Background
Wastech Services Ltd. (Wastech) moves and disposes of waste. In
1996, Wastech and the Greater Vancouver Sewerage and Drainage
District (Metro) entered into a 20-year contract for the disposal
of waste from the Greater Vancouver Regional District (the
Contract).
Wastech agreed to remove and transport waste to three disposal
facilities. Metro was responsible for allocating where the waste
was to be disposed. The volume of waste allocated to each facility
was a critical variable in calculating Wastech s compensation.
In 2010, Metro significantly redirected the volume of waste between
the three facilities, such that it was impossible for Wastech to
achieve its target operating revenue.
Wastech, the Court
clarified the content of another doctrine flowing from the
organizing principle: the duty to exercise contractual discretion
in good faith.
Background
Wastech involved a waste transportation company
(Wastech) and a corporation responsible for municipal waste
disposal (Metro). In 1996, Wastech and Metro entered into a
contract for waste disposal services that contemplated disposing
waste in three landfills, one of which was much farther away than
the others. The contract stated Metro had absolute
discretion in allocating the amount of waste to go to this
farther facility.
In 2011, Metro exercised this discretion by directing less waste
to go to the farther facility, causing Wastech to receive a lower
Today, in its decision in Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District1, the Supreme Court has clarified the limits on the duty to exercise contractual.
The Supreme Court of Canada released its long-anticipated decision in Wastech Services Ltd v Greater Vancouver Sewerage and Drainage District today, a major decision concerning the scope of the.
not breached. The Greater Vancouver Sewerage and
Drainage District (
Metro ) and Wastech
Services Ltd. (
Wastech ) entered into a
long-term contract for the removal and transportation of waste to
three disposal sites. The contract gave Metro absolute
discretion to allocate waste between the sites and provided
that Wastech would be paid a different rate depending on the site.
In 2011, Metro reallocated waste in a way that resulted in
Wastech s not achieving a cost/revenue target identified in the
contract. The Court held that this reallocation did not breach
Metro s duty to exercise its contractual discretion in good
faith because it was consistent with the purposes for which the