110250 B.C. Ltd. v. Preisco Foods Ltd.

110250 B.C. Ltd. v. Preisco Foods Ltd.

Section 7.1 of the Partnership Agreement was ambiguous; the January 5, 1995 Letter Agreement formed part of the admissible factual matrix and demonstrated the parties intended profit allocation to be calculated using revenues from the Perco Lines only (with specified operating expense limits and Preisco's $550,000...

Source-derived case information.

Citation
2002 BCSC 1473
Parties
Petitioner/defendant (perco): 110250 B.C. Ltd.; Petitioner/defendant (perco): 306383 British Columbia Ltd.; Respondent/plaintiff (preisco): Preisco Foods Ltd.; Respondent/plaintiff (preisco): PPP Holdings Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
22 October 2002
Procedural Posture
Partnership Agreement Dispute; Declaratory Relief and Accounting / Hearing on Cross Applications Under Rule 18 A; Reasons for Judgment on Interpretation and Relief
Outcome
Declaration granted in favour of Preisco that Section 7.1 is to be interpreted in light of the January 5, 1995 Letter Agreement so that allocation is based on revenues from the Perco Lines alone; Perco's petition dismissed; no rectification ordered; costs to Preisco on Scale 3; directions for accounting resolution.
Legal Topics
Contract Interpretation, Rectification, Profit Allocation, Admission of Extrinsic Evidence (factual Matrix), Partnership Accounting
Source Language
english
Contract Law Partnership Law Equity (rectification) Commercial Law Tax Law Contract Interpretation Rectification Profit Allocation +2 more

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Parties

110250 B.C. Ltd.

Petitioner/defendant (perco)

306383 British Columbia Ltd.

Petitioner/defendant (perco)

Preisco Foods Ltd.

Respondent/plaintiff (preisco)

PPP Holdings Ltd.

Respondent/plaintiff (preisco)

Procedural Posture

Partnership Agreement Dispute; Declaratory Relief and Accounting / Hearing on Cross Applications Under Rule 18 A; Reasons for Judgment on Interpretation and Relief

Legal Issues

  1. 1 Proper construction of paragraph 7.1 of the Partnership Agreement for calculating payments to Perco
  2. 2 Whether paragraph 7.1 is clear and unambiguous
  3. 3 Whether extrinsic evidence (letters of intent and factual matrix) may be considered

Ratio Decidendi

Section 7.1 of the Partnership Agreement was ambiguous; the January 5, 1995 Letter Agreement formed part of the admissible factual matrix and demonstrated the parties intended profit allocation to be calculated using revenues from the Perco Lines only (with specified operating expense limits and Preisco's $550,000 guaranteed allocation); therefore the Agreement must be interpreted accordingly and declaration granted to Preisco.

Court Disposition

Declaration granted in favour of Preisco that Section 7.1 is to be interpreted in light of the January 5, 1995 Letter Agreement so that allocation is based on revenues from the Perco Lines alone; Perco's petition dismissed; no rectification ordered; costs to Preisco on Scale 3; directions for accounting resolution.

Orders

  • Declare Section 7.1 of the Partnership Agreement to be interpreted in light of the January 5, 1995 Letter Agreement such that profit allocation is based on revenues from the Perco Lines only
  • Dismiss Perco's petition in Action No. C990732