BJ’s v. Eastern Shredding (1990), 83 Nfld. & P.E.I.R. 121 (NFCA);

    260 A.P.R. 121

MLB headnote and full text

B.J.’s Contracting Limited (appellant) v. Eastern Shredding Limited (respondent)

(1989 No. 119)

Indexed As: B.J.’s Contracting Ltd. v. Eastern Shredding Ltd.

Newfoundland Supreme Court

Court of Appeal

Goodridge, C.J.N., Mahoney and Marshall, JJ.A.

April 18, 1990.


Eastern Shredding contracted with a subsidiary of C.N.R. to dismantle 10.2 miles of railway line. Eastern paid C.N.R. $54,800.00 for the salvage rights to the track material and also agreed to return the right of way to its natural state. Eastern subcontracted part of the project to B.J.’s Contracting. Eastern agreed to pay $33,000.00 to B.J.’s Contracting and to give it ownership of all the ties it removed from the roadbed. B.J.’s agreed to stockpile the hardware at 100 foot intervals along the roadbed and to stockpile the rails at accessible locations. B.J.’s failed to remove all of the ties and Eastern submitted that the work was only 80% completed. Eastern also claimed that B.J.’s lost 200 tons of track hardware. Eastern refused to pay B.J.’s the final $13,000.00 due under the subcontract. B.J.’s sued and Eastern counterclaimed for the cost of completing the contract as well as the value of the lost material. The Newfoundland Supreme Court, Trial Division, in a decision not reported in this series of reports, gave Eastern judgment for $23,561.00. B.J.’s appealed. Eastern cross-appealed to increase the quantum of the award.

The Newfoundland Court of Appeal dismissed both the appeal and the cross-appeal.

Contracts – Topic 2066

Terms – Implied terms – Main contract term implied in subcontract – An owner and a contractor executed a contract on the basis of the owner’s estimate that the project involved 1,650 tons of steel – The contractor and a subcontractor executed a subcontract on the basis of the terms of the head contract – The contractor used the main contract’s reference to 1,650 tons of steel as the basis of its claim for damages – The subcontractor submitted that because that figure was not included in the subcontract, it was inadmissible as hearsay evidence – The Newfoundland Court of Appeal held that the figure was not hearsay evidence and was admissible as constituting an integral part of the subcontract as an implied term – See paragraphs 106 and 108.

Contracts – Topic 9705

Contracts for work, materials and services – Contracts for services – Remuneration – Eastern Shredding paid C.N.R. $54,800.00 for salvage rights to 10.2 miles of railway line – The material was to be removed within a fixed period and the right of way returned to its natural state – Eastern subcontracted part of the job to B.J.’s Contracting – B.J. was to receive $33,000 and all the ties it removed from the roadbed – B.J. failed to remove all of the ties and to stockpile the hardware at 100 foot intervals – B.J. sued for the final payment of $13,000 – Eastern counterclaimed for $53,441.58 – The Newfoundland Court of Appeal affirmed the trial judge’s decision and gave Eastern judgment for $23,361.00.

Damages – Topic 803

Assessment – General – Where amount of loss difficult to estimate or determine – A subcontractor failed to complete its obligations and the contractor counterclaimed for the amount expended in having the work performed properly – The subcontractor disputed the counterclaim on the ground the contractor failed to submit proof of the expenditures allegedly incurred – The Newfoundland Court of Appeal held that the level of certainty and particularity required to establish damages will depend on the circumstances – The court stated that when a reasonable estimate can be made from the evidence, damages cannot be withheld merely because of the difficulty in measuring or estimating them – See paragraphs 99 to 110.

Damages – Topic 7067

Contracts – Contracts for services – Breach – Failure to perform – A subcontractor negligently performed a contract – The contractor claimed for damages based on the cost of having the contract performed properly – The Newfoundland Court of Appeal stated that in cases where the measure of damages was the cost of performance of the contract “the direct measure of damages will be the difference between the reasonable cost to the employer of repairing the defects or completing the work, together with any sums paid by or due from him under the contract, and the sums which would have been payable by him under the contract if it had been properly carried out …” – See paragraphs 80 to 82 and 117.

Evidence – Topic 221

Inferences and weight of evidence – Inferences – Inference from failure to cross-examine – A contractor claimed damages from a subcontractor but offered no documentation to substantiate the claim – The subcontractor declined to comment upon the lack of supporting evidence during the cross-examination – However, the subcontractor appealed the decision on the ground the contractor failed to prove damages – The Newfoundland Court of Appeal stated that “a court is justified in considering that there is no real intention to attack the testimony of a witness unless he or she is cross-examined and given opportunity to explain any circumstances which may tell against him or her” – See paragraphs 79 and 102.

Cases Noticed:

Ratcliffe v. Evans, [1892] 2 Q.B. 524 (C.A.), refd to. [paras. 50, 98].

Chaplain v. Hicks, [1911] 2 K.B. 786, refd to. [para. 51].

Wood v. Grand Valley Railway Company, [1976] 1 S.C.R. 267, refd to. [para. 52].

Stroms Bruke Aktie Bolag v. John & Peter Hutchison, [1905] A.C. 515, refd to. [para. 54].

Wilson v. Rowsell, [1970] S.C.R. 865, refd to. [para. 99].

Tai Hing Cotton Mill Ltd. v. Kansas Knitting Factory, [1979] A.C. 91, refd to. [para. 99].

Jarvis v. Connell (1918), 44 O.L.R. 264, refd to. [para. 102].

Robinson v. Harman (1848), 154 E.R. 363, refd to. [para. 113].

Wertheim v. Chicoutimi Pulp Co., [1911] A.C. 301, refd to. [para. 113].

Curtis v. General Petroleum et al., [1951] S.C.R. 154, refd to. [para. 113].

Authors and Works Noticed:

Halsbury’s Laws of England (4th Ed.), vol. 12, p. 416 [para. 56].

Waddams, The Law of Damages (1983), c. 13 [para. 49].

Hudson, Building and Engineering Contracts (10th Ed. 1970), p. 585 [paras. 80, 117].


Bryan Blackmore, for the appellant;

Ronald Cole, for the respondent.

This appeal was heard on April 15, 1990, before Goodridge, C.J.N., Mahoney and Marshall, J.A., of the Newfoundland Court of Appeal. On April 18, 1990, the following opinions were filed:

Goodridge, C.J.N., dissenting – see paragraphs 1 to 84;

Marshall, J.A. (Mahoney, J.A., concurring) – see paragraphs 85 to 126.


B.J.’s Contracting Ltd. v. Eastern Shredding Ltd.

(1990), 83 Nfld. & P.E.I.R. 121 (NFCA)

Newfoundland Court of Appeal
Reading Time:
31 minutes
Goodridge, Mahoney, Marshall 

Goodridge, C.J.N.
[dissenting]: The issue in this appeal primarily concerns the standard of proof of damages in breach of contract cases. The appellant (“B.J.”) sued the respondent (“Eastern”) for $13,000.00 allegedly due and payable under a contract; Eastern counterclaimed against B.J. for damages for nonperformance of the contract.

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