G C Lobster Ltd. v. B Atkinson Boat Builders Limited

In Ship Building and Repair on (Updated )

Précis: The Supreme Court of Nova Scotia found the plaintiff owed the defendant for sums due and owing after numerous non-fundamental breaches of the build contract despite the contract being mutually repudiated.

Facts: This was a contractual dispute between the plaintiff and defendant regarding an extension to the aft end of a fishing vessel which the defendant was to build. By written quote the specifications, purchase price, payment schedule and additional costs for extras were outlined but no completion date was stated. The plaintiff wanted the extension strengthened for scallop dragging, but it was not contemplated that the vessel was to be used in the scallop fisheries. If the vessel was to be used in the scallop fishery, the defendant wanted the plaintiff’s principal to sign a waiver of liability. The plaintiff’s principal refused to sign and in turn the defendant refused to transport the vessel to water and complete construction. The plaintiff’s principal’s father then got involved and signed the waiver for the plaintiff. The plaintiff then took control of the vessel. The plaintiff completed the construction without the involvement of defendant, and brought this action for costs of, among other things, remedying deficiencies, completing the work, and delay associated costs. The defendant counterclaimed for the outstanding contract price less the value of the work completed by the plaintiff.

Decision: Defendant required to pay plaintiff $762.59.

Held: The Court found there was no completion date agreed upon, further holding that if it was wrong about there being a completion date that any completion date would be a vague term and therefore unenforceable. As the waiver was signed by the plaintiff’s principal’s father, who did not have authority to contract on the plaintiff’s behalf, the plaintiff did not waive any claim related to the extension.  The Court held that, if not for the disagreement between the parties, the defendant would have completed the further work on the vessel in a reasonable time and held that the inability of the parties to restore the working relationship resulted in mutual repudiation and acceptance of the contract. Therefore the defendant could recover the contract price, less the value of uncompleted work and reasonable costs of remedying the deficiencies.