June 18, 2024

Obligate Law

Professional Law Makers

Ontario CA defers to lower court in case with awkwardly written commercial contract

2 min read
Ontario CA defers to lower court in case with awkwardly written commercial contract

The catch, however, is that a meeting occurred between ISSC and the municipality before the agreement was signed, and ISSC argued that this was the pre-consultation meeting.

During the lower court hearing, the application judge grappled with questions of grammar and language in the contract (“to” was missing in the awkwardly written four-week time clause) and decided that the meeting was required to have taken place after the contract was signed. Otherwise, it would not make sense to include the Milestone Termination Option in the agreement.

Obolus sought a declaration saying that the agreement was validly terminated. ISSC sought to have the application converted to an action. The application judge refused to convert the application to an action.

The court was split in the decision, with Justice Lorne Sossin and Associate Chief Justice Michal Fairburn in agreement and Justice Kathryn Feldman dissenting. In Sossin’s view, “it was open to the application judge to reach this finding on the record before her. The fact that other evidence in the record about the February 26, 2021, meeting might support a different finding does not lead to a conclusion that the application judge erred in preferring the evidence on which she relied. The application judge’s finding is entitled to deference. As a result, this ground of appeal fails as well.”

Justice Feldman offered this take on the interpretation of the meeting by the lower court judge: “I have had the benefit of reading my colleague’s reasons. I agree that the application judge did not err in refusing to convert the application to an action. I respectfully disagree, however, that the application judge made no error in her interpretation of the Milestone Termination Option. In my view, the interpretation by the application judge was based on a palpable and overriding error of fact regarding the surrounding circumstances, as well as a failure to give effect to the words of the agreement.”

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