Motives are Important: Petrofrontier Corp. v Macquarie Capital Markets Canada Ltd.
March 2022 - 1 min read
In 2020 and 2021, C.M. Callow Inc. v. Zollinger, 2020 SCC 45 and Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7, two significant Supreme Court of Canada cases, clarified and confirmed the duty of good faith and honest contract performance. These cases have since been followed several times in Alberta and Canada to confirm, clarify, or extend the duty of good faith and honest performance. Understanding the evolution of the law following Callow and Wastech is essential for all individuals and entities with contractual duties and rights.
This article aims to provide an update on how appellate courts have applied the concepts of good faith and honest contractual performance, following Callow and Wastech.
Although personal gain is not necessary to find that the duty of good faith and honest performance was breached, the motive behind the breach is relevant. This was confirmed in Petrofrontier, a decision that looks at whether certain questions asked during a Questioning should be answered. The Court held that evidence as to the motive of the party alleged to be in breach could assist in proving whether or not a defendant deliberately created a state of affairs to justify the termination of a contract.