Drew Hasselback | November 13, 2014
Justice Thomas Cromwell's decision in Bhasin v. Hrynew updates Canadian common law to make 'good faith' an implied term of all agreements
Honesty isn’t just the best policy — it’s the law, the Supreme Court of Canada has ruled.
In a case released Thursday called Bhasin v. Hrynew, the court said Canadian contract law comes with a duty of good faith that requires parties to perform their contractual obligations honestly.
“Finding that there is a duty to perform contracts honestly will make the law more certain, more just and more in tune with reasonable commercial expectations,” wrote Mr. Justice Thomas Cromwell wrote in the unanimous seven-judge decision.
Commercial lawyers have been following the case closely. Some specific areas of law, such as employment and insurance, come with implied terms of good faith. The question was whether the court might apply the doctrine of good faith to all deals made in Canada.
“I think this is the most important contract case in 20 years,” said Neil Finkelstein of McCarthy Tétrault LLP, counsel for Harish Bhasin, the plaintiff who won the case. “We’re going to find another series of jurisprudence arising out of this case over time about how far this duty of good faith and duty of honesty goes.”
Justice Cromwell acknowledged that the common law has long resisted acknowledging a general duty of good faith in contracting outside those specific areas. The piecemeal approach of Canadian common law is out of step with the civil law in Quebec and in most U.S. jurisdictions, he wrote.
“In my view, it is time to take two incremental steps in order to make the common law less unsettled and piecemeal, more coherent and more just. The first step is to acknowledge that good faith contractual performance is a general organizing principle of the common law of contract which underpins and informs the various rules in which the common law, in various situations and types of relationships, recognizes obligations of good faith contractual performance. The second is to recognize, as a further manifestation of this organizing principle of good faith, that there is a common law duty which applies to all contracts to act honestly in the performance of contractual obligations.”
Mr. Bhasin, the plaintiff, had a business that sold RESPs. He struck a deal to sell his customers RESP products provided by the defendant. The contract automatically renewed every three years. Either party had a non-renewal right on six months’ notice. The written agreement did not require the company to provide a reason for ending the deal.
Mr. Bhasin argued that the contract was terminated in bad faith. He won a judgment in an Alberta trial court, but that decision was overturned by the Alberta Court of Appeal. The provincial appellate court found that the trial court had erred by implying a term of good faith in a deal that contained a clear, unambiguous termination clause.
The Alberta appellate ruling was appealed to the Supreme Court of Canada, which heard the case last February.
Justice Cromwell said the respondent RESP company, which was formerly known as Canadian American Financial Corp. (Canada) Ltd., misled Mr. Bhasin about the circumstances involving the termination of the agreement in May 2001. The judge awarded him damages of $87,000 plus interest.
Eli Lederman of Lenczner Slaght Royce Smith Griffin LLP, counsel for the defendants, said the case fills a gap in Canadian law by creating a general organized principle that parties are to act honestly in the performance of all contractual obligations. Yet that does raise questions, he said.
“What does it mean if you have a generalized duty to act honestly in your contractual obligations? When you exercise a contractual right not to renew an agreement, does that you mean you have to explain your reason for doing so?”
Counsel for Mr. Bhasin argued in their factum that the freedom to contract comes with reasonable limits. Good faith should exist when a party is exercising a discretionary power that can devastate a counter party, they wrote. He was represented by Mr. Finkelstein and Brandon Kain of McCarthy Tétrault LLP, John McCamus of Davis Ward Phillips & Vineberg LLP and Stephen Moreau of Cavalluzzo LLP.
“The law of contracts is not exempt from basic requirements of honesty and fairness,” Mr. Bhasin’s lawyers argued. “One need look no further than the existing jurisprudence of this court, which recognizes the duty of good faith in employment, insurance and tendering agreements, in addition to cases like this one where a discretionary power is exercised for an improper purpose so as to defeat a party’s legitimate contractual objectives.”
Mr. Lederman, Jon Laxer and Constanza Pauchulo of Lenczner Slaght, counsel for the defendant RESP company, countered that the first principle of common law contracting is that parties are bound by the terms they have agreed to, not what they ought to have agreed to. “To succeed in this appeal, Mr. Bhasin must persuade this Court to adopt a radically new contract model which would give effect to new, unbargained for rights and obligations,” they wrote.
Commentary by the Ottawa Mens Centre
Judges have a fundamental obligation, to act in "good faith".
There is nothing more insulting and degrading than hearing the Supreme Court
of Canada talk about "Bad Faith" when our Judiciary is riddled with not just
"Bad Faith" but the open, blatant and habitual promotion of Criminal Offenses by
Judges and their former employers.
The Corrupt Historical Ontario Government, while having elected a variety of political parties has, been systematically controlled by those who have a vested interest in promoting Crime and Injustice.
Ontario has carefully manipulated the Judicial Selection Process to ensure that only those who will follow their Fasscist Ideals of Gender Superiority that has effectively turned Ontario barren when it comes to homes with single fathers.
Ontario Judges have the dubious record of having Cleaned Ontario up of Single Fathers, who are now an almost extinct species when Ontario Superior Court Judges use any and all justifications to rid Children of fathers.
Ontario Judges support and promote Violence against children and fathers. If a father provides incontrovertible evidence that a mother is violent, his full time role as a parent is suddenly terminated.
Ontario Judges support Ontario's Gestapo, the unaccountable Children's Aid Societies of Ontario whose lawyers personally fabricate evidence.
Its a chilling deadly experience in meeting those who commit crimes against children while supposedly lawyers for Ontario's Private Unaccountable Criminal Cartel called the Children's Aid Society.
Justice Cromwell can smile till the cows come home but it wont change the fact that Canada would be a much safer place if the above Dis-Honourable Underbelly of the Ontario Superior Court who engage in Crimes against the Administration of Justice had been drowned at birth and the milk given to the pigs.
Ottawa Mens Centre
Commentary by the Ottawa Mens Centre
When it comes to "Bad Faith" and failure to perform to a Contract, the Supreme Court of Canada needs to start looking across a few blocks to 161 Elgin Street where the Judges of the Ontario Superior Court of Justice promote not just bad faith, they Encourage the Fabrication of Evidence by lawyers who get rewarded with decisions cast in stone that are not ever overturned at trial especially when it comes to their promotion of violence by women against men.
The Supreme Court really does not give a dam when it comes to bad faith. The judges of the Supreme Court are unpredictable and unlikely to make any decision that does not meet with political approval.
Like most judges in Canada they don't make Legal Decisions, they make Political Decisions primarily based on Gender.
Ontario Superior Court Judges in particular Operate under the FASSCCIST Ontario Government policy of Gender Superiority.
That means, they actively promote Female Violence towards children and Fathers who have next to NO legal rights and what ever legal rights you might think they have they remove.
When Justice Paul Lalonde gets fathers in front of him, he tells them he wants to vomit because they have the audacity to tell them that they want to have a relationship with their children.
When the Corrupt Allan Sheffield gets fathers in front of him, he issues Vexatious litigant orders when a father responds to a motion to terminate his access.
When the Dis-Honourable Former CAS lawyer Tim Minemma gets a father in front of him who was the Victim of extreme female violence, he takes the children away from him and puts them in foster care and then personally Fabricates Evidence to support Ontario's Fasscist Government Police of Gender Cleansing.
When the Dishonourable Robert Maranger gets a male victim of domestic violence he again terminates the children's relationship because the father committed the Political Crime of suggesting that a female was violent.
The Ontario Superior Court of Justice is a Court that is an Insult to Justice, It operates on Fasscist Ideas that have nothing to do with legal principles or the fundamental principles of Justice.
Our Ottawa Superior Court is Riddled with un-convicted Criminals who support Crimes against Humanity and who engage in Torture.
If you don't like Child Abusers, spare a thought for those who are victims of the Worst Child Abusers in Canada, the Judges of the Ottawa Superior Court of Justice who are Out Of Control and out of this world when it comes to promoting Crime.
The Classic Example of the Criminal Minds of our Judges in Ottawa is their unbridled support of Criminal Offenses committed against, the Administration of Justice.
Dam near every Ottawa Superior Court of Justice is familiar with Marguerite Isobel Lewis, a lawyer for the Ottawa Branch of the Ontario "Gestapo" thats the name local Ottawa lawyers will correct you with when you use the expression "Children's Aid Society of Ottawa".
Marguerite Isobel Lewis is an officer of the court, a lawyer no less ,however she personally fabricates evidence to NOT return children to FATHERS when, the mother is violent beyond comprehension towards children and fathers.
The Ottawa Police is another well known disrespected hated Criminal Organization that Promotes Criminal Offenses against the administration of Justice. It's riddled with hundreds of Police Officers who have been trained to Fabricate Evidence in what is called "Old School Policing".
That means they Fabricate Evidence or knowingly use Fabricated Evidence to charge Male Victims of Domestic Violence. It means they habitually FAIL to provide disclosure.
The Supreme Court should take note of TARA DOBEC, this Corrupt Crown attorney has a long history of malicious prosecutions against Male Victims of Domestic Violence while STAYING charges against the most violent of female offenders.
Ontario operates under the FASSCCIST principles of Gender Superiority apparently at the behest of extreme feminists who actively promote violence towards fathers.
If you are a father in Ottawa and a victim of domestic violence DO NOT CALL THE CORRUPT FATHER HATING OTTAWA POLICE.
These "Black Shirts" of society operate on the principle that 90% of victims of domestic violence are female, and of course Pigs Fly too.
The Gender Police in Ottawa include Det. Peter Van Der Zander an underbelly of the Ottawa Police who personally fabricates evidence to NOT charge the most violent of female offenders.
If you are a FATHER, don't live in Ottawa Ontario Canada, its a cess pool of FASSCCIST judges, police and "The Gestapo" Ontario's Secret Unaccountable Police, the Children's Aid Society of Ottawa who are Canada's greatest danger to National Security.
Ottawa Mens Centre