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THE ADVOCATE V O L . 7 5 P A R T 2 M A R C H 2 0 1 7 191 service) for which termination is only available for the provider for the default of the customer, is there an implied term the provider may terminate on reasonable notice? No. Energy Fundamentals Group Inc. v. Veresen Inc.18 In an option to acquire twenty per cent of a limited partnership is there an implied term that financial information relating to the limited partnership will be provided to the optionee in order to allow the optionee to decide whether to exercise the option? Yes. The two United Kingdom cases are also interesting examples of the consideration of whether a term should be implied: Belize Telecom19 In the articles of a company entitling a major shareholder to appoint directors is there an implied term that the directors would be removed if the shareholder lost its shareholding? Yes. Marks and Spencer20 In a lease requiring rent to be paid quarterly is there an implied term that the rent will be pro-rated if the tenant elects under the lease to terminate the term one month into the quarter? No. LESSONS TO BE DRAWN So what can we take from all this? Courts routinely imply terms because parties do not agree on, or have not considered, how certain events will be dealt with. This is often because the parties do not think about all the possible events that might occur, sometimes even what in hindsight is obvious, although sometimes parties deliberately ignore dealing with issues when negotiating a contract because they are too obvious, too controversial or too unlikely to occur. What is important to remember is that each of the court decisions is driven by the facts, or more accurately the court’s assessment of the facts. For example in Zeitler,21 as part of a matrimonial settlement the wife had transferred her interest in a property to her husband. On his death years later a capital gain was triggered which, it was claimed, was attributable to the wife under a provision of the Income Tax Act.22 The B.C. Court of Appeal observed: There was no need for the contract to be explicit on that topic. With or without knowledge of the attribution provision in the Income Tax Act, it seems to me to be obvious that, if asked at the time they formed the contract which of them was to be responsible for the tax, both parties would have said that Mr. Zeitler would be responsible. He acquired both the legal and the beneficial interest in the property. He was entitled to the gain for his sole use absolutely.23


March Pages 2017
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