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Feb 12, 2021 · Supreme Court Clarifies the Duty of Honest Performance. The majority of the SCC would allow the appeal and adopt the reasons of the trial judge. The SCC held that the manner in which Baycrest exercised the termination clause was dishonest, and as a result breached the duty of honesty, even though the 10-day notice requirement was satisfied.
- Factual Background
- Decisions of The Lower Courts
- Decision of The Majority of The Supreme Court
- Concurring Reasons
- Conclusion
The appellant, C.M. Callow Inc.("Callow"), had entered into a two-yearwinter maintenance agreement with a group of condominiumcorporations ("Baycrest"). The agreementincluded a clause pursuant to which Baycrest was entitled toterminate the agreement for any reason upon giving ten days'notice to Callow. Towards the end of the first winter, Baycrest ...
At trial, the judge found that Baycrest had actively deceivedCallow about termination, in breach of the duty of honestperformance formulated in Bhasin. She awarded damages toCallow in the amount of the value of the winter maintenanceagreement for one year, minus expenses that Callow would typicallyincur. The Court of Appeal set aside the judgment. ...
Writing for the majority, Kasirer J. (Wagner C.J., Abella,Karakatsanis and Martin JJ. concurring) reversed the decision ofthe Court of Appeal. After reviewing the principles set out inBhasin, he noted that the scope of the duty of honestperformance was limited by the requirement that any breach of theduty be directly linked to the performance of ob...
Brown J. (Moldaver and Rowe JJ. concurring) agreed with themajority that Baycrest did not identify any palpable and overridingerrors in the trial judge's findings and that, as a result, thetrial judge's award should be restored. However, he expressed a"fundamentally methodological" objection8 with respect to themajority's use of the civilian abuse ...
In light of the disagreement between the lower courts in thiscase, additional clarification and guidance regarding theapplication of the duty of honest performance are welcomed. Sincethe duty of honest performance is a relatively new doctrine inCanadian common law, it will likely take many more years anddecisions to "flesh it out". In doing so, ref...
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 ...
Jan 29, 2024 · The application judge made no award of damages for breach of duty of honest performance. This was based on the court’s conclusion that had the Appellants had been promptly advised of the change in the closing date in October 2019, they would not have been able to meet the revenue targets or take steps to force the Cresco transaction to close ...
Jan 21, 2021 · In 2014, the Supreme Court of Canada in Bhasin v. Hrynew, 2014 SCC 71, recognized a new common law contractual duty: specifically, the duty of honest performance.The duty requires that parties not lie or otherwise knowingly mislead each other about matters directly linked to the performance of their contract. Six years later, the Supreme Court ...
The Ontario Court of Appeal held that the trial judge erred by improperly expanding the duty of honest performance beyond the terms of the winter maintenance agreement. Any deception in the communications during the summer of 2013 related to a new contract not yet in existence – the renewal that Callow hoped to negotiate.
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Jan 22, 2021 · The trial judge emphasized that Baycrest’s duty of honest performance did not amount to a duty of disclosure but did require a minimum degree of honesty to give the parties a fair opportunity to protect their interests. By engaging in active deception, Baycrest failed to meet this minimum standard. Court of Appeal Decision
