A BC Supreme Court judge ordered a subcontractor to pay the actual cash value, rather than the replacement price, for a 2005-built trailer that crashed during an October 2019 liquefied natural gas delivery.
Kate Energy Holdings Inc. hired Energetic Services Inc. to haul the gas from Dawson Creek to Whitehorse. The vehicle and trailer crashed on the Alaska Highway during the trip. The trailer, owned by Clean Energy, was damaged beyond repair.
Kate Energy paid Clean Energy $314,522.32 to replace the trailer. Energetic Services admitted liability for the accident, but said it should only pay the actual cash value.
According to the lease, if the trailer was damaged beyond repair while in Kate Energy’s possession, Kate Energy must pay the actual cost of a replacement trailer.
“While Energetic was aware that Kate Energy did not own the trailer, Kate Energy did not expressly advise Energetic of the existence of the lease and the terms of the lease, including the new trailer replacement price if the trailer was damaged beyond repair,” said Justice Anita Chan in the Nov. 20 judgment. “Clean Energy and Energetic had no relationship with each other.”
Kate Energy sued Energetic for the new trailer price, because it suffered a loss of $314,522.32.
“Receipt of the new trailer replacement price will place Kate Energy into the position it would have been in if not for the wrongful conduct of Energetic,” Chan said.
Chan agreed with Energetic’s position was that damages should be the value of a like-for-like replacement trailer. Since it was unaware of the lease terms between Kate Energy and Clean Energy, it would be unfair to hold it liable for the cost of a new trailer.
“The payment for a brand-new trailer is a consequence too remote for Energetic to bear,” Chan concluded.
