WCI Waste Conversion Inc. v. ADI International Inc., (2011) 309 Nfld. & P.E.I.R. 1 (PEICA)

• Judge: Jenkins, C.J.P.E.I., Murphy and McQuaid, JJ.A.
• Case Date: July 13, 2011
• Jurisdiction: Prince Edward Island
• Citations: (2011), 309 Nfld. & P.E.I.R. 1 (PEICA)

WCI Waste v. ADI Intl. (2011), 309 Nfld. & P.E.I.R. 1 (PEICA);

    962 A.P.R. 1

MLB headnote and full text

Temp. Cite: [2011] Nfld. & P.E.I.R. TBEd. JL.024

ADI International Inc. (appellant) v. WCI Waste Conversion Inc. (respondent)

(S1-AD-1168; 2011 PECA 14)

Indexed As: WCI Waste Conversion Inc. v. ADI International Inc.

Prince Edward Island Court of Appeal

Jenkins, C.J.P.E.I., Murphy and McQuaid, JJ.A.

July 13, 2011.

Summary:

Prince Edward Island's provincial crown corporation responsible for waste management, Island Waste Management Corporation (IWMC), issued a public Request For Proposals (RFP) to prequalify professional design firms and contractors to provide an enclosed compost facility capable of handling 30,000 metric tonnes of material for composting annually and converting into Category "A" compost. WCI Waste Conversion Inc. (WCI) was interested in responding to the pre-qualification RFP. Kennedy and Kerrigan, the company's principal shareholders and employees, were both engineers. Because WCI did not have the necessary financial capacity to obtain the required bonding for the project, they invited ADI International Inc. (ADI) to participate. ADI acknowledged that it had no composting expertise but confirmed its interest in the project, following which a prequalification submission prepared principally by WCI was submitted jointly to IWMC. Their submission was successful and they went on to respond jointly to IWMC's formal RFP to "design-build-operate" a central compost facility. The bid was successful, resulting in a design-build contract for $17,575,000 being awarded by IWMC. IWMC also agreed to enter into a separate five-year operating agreement, with WCI being the operator. However, with ADI being responsible for the bonding of the project, ADI became the named principal in the contract with IWMC, and WCI became a subcontractor to ADI. The facility was constructed and began accepting organic material in mid-July 2002. Less than five months later, ADI terminated its operating agreement with WCI and took over operation of the facility itself. At the same time, ADI terminated the design-build contract with WCI. Several actions and cross-actions involving numerous other parties were commenced and ultimately consolidated. The pleadings now reflected claims only between ADI and WCI. WCI claimed $2,237,062 for ADI's alleged breach of the operating contract and a further $2,923,981 for ADI's alleged breach of the design-build contract, for a total claim of $5,161,043 plus interest and costs. ADI claimed against WCI for both negligence and breach of contract for a total claim of $5,639,697 plus interest and costs.

The Prince Edward Island Supreme Court, Trial Division, in a decision reported at 283 Nfld. & P.E.I.R. 254; 873 A.P.R. 254, allowed WCI's action. The court assessed WCI's damages and deducted several items owing to ADI for a total damage award of $4,306,339, plus interest and costs. The court dismissed ADI's action and counterclaim. ADI appealed.

The Prince Edward Island Court of Appeal, McQuaid, J.A., dissenting, allowed the appeal in part.

Editor's note: An application to have a mechanic's lien discharged was reported as ADI International Inc. v. WCI Waste Conversion Inc. et al. and can be found at 221 Nfld. & P.E.I.R. 298; 661 A.P.R. 298.

Building Contracts - Topic 686

The contract - Oral terms - Oral terms collateral to written agreement - WCI and ADI (the parties) responded jointly to a formal Request For Proposals - They were successful, resulting in a design-build contract for $17,575,000 and a separate operating agreement being signed in July 2001- The parties signed an initial memorandum of understanding (MOU) in May 2001 and a further MOU in August 2001 - Before the August MOU was signed, the parties became aware that certain items that had been budgeted for with PST in the contract, were actually PST exempt - Around this time, ADI was proposing revisions to the MOU - WCI's compensation amount was reduced by $441,660 - While the May MOU was based on WCI being compensated for their scope of work "in accordance with the pricing provided by WCI during preparation of the proposal submitted on March 30, 2001", ADI revised the compensation clause to read: "Compensation in the amount of $5,324,918.00 plus provincial sales tax and HST as applicable (in accordance with pricing provided by WCI to ADI during preparation of the proposal submitted on March 30, 2001 of $5,766,578.00 less $441,660.00 credit for ..." - WCI claimed, inter alia, its portion of the windfall that arose because provincial sales tax was not payable - The trial judge allowed WCI's claim - The phrase "as applicable" was ambiguous and to be interpreted against ADI - Alternatively, the parties concluded a collateral contract at the time of executing the August MOU - Kennedy testified that he was not comfortable signing the revised MOU on behalf of WCI because of the words "as applicable" - After discussions, Beattie (acting for ADI) verbally agreed that the tax savings would be shared pro rata to the parties' scope of work - Based on that agreement, Kennedy agreed to sign the August MOU - The Prince Edward Island Court of Appeal held that the trial judge made no error in applying the contra proferentem rule against ADI or in finding that there was a collateral contract - See paragraphs 108 to 125.

Contracts - Topic 3502

Performance or breach - Obligation to perform - Good faith - Exercise of - The Prince Edward Island Court of Appeal noted that the question of whether contracts should be interpreted as requiring good faith in the performance of contractual obligations was very unsettled - There was broad acceptance that a duty of good faith performance existed in some particular circumstances, which included the exercise of discretionary power - See paragraph 104.

Contracts - Topic 3502

Performance or breach - Obligation to perform - Good faith - Exercise of - WCI and ADI responded jointly to IWMC's formal Request For Proposals to "design-build-operate" a central compost facility - They were successful, resulting in a design-build contract for $17,575,000 - IWMC also agreed to enter into a separate five-year operating agreement, with WCI being the operator - However, with ADI being responsible for the bonding of the project, ADI became the named principal in the contract with IWMC, and WCI became a subcontractor to ADI - The facility was constructed and began accepting organic material in mid-July 2002 - Less than five months later, ADI terminated its operating agreement with WCI and took over operation of the facility itself - At the same time, ADI terminated the design-build contract with WCI - The trial judge looked at the circumstances and conduct of the parties as a whole and held that WCI did not repudiate the joint venture contract with ADI - WCI's statements or conduct would not have caused a reasonable person to conclude that WCI no longer intended to be bound by its contractual obligations - WCI had worked diligently under difficult circumstances to meet their contractual obligations and they were continuing to do so at the time they were alleged to have repudiated the contract - WCI was entitled to anticipate that the specific provisions of the joint venture contract that it signed would be applied honestly, fairly, and in good faith - That did not happen - The Prince Edward Island Court of Appeal held that the trial judge was entitled to imply a duty of good faith from the terms of a memorandum of understanding between the parties - ADI was in a position where it could exercise its discretion, and WCI was correspondingly dependent on that discretion being exercised in good faith - Further, the trial judge made no reviewable error in holding that WCI did not repudiate the contract - See paragraphs 96 to 107.

Contracts - Topic 3661

Performance or breach - Repudiation - General - The Prince Edward Island Court of Appeal stated that "... repudiation is not lightly to be inferred from a party's conduct, where prior to the time for performance that party has repeated its intention to carry out the contract" and "... one must inquire whether deficiencies are capable of being remedied in a period that would not destroy the commercial purpose of the contract ..." - See paragraph 102.

Contracts - Topic 3664

Performance or breach - Repudiation - What constitutes repudiation - [See second Contracts - Topic 3502 ].

Contracts - Topic 7426

Interpretation - Ambiguity - What constitutes ambiguity - [See Building Contracts - Topic 686 ].

Contracts - Topic 7433

Interpretation - Ambiguity - Contra proferentem rule - [See Building Contracts - Topic 686 ].

Damage Awards - Topic 1622

Contracts - Joint ventures - Breach of - A trial judge held that the parties had decided that their contractual relationship would be based on joint venture principles - The trial judge held that the defendant was not entitled to terminate the plaintiff's design-build subcontract and operating agreement for a compost facility - The defendant appealed - With respect to damages for compost sales, the defendant submitted that the trial judge made reversible errors when he: (i) accepted the opinion of MacPherson FCA on its face, despite serious inconsistencies and errors and key assumptions being inaccurate, inflated, and unsubstantiated by any evidence; and (ii) by ignoring in its entirety the Dunstan, C.A., opinion, which provided relevant and material evidence - The Prince Edward Island Court of Appeal held that there was no evidence upon which the trial judge could base an opinion that there would be revenue from "compost sales" of $1,604,673 over five years - The court reduced this portion of the award to $373,000 - See paragraphs 164 to 207.

Equity - Topic 3606

Fiduciary or confidential relationships - General principles - What constitutes a fiduciary relationship - At issue on an appeal was whether a trial judge made a reversible error when he determined that the defendant was not entitled to terminate the plaintiff's design-build subcontract and operating agreement, and that the plaintiff did not repudiate its contracts with the defendant - Also at issue, inter alia, was whether the trial judge's determinations regarding joint venture were based on a reversible error, and if so, what effect such error had on the ultimate issues of liability and damages - The Prince Edward Island Court of Appeal rejected the defendant's argument that the trial judge erred in imposing fiduciary duties on it - The evidence was such that the trial judge was entitled to find that the defendant had scope for the exercise of discretion, which it could exercise so as to affect the plaintiff's legal or practical interests, and the plaintiff was peculiarly vulnerable to the defendant's exercise of its discretion - See paragraphs 44 to 50.

Equity - Topic 3650

Fiduciary or confidential relationships - Breach of fiduciary relationship - Joint ventures - WCI and ADI (the parties) responded jointly to a formal Request For Proposals - They were successful, resulting in a design-build contract for $17,575,000 and a separate operating agreement being signed in July 2001- The parties signed an initial memorandum of understanding (MOU) in May 2001 and a further MOU in August 2001 - Before the August MOU was signed, the parties became aware that certain items that had been budgeted for with PST in the contract, were actually PST exempt - Around this time, ADI was proposing revisions to the MOU - WCI's compensation amount was reduced by $441,660 - While the May MOU was based on WCI being compensated for their scope of work "in accordance with the pricing provided by WCI during preparation of the proposal submitted on March 30, 2001", ADI revised the compensation clause to read: "Compensation in the amount of $5,324,918.00 plus provincial sales tax and HST as applicable (in accordance with pricing provided by WCI to ADI during preparation of the proposal submitted on March 30, 2001 of $5,766,578.00 less $441,660.00 credit for ..." - The Prince Edward Island Court of Appeal stated that the trial judge referred to the joint venture proviso in the August MOU regarding the PST issue - He found that ADI showed neither loyalty regarding a common interest nor good faith when it attempted to convert monies earned in respect to WCI's portion of the contract for its own use; and that by adding the words "as applicable" ADI failed to fully disclose to WCI the impact ADI intended to derive from that change - The court stated that the trial judge was entitled to make that finding - He had already decided that the parties had expressed their agreement that their working relationship would be based on the principles of a joint venture relationship - Application of particular fiduciary obligations and related findings of discretion, vulnerability, and appropriation became for the trial judge mostly questions of fact - There was ample evidence upon which the trial judge could base his conclusion - See paragraph 121.

Equity - Topic 3993

Fiduciary or confidential relationships - Practice - Pleadings - The defendant (ADI) contended that the plaintiff (WCI) had pleaded neither joint venture nor fiduciary duty and therefore any claim based on either should fail - However, both ADI and WCI pleaded the contract, one provision of which declared that their relationship would be governed by the general principles applicable to joint ventures - At the end of the trial, WCI moved to amend the pleadings under rule 26.01 which provided that "On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment." - ADI opposed the motion, claiming prejudice as a result of the timing - WCI maintained that there was no prejudice and that ADI was aware from WCI's pretrial brief and possibly from its pretrial conference memorandum that WCI was relying on this aspect of the contract - The trial judge held that the issue was already before the court by virtue of the parties having pleaded the contract containing a provision relating to the general principles applicable to joint ventures (which would include a fiduciary duty) - Alternatively, the court would have granted the motion because there could be no prejudice to ADI because it was clear that WCI would be relying on that aspect of the contract - The Prince Edward Island Court of Appeal found no reversible error in this disposition - See paragraphs 51 to 55.

Joint Ventures - Topic 602

Creation of relation - General - Joint venture agreement - A memorandum of understanding (MOU) between ADI and WCI provided that "For the purpose of the Proposal, ADI will be the contracting party, with WCI acting as a subcontractor. This arrangement is necessary since ADI will provide the bonding as stipulated by the Waste Authority [IWMC]. However, it is intended that the actual working relationship between ADI and WCI will be based on the general principles of a joint venture agreement as summarized below:" - The wording was incorporated into subsequent documents - The trial judge held that as between themselves, the parties agreed to be joint venturers even though with respect to IWMC they agreed to present ADI as the contractor and WCI as the subcontractor in order to meet the requirements of the bid process - The characterization of their respective relationships with IWMC was not determinative of the legal relationship between themselves - The parties agreed to be bound by the general principles applicable to joint ventures - They were free to do so - It was not for the courts to ignore those intentions and seek to identify or create a different arrangement - The Prince Edward Island Court of Appeal held that the trial judge did not err in interpreting the MOU - See paragraphs 24 to 43.

Joint Ventures - Topic 1402

Relations between parties - General - Fiduciary - The Prince Edward Island Court of Appeal stated that "Care must be exercised in determining whether a particular joint venture relationship gives rise to fiduciary duties, and if so, then which fiduciary duties should be imposed. The joint exploration of a business opportunity is viewed in law as giving rise to a quasi-trust relationship; however, while partnership relationships are viewed as fiduciary per se so that fiduciary duties are automatically engaged, for joint ventures they are not automatically engaged, but they may be engaged, depending on the circumstances." - See paragraph 47.

Joint Ventures - Topic 1402

Relations between parties - General - Fiduciary - [See Equity - Topic 3606 and Equity - Topic 3650 ].

Practice - Topic 2105

Pleadings - Amendment of pleadings - Prejudice or presumed prejudice - What constitutes - [See Equity - Topic 3993 ].

Practice - Topic 2134

Pleadings - Amendment of pleadings - At trial - After evidence taken - [See Equity - Topic 3993 ].

Practice - Topic 7061

Costs - Party and party costs - Counsel fees - Increased or decreased fee (incl. premium) - A trial judge held that the parties (WCI and ADI) had entered into a joint venture agreement respecting a compost facility, which ADI had breached - Both parties had claimed sums in the amount of $5 million - WCI recovered a net sum of $4,306,339 - WCI also recovered costs, including increased counsel fees - The defendant appealed - The Prince Edward Island Court of Appeal allowed the appeal in part, reducing damages for "compost sales" from $1,604,673 over five years to $373,000 - The court noted that while the amounts preserved and successfully appealed were both substantial, most of the appeal case was concentrated on liability and related issues - The court awarded WCI 90% of its partial indemnity costs on appeal - The court did not disturb the trial judge's costs award - He had presided over a lengthy and complex trial - While ADI had successfully challenged the damages assessment on the operating agreement, it remained partially intact - While amounts sought and recovered were factors for the trial judge, and matters which could have reasonably been expected to result in some adjustment on appeal, his reasons on costs advised that he considered the complexity of reconstructing the parties' relationship and obtaining an understanding of the composting facility to be important - He also awarded some additional costs to compensate WCI for incremental counsel attendances that he attributed to ADI's lack of organization at trial - See paragraphs 208 and 209.

Practice - Topic 8327.6

Costs - Appeals - Costs of appeal - Party and party or partial indemnity basis - [See Practice - Topic 7061 ].

Practice - Topic 8800

Appeals - General principles - Duty of appellate court regarding findings of fact - At issue on an appeal was whether a trial judge made a reversible error when he determined that the defendant was not entitled to terminate the plaintiff's design-build subcontract and operating agreement, and that the plaintiff did not repudiate its contracts with the defendant - Also at issue was whether the trial judge's determinations regarding joint venture were based on a reversible error, and if so, what effect such error had on the ultimate issues of liability and damages - Grounds of appeal regarding entitlement to PST savings and various assessments of damages for breach of the design-build subcontract and the operating agreement involved discrete considerations - The Prince Edward Island Court of Appeal discussed the applicable standards of review - See paragraphs 1 to 19.

Practice - Topic 8800.1

Appeals - General principles - Duty of appellate court regarding findings of mixed law and fact by a trial judge - [See Practice - Topic 8800 ].

Practice - Topic 8800.2

Appeals - General principles - Duty of appellate court regarding findings of law - [See Practice - Topic 8800 ].

Practice - Topic 8802

Appeals - General principles - Duty of appellate court regarding damage awards by a trial judge - [See Damage Awards - Topic 1622 and Practice - Topic 8800 ].

Cases Noticed:

Housen v. Nikolaisen et al. (2002), 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [paras. 6, 235].

H.L. v. Canada (Attorney General) et al. (2005), 333 N.R. 1; 262 Sask.R. 1; 347 W.A.C. 1; 2005 SCC 25, refd to. [para. 6].

N.R. v. B.B. et al. (2009), 385 N.R. 85; 266 B.C.A.C. 1; 449 W.A.C. 1; 2009 SCC 10, refd to. [para. 6].

Morin v. Board of Education of Regional Administrative Unit No. 3 (2002), 212 Nfld. & P.E.I.R. 69; 637 A.P.R. 69; 2002 PESCAD 9, refd to. [para. 7].

Croken v. Kennedy, [2008] Nfld. & P.E.I.R. Uned. 23; 2008 PESCAD 8, refd to. [para. 7].

Weeks v. O'Connor - see Weeks v. Weeks.

Weeks v. Weeks (2009), 286 Nfld. & P.E.I.R. 78; 883 A.P.R. 78; 2009 PECA 13, refd to. [para. 7].

Harris v. Beck Estate (2009), 284 Nfld. & P.E.I.R. 29; 875 A.P.R. 29; 2009 PECA 8, refd to. [para. 7].

Ayangma v. French School Board et al. (2010), 300 Nfld. & P.E.I.R. 152; 927 A.P.R. 152; 2010 PECA 16, refd to. [para. 7].

Double N Earthmovers Ltd. v. Edmonton (City) et al. (2005), 363 A.R. 201; 343 W.A.C. 201; 2005 ABCA 104, refd to. [paras. 9, 232].

P.E.I. Lending Agency v. McCain Produce Inc. (2010), 294 Nfld. & P.E.I.R. 272; 908 A.P.R. 272; 2010 PECA 4, refd to. [paras. 9, 232].

White v. E.B.F. Manufacturing Ltd. et al. (2005), 239 N.S.R.(2d) 270; 760 A.P.R. 270; 2005 NSCA 167, refd to. [para. 9].

MacDougall v. MacDougall (2005), 205 O.A.C. 216 (C.A.), refd to. [para. 11].

Dow Chemical Canada Inc. v. Shell Chemicals Canada Ltd. et al. (2010), 477 A.R. 112; 483 W.A.C. 112; 2010 ABCA 126, leave to appeal refused (2010), 413 N.R. 389 (S.C.C.), refd to. [paras. 12, 234].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201 (C.A.), folld. [para. 13].

Woelk v. Halvorson, [1980] 2 S.C.R. 430; 33 N.R. 232; 24 A.R. 620, refd to. [para. 19].

Graham v. Central Mortgage & Housing Corp. and Bras D'Or Construction Ltd. (1973), 13 N.S.R.(2d) 183; 9 A.P.R. 183; 43 D.L.R.(3d) 686 (T.D.), refd to. [paras. 38, 258].

Dover Financial Corp. v. Sharpe (W.K.) and Son Contractors Ltd. et al. (1996), 147 N.S.R.(2d) 186; 426 A.P.R. 186 (C.A.), refd to. [para. 40].

Design Services Ltd. et al. v. Canada (2006), 352 N.R. 157; 2006 FCA 260, dist. [para. 41].

Cadbury Schweppes Inc. et al. v. FBI Foods Ltd. et al., [1999] 1 S.C.R. 142; 235 N.R. 30; 117 B.C.A.C. 161; 191 W.A.C. 161, refd to. [paras. 43, 273].

Eli Lilly & Co. et al. v. Novopharm Ltd. et al., [1998] 2 S.C.R. 129; 227 N.R. 201, refd to. [para. 43].

Wonsch Construction Co. et al. v. Danzig Enterprises Ltd. et al. (1990), 42 O.A.C. 195; 75 D.L.R.(4th) 732; 1990 CarswellOnt 135 (C.A.), refd to. [paras. 44, 273].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57, refd to. [para. 48].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1, refd to. [paras. 48, 291].

McKenna's Express Ltd v. Air Canada (1992), 102 Nfld. & P.E.I.R. 185; 323 A.P.R. 323; 1992 CanLII 2849 (P.E.I.T.D.), refd to. [paras. 92, 299].

Standard Precast Ltd. v. Dywidag Fab Con Products Ltd., [1989] B.C.J. No. 129 (C.A.), refd to. [para. 92].

McBride v. Johnston, [1962] S.C.R. 202, refd to. [para. 102].

Gateway Realty Ltd. v. Arton Holdings Ltd. and LaHave Developments Ltd. (No. 3) (1991), 106 N.S.R.(2d) 180; 288 A.P.R. 180; 1991 CarswellNS 320 (T.D.), refd to. [paras. 103, 294].

Mesa Operating Limited Partnership v. Amoco Canada Resources Ltd. (1994), 149 A.R. 187; 63 W.A.C. 187 (C.A.), appld. [para. 104].

Morin v. Board of School Trustees of Regional Administrative Unit No. 3 (1995), 125 Nfld. & P.E.I.R. 211; 389 A.P.R. 211 (P.E.I.C.A.), refd to. [para. 122].

BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241, refd to. [para. 243].

UAP Inc. v. Oak Tree Auto Centre Inc. (1997), 149 Nfld. & P.E.I.R. 313; 467 A.P.R. 313 (P.E.I.C.A.), refd to. [para. 258].

Visagie et al. v. TVX Gold Inc. (2000), 132 O.A.C. 231; 187 D.L.R.(4th) 193 (C.A.), refd to. [para. 266].

Blue Line Hockey Acquisition Co. et al. v. Orca Bay Hockey Limited Partnership et al., [2008] B.C.T.C. Uned. 985; 2008 BCSC 27, affd. (2009), 266 B.C.A.C. 71; 449 W.A.C. 71; 2009 BCCA 34, leave to appeal refused (2009), 400 N.R. 386; 286 B.C.A.C. 319; 484 W.A.C. 319 (S.C.C.), refd to. [para. 273].

Tercon Contractors Ltd. v. British Columbia (Minister of Transportation and Highways, [2010] 1 S.C.R. 69; 397 N.R. 331; 281 B.C.A.C. 245; 475 W.A.C. 245; 2010 SCC 4, refd to. [para. 290].

Transamerica Life Canada Inc. et al. v. ING Canada Inc., [2003] O.A.C. Uned. 565; 68 O.R.(3d) 457 (C.A.), refd to. [para. 293].

Greenberg v. Montreal Trust Co., Meffert and Melfi (1985), 9 O.A.C. 69; 18 D.L.R.(4th) 548 (C.A.), refd to. [para. 300].

Mesa Operating Limited Partnership v. Amoco Canada Resources Ltd.(1992), 129 A.R. 177 (Q.B.), affd. (1994), 149 A.R. 187; 63 W.A.C. 187; 19 Alta. L.R.(3d) 38 (C.A.), refd to. [para. 301].

LeMesurier v. Andrus (1986), 12 O.A.C. 299; 25 D.L.R.(4th) 424 (C.A.), refd to. [para. 301].

Authors and Works Noticed:

Chitty on Contracts (30th Ed. 2008), vol. 2, para. 37-017 [para. 40].

Ellis, Mark Vincent, Fiduciary Duties in Canada, c. 13, pp. 13-2 to 13-4 [para. 48].

Fridman, Gerald Henry Louis, The Law of Contract in Canada (5th Ed. 2006), pp. 757, 758, 759 [para. 202].

Goldsmith, Immanuel, and Heintzman, Thomas G., Canadian Building Contracts (4th Ed. 1988) (2010 Looseleaf Supp.), paras. 1, § 1(a)(i)(H) [para. 40]; 5, § 1(d) [para. 70].

Hall, Geoff R., Canadian Contractual Interpretation Law (1st Ed. 2007), c. 2 [para. 43]; c. 9, pp. 289, 290 [para. 104]; pp. 107, 108, 109 [para. 11]; §§ 2.8 [para. 37]; 2.9 [para. 119]; 3.2 [para. 37]; 3.15 [para. 10].

McCamus, John D., The Duty of Good Faith Contractual Performance at Common Law (2000), generally [para. 301].

O'Byrne, Shannon Kathleen, The Implied Term of Good Faith and Fair Dealing: Recent Developments (2007), 86 Can. Bar Rev. 193, generally [para. 290].

Williston, Samuel, and Jaeger, W.H.E., Contracts (3rd Ed. 1959), generally [para. 38].

Counsel:

Kevin J. Kiley and Michael G. Drake, for the appellant;

James W. Gormley, Q.C., and J. Michael P. McGonnell, for the respondent.

This appeal was heard at Charlottetown, P.E.I., on November 15-19 and 22, 2011, by Jenkins, C.J.P.E.I., Murphy and McQuaid, JJ.A., of the Prince Edward Island Court of Appeal. The Court of Appeal delivered the following decision on July 13, 2011, which included the following opinions:

Jenkins, C.J.P.E.I. (Murphy, J.A., concurring) - see paragraphs 1 to 210;

McQuaid, J.A., dissenting - see paragraphs 211 to 323.