Executive Summary: Key Legal and Evidentiary Issues

• Appeal dismissed as trial judge made no palpable or overriding error in awarding damages for breach of contract.

• Installation costs, including scaffolding and crane expenses, found to be reasonably contemplated by both parties at the time of contracting.

• Sunray lacked manufacturing capability even at trial, and no force majeure clause excused its non-performance.

• Prostar’s efforts to find a substitute hot tub deemed reasonable; Sunray provided no evidence to the contrary.

• Contract clause stated delivery date was an estimate, not a warranty, but did not relieve Sunray of liability for non-performance.

• Trial judge reduced one invoice by half, ensuring the awarded damages were reasonably assessed.

Background and factual context

Prostar Painting and Restoration Inc. brought an action against Sunray Manufacturing Inc. arising from a February 16, 2021 Sales Agreement for a split (two-piece) hot tub. The hot tub was to be installed on a rooftop patio on the 31st floor of a condominium in Vancouver. A split design was required so the tub could fit into the building’s elevator for delivery and assembly.

Prostar paid a deposit and Sunray was to manufacture, supply, deliver, and install the hot tub. Despite repeated requests, Sunray failed to deliver the hot tub or refund the deposit. Prostar incurred significant costs arranging delivery and placement of an alternative, used hot tub that required scaffolding and crane use. Prostar’s total claim was $49,070.31, including $10,000 in aggravated damages. The aggravated damages claim was dismissed at the outset.

At trial, Sunray conceded it could not fulfill the contract. Sunray cited repeated disruptions due to multiple facility moves and pandemic-related impacts on manufacturing, but the court found it never had operational capacity to manufacture the hot tub during its dealings with Prostar.

Trial court decision

Justice L.D. Young of the Alberta Court of Justice awarded Prostar $29,797.50 in damages, plus $967.79 in interest and $3,454.17 in costs. The damages awarded consisted of:

• $9,688.68 (deposit),

• $10,836 (Scaffcat Invoice),

• $9,688.82 (half of the Devray Invoice).

Justice Young found that Sunray knew the hot tub was to be installed on the 31st floor and would require special delivery considerations. She concluded that the use of scaffolding and a crane was a foreseeable consequence of Sunray’s breach.

Discussion of policy terms and contract clauses

The Sales Agreement included language stating that the delivery date “is an estimate and does not represent a warranty on the seller” and was “subject to, among other factors, the availability of materials and labour and demand upon the manufacturer.” However, it did not include a force majeure clause.

Despite the estimated delivery clause, evidence showed Sunray had no operational oven to manufacture the hot tub at the time of the contract and throughout the entire period, including at trial. The court found this rendered Sunray incapable of performance, and its reliance on estimated timelines was unreasonable.

Findings on mitigation

Justice Young held that Prostar made reasonable efforts to mitigate its damages. Evidence showed that Prostar searched online and visited a vendor to locate another two-piece hot tub but was unsuccessful. Sunray claimed other suppliers existed but provided no evidence that a substitute was available or affordable.

Prostar ultimately obtained a second-hand one-piece hot tub from the 26th floor of the same building and hired Scaffcat to lift it to the 31st floor using scaffolding and a crane. Justice Young found this to be a more economical option than purchasing a new hot tub and raising it from ground level. Sunray failed to demonstrate that Prostar’s mitigation efforts were unreasonable.

Appeal and appellate ruling

Sunray appealed on three grounds:
a. The crane and scaffolding costs were not reasonably contemplated;
b. The trial judge failed to consider Sunray’s operational disruptions;
c. Prostar failed to mitigate its damages.

Justice Kelsey L. Becker Brookes of the Court of King’s Bench of Alberta dismissed the appeal in full. She found that:

• The crane and scaffolding costs were reasonably foreseeable at the time the contract was made;

• Sunray was not in a position to manufacture the hot tub at contract inception and lacked any valid excuse for non-performance;

• Prostar’s mitigation efforts were reasonable, and Sunray did not meet its burden to prove otherwise.

The judge affirmed that the trial court’s damages assessment was well supported. Justice Young had even reduced the Devray Invoice by half due to concerns over its reasonableness.

Final outcome

The appeal was dismissed on June 9, 2025. The original judgment awarding Prostar $29,797.50 in damages, $967.79 in interest, and $3,454.17 in costs was upheld. Sunray was found liable for breach of contract, with no excusing circumstances, and Prostar’s efforts to mitigate were confirmed as reasonable and supported by evidence.