Dear Colleagues:

For those of you who are interested in the NAV Canada case and whether

it will be accepted fully into Canadian law, I came across the following

which suggests that other courts may not be as willing as academics to

accept NAV Canada with open arms:

*River Wind Ventures Ltd. v. British Columbia,* 2009 BCSC 589.

32     I agree with the reasoning of the court in the Greater

Fredericton Airport Authority case in deciding to modernize the

requirement of consideration in the context of variations of existing

contracts. With respect, however, it is not clear to me that the first

sentence in para. 31 of the quoted reasons [ie, "post-contractual

modification, unsupported by consideration, may be enforceable so long

as it is established that the variation was not procured under economic

duress"]  fully captures the modernized principle intended to be

enunciated by the court. That sentence seems to state that the only

prerequisite for the enforceability of a post-contractual modification

is that the variation was not procured by duress, but I note that the

second reason (set out in the quoted para. 29) for making what is

characterized as an incremental change in the law was to avoid imposing

an injustice:

          o ... on those promisees who have acted in good faith and to

            their detriment in relying on the enforceability of the

            contractual modification. The notion that detrimental

            reliance can only be invoked if the promisee is the

            defendant to the action (i.e., as a shield and not a sword)

            is simply unfair and leads to an unjust result if the

            promisor was not acting under economic duress.

33     While I find that the facts of this case represent a situation

where it would be unjust to adhere to the entrenched principle that

equitable estoppel can only be relied upon as a shield, and not as a

sword, I would follow the reasoning in the Greater Fredericton Airport

Authority case only so far as enforcing a post-contractual variation in

the absence of consideration if the evidence established either

detrimental reliance by the plaintiff or the gaining of a benefit or

advantage by the defendant. I am not persuaded that equity calls for

enforceability where neither of those elements are present.

--

Jason Neyers

Associate Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435