Federal Court


Contracts

Construction and interpretation

Words and phrases

Insist meant no more than “require” or “demand”

Plaintiff placed orders for supply of bunkers to vessels it chartered, pursuant to agreement with defendant suppliers for time-to-time purchases, and suppliers made arrangements with third party M Ltd. for physical delivery of bunkers. M Ltd. invoiced suppliers while suppliers invoiced plaintiff and, when suppliers declared bankruptcy, both requested payment from plaintiff. In action by plaintiff and shipowners, M Ltd.’s motion for summary judgment was granted with ruling that plaintiff pay M Ltd. its invoiced amount and pay suppliers’ receivers amount equal to suppliers’ mark-up. Receivers’ appeal was allowed, primarily with respect to use of parol evidence, and matter remitted back for reconsideration. M Ltd’s motion granted, with original conclusion on payment out of funds confirmed, and receivers’ motion dismissed. Specific task was to consider meaning and implication of one clause in suppliers’ general terms and conditions in determining who was contractually entitled to funds from plaintiffs, while other conclusions including that plaintiff had agreed to assume obligations to M Ltd. were left unaffected. Pursuant to language of clause, M Ltd. “insisted” that plaintiff be bound by its terms and conditions for sale and delivery of bunkers to vessels. Such insistence did not require direct dealing with plaintiff, as M Ltd. took persistent or peremptory stand in course of significant chain of transactions that its terms and conditions would apply. Neither suppliers nor plaintiff raised or conceived of any objection to M Ltd.’s standard terms and conditions. There was no indication that M Ltd. would have been willing to negotiate or deliver bunkers on any terms other than its standard ones. Insistence on contractual terms did not require something over and above usual business dealings, as suggestion that it would require something forcing term through over resistance would untenably make insistence dependent on whether there was resistance by other parties. Receivers were trying to set clear intention of contracting parties in order to could claim full amount rather than mark-up that they were entitled to. Insist meant no more than “require” or “demand” where deal would not go through unless terms were accepted, and fact that terms were part of standard terms and conditions did not mean they were not forcefully demanded with no room for refusal.

Canpotex Shipping Services Limited v. Marine Petrobulk Ltd. (2018), 2018 CarswellNat 5535, 2018 CarswellNat 6210, 2018 FC 957, 2018 CF 957, James Russell J. (F.C.).

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