Judge hears submissions in case of alleged breach of contract with Yukon propane company
Court proceedings have wrapped and now a Yukon judge must decide whether a Whitehorse helicopter company is on the hook for more than $18,000 for breaching a contract with its propane supplier.
Super Save Propane sued Fireweed Helicopters in the Small Claims Court of Yukon in December 2021. It claims it had a five-year contract for propane supply with Fireweed beginning in November 2017, but that Fireweed ended the contract early and without notice.
Super Save says Fireweed should pay for the propane it would have purchased from the company over the remainder of the contract, which it says amounts to $18,480, plus interest.
Super Save cites a clause in the contract that binds Fireweed to keep paying the full price of propane if it cancels the service early. That cost is calculated based on the average amount Fireweed spent on propane per month and the number of months left in the contract.
The case went to trial before Judge Karen Ruddy on Wednesday and Thursday.
Alleged breach of contract
According to Super Save, represented in court by Whitehorse firm Austring Fairman and Fekete, the contract was for the company to provide the propane used to heat Fireweed's hangar at the Whitehorse airport. Fireweed had signed up for auto-fill delivery with the supplier.
But in mid-July 2021, Super Save says, Fireweed breached the contract by having Super Save's tanks removed from its hangar site and entering into a new agreement with Borealis Fuels, another propane supplier.
Super Save's propane tank was returned by Borealis Fuels that month. Super Save says it received no written or verbal notice that Fireweed intended to switch suppliers.
It also says Fireweed didn't raise issues it had with the service ahead of cancelling.
Fireweed says Super Save breached contract first
Fireweed's legal counsel told court Super Save's claim should be dismissed.
James Tucker of law firm Tucker Carruthers argued Super Save was first to breach the contract with Fireweed Helicopters, by failing to keep the tanks properly filled.
One morning in January 2020, Fireweed claims, its propane levels were at about 20 per cent, and the hangar wasn't getting heat.
The company says it was colder than –30 C, and it became worried that without heat, its equipment would stop functioning properly.
A former Fireweed employee told the court that he called Super Save, but said the company told him they couldn't confirm when someone would be able to come and fill the tank.
A fill ticket from the same day shows Super Save came and filled the tank that afternoon.
Fireweed argues Super Save breached its contract because it didn't uphold its end of the agreement to keep the tanks filled to an appropriate level.
It also alleges Super Save overcharged for the service throughout the term of the contract.
Damages clause is 'punitive,' Fireweed says
Fireweed also took issue with the damages clause in Super Save's contract, saying the remaining balance doesn't accurately reflect the loss Super Save would have suffered by ending the contract early. According to Fireweed, that charge instead acts as a penalty for customers choosing to leave.
Super Save wants Fireweed to pay what it would have been charged if propane delivery had continued to the end of the five-year contract. But Fireweed says that doesn't take into account the money Super Save retained by not purchasing the propane it would have sold to Fireweed or paying the overhead costs of delivering it.
A decision on the case is not expected before the end of March.
