COMM 393 Chapter Notes - Chapter Case: All England Law Reports, Natural-Gas Processing, Engine-Generator
COMM 393 Westcoast Transmission Co. v. Cullen Detroit Diesel Allison Ltd. Case Briefs
[1990] B.C.J. No. 942, 70 DLR (4th) 505
British Columbia Court of Appeal
April 24, 1990
Facts
• This claim for $120,000 results from the failure of two generators supplied by third party Kato Engineering
International Inc. (Kato) to the defendant Cullen Detroit Diesel Allison Ltd. (Cullen) for incorporation with
motors provided by third party Cooper Energy Services Ltd. (Cooper) into gensets for use as an electrical
power source for a natural gas processing plant built by the plaintiff, Westcoast Transmission Company
Limited (Westcoast).
• Cullen settled the claim brought by Westcoast, and the action proceeded as a third party claim by Cullen
against its suppliers
o the judge awarded as damages costs incurred in repairing the machines but did not allow a claim
by Cullen for reimbursement of costs incurred by Westcoast in renting portable power units for
the time that the gensets were under repair
• Cullen appeals the dismissal of the claim
• The trial judge dismissed the claim on two grounds
o the rental costs were incurred by a subsequent purchaser, and not by the purchaser of the
broken component, and thus were not foreseeable naturally from the breach of contract
between Kato and Cullen, nor could they reasonably be supposed to have been in contemplation
by Kato at the time that contract was made as a probably result of a breach
o liailit fo suh oseuetial daages as eluded a te of Katos printed contract of
sale, even though the term does not specifically refer to damages for breach of warranties
implied by the statute
• The trial judge made their decision on the following facts
o Kato knew the generators were to provide electricity for the Westcoast Pine River gas plant in
British Columbia
o Kato supplied the generators under a guarantee which purported to exclude consequential
damage
o thee is o eidee that Kato as ee told that a of Westoasts edeaos o successes
depended on the time of delivery of the generator or genset
o No evidence was offered to Kato as to any of the operations of Westcoast or the size,
configuration or importance of the electrical supply
o Kato was never originally scheduled to go on site
• Cullen disputes the fourth point, and points to contract documents indicating the genrators were to be
iopoated ito poe plats desiged fo otiuous use as a pie poe soue.
o pie poe eaig otiuous uig as a pia soue of poe
• Westcoast actually intended for one of the gensets to be used as a reserve or to alternate between the
two gensets
Issues
• “hould Culles lai agaist Kato e alloed?
• Is Kato liale fo Westoasts losses as a esult of its fault geeatos
Reasons
No evidence was found which would suggest a plant powered by such gensets would normally have no alternative
soue of suppl fo stad puposes
Law: Hadley v. Baxendale
• states that the following damages are recoverable
o such as arise naturally, according to the usual course of things, from the breach of contract
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Document Summary
This claim for ,000 results from the failure of two generators supplied by third party kato engineering. The trial judge made their decision on the following facts: kato knew the generators were to provide electricity for the westcoast pine river gas plant in. Facts: westcoast actually intended for one of the gensets to be used as a reserve or to alternate between the two gensets. Is kato lia(cid:271)le fo(cid:396) west(cid:272)oast(cid:859)s losses as a (cid:396)esult of its fault(cid:455) ge(cid:374)e(cid:396)ato(cid:396)s(cid:863) No evidence was found which would suggest a plant powered by such gensets would normally have no alternative sou(cid:396)(cid:272)e of suppl(cid:455) fo(cid:396) (cid:862)sta(cid:374)d(cid:271)(cid:455) pu(cid:396)poses(cid:863) Law: hadley v. baxendale states that the following damages are recoverable such as arise naturally, according to the usual course of things, from the breach of contract. Westcoast transmission co. v. cullen detroit diesel allison ltd. Law: alisa craig fishing co. ltd. v. malvern fishing co. ltd. [1983] 1 all e. r.
