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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...
In other cases, expectation damages and reliance damages may produce drastically different results. As Brown J. reasoned, a defendant may fulfil its contractual obligations to the letter but breach the duty of honest performance, causing loss to the plaintiff as a result of its reliance on the dishonest conduct.
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 ...
Nov 13, 2014 · The allegations in the statement of claim clearly put the questions of improper purpose and dishonesty in issue. These facts are sufficient to put Can-Am’s good faith in issue. The question of whether this conduct amounted to a breach of the duty of good faith is a legal conclusion that did not need to be pleaded separately.
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.
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Jun 25, 2020 · At para. 71, it found that Bhasin was concerned with conduct that has “at least a subjective element of improper motive or dishonesty” and considered the meaning of “bad faith”. It refers to “conduct that is contrary to community standards of honesty, reasonableness or fairness”, connoting “malice, untruthfulness, ulterior motive or…other intentional conduct equivalent to fraud ...
