Supreme Court of Canada to hear appeal over contractual breach by active non-disclosure

Lead Office

Toronto

On June 27, 2019, the Supreme Court of Canada (the “SCC” or the “Court”) granted leave to appeal in the matter of CM Callow Inc. v. Zollinger. The Court will consider whether the contractual duty of honest performance can be breached by active non-disclosure.

In April 2012, CM Callow entered into two-year maintenance contracts with 10 condominium corporations for summer and winter maintenance work. In early 2013, the condominium corporations decided that they would terminate the winter contract. That summer, unaware that the decision to terminate the winter contract had already been made, CM Callow performed additional “freebie” landscaping work as an incentive for the condominium corporations to renew the contracts. The condominium corporations announced in September that they intended to terminate the winter contract. CM Callow sued for breach of contract.

The Ontario Superior Court of Justice determined that the condominium corporations had breached their duty of honest contractual performance by acting in bad faith. The Court of Appeal for Ontario subsequently overturned the trial judgment, on the basis that the trial judge had improperly expanded the duty of honest performance. That decision is now under appeal before the SCC.

McCarthy Tétrault LLP is representing CM Callow with a team led by Brandon Kain that includes Adam Goldenberg.

People