DirectCash ATM Management Partnership et al. v. Maurice's Gas & Convenience Inc. et al., 2015 NBCA 36

• Judge: Richard, Green and Baird, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: March 25, 2015
• Jurisdiction: New Brunswick
• Citations: 2015 NBCA 36;(2015), 437 N.B.R.(2d) 292 (CA)

DirectCash ATM v. Maurice's Gas (2015), 437 N.B.R.(2d) 292 (CA);

    437 R.N.-B.(2e) 292; 1140 A.P.R. 292

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Sommaire et texte intégral

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2015] N.B.R.(2d) TBEd. JN.024

Renvoi temp.: [2015] N.B.R.(2d) TBEd. JN.024

DirectCash ATM Management Partnership and DirectCash ATM Processing Partnership (appellants) v. Maurice's Gas & Convenience Inc. and 055655 N.B. Ltd. (respondents)

(90-14-CA; 2015 NBCA 36)

Indexed As: DirectCash ATM Management Partnership et al. v. Maurice's Gas & Convenience Inc. et al.

Répertorié: DirectCash ATM Management Partnership et al. v. Maurice's Gas & Convenience Inc. et al.

New Brunswick Court of Appeal

Richard, Green and Baird, JJ.A.

June 18, 2015.

Summary:

Résumé:

DirectCash ATM Management Partnership entered into two agreements with Maurice's Gas & Convenience Inc. (agreements 024 and 396) and a third agreement with a numbered company (agreement 025). Clause 2.3 of the agreements gave DirectCash a right of first refusal upon expiration of the agreements. Maurice's and the numbered company found a new service provider without giving DirectCash an opportunity to bid on the contracts and notified DirectCash that they would not be renewing the agreements. DirectCash sued for liquidated damages on the basis that Maurice's and the numbered company had breached clause 2.3 of the agreements.

The New Brunswick Court of Queen's Bench, Trial Division, in a decision not reported in this series of reports, held that the numbered company had breached clause 2.3 of agreement 025 and awarded DirectCash damages. With respect to agreements 024 and 396, the court applied the contra proferentem rule, and, having found that there was no "clearly defined obligation" concerning disclosure of a bona fide offer, concluded that Maurice's was not in breach of the agreements. DirectCash appealed the dismissal of its action against Maurice.

The New Brunswick Court of Appeal allowed the appeal and awarded DirectCash damages. DirectCash was entitled to their costs of the trial and the appeal.

Contracts - Topic 3502

Performance or breach - Obligation to perform - Good faith - Exercise of - DirectCash ATM Management Partnership entered into two agreements with Maurice's Gas & Convenience Inc. (agreements 024 and 396) and a third agreement with a numbered company (agreement 025) - Clause 2.3 of the agreements gave DirectCash a right of first refusal upon expiration of the agreements - Maurice's and the numbered company found a new service provider without giving DirectCash an opportunity to bid on the contracts - DirectCash sued for damages - The trial judge held that the numbered company had breached clause 2.3 of agreement 025 - With respect to agreements 024 and 396, the judge applied the contra proferentem rule, and, having found that there was no "clearly defined obligation" concerning disclosure of a bona fide offer, concluded that Maurice's was not in breach of the agreements - The New Brunswick Court of Appeal allowed DirectCash's appeal - The trial judge erred in law when he applied a narrow or restrictive interpretation of clause 2.3 in agreements 024 and 396 - The judge failed to examine the agreements as a whole - Using agreement 025 as a comparator, he defaulted to the contra proferentem principle to construe the clause in favour of Maurice's - That principle should be employed as a last resort measure when all other rules of interpretation had failed - It applied only where contractual provisions were ambiguous - Such was not the case here - Read contextually, it was reasonable to conclude that DirectCash required "specific" disclosure of any other offers received by Maurice's, including details of the terms of the offer such as monetary details - Further, the judge made a reversible error when he relied on agreement 025 as an aid to interpret agreements 024 and 396, contrary to the doctrine of res inter alios acta - In not focusing on the language in each agreement, he ignored the overall objective of clause 2.3 - Further, although there was no allegation of bad faith, there was a subtle overtone that permeated throughout - It would have been easy for Maurice's to have forwarded the "specific terms" of their bona fide offer to DirectCash as requested - Instead, they responded in a capricious fashion, with no regard to the agreement's overarching intent as a whole - To simply rely on their own interpretation of clause 2.3 with no consideration to the true intent behind it was indefensible.

Contracts - Topic 7401

Interpretation - General principles - Intention of parties - The New Brunswick Court of Appeal stated that "... in applying [Creston Moly Corp. v. Sattva Capital Corp. (2014, SCC)], I conclude that contractual interpretation in an ordinary appeal is now primarily a question of mixed fact and law, which involves ascertaining the objective intentions of the parties, through an analysis of their commercial dealings or the 'surrounding circumstances'. These interpretive questions are reviewable on a correctness standard only when there is an extricable question of law. The circumstances under which a question of law can be extricated from the interpretation process are 'rare' ... The Supreme Court identified the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor as possible extricable errors of law." - See paragraph 17.

Contracts - Topic 7406

Interpretation - General principles - Interpretation by context - [See Contracts - Topic 3502 ].

Contracts - Topic 7407

Interpretation - General principles - Whole contract to be considered - [See Contracts - Topic 3502 ].

Contracts - Topic 7415.1

Interpretation - General principles - Good faith - [See Contracts - Topic 3502 ].

Contracts - Topic 7433

Interpretation - Ambiguity - Contra proferentem rule - [See Contracts - Topic 3502 ].

Contracts - Topic 7526

Interpretation - Surrounding circumstances - Commercial setting - [See Contracts - Topic 7401 ].

Evidence - Topic 1133

Relevant facts - Relevance and materiality - Relevance of evidence offered - Third party matters - [See Contracts - Topic 3502 ].

Practice - Topic 8800.1

Appeals - General principles - Duty of appellate court regarding mixed law and fact by a trial judge - [See Contracts - Topic 7401 ].

Practice - Topic 8800.1

Appeals - General principles - Duty of appellate court regarding mixed law and fact by a trial judge - DirectCash ATM Management Partnership sued Maurice's Gas & Convenience Inc. and others for breach of contract - The trial judge applied the contra proferentem rule and dismissed the claims against Maurice's - DirectCash appealed - The New Brunswick Court of Appeal concluded that the question of contractual interpretation was grounded in mixed law and fact - However, there was an extricable error of law in the impugned decision, which resulted in a correctness standard being the applicable standard of review - See paragraph 15.

Practice - Topic 8800.2

Appeals - General principles - Duty of appellate court regarding findings of law - [See Contracts - Topic 7401 and second Practice - Topic 8800.1 ].

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge - Contractual interpretation - [See Contracts - Topic 7401 and second Practice - Topic 8800.1 ].

Cases Noticed:

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633; 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, appld. [para. 1].

Lemay v. Peters (2014), 425 N.B.R.(2d) 336; 1107 A.P.R. 336; 2014 NBCA 59, refd to. [para. 12].

ProSuite Software Ltd. et al. v. Infokey Software Inc. et al. (2015), 368 B.C.A.C. 74; 633 W.A.C. 74; 2015 BCCA 52, refd to. [para. 14].

Do Process LP v. Infokey Software Inc. - see/voir ProSuite Software Ltd. et al. v. Infokey Software Inc. et al.

Canadian National Railway Co. v. Halifax (Regional Municipality) (2014), 353 N.S.R.(2d) 18; 1115 A.P.R. 18; 2014 NSCA 104, refd to. [para. 14].

Linden v. CUMIS Life Insurance Co. (2015), 356 N.S.R.(2d) 288; 1126 A.P.R. 288; 2015 NSCA 20, refd to. [para. 14].

Ariston Realty Corp. v. Elcarim Inc. et al. (2014), 325 O.A.C. 319; 2014 ONCA 737, refd to. [para. 14].

Goreway Total Health Inc. v. Goldbrite Trading Co., [2014] O.A.C. Uned. 769; 2014 ONCA 873, refd to. [para. 14].

Alberta Teachers' Association v. Buffalo Trail Public Schools Regional Division No. 29 (2014), 588 A.R. 179; 626 W.A.C. 179; 2014 ABCA 407, refd to. [para. 14].

First Elgin Mills Developments Inc. v. Romandale Farms Ltd. et al., [2015] O.A.C. Uned. 31; 2015 ONCA 54, refd to. [para. 14].

Webster v. Duncanson et al. (2015), 357 N.S.R.(2d) 199; 1127 A.P.R. 199; 2015 NSCA 29, refd to. [para. 14].

BDO Dunwoody Ltd. v. Bell Canada, [2015] O.A.C. Uned. 16; 2015 ONCA 33, refd to. [para. 14].

Wesbell Networks Inc. v. Bell Canada - see/voir BDO Dunwoody Ltd. v. Bell Canada.

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 15].

Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. et al. (2015), 599 A.R. 363; 643 W.A.C. 363; 2015 ABCA 121, refd to. [para. 15].

Association des parents ayants droit de Yellowknife et al. v. Northwest Territories (Attorney General) et al. (2015), 593 A.R. 180; 637 W.A.C. 180; 2015 NWTCA 2, refd to. [para. 17].

Capital Safe & Lock Service Ltd. et al. v. Steeves et al. (2000), 230 N.B.R.(2d) 117; 593 A.P.R. 117; 2000 NBCA 1, refd to. [para. 18].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 19].

Pharmacie Acadienne de Beresford ltée v. Beresford Shopping Centre Ltd./ltée et al. (2008), 328 N.B.R.(2d) 205; 841 A.P.R. 205; 2008 NBCA 12, refd to. [para. 19].

Robichaud et al. v. Pharmacie Acadienne de Beresford ltée - see/voir Pharmacie Acadienne de Beresford ltée v. Beresford Shopping Centre Ltd./ltée et al.

Bhasin v. Hrynew et al., [2014] 3 S.C.R. 495; 464 N.R. 254; 584 A.R. 6; 623 W.A.C. 6; 2014 SCC 71, refd to. [para. 22].

Canadian National Railway Co. et al. v. Royal & Sun Alliance Insurance Co. of Canada et al., [2008] 3 S.C.R. 453; 381 N.R. 332; 243 O.A.C. 340; 2008 SCC 66, refd to. [para. 23].

McClelland and Stewart Ltd. v. Mutual Life Assurance Co. of Canada, [1981] 2 S.C.R. 6; 37 N.R. 190, refd to. [para. 25].

Confederation Trust Co. v. Duncan et al. (2000), 226 N.B.R.(2d) 277; 579 A.P.R. 277 (C.A.), leave to appeal refused (2001), 267 N.R. 196; 237 N.B.R.(2d) 200; 612 A.P.R. 200 (S.C.C.), refd to. [para. 27].

Hanen v. Cartwright et al., [2007] A.R. Uned. 192; 2007 ABQB 184, affd. (2007), 422 A.R. 218; 415 W.A.C. 218; 2007 ABCA 388, refd to. [para. 27].

Counsel:

Avocats:

Richard J. Scott, Q.C., for the appellants;

Basile Chiasson, Q.C., for the respondents.

This appeal was heard on March 25, 2015, by Richard, Green and Baird, JJ.A., of the New Brunswick Court of Appeal. Baird, J.A., delivered the following reasons for judgment, in both official languages, for the court on June 18, 2015.