Bhasin v Hrynew
| Bhasin v Hrynew | |
|---|---|
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| Hearing: 12 February 2014 Judgment: 13 November 2014 |
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| Citations | 2014 SCC 71 |
| Prior history | APPEAL from Bhasin v. Hrynew 2013 ABCA 98 (18 March 2013), setting aside Bhasin (Bhasin & Associates) v. Hrynew 2011 ABQB 637 (4 November 2011). Leave to appeal granted, Harish Bhasin, carrying on business as Bhasin & Associates v. Larry Hrynew, et al. 2013 CanLII 53400 (22 August 2013), Supreme Court (Canada) |
| Ruling | Appeal allowed in part. |
| Holding | |
| The trial judge did not make a reversible error by adjudicating the issue of good faith. Her detailed findings amply support the overall conclusion that C acted dishonestly with B throughout the period leading up to its exercise of the non‑renewal clause in question. | |
| Court Membership | |
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Chief Justice: Beverley McLachlin Puisne Justices: Louis LeBel, Rosalie Abella, Marshall Rothstein, Thomas Cromwell, Michael Moldaver, Andromache Karakatsanis, Richard Wagner |
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| Reasons given | |
| Unanimous reasons by | Cromwell J |
| Moldaver J took no part in the consideration or decision of the case. | |
Bhasin v Hrynew 2014 SCC 71 is a leading Canadian contract law case, concerning good faith as a basic organizing principle in contractual relations in Canada's common law jurisdictions.
Canadian American Financial Corp (now known as Heritage Education Funds) marketed Registered Education Saving Plans, and hired Bhasin as an "enrollment director" in 1998 for three years with automatic renewal unless six months' notice was given. Hrynew, another enrollment director who competed, had proposed to merge their agencies, and asked Can-Am to force it, but Bhasin refused. Then, Can-Am appointed Hrynew as a "provincial trading officer" to review compliance with the Alberta Securities Commission's regulations, which meant auditing enrollment directors, with the power to review confidential business records. Bhasin objected. In June 2000, Can-Am told the Commission it would restructure its agencies to comply and this involved Bhasin working for Hrynew’s agency, but nothing was said to Bhasin. Bhasin was told that Hrynew was obliged to treat information confidentially, and was evasive when Bhasin asked in August 2000 if the merger was a "done deal." Bhasin then refused to allow Hrynew to audit his records. Can-Am threatened to terminate his post, and in May 2001 gave notice of non-renewal. When the term expired, Bhasin lost the value of his business and workforce, while his sales agents were poached by Hrynew. Bhasin claimed that there was a breach of the implied term of good faith.
At the Court of Queen's Bench of Alberta, Moen J found that it was an implied term of the contract that decisions about whether to renew the contract would be made in good faith. The court held that the corporate respondent was in breach of the implied term of good faith, Hrynew had intentionally induced breach of contract, and the respondents were liable for civil conspiracy. He found that Can-Am acted dishonestly with Bhasin throughout the events leading up to the non-renewal: it misled him about its intentions with respect to the merger and about the fact that it had already proposed the new structure to the Commission; it did not communicate to him that the decision was already made and final, even though he asked; and it did not communicate with him that it was working closely with Hrynew to bring about a new corporate structure with Hrynew’s being the main agency in Alberta. The trial judge also found that, had Can-Am acted honestly, Bhasin could have "governed himself accordingly so as to retain the value in his agency."
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