Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd.

Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd.

Rectification was ordered because plaintiff proved a definite prior oral agreement, the written clause misstated the agreed dimension, defendant knowingly permitted the mistake (fraud/equivalent to fraud), the precise correction (change 'feet' to 'yards') was ascertainable and convincing proof supported the rectification; lack of plaintiff due diligence is not an absolute bar to rectification though it is relevant to equitable discretion; punitive damages were not restored because compensatory relief and other sanctions sufficiently achieved retribution, deterrence and denunciation and the punitive award failed the rationality test.

Citation
2002 SCC 19
Parties
Appellant/respondent on Cross Appeal: Performance Industries Ltd.; Appellant/respondent on Cross Appeal (individual Directing Mind): Terrance O'Connor; Respondent/appellant on Cross Appeal: Sylvan Lake Golf & Tennis Club Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
22 February 2002
Procedural Posture
Civil Appeal (contract and Tort) / Supreme Court of Canada Decision on Appeal From the Alberta Court of Appeal
Outcome
Appeal and cross-appeal dismissed.
Legal Topics
Rectification of Contract, Unilateral Mistake, Fraud and Equitable Fraud, Due Diligence and Equitable Discretion, Damages in Lieu of Specific Performance, Punitive Damages Rationality Test, Piercing the Corporate Veil, Solicitor Client Costs
Source Language
English
Contract Torts Equity Property Corporate Law Rectification of Contract Unilateral Mistake Fraud and Equitable Fraud +5 more

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Parties

Performance Industries Ltd.

Appellant/respondent on Cross Appeal

Terrance O'Connor

Appellant/respondent on Cross Appeal (individual Directing Mind)

Sylvan Lake Golf & Tennis Club Ltd.

Respondent/appellant on Cross Appeal

Procedural Posture

Civil Appeal (contract and Tort) / Supreme Court of Canada Decision on Appeal From the Alberta Court of Appeal

Legal Issues

  1. 1 Whether rectification of a written agreement is available where a prior oral agreement existed but the written document misstated dimensions and the defendant knew of the mistake
  2. 2 Whether lack of due diligence by the plaintiff is an absolute bar to rectification
  3. 3 Proper measure of damages in lieu of rectification for an option to develop land

Ratio Decidendi

Rectification was ordered because plaintiff proved a definite prior oral agreement, the written clause misstated the agreed dimension, defendant knowingly permitted the mistake (fraud/equivalent to fraud), the precise correction (change 'feet' to 'yards') was ascertainable and convincing proof supported the rectification; lack of plaintiff due diligence is not an absolute bar to rectification though it is relevant to equitable discretion; punitive damages were not restored because compensatory relief and other sanctions sufficiently achieved retribution, deterrence and denunciation and the punitive award failed the rationality test.

Court Disposition

Appeal and cross-appeal dismissed.

Orders

  • Rectification ordered: clause 18 amended by changing 'one hundred ten (110) feet' to 'yards'
  • Compensatory damages awarded to Sylvan in lieu of rectification in the amount of CAD 620,100