Pemberton-Benchlands-Housing-Corp.-v.-Sabre-Transport-Ltd. PDF

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COMM 393

Pemberton Benchlands Housing Corp. v. Sabre Transport Ltd.

Case Briefs

[2008] B.C.J. No. 417 2008 BCSC 294 165 A.C.W.S. (3d) 662 British Columbia Supreme Court March 7, 2008 Facts  Serge Côté was the president of a real estate development company, Glacier Creek Development Corporation (Glacier). He worked with a business partner Eric Prall.  Art Den Duyf was the president of Sabre Transport Ltd (Sabre), a company that performed civil engineering work. Dave Paterson is an employee of Sabre and works as its construction superintendent  In early 2003, Glacier entered into a joint venture with Sabre to acquire and develop lands near Pemberton, BC. A new company, Pemberton Benchlands Housing Corporation was formed (PBH).  PBH acquired the property, and Sabre did the civil work to develop it into 54 serviced lots that could be sold. The initial phase consisted of 30 lots.  A dispute arose about the amount that was to be paid by PBH to Sabre for the work – PBH commenced the action seeking a declaration that the contract was for a fixed price.  In the original statement of claim filed on May 13, 2005, PBH sought a declaration that the parties had entered into a fixed price contract and that the amount payable to Sabre was $2,859,765.  Sabre applied that PBH’s claim be dismissed on the grounds that their agreement was purely oral, and the written documents that the plaintiff is citing was never signed by an authorized signatory of Sabre.  Sabre is counterclaiming that the oral contract required PBH to pay Sabre on a time and materials basis for its work, seeking $3,351,542.42.  The parties agreed for summary trial, so the only issue to consider is whether the construction contract was for a fixed price and potential contingency. The plaintiff relies on a photocopy of a Document 345, which consists of two parts (no original available)  the first part is a standard Canadian Construction Documents Committee Stipulated Price Contract Form (CCDC2 form) o the form has an unfilled date space, and the parties are identified. A contract price of $2,859,765 was stated.  the second part is an appended 20-page list of construction items and prices (Tablulation)  the signature of Côté is present, as well as what appears to be the signature of Duyf Issues  Is the construction contract a fixed price contract with potential contingency?  Did Mr. Paterson have apparent authority to sign on behalf of Sabre? Reasons The plaintiff’s first theory of interpretation is that the written terms of the contract are contained in Document 345 entirely, calling for a price of $2,859,765.  the defendant stipulates that the signature of Duyf is a forgery  William Thorpe of the Vancouver Police Department stated that in his opinion that Duyf’s signature on the CCDC2 form was transferred from a letter dated June 24, 2005.  Mr. Côté in his testimony states that: o he has “no clue” if Art Den Duyf signed the CCDC2 form

Pemberton Benchlands Housing Corp. v. Sabre Transport Ltd.

COMM 393

o o

Case Briefs

the CCDC2 form was never used as a contract the CCDC2 form was never agreed to between Sabre and PBH

Conclusion: the plaintiff cannot succeed on its first theory – the CCDC2 form is not part of any contract between PBH and Sabre The plaintiff’s alternative theory is that the written terms of the contract are contained exclusively in the Tabulation that forms the last 20 pages of Document 245.  the tabulation was titled Construction Contract, signed by Dave Paterson next to “Authorized Signature: Sabre Transport”, and gives a cost summary of $2,859,765.  Côté testifies that the terms of the joint venture are in a document as Exhibit C. The document was not signed, but was reviewed by Art Den Duyf and Dave Paterson. One of the terms was that Sabre will enter into a fixed price contract with “NewCo” (PBH) for all required site servicing.  Côté and Prall give similar evidence in affidavits o upon repeated requests by PBH to Sabre for a cost estimate, both parties agreed to a fixed price contract based on the estimate of $2,859,765 with a contingency of $500,000. o all parties treated “Exhibit C” plus a $500,000 contingency reserve as Sabre’s budget and fixed cost commitment o Dave Paterson signed on behalf of Sabre and agreed to the fixed price, with an oral agreement for the contingency allowance. The defendant counters:  Dave Paterson did not sign the Tabulation as a construction contract  even if he did, Paterson had no authority to bind Sabre as only Art Den Duyf could do that  even if the Tabulation was a binding contract, it must be interpreted as a time and materials contract  the conduct of parties is inconsistent with that of a fixed price contract Dave Paterson deposes that  Sabre never agreed to a fixed price contract for the construction work  he did not make any representation that Sabre could do all the construction under an estimated cost  he denies signing the Tabulation as a construction contract  he signed the Tabulation based off a number that Mr. Côté had asked him to put, and was never discussed as a contract amount. Art Den Duyf then says that he did not authorize Mr. Paterson to sign the document on behalf of Sabre and that the first time he ever saw the Tabulation was in 2005. The difference in testimony is that the plaintiff’s representatives testifies that the Tabulation was of a fixed price contract and the defendant’s representatives testifies that the Tabulation was not a contract. Mr. Paterson had no actual authority to sign the Tabulation as a contract binding on Sabre. However, the plaintiff alleges that Mr. Paterson had apparent authority, and this is sufficient to make the agreement enforceable against Sabre. Law: Rockland Industries Inc. v. Ameranda Minerals Corp. of Canada [1980] 2 S.C.R. 2  lists the criteria for a contract to be enforced against a company when the contract was entered into on behalf of the company by an agent with no actual authority to do so.

COMM 393

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Pemberton Benchlands Housing Corp. v. Sabre Transport Ltd.

Case Briefs

(1) a representation that the agent had authority to sign the contract was made to the contractor (2) such representation was made by a person who had actual authority in respect to those matters (3) the contractor was induced by such representation to enter into the contract (reliance) (4) the company was not deprived of the capacity to enter into a contract of the kind or to delegate authority to enter into a contract of the kind

The plaintiff has not shown that anyone with actual authority for Sabre made representations to Mr. Côté or anyone else at PBH that Mr. Paterson was authorized to sign the contract on behalf of Sabre. The first two criteria are not satisfied and so there is no apparent authority in this case. Conclusion: The plaintiff’s action is dismissed and the defendant’s counterclaim may proceed....