Canada: Ross-Clair v. Canada (Attorney General): Judge's Failure To Consider Contract As A Whole Leads To Correctness Review

The Ontario Court of Appeal's decision in Ross-Clair v. Canada (Attorney General)is another post-Sattva instance of a dispute over the standard of review of contract interpretation. For a unanimous Court of Appeal, Justice Epstein reviewed the application judge's interpretation of a contract on the correctness standard. She did so not because the contract was standard form (as was the appellant's primary argument) but because the trial judge committed an extricable error of law by reading a particular provision in the contract in isolation and thus failing to consider the contract as a whole. She held:

[45] In my view, the decision is reviewable on a standard of correctness.

[46]  I do not come to this conclusion based on a finding as to the nature of the Contract. Although it may be appropriate to regard the Contract as a standard form agreement, the interpretation of which is subject to review on a correctness standard, it is difficult to arrive at a definitive resolution of that question on this record. There is scant evidence of the circumstances surrounding the formation of the Contract, particularly any aspects that may have been negotiated. There is also scant evidence of the extent to which the terms in the Contract are used in other agreements with the Government of Canada. Moreover, the fact that in a previous decision, the court was required to interpret a very similar contractual provision does not provide a basis for a conclusion that the interpretive exercise in this case would have the potential precedential value that influenced the decisions in Vallieres, Precision Plating, Ledcor, and Chicago Title.

[47] My view rests on PWC's alternative argument. For reasons I will now explain, I agree that, in interpreting the Contract, the application judge erred by failing to construe the Contract as a whole. Accordingly, it falls to this court to properly interpret and apply GC 35.4.

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