Travelers Indemnity Company v. Foley Brothers (Canada) Limited et al.

Travelers Indemnity Company v. Foley Brothers (Canada) Limited et al.

Concurrent findings of fact that Stormont defaulted and that Travelers was liable under the performance bond were supported by evidence and affirmed; the April 13, 1959 letter constituted a conditional undertaking under art. 1079 C.C. and never took effect because Stormont did not satisfy the conditions, therefore the subcontract was not amended and original unit prices applied; the trial judge’s allowance for overhead was supported by evidence and should stand.

Citation
[1970] SCR 56
Parties
Appellant / Defendant / Surety: The Travelers Indemnity Company; Respondent / Plaintiff: Foley Brothers (Canada) Limited; Respondent / Plaintiff: C.A. Pitts General Contractors Ltd.; Mise En Cause / Subcontractor / Third Party: Stormont General Contractors Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
7 October 1969
Procedural Posture
Action on a Performance Bond (insurance/surety) Arising From Subcontract Default; Appeal and Cross Appeal to the Supreme Court of Canada / Final Appeal and Cross Appeal Heard and Decided by the Supreme Court of Canada (judgment on Appeal and Cross Appeal)
Outcome
Appeal dismissed; cross-appeal allowed; trial judgment restored in favour of the plaintiffs with costs
Legal Topics
Performance Bond, Subcontract Default, Quantum of Damages, Overhead Recovery, Conditional Modification of Contract, Civil Code Art. 1079
Source Language
English
Contract Law Insurance Law Suretyship Civil Procedure Quebec Civil Law Performance Bond Subcontract Default Quantum of Damages +3 more

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Parties

The Travelers Indemnity Company

Appellant / Defendant / Surety

Foley Brothers (Canada) Limited

Respondent / Plaintiff

C.A. Pitts General Contractors Ltd.

Respondent / Plaintiff

Stormont General Contractors Limited

Mise En Cause / Subcontractor / Third Party

Procedural Posture

Action on a Performance Bond (insurance/surety) Arising From Subcontract Default; Appeal and Cross Appeal to the Supreme Court of Canada / Final Appeal and Cross Appeal Heard and Decided by the Supreme Court of Canada (judgment on Appeal and Cross Appeal)

Legal Issues

  1. 1 Was the subcontractor (Stormont) in default so as to entitle the contractor (Pitts‑Foley) to damages?
  2. 2 Is the surety (Travelers) liable under the performance bond for the damages assessed?
  3. 3 Proper measure of damages including overhead percentage and credits for clearing and grubbing

Ratio Decidendi

Concurrent findings of fact that Stormont defaulted and that Travelers was liable under the performance bond were supported by evidence and affirmed; the April 13, 1959 letter constituted a conditional undertaking under art. 1079 C.C. and never took effect because Stormont did not satisfy the conditions, therefore the subcontract was not amended and original unit prices applied; the trial judge’s allowance for overhead was supported by evidence and should stand.

Court Disposition

Appeal dismissed; cross-appeal allowed; trial judgment restored in favour of the plaintiffs with costs

Orders

  • Appeal dismissed with costs
  • Cross-appeal allowed with costs