On November 13, the Supreme Court in Bhasin v. Hrynew, 2014 SCC 71 (CanLII) changed the law of contract in Canada by imposing duties of good faith and honesty on all contractual relations. Until now, the duties have been applied to agreements in situations of power imbalance, notably insurance, employment and franchises.
The plaintiff, Mr. Bhasin, was a dealer in education savings plans, a type of consumer investment, offered by the corporate defendant. At the end of the three-year contract, the corporate defendant decided to invoke a notice provision blocking the automatic renewal of the contract. The reason for its decision not to renew was the favouring of another dealer, the other defendant and a competitor of the plaintiff. The facts resembled that of franchise, regulated by provincial legislation, but fell short of the statutory definition of franchise.
In siding with the plaintiff’s claim for damages, Justice Cromwell stated on behalf of a unanimous court three elements to the new state of contract law:
(1) There is a general organizing principle of good faith that underlies many facets of contract law.
(2) In general, the particular implications of the broad principle for particular cases are determined by resorting to the body of doctrine that has developed which gives effect to aspects of that principle in particular types of situations and relationships.
(3) It is appropriate to recognize a new common law duty that applies to all contracts as a manifestation of the general organizing principle of good faith: a duty of honest performance, which requires the parties to be honest with each other in relation to the performance of their contractual obligations.
The “blawgosphere” seems to have lit up this week with the release of Morland-Jones v. Taerk, a dispute between neighbours in the affluent Toronto, Canada, neighbourhood of Forest Hill. Essentially, the Ontario Superior Court ruled that the case, an interlocutory injunction matter involving multiple allegations of trespass and invasion of privacy, should be dismissed because “there is no serious issue.”
We may derive some guilty pleasure from reading about the dispute – evidently between a pair of awful neighbours with no shortage of money to spend on lawyers – but was it right for the judge simply to turn them away? If it were a matrimonial dispute between two annoying spouses from a rich family, would the court be justified in refusing a request by one party for interim relief on this basis? Would the judge have ruled this way, if the same complaints were made by neighbours from a less expensive postal code? My entry on the Gilbertson Davis LLP litigation blog (click link, or click on image above right) canvasses these issues concerning the role of the court in a society where we all depend on the rule of law to get along.
More often than not, referral of a legal problem to lawmakers, or to rules committees for broad consultation, is manifestly preferable to making up procedural law on the fly. In the Ontario Superior Court decision released this week in Moore v. Getahun, 2014 ONSC 237 (CanLII), the trial judge issued an injunction against the practice of litigation counsel reviewing draft reports with expert witnesses.
The relevant paragraphs from the ruling appear at paragraphs 50-52:
 For reasons that I will more fully outline, the purpose of Rule 53.03 is to ensure the expert witness’ independence and integrity. The expert’s primary duty is to assist the court. In light of this change in the role of the expert witness, I conclude that counsel’s prior practice of reviewing draft reports should stop. Discussions or meetings between counsel and an expert to review and shape a draft expert report are no longer acceptable.
 If after submitting the final expert report, counsel believes that there is need for clarification or amplification, any input whatsoever from counsel should be in writing and should be disclosed to opposing counsel.
 I do not accept the suggestion in the 2002 Nova Scotia decision, Flinn v. McFarland, 2002 NSSC 272 (CanLII), 2002 NSSC 272, 211 N.S.R. (2d) 201, that discussions with counsel of a draft report go to merely weight. The practice of discussing draft reports with counsel is improper and undermines both the purpose of Rule 53.03 as well as the expert’s credibility and neutrality.
Despite the splash that ‘unbundling’ made as a model for legal service delivery, it has largely been the domain of family law and small claims litigation. As a business model, unbundling presents considerable challenges for the law practice. My recent paper, Drawing Clear Boundaries: Unbundling Litigation Without Letting It All Hang Out, provides some do’s and don’ts of making limited-scope retainers work in a litigation practice.
In the privacy of mediation rooms, I often listen to assertions made by counsel about certain facts, such as soft-tissue injuries suffered in a car crash, and then I ask: How are you going to prove that?
I may as well have asked a question about Heidegger’s thoughts on the revelation of reality. The lack, most of the time, of a satisfactory answer to my question comes from the apocryphal nature of the rules of civil evidence in Canada, and from the dearth of actual trial experience among litigators called to the bar in the last 15 years.
(la version française suit)
So much of the practice of civil litigation is now not about evidence but information. An entire industry called E-Discovery has grown in large firms which has little to do with litigation as it does about searching for dots in complicated constellations of (hoped for) exceptions to the hearsay rule. Parties in large commercial cases are tempted to settle after shuddering at the size of the bill for a round of E-Discovery. Very few of the lawyers involved in such matters actually have much sense of what the case is about. The holy grail is server full of coded productions, whether or not any of it might end up being used by the court as proof of fact or legal theory. Continue reading