Executive Summary: Key Legal and Evidentiary Issues

• The case centers on whether B/E Aerospace breached a 2016 Sales Agreement by failing to deliver a third Large Freight Door conversion kit to Air Inuit.
   
• Both parties filed competing summary judgment motions, with Air Inuit seeking specific performance and B/E Aerospace seeking dismissal of the action.
   
• A key evidentiary issue was whether the 2021 sale of the third-manufactured LFD kit to Field Aviation satisfied B/E Aerospace's contractual obligations to Air Inuit.
   
• Conflicting affidavit evidence from Van Gorp and Lapointe required the court to weigh credibility regarding discussions surrounding that sale.
   
• B/E Aerospace's reliance on an excusable-delay clause and a limitation-of-liability clause raised questions about the scope and timing of those defences.
   
• The availability of specific performance as an equitable remedy, given the LFD kit's unique and irreplaceable nature, was a central question for the court.
   

Facts of the case

Air Inuit Ltd. is an airline established in 1978 that serves 14 coastal villages in Northern Quebec, communities comprising roughly 14,000 Inuit residents who rely on the airline for goods delivery, medical transport, community security, and passenger transportation. Air Inuit operates Dash 8-300 aircraft, and on December 14, 2016, it entered into a Sales Agreement with B/E Aerospace Limited under which B/E Aerospace would design, certify, and manufacture an enlarged cargo door installation—a Large Freight Door ("LFD") conversion kit—for three of Air Inuit's Dash 8-300 aircraft, at a total price of $4,600,000 USD. The Sales Agreement allocated this price across several components, including non-recurring engineering for the cargo interior and the LFDs, a Bombardier Data Licensing Agreement, and the first, second, and third LFD kits. The first LFD was installed around May 2019, and the second and third kits were ordered in 2021, with the second LFD received in July 2022. The third LFD kit was manufactured but never delivered to Air Inuit; instead, it was sold to Field Aviation in 2021 after British Antarctic Survey approached B/E Aerospace at the request of Field Aviation. Air Inuit permitted this sale and received a $110,000 commission, but maintained it never abandoned its right to receive a third LFD kit for itself. Communications between Air Inuit's Lapointe and B/E Aerospace's Mantaci in March 2023 indicated delivery would occur by Q4 2023 or Q1 2024, but by March 2024 B/E Aerospace advised it could not locate a manufacturing partner and cited concerns about financial viability.

Policy and legislative provisions at issue

Several Sales Agreement provisions were central to the dispute. Section 3 gave Air Inuit a first right of refusal on the first three cargo door kits and barred B/E Aerospace from delivering kits to other customers until Air Inuit had taken delivery of three complete kits, absent written notice otherwise. Section 5.4 entitled Air Inuit to a commission on future kit sales once it recovered specified amounts. B/E Aerospace invoked Section 22, an excusable-delay clause covering causes beyond its reasonable control such as government action, regional medical crises, or unforeseen material shortages. It also relied on Section 19, a limitation-of-liability clause capping damages at the price allocable to the product causing loss, and on Section 5.3, which vested intellectual property in B/E Aerospace. The court also considered the agreement's termination provisions—Section 23 (Termination for Default) and Section 24 (Termination for Convenience)—in assessing whether either party had validly ended the contract.

Reasoning and analysis

The court found that Air Inuit's evidence established there was no genuine issue requiring a trial, while rejecting B/E Aerospace's competing motion. It accepted that Air Inuit had contracted for three LFDs under Section 3 and never abandoned that order, and it found the parties themselves treated the LFD sold to Field Aviation as effectively a fourth kit, since the $110,000 commission would not otherwise have been payable. The court noted no written notice was ever given under Section 3 concerning the Field Aviation sale. It preferred Lapointe's affidavit evidence over Van Gorp's regarding discussions about pricing and delivery, and found it telling that B/E Aerospace's Mantaci confirmed a Q4 2023/Q1 2024 delivery timeline without mentioning any excusable-delay issues, which were raised only after litigation commenced. The court rejected B/E Aerospace's argument that it lacked the necessary materials or partners, finding no evidentiary support, and noted B/E Aerospace had become a division of Collins Aerospace since 2017 without providing financial evidence to substantiate its viability concerns. The court also rejected the argument that Section 5.3's intellectual property clause limited damages, finding its plain meaning was directed at design or production failures rather than a unilateral refusal to perform.

Ruling and overall outcome

The court granted Air Inuit's motion for summary judgment and dismissed B/E Aerospace's competing motion, finding that B/E Aerospace had breached the Sales Agreement. In light of the LFD kit's unique characteristics—Air Inuit having paid for the underlying engineering and licensing while B/E Aerospace remained the only manufacturer capable of producing the kit—the court held that damages were insufficient and ordered the equitable remedy of specific performance, requiring B/E Aerospace to manufacture the third LFD kit and to produce a delivery schedule within 90 days of the judgment. The court noted Air Inuit had already paid $4,100,000 USD of the $4,600,000 total price and would owe the remaining $500,000 upon delivery. Tariff IV Costs were awarded to Air Inuit, with the quantum left to be agreed or spoken to if the parties could not settle it; no other monetary award was specified in the judgment.