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Contract - Interpretation - Sattva (3). J. Jenkins and Son Landscape Contractors Limited v. Iron Trio Inc.
In J. Jenkins and Son Landscape Contractors Limited v. Iron Trio Inc. (Ont Divisional Ct, 2025) the Divisional Court considered an appeal, here in a fact issue about the volume of a product delivered.
Here the court considers 'contractual interpretation', citing Sattva:[43] Section 34(a) of the Sale of Goods Act, R.S.O. 1990, c. S.1., provides that a buyer and seller of goods shall be deemed to have accepted the goods when the buyer intimates to the seller that the goods have been accepted. The appellant asserts that, in accordance with the parties’ contract, the respondent accepted each delivery, including the quantities of soil represented as having been delivered, when its employee on site signed the corresponding delivery ticket. This was how the parties had done business with each other for a decade. In the soil business, it was also commercially sensible to be paid per load, and to specify that the delivery tickets are conclusive.
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[45] The trial judge did not, in my view, rewrite the parties’ contract. He referred to the “black letter” approach to the interpretation of contract law having been replaced by a more contextualised and pragmatic approach. That view is consistent with the Supreme Court of Canada’s statement that the interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction, and that the overriding concern is to determine "the intent of the parties and the scope of their understanding": Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at para. 47. . ID Inc. v. Toronto Wholesale Produce Association
In ID Inc. v. Toronto Wholesale Produce Association (Ont CA, 2025) the Ontario Court of Appeal allows an appeal, here from trial orders of a declaration of breached contract and damages.
Here the court considers basic contract interpretation:[30] Generally, a trial judge’s interpretation of a contract is entitled to deference on the basis that the interpretation of a contract involves a question of mixed fact and law. As Rothstein J. said in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at para. 50: “Contractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix.”
[31] While reaching that conclusion, Rothstein J. also repeated certain basic principles involved in the interpretation of a contract. Two of those basic principles should be repeated in the context of this case. First, a contract must be read as a whole “giving the words used their ordinary and grammatical meaning”: Sattva, at para. 47. Second, the interpretation of a contract “must always be grounded in the text”: Sattva, at para. 57. . JPM Trade Capital Inc. v. Blanchard
In JPM Trade Capital Inc. v. Blanchard (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal, this from a "judgment in favour of the respondent in the amount of $1,100,000 plus interest and costs."
Here the court considers the role of 'objectivity' in determining the intention of parties, as a matter of contractual interpretation:[10] In Sattva, the Supreme Court changed the law on the applicable standard of review for interpretation of a contract. Rothstein J. explained at para. 47:[T]he interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine “the intent of the parties and the scope of their understanding”.... To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning:No contracts are made in a vacuum: there is always a setting in which they have to be placed.… In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.
(Reardon Smith Line, at p. 574, per Lord Wilberforce) [11] Just this year, in Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20, 492 D.L.R. (4th) 389, the Supreme Court reminded courts that ascertaining the objective intention of the parties to a contract is the prevailing goal of contractual interpretation and is an “inherently fact specific” exercise: at para. 28. The Court stated at para. 27: “This Court’s jurisprudence firmly establishes that questions of contractual interpretation, which involve questions of mixed fact and law, are ordinarily afforded deference on appellate review.” . 1797472 Ontario Inc. v. Independent Electricity System Operator
In 1797472 Ontario Inc. v. Independent Electricity System Operator (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal, here engaging contract interpretation issues in an electricity supply context.
Here the court considers some basics of contract interpretation:[11] The correctness standard applies in the of review of the application judge’s interpretation of s. 2.1(b) of standard form FIT 1 Contracts: Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23, at para. 4.
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[13] The application judge set out the relevant principles of contract interpretation in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 47-48; Prism Resources Inc. v. Detour Gold Corporation, 2022 ONCA 326, 162 O.R. (3d) 200, at para. 16; Ledcor Construction, at paras. 31-32; and EPCOR Electricity Distribution Ontario Inc. v. Municipal Electric Association Reciprocal Insurance Exchange, 2022 ONCA 514, at para. 55. She noted that the contractual provisions at issue must not be read in isolation but considered “in harmony with the rest of the contract in light of its purposes and commercial context.” As she correctly observed, the “relevant surrounding context is generally considered to be that which was present at the time the contract was made, not subsequently”: Prism Resources, at para. 16(iii). . Preston v. Cervus Equipment Corporation
In Preston v. Cervus Equipment Corporation (Ont CA, 2024) the Ontario Court of Appeal allowed an appeal, here involving the interpretation of a settlement release and agreement emanating from a wrongful dismissal claim:[12] In regard to the interpretation of the Settlement Documents, the motion judge relied on Corner Brook (City) v. Bailey, 2021 SCC 29, [2021] 2 S.C.R. 540, at para. 20, as follows:As noted in Corner Brook, a release is an agreement and is to be interpreted in accordance with the rules of contractual interpretation. Like any agreement, the goal of contractual interpretation is to ascertain the objective, mutual intentions of the parties at the time of the formation of the Release. This includes having regard to the factual matrix or surrounding circumstances. Of course, the surrounding circumstances are intended as an interpretative aid and are not to overwhelm the words of the Release. The surrounding circumstances are also not to be used to deviate from the text to effectively create a new agreement ... . [13] The motion judge also cited Corner Brook, at para. 35, for the proposition, “[s]ometimes the ordinary meaning of the words and the surrounding circumstances come into tension, and courts must decide whether to rely on the surrounding circumstances to refine the meaning of the words, or whether doing so would impermissibly overwhelm the words of the agreements, in which case the words must override.”
[14] Further, he took guidance from the following statement in Corner Brook, at para. 38:For these reasons, releases may tend to lead to dissonance between the words of the agreement on their face and what the parties seem to have objectively intended based on the surrounding circumstances, with greater regularity than other types of contracts… In resolving this tension, courts can be persuaded to interpret releases narrowly more so than other types of contracts, not because there is any special rule of interpretation that applies to releases, but simply because the broad wording of releases can conflict with the circumstances, especially for claims not in contemplation at the time of the release. The broader the wording of the release, the more likely this is to be so. ....
Analysis
[20] The motion judge correctly cited the applicable law, noting that pursuant to Corner Brook, releases are to be interpreted in the same manner mandated by Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633. He also correctly observed that the factual matrix of the case could not overwhelm the ordinary meaning of the words used in the release.
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[23] In our view, the motion judge made three extricable legal errors in his analysis. First, he allowed his interpretation of the factual matrix to overwhelm the actual wording of Settlement Documents and effectively rewrote the contract between the parties. In this regard, we do not accept his conclusion that the statement that the release of stock units applied only to stock or share awards which have either not been awarded or not been redeemed. The parties could have specified this result but chose not to do so. Instead, they used the following specific language: “I further declare that I have no entitlement under or from, or any claim of any nature or kind against the Releasees in respect of, any bonus, share award, stock option, deferred share or similar incentive plan offered by or on behalf of the Releasees.”
[24] Second, we find that the motion judge’s reliance on the Supreme Court’s guidance in Corner Brook to the effect that broad releases may be narrowly construed was misplaced in the circumstances of the case at bar. While it is true that the Settlement Documents included a broad release of claims, the language regarding the release to claims for stock options and other share awards was specific.
[25] Third, it is not the province of a judge interpreting minutes of settlement to evaluate the economic benefits conferred under the settlement, absent a party being under disability.
[26] In our view, the words of the Settlement Documents should be given their ordinary meaning, which included a release of any payments to be made under the Plan. In this regard we note the following from the Minutes of Settlement:The entitlements set out in these Minutes of Settlement, including the Settlement Payment, are inclusive of any and all entitlements whatsoever that Cervus may owe, or which may have accrued, to Mr. Preston pursuant to statute, contract, common law or otherwise. [27] Clearly the payment of the settlement funds was intended to cover, among other things, all claims and entitlements owed or accrued pursuant to any contract, including Mr. Preston’s employment contract and the Plan. It is evident looking at the Settlement Documents that they were intended to be final and bring an end to the parties’ relationship and obligations.
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