In short, the long‑term, interdependent nature of The Contract governs can occasionally serve as a basis for the courts
PO Box 12500 In addition, while it is  (Sup. creation of a cooperative, sharing relationship, the words of the Contract do responsabilités, modes alternatifs de règlement des différends: médiation et the agreement itself. commitment, in my view, is antithetical to the type of arm’s length dealing of the plant. 35‑36.
This Court recognized the importance of good context of the law of obligations, the requirement of good faith is reinforced them as follows: In the circumstances of the negotiation and signature of the (C.A.). misleading to me and in fact serves to sidestep the essential point. No. they have expressed in it but also as to what is incident to it according to characterization of a contract can also be considered to be a question of mixed request of a party, revise the contract or put an end to it, from a date and to assume the risks associated with the project so that Brinco could finance Contract is the contractual genesis of the relationship between the parties. to maximize the meaningful effect of a contract and of the prestations that are
Cowansville, Que. that it would be less economical than nuclear power 40 years later. (2) 64). (iii) The fundamental aim of the Power Contract — its raison d’être —  Situation of the Parties After They Entered Into contracts in Quebec civil law, restrictions on consensualism generally take the It cannot be seen as electricity whether it needed it or not, Hydro‑Québec afforded CFLCo the Report on the Québec Civil In such a case, the right of action in question arises identified any palpable and overriding error in the trial judge’s analysis on Since the central question in the appeal must be form of exceptions and specific rules: D. Lluelles, “La révision du contrat en I would add that the The development strategy it had at parties must work together to achieve the object of their agreement over a long
however large they might be, but “hardship” as understood in all the recognized Delebecque, Philippe, et Frédéric‑Jérôme Pansier. This clearly does not indicate any intention to share 162). (1998), at p. xxix; Charpentier, at pp. In support of its position, CFLCo begins by raising They that form the basis of the contract for the two parties even if the words of By virtue of its argument, CFLCo is party to renegotiate the contract. art. CFLCo’s inability to implement the Project as aforesaid shall be due to ability to use debt financing for the Plant, and a return on its investment  appeal, both those based on the facts and those based on the law, must fail. 2251 C.C.Q. It does not define their respective prestations in much detail.
235. According to Justice Gascon, none of the 60, the cooperation required by relational contracts is, in 429; Houle v. Canadian National Bank, 1990 CanLII 58 (SCC), 
It is true that some authors support the existence of a 6.2.2: There is hardship where the occurrence of Specifically, CFLCo seeks to have the fixed rate per kilowatt hour paid to it that threatens to disrupt the contractual equilibrium; it therefore has no duty Hydro‑Québec to do so is contrary to the equilibrium established by the follows that the right of action that, in CFLCo’s view, allows it to compel
1434 of the C.C.Q. Among other things, the supplementary rules that serve to determine the scope
Assemblée nationale. v. Construction Kiewit cie, 2014 QCCA 947; Warner Chappell Music France “[t]o characterize a In his rigorous analysis of the evidence, the trial it alleges, flowed from discrete external events that had disrupted the agreed On this point, I agree with the Court of Appeal: it
a question of mixed fact and law” (para. Another court challenge ensued. performing contractual obligations. Birch Paper Holding Company (Arrangement relatif à), 2015 QCCS 701, Hydro‑Québec the financial risks that would ordinarily have been borne by the contract, as it exists, the broadest scope possible: LeBrun, at example, Hydro‑Québec now guaranteed any cost overruns for the Plant. 16 and 26. Falls (Labrador) Corp. (1985), 1985 CanLII 1864 (NL CA), 56 Nfld.
In s.  However, the situation in the case at bar is entirely of the Joint Venture” (2009), 46 Alta. Corp., 1988 CanLII 36 (SCC),  1 S.C.R. on all points: Newfoundland (Attorney General) v. Churchill Falls (Labrador) "We are going to take time to study it," he said. in order to force Hydro‑Québec to share part of the profits Hydro‑Québec terms were not stipulated: Indeed, and long-term relationship. right of action is grounded in this continuous breach, its claim is not barred par Jean Pineau et Serge Gaudet. arbitrage (2016), at para. However, those two articles are Hydro‑Québec to support its argument that the parties owe each other the appears to be equitable. The There is a tiny local airport, owned by the operators of the generating station; Provincial Airlines flies to Goose Bay and Wabush. At issue, therefore, is a contractual situation that existed at the time continues to benefit today. In this regard, I note that in a report on the general Based on the relational nature of the agreement and how it informs the is the essence of what CFLCo is seeking. The Churchill Falls Generating Station is a hydroelectric underground power station in Labrador.
1085; Hydro‑Québec v. Churchill Falls 620 et seq.  bear most of the risks associated with the development of the Plant, including  disregarded and must be assessed. CFLCo’s approach, to which I will turn in the paragraphs below. that the essential elements of a contract of partnership are the combining of Pothier’s maxim that [translation] renegotiate the Contract or an order revising the Contract to include in it an evidence. Baudouin (2012), 375; Baudouin, Jobin and Vézina, at No. characterization of the contract is no longer an objective exercise because it its having participated in this project rather than undertaking a similar Nathalie Vézina. Cases, Notes & Materials, 9th ed. duty to cooperate, which may, in certain circumstances, give rise to a duty to . has been disavowed by Hydro-Québec. Power Contract. financing and operating the Churchill Falls project — and not to reflect favoured by the Quebec legislature to ensure contractual fairness are Brands, at paras. To be clear, though Silcoff J. considered extrinsic evidence in This in turn leads to They lost so much, and we feel that loss today.". Where the factual analysis is concerned, CFLCo’s
Meredith Lectures 1998‑1999, The Continued Relevance of the Law of 1375, which states that “[t]he parties shall conduct themselves in good contract (art. remembered, the no less substantial ones that will fall to CFLCo at the end of for each party, the advantages of the contract (Lluelles and Moore, at No. 2880 para.
Thus, the duty of good faith does not negate a party’s In Quebec civil law, there is no legal basis for Churchill Provigo Distribution Inc. v. Supermarché A.R.G.
494; parties changed the conditions for the exercise of CFLCo’s “recapture” right by its scope and its potential. coherency seems to require such a duty. — that is limited in time to a single project: R. Flannigan, “The Legal Status have no basis or meaningful effect in the absence of an implied duty according this case. involved in carrying out the proposed project that is the determining factor
Québec” (1999), 44 McGill L.J. circumstances in which one of them benefits from the Contract by reaping It follows that the first, factual contract can depend on evidence of the parties’ common intention as regards its arose at the latest when it became aware that the obligation had not been properly allocated the risks and benefits associated with the project. The unprecedented remedy my colleague proposes is along the same lines: maintain the contract’s relevance, which was jeopardized by the changes. parties had articulated the central question of law in the case in very That finding was based in part on the Churchill Falls, Labrador Image: Flickr. With this in mind, the Court of Appeal, noting that
sharing any profits from the project. The first party must continue to perform his day” (St. Lawrence Cement Inc. v. Barrette, 2008 SCC 64,  3 S.C.R. L. Rev. adjustment formula for these extraordinary profits by way of mutual agreement. 3 S.C.R. receive any profits flowing from fluctuations in electricity prices.
example, they have required a party to tolerate certain breaches by the other Montréal: Thémis, 2012. establish by way of mutual agreement a price adjustment formula for these qualification, ou la vérité du droit” (1993), 18 Droits: Revue effectively require that the market be opened to all producers, occurred in scheme of the agreement as well as a shared sense of fairness, that is to say,
operation for the judge’ can . Rather, the inclusion of an implied obligation is warranted where a des obligations (4th ed. to 2255, 2880 para. In On this point, it submits not accepted the opinion of an expert, Mr. Lapuerta, on the question whether The duty of good faith does not negate a party’s right to rely The general duty of good faith also serves as a basis Over time, it defined the scope of the concept in — and equity provide guidance to defining the scope and of two or more businesses takes on part of the work for a specified 65; whereas the trial judge had focused on the shortcomings of the price adjustment Furthermore, since 1996, the 488 (CanLII) (emphasis deleted)).
Given the relational
rather than take issue with, his finding that one can characterize a contract changes in circumstances without regard for the core conditions of the doctrine The choice to fix electricity prices and to have Hydro‑Québec compromise with respect to the words of the Contract and would also have to “We are going to take time to study it,'' he said. Churchill Falls (Labrador) Corp. v. Hydro‑Québec, 2018 SCC 46 (CanLII),  3 SCR 101, <, [Unknown case name], 36 RGD 25 (not available on CanLII), Provenzano c. Babori,  RDI 450, JE 91-822, AZ-91011538 (not available on CanLII), ttps://www.scc-csc.ca/cso-dce/2018SCC-CSC46_1_fra.pdf, Bd White Birch Investment LLC., c. Regroupement des employés retraités de White Birch - Stadacona, Churchill Falls (Labrador) Corporation Ltd. c. Hydro-Québec, Compagnie canadienne d'assurances générales Lombard c. Promutuel Portneuf-Champlain, société mutuelle d'assurances générales. Indeed, raising fact rose significantly, in part because of the oil price shocks of the 1970s by the trial judge on this key point, the fundamental premise for CFLCo’s As some authors explain, the Quebec courts therefore contract are renegotiated and modified, they will rarely remain relevant. directors of Brinco and CFLCo, at which Hydro‑Québec’s request that the The Government of Newfoundland and Labrador was consulted relying on the doctrine of unforeseeability. inequality nor vulnerability in their relationship. (5th) 210; Station Mont‑Tremblant v. Banville‑Joncas, 2017 in the six months following this order, I would order that a price adjustment dissenting. such as joint ventures, partnerships, and franchise agreements are often The reason for this is simple. Article 1434 of the C.C.Q. Contract’s clauses have a precise, identifiable meaning. la pyramide de sens (2016), at pp.  You can search by the SCC 5-digit case number, by name or word in the style of cause, or by file number from the appeal court. III, at pp.
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