign supplier of electrical components in international markets would reasonably be expected to have reviewed the terms of both documents and would expect clauses of the type contained in Orgalime.

[7] Given that Orgalime applies, arbitration was the appropriate dispute resolution mechanism, and the motion judge properly stayed the action. We note that because the clause in Orgalime excluding liability for consequential loss applies whether or not the dispute is resolved by arbitration, the appellant did not pursue its argument that ABB was precluded from invoking the arbitration clause because of its delay in doing so.

[8] Accordingly, the appeal is dismissed.

[9] ABB is entitled to its costs of the appeal, fixed in the amount of $5,000, inclusive of HST and disbursements.

“Alexandra Hoy A.C.J.O.”

“Doherty J.A.”

“Marrocco A.C.J.S.C. (ad hoc)”