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192 V O L . 7 5 P A R T 2 M A R C H 2 0 1 7 THE ADVOCATE In Shaw Cablesystems24 the customer was the Canadian Legion Memorial Housing Foundation, which operated two senior citizens’ homes. The contract provided a mechanism for price increases but, even so, the rates were well below current rates being charged by Shaw. The Manitoba Court of Appeal concluded: No doubt the individual occupants of the units want the service to continue. In truth, the company Shaw does not wish to terminate the service, but merely use the power of termination to compel the customers to pay a higher fee. I do not think a termination clause should be implied for the purpose of allowing the company to compel renegotiation of the contract terms. All these circumstances lead to the conclusion that the agreement does not require the implication of a further term to give it efficacy. Would the outcome have been different if the cable company had been a small local operation and the customer a national landlord owning a number of luxury apartment blocks? In the cases listed above it is not clear from the judgments whether the issue for which an implied term was sought had been overlooked by the parties or ignored. An overlooked issue is different from an ignored issue. An ignored issue is one to which one or both parties have turned a blind eye. It therefore becomes a form of Russian roulette when one or both parties gamble that an ignored issue will never arise but if it does they will leave it to the courts to sort out. If a term is to be implied for “business efficacy”, it is from the “objective” perspective of the two contracting parties, not the perspective of a “reasonable” bystander. However, the test for determining the “business” question, as articulated in Belize Telecom, is somewhere between an objective and a subjective test: “in considering what the instrument would have meant to a reasonable person who had knowledge of the relevant background, one assumes the notional reader will take into account the practical consequences of deciding that it means one thing or the other.”25 While expressed differently, the test in Canada seems to take a similar approach: again, as quoted earlier from M.J.B. Enterprises, “what is important … is a focus on the intentions of the actual parties. A court, when dealing with terms implied in fact, must be careful not to slide into determining the intentions of reasonable parties.”26 In each test the court is to focus on the circumstances of the parties to the contract in the light of the surrounding circumstances. In Canada under the approach in M.J.B. Enterprises this analysis is to be done after interpreting the contract. However, the intentions of the parties are largely inferred from the terms of the contract. There is a weighing of the impact that implying or not implying a term will have on each party. This is also done under the rubric of “business


March Pages 2017
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