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Dec 21, 2020 · In Callow, the Supreme Court of Canada held that: Parties to a contract have a duty of honest performance, as the Court first recognized six years ago in Bhasin v. Hrynew. [2] This duty “applies to the performance of all contracts and, by extension, to all contractual obligations and rights”. [3] Further, parties are “not free to exclude ...
- Background
- The Lower Court Decisions
- The Supreme Court of Canada Decision
- Conclusion
In Callow, a company, Baycrest, and its designated property manager managed the joint and shared assets of ten condominium corporations. In 2012, Baycrest renewed a winter maintenance services agreement with C.M. Callow Inc. and entered into a new summer contract as well. The winter contract had a two-year term, though it allowed Baycrest to unilat...
At trial, the Court held that Baycrest had breached the duty of honesty in contractual performance. The Court awarded damages, including a sum that represented the profit Callow would have received during the remaining term of the winter contract. The Ontario Court of Appeal reversed the trial decision. While acknowledging that Baycrest's conduct m...
A five-member majority allowed the appeal. The majority held that when a party to a contract is aware its conduct or representations have created a misapprehension in the counterparty's mind in relation to the performance of an obligation or the exercise of a right under a contract, the duty of honesty requires that party to correct it. The determi...
The Supreme Court of Canada's decision confirms that the duty of honesty applies to the performance of obligations and the exercise of rights under a contract. Where a party knows that its conduct or representations have led a counterparty to hold a false impression in connection with the contract, the duty of honesty requires that party to correct...
The required elements of the intentional torts of civil fraud and deceit were outlined by the Supreme Court of Canada in Hryniak as: (1) a false representation made by the defendant; (2) some level of knowledge of the falsehood by the defendant or recklessness in making the representation; (3) the false representation caused the plaintiff to act; and (4) the plaintiff’s actions resulted in a ...
Jan 14, 2019 · the defendant did rely on the false statements of plaintiff counsel, and as a result the defendant incurred a loss in the sense that they agreed to pay more than the case was worth (para 51). The motions judge further held that the plaintiff lawyer was bound by the doctrine of honesty and good faith in contractual dealings as declared by the Supreme Court in Bhasin v.
May 4, 2021 · The duty of good faith and honest contractual performance does not just preclude actively misleading conduct, it also precludes half-truths, omissions and silence, which mislead the other party. Accordingly, a party cannot rely on opaque language in a disclosure schedule, or obfuscate disclosures with half-truths, in order to escape liability.
Mar 26, 2021 · It states: ‘ (1) Orders for costs made against the claimant may be enforced to the full extent of such orders with the permission of the court where the claim is found on the balance of probabilities to be fundamentally dishonest.’. So the protection from a costs order of the defendant’s costs against a claimant is put aside.
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Jan 7, 2021 · A party need not intend for the other party to rely on their dishonest conduct. The party's motives are not relevant to whether the duty of honesty is breached, unless such motives show dishonesty. Applying these principles to the facts, the majority concluded that Baycrest knowingly misled Callow in the way in which it exercised the termination clause.
