CCH Canadian Ltd. v. Mollenhauer, [1976] 1 SCR 49

Supreme Court of Canada

CCH Canadian Ltd. v. Mollenhauer, [1976] 1 S.C.R. 49

Date: 1974-12-19

CCH Canadian Limited (Defendant and Plaintiff by Counterclaim) Appellant;

and

Mollenhauer Contracting Company Limited and United Ceramics Limited (Defendants by Counterclaim);

and

United Ceramics Limited (Third Party) Respondents.

1974: November 20, 21; 1974: December 19.

Present: Laskin C.J. and Martland, Judson, Ritchie and Spence JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Contracts—Building contracts—Liability of contractor for materials specified in contract—Materials unsuitable or defective—Liability of supplier in absence of contractual relationship with owner.

Mollenhauer contracted to build and built an office building for the appellant, CCH. The contract specified the kind and quantity of building brick and this had been furnished by United in accordance with the contract specifications and under the supervision of CCH’s architect. The brick proved to be unsuitable and United (and its successor) made zealous efforts to replace it and make good any defects. At trial the claim of Mollenhauer for the balance due under the contract was allowed against CCH and the counterclaims against Mollenhauer (for failure to install suitable brick) and against United (for supplying defective brick) were dismissed. The Court of Appeal affirmed the judgment at trial.

Held: The appeal should be dismissed.

As the brick had been furnished in accordance with specifications and under the supervision of CCH’s architect and the owner, CCH, did not rely on the skill and judgment of the builder, the builder was not liable for defects in or unsuitability of the brick. The claim against United failed for reason of lack of consideration capable of supporting a contract between CCH and United.

Steel Co. of Canada Ltd. v. Willand Management Ltd., [1966] S.C.R. 746, distinguished.

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APPEAL from a judgment of the Court of Appeal for Ontario dismissing an appeal from a judgment of Osler J., at trial, dismissing counterclaims on an action on a building contract. Appeal dismissed.

W.B. Williston, Q.C, and Allan Rock, for the appellant.

Frederick E. Leitch, and A.J. Fuller, for the respondent.

Douglas K. Laidlaw, Q.C., and Colin L. Campbell, for the third party, respondent.

The judgment of the Court was delivered by

RITCHIE J.—This is an appeal from a judgment of the Court of Appeal for Ontario affirming the judgment rendered by Osler J. at trial whereby he allowed the claim of Mollenhauer Contracting Company Limited (hereinafter referred to as “Mollenhauer”) against CCH Canadian Limited, (hereinafter referred to as “CCH”) for the balance owing to it under a contract entered into in May, 1967, for the construction of an addition to the CCH plant and office building.

Mr. Justice Osler dismissed the counterclaim of CCH against Mollenhauer for its alleged failure to supply and install suitable brick under the terms of a contract dated May 31, 1961, for the construction of the main CCH building and he also dismissed the CCH counterclaim against United Ceramics Limited, the supplier of the allegedly defective brick.

This action was commenced by Mollenhauer to recover $30,857.17 in respect of the construction of the addition to the CCH building in 1967 and 1968. There does not appear to be any serious dispute about this amount and it is the sum which Mollenhauer was found to be entitled to recover under the judgment at trial.

The main issues on this appeal concerned the counterclaims advanced by CCH against Mollenhauer and United.

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After a careful review of the relevant facts, Osler J. concluded with respect to the 1961 contract that:

Under its contract, however, all Mollenhauer was called upon to do was to produce and to incorporate into the building brick of the kind and quantity described in its contract. There is no indication that the special skill and knowledge of Mollenhauer was to be relied upon or was relied upon by CCH, unlike my finding that Mollenhauer was relying upon the special skill and knowledge of United with respect to the suitability of its brick for exterior use. Likewise, the evidence with respect to the bricklaying and the building of this structure persuades me that it was well done in accordance with good and workmanlike practice.

The brick which had been furnished in accordance with the contract specifications and under the supervision of Mr. Fisher, the architect employed by CCH, proved to be unsuitable and United and its successor Toronto Brick Company Limited, were zealous in their efforts to replace it and make good any defects.

The efforts exerted by Toronto Brick and the undertaking to continue replacing the brick conveyed by one of its officers to a representative of CCH in June 1964 were relied on by the appellant as evidence of a contract between CCH and United, but, like the learned trial judge, I am unable to find any consideration moving from CCH to United capable of supporting such a contract, and as the action was framed in contract, this must be an end of the matter as far as any claim against United is concerned.

Reference is made in the factum of the appellant to the case of Steel Company of Canada Limited v. Willand Management Limited[1], where the contractor was found liable for defects in the glue used for attaching roofing material to the structure notwithstanding that it had been employed in conformity with the plans and specifications prepared by the owner’s employees; but that case is distinguishable from the present one inter alia, because the contractor had agreed “...

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to furnish a written guarantee running for a period of five years, that all work…will remain weather tight and that all material and workmanship employed are first class and without defect.” There is no such specific guarantee in the present case.

Counsel for the appellant in this Court argued forcefully that the manufacturer was liable to CCH in negligence but, as the Court of Appeal said in its unanimous judgment, “Such a foundation for liability is not even suggested in the Notice of Appeal and the Statement of Counterclaim alleges no facts material to a claim in negligence.”

For the above reasons, as well as for those contained in the reasons of the learned trial judge, I agree with the judgment of the Court of Appeal and would therefore dismiss this appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Woolley, Hames, Dale & Dingwall, Toronto.

Solicitors for the respondent: Saul, Leitch & Hays, Toronto.

Solicitors for the third party, respondent: McCarthy & McCarthy, Toronto.