Dussault & Pageau v. The King

Dussault & Pageau v. The King

Majority: A contractor who abandons performance cannot recover any saving realized by the owner when the work is completed by others. However, a separate security deposit contract governs the deposit: if the owner did not in fact apply the security to completion and the work was completed without resort to those funds under the terms of that agreement, the deposit must be returned (with interest as appropriate). Dissent (Fitzpatrick C.J.): where the owner paid more for completion than the amount of the security, the security is not recoverable.

Citation
(1917) 58 SCR 1
Parties
Appellants / Plaintiffs: Dussault & Pageau; Respondent / Defendant: His Majesty The King
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
28 November 1917
Procedural Posture
Civil Appeal (petition of Right) — Contract Dispute / On Appeal From the Exchequer Court of Canada; Final Disposition by Supreme Court of Canada
Outcome
Appeal dismissed without costs; cross-appeal dismissed with costs.
Legal Topics
Contractor Default, Security Deposit Recovery, Application of Security to Completion, Conversion/ownership of Materials Left on Site, Interest on Held Deposits
Source Language
English
Contract Law Security/surety Remedies Contractor Default Security Deposit Recovery Application of Security to Completion Conversion/ownership of Materials Left on Site Interest on Held Deposits

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Parties

Dussault & Pageau

Appellants / Plaintiffs

His Majesty The King

Respondent / Defendant

Procedural Posture

Civil Appeal (petition of Right) — Contract Dispute / On Appeal From the Exchequer Court of Canada; Final Disposition by Supreme Court of Canada

Legal Issues

  1. 1 Whether a contractor who abandons a contract can recover the difference between contract price and lower cost of completion by a third party
  2. 2 Whether a security deposit delivered as a separate agreement must be returned when the owner completes the work under a second contract for less than the original price and did not apply the deposit
  3. 3 Whether materials abandoned on the site become the property of the owner and affect credits and liabilities

Ratio Decidendi

Majority: A contractor who abandons performance cannot recover any saving realized by the owner when the work is completed by others. However, a separate security deposit contract governs the deposit: if the owner did not in fact apply the security to completion and the work was completed without resort to those funds under the terms of that agreement, the deposit must be returned (with interest as appropriate). Dissent (Fitzpatrick C.J.): where the owner paid more for completion than the amount of the security, the security is not recoverable.

Court Disposition

Appeal dismissed without costs; cross-appeal dismissed with costs.

Orders

  • Appeal dismissed without costs.
  • Cross-appeal dismissed with costs.