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SALE OF GOODS - Breach of contract - Seller’s remedies

Friday, September 13, 2019 @ 8:44 AM  


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Appeal by the defendant from summary judgment finding it liable for the full amount of shrimp purchased from the respondent and from the award of pre-judgment interest of eight per cent per annum. The respondent sold frozen shrimp to the appellant sourced from an Ecuadorian supplier. The respondent delivered the shrimp to a Mexican port in June. By August, the appellant still was not able to pass the goods through Mexican customs. The appellant then refused to pay the respondent’s invoice for the contract price of the shrimp. The shrimp was returned to Ecuador. The respondent deposed that it never received the returned shrimp, never sold the shrimp, and was not aware what the original vendor did with the shrimp. The motion judge found title to the shrimp passed to the appellant upon delivery of the goods at the Mexican port and the appellant’s subsequent problems clearing the goods did not alter the fact that title passed to it. She also found that the respondent did not make any representation, promise or agreement that it would not require the appellant to pay the purchase price if the product was returned to Ecuador. The appellant argued the motion judge erred by concluding that the UN Convention on Contracts for the International Sale of Goods did not impose on the respondent a duty to mitigate and in finding that the respondent was entitled to interest on the amount owing at the rate of eight per cent per annum based on an interest clause found on the reverse side of the respondent’s invoice.

HELD: Appeal dismissed.  Although the motion judge did not make specific findings on the issue of mitigation, the written record enabled this court to make any necessary additional findings on the issue. Assuming that the respondent was subject to a duty to mitigate under the Convention, it satisfied any such duty. On the motion judge’s findings, when the appellant breached the contract by refusing to pay the invoice, it had title to and possession of the goods, circumstances that limited the reasonable measures the respondent could take to mitigate its losses caused by the breach. There was no error in the motion judge’s holding that the appropriate rate of prejudgment interest was the contractual rate of eight per cent. Given the clear disclosure that the invoice contained additional terms, the appellant’s approval of the acceptability of a copy of the invoice bearing that language operated to incorporate those terms into the contract of sale.

Solea International BVBA v. Bassett & Walker International Inc., [2019] O.J. No. 3911, Ontario Court of Appeal, K.N. Feldman, C.W. Hourigan and D.M. Brown JJ.A., July 25, 2019. Digest No. TLD-September92019014