The Hydro-Electric Commission of Ontario v. Albright

The Hydro-Electric Commission of Ontario v. Albright

For the first series of debentures the Court construed 'accrued but not due' to include sinking fund amounts that became indefeasible obligations when horsepower was sold and paid for, and therefore such amounts accrued de die in diem and had to be provided by the vendor up to the completion date; for the second mortgage the sinking fund obligation was payable only out of net earnings and, as no net profits were shown, no liability was established for that portion.

Citation
(1922) 64 SCR 306
Parties
Appellant/plaintiff: Hydro-Electric Power Commission of Ontario; Appellant/co Plaintiff: Ontario Power Company of Niagara Falls; Respondent/defendant: John Joseph Albright
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
2 May 1922
Procedural Posture
Contract / Appeal to Supreme Court of Canada From Appellate Division of the Supreme Court of Ontario
Outcome
Appeal allowed in part; judgment of trial judge restored except reduced by one‑fifth to reflect absence of liability under the second mortgage; costs awarded to appellants.
Legal Topics
Sinking Fund, Accrual and Apportionment, Contract Interpretation, Mortgage Security, Debenture Redemption, Completion Adjustment
Source Language
English
Contract Property Corporate Commercial Sinking Fund Accrual and Apportionment Contract Interpretation Mortgage Security +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 3 Authorities cited 13 Party arguments 2 Amounts and remedies 7
Sign in to unlock

Parties

Hydro-Electric Power Commission of Ontario

Appellant/plaintiff

Ontario Power Company of Niagara Falls

Appellant/co Plaintiff

John Joseph Albright

Respondent/defendant

Procedural Posture

Contract / Appeal to Supreme Court of Canada From Appellate Division of the Supreme Court of Ontario

Legal Issues

  1. 1 Whether 'interest and sinking fund payments ... which shall have accrued but shall not be due at the time for completion' includes sinking fund amounts attributable to sales from Jan 1 to Aug 1, 1917
  2. 2 Whether sinking fund payments payable on fixed dates are apportionable de die in diem
  3. 3 Construction of the word 'accrued' in the commercial contract context

Ratio Decidendi

For the first series of debentures the Court construed 'accrued but not due' to include sinking fund amounts that became indefeasible obligations when horsepower was sold and paid for, and therefore such amounts accrued de die in diem and had to be provided by the vendor up to the completion date; for the second mortgage the sinking fund obligation was payable only out of net earnings and, as no net profits were shown, no liability was established for that portion.

Court Disposition

Appeal allowed in part; judgment of trial judge restored except reduced by one‑fifth to reflect absence of liability under the second mortgage; costs awarded to appellants.

Orders

  • Appeal allowed in part
  • Judgment of the trial court restored with modification reducing the amount awarded by one‑fifth