Aselford Martin Shopping Centres v. A.L. Raymond, [1990] R.J.Q. 1971 (C.S.)

Aselford Martin Shopping Centres v. A.L. Raymond, [1990] R.J.Q. 1971 (C.S.)

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  note that the judge has to ground it in 1024 CCLC principles of equity, because this is 1990 and the good faith provisions didn’t exist yet.
  
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  This case seems to almost bring good faith to a status of public order, the judge says that it’s not just the abusive exercise of the right but the clause itself is abusive, seems to be saying that you can’t contract out of good faith
  
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  Basically, Houle and Aselford tell us that equity exists despite autonomy of the will: is this overrides the parties’ will, then too bad. It’s worth it, and we have to have faith in the judiciary that it will only be used in appropriate circumstances.
  

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  A court will not allow a party to act in a certain manner when it will be against good faith.
  
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  If you have an immovable property and has lessees you have to put an assignment of rents clause that allows you to pay the rent directly to you. It is a perfectly legitimate clause which is triggered by default of the debtor.
  
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  Was there a default in this case? The court later said that there was no default. Therefore the explicit clause in the assignment of rents gives the right to use it even in absence of default.
  
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  The court says that you cannot exercise a right contrary to good faith. If it is abusive or arbitrary and violate the rules of equity you cannot exercise the right. This is a continuation of Houle.
  
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  How can we override the obligations of the parties? In Houle there is a dissent that says if you give judgment for one of the parties you will undermine of the basic tenets of contract. In essence it would be an alteration of the contract which would violate autonomy of the will. Aselford answers in other words that it does not care.
  
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  HD in Houle says that it is without doubt and encroachment into the will of the parties.
  
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  If Aselford was decided in 2002, what would happen?
  
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  Art. 1379 – adhesive k
  
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  Art. 1437 – abusive right
  
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  Art. 1375 – good faith
  

Along comes the final case in what is called the trilogy of good faith cases – Bail. How does this case take it one step further?

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  “The obligation to inform is now well-established in Quebec Law”
  
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  I believe it is possible to outline a general theory of the obligation to inform, based on the duty of good faith in the realm of contracts.
  
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  The main elements of the obligation to inform are the following:
  

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   Actual or presumed knowledge of the information on the part of the party which owes the obligation to inform
   
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   The information in question is of decisive importance
   
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   It is impossible for the party to whom the obligation is owed to inform itself, or the creditor is legitimately relying on the debtor of the obligation
   

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  the advent of this obligation relates to a certain shift that has been taking place in the civil law: we are now more attentive to inequalities in terms of information, and are imposing positive obligations where one party is in a vulnerable position with regard to information, from which damage may result
  
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  the obligation to inform and the duty not to give false information are two sides of the same coin
  
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  However, the obligation to inform must not be construed so broadly as to obviate the fundamental obligation which rests on every one to self-inform and take care in conducting one’s affairs. Moreover, this must not be confused with the obligation to counsel or advise.
  
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  This case deals with a contractual duty to inform, although such a duty may arise in other circumstances
  

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  So, obligation to inform is a subset of overarching concept of good faith, and it extends to the pre-K sphere
  
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  But, in this case although the contractual duty to inform is the key point, the fact is that the Bank’s action is based on x-k responsibility because there was no K between Hydro Quebec and the sub-K’or. The question is not whether there was K’al fault, although it is a juridical fact that can aid in the assessment of delictual fault. The Q is whether Hydro Quebec acted reasonably towards the third party, the subcontractor. In this situation, Hydro Quebec committed an x-k fault by creating a fact situation which it could easily have foreseen would cause damage to the sub-contractor.
  
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  Where does it say that this doctrine applies - with respect to third parties?
  
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  Where is the breach of the obligation of good faith in Soucise? In the extinction of the obligation.
  
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  In Bail the obligation of good faith extends into the formation of the contract.
  

-Gonthier says that if one of the parties in the pre-contractual stage has knowledge, and is important, and it is impossible for the other party to get that knowledge, and the other party is in reliance.

-You better spit out that knowledge or you will be found to be in violation of that obligation.
We see these three decisions that in a period of 11 years extends the notion of good faith and extends into all aspects.
Remember Martel (2000) in which a lease was being negotiated between a lessee and a branch of the government. The lessor dangled the lessee along and the latter did everything to try to win the lease and finally the lease was not awarded to the lessee. The SCC in this case said there was no obligation of good faith in the common law.
State of the Law Post-Trilogy

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  Where does the law stand post this trilogy?
  
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  The first thing to now is that the CCQ which come into force in Jan 1, 1994 is tremendously influenced by these decisions and we can remember that the tradition of the civil law is that it is supposed to provide a guide to future behaviour.
  
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  Here is an example where the Code is influenced by the jurisprudence and the Code reflects the developments of the jurisprudence. This contradicts the notion that civil law judges do not make law.
  
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  The new Code contains a number of important provisions:
  

There is also art. 1375, which picks up on the jurisprudence.

We also have 1434 (CCLC 1024). The other articles that we will look at are CCQ arts. 1416/1419/1401(2).

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  Conclusions?
  

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   The CCQ is tremendously influenced by case law with respect to the GOOD FAITH.
   
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   These articles are enacted in the Code
   
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   There is jurisprudence that is developing the doctrine. There are no countless articles on good faith.
   

We now have a proliferation of doctrine and jurisprudence in this area. The doctrine is now being extended to all kinds of situations. Some would say that good faith is a principle of public order. Therefore you cannot contract around public order provisions.