First Queensborough Shopping Centres Limited v. Wales McLelland Construction Company (1988) Ltd.

First Queensborough Shopping Centres Limited v. Wales McLelland Construction Company (1988) Ltd.

The release clause did not extinguish the respondent's entitlement to interest because reading the clause to bar interest claims that had not yet crystallized at the date of the final certificate is commercially unreasonable and inconsistent with the contract as a whole; interest under the contract is part of the debt and accrues until payment; the holdback became payable following the legislated holdback expiry (Nov 6, 2006) and interest on that amount was properly awarded; promissory estoppel was not established and the appellant's conduct undermined that defence. Accordingly the trial judgment awarding interest was affirmed.

Citation
2014 BCSC 764
Parties
Appellant/defendant: First Queensborough Shopping Centres Limited; Respondent/claimant: Wales McLelland Construction Company (1988) Ltd.
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
2 May 2014
Procedural Posture
Appeal Under the Small Claims Act (supreme Court of British Columbia) / Appeal From Provincial Court Judgment (small Claims)
Outcome
Appeal dismissed; trial judgment affirmed; respondent awarded costs of the appeal.
Legal Topics
Release Clause, Interest on Late Payment, Contract Interpretation, Estoppel (promissory Estoppel), Holdback, Payment Certification, Tercon Exclusion Clause Test
Source Language
English
Construction Law Contract Law Commercial Law Equitable Remedies Builders Lien Law Release Clause Interest on Late Payment Contract Interpretation +4 more

Case Brief

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Parties

First Queensborough Shopping Centres Limited

Appellant/defendant

Wales McLelland Construction Company (1988) Ltd.

Respondent/claimant

Procedural Posture

Appeal Under the Small Claims Act (supreme Court of British Columbia) / Appeal From Provincial Court Judgment (small Claims)

Legal Issues

  1. 1 Whether the release clause in the contract extinguished claims for interest on late payments
  2. 2 Whether the trial judge erred in law in interpreting the release clause
  3. 3 Whether promissory estoppel barred the respondent's interest claim

Ratio Decidendi

The release clause did not extinguish the respondent's entitlement to interest because reading the clause to bar interest claims that had not yet crystallized at the date of the final certificate is commercially unreasonable and inconsistent with the contract as a whole; interest under the contract is part of the debt and accrues until payment; the holdback became payable following the legislated holdback expiry (Nov 6, 2006) and interest on that amount was properly awarded; promissory estoppel was not established and the appellant's conduct undermined that defence. Accordingly the trial judgment awarding interest was affirmed.

Court Disposition

Appeal dismissed; trial judgment affirmed; respondent awarded costs of the appeal.

Orders

  • Appeal dismissed
  • Trial judgment awarding interest and costs to respondent affirmed