On April 10, 2025, McCarthy Tétrault's National Appellate Litigation Group hosted its second Appellate Quarterly webinar of the year, featuring five appeals of importance to the business community and the law around the country. Laura Gill, Jean-Philippe Mathieu, Kevan Hanowski, Michael (Ruofan) Cui, and Connor Bildfell discussed these recent appellate developments, as well as upcoming cases and future developments in their respective jurisdictions.
1. The role of negotiation evidence in interpreting contracts [Alberta]
In IFP Technologies (Canada) Inc. v. EnCana Midstream and Marketing ("IFP"), the Court of Appeal of Alberta concluded that evidence of negotiations is not itself admissible, unless such evidence demonstrates the factual matrix.1 The Court recently reaffirmed this principle in Chemtrade Electrochem Inc. v. Superior Plus Corporation.2 In that case, Superior Plus Corporation ("Superior") and Canexus Corporation ("Canexus") entered into an agreement where Superior agreed to acquire Canexus by way of a plan of arrangement, pending regulatory approval in Canada and the United States. The deal collapsed and Chemtrade Electrochem Inc. ("Chemtrade") acquired Canexus. Both Chemtrade and Superior claimed that they were entitled to the "Reverse Termination Fee" in the agreement. The Court of Appeal applied the principles from IFP, emphasizing that evidence showing the parties' understanding of the purpose of the Reverse Termination Fee amounted to evidence of subjective intent, rather than the factual matrix. Any subjective intent evidenced by the negotiations did not amount to the intent reflected in the written agreement. Indeed, even if subjective intent is mutually understood, it cannot override the written terms of an agreement.
While IFP remains the leading case on contractual interpretation in Alberta, Chemtrade demonstrates the continuing need to distinguish between the proper use of objective and subjective evidence in discerning a contract's purpose and meaning. To minimize risks, contracts should include clear and precise wording. Any negotiation evidence should reflect objective facts, as background facts such as market norms or contractual relationships may carry more weight.
2. The relationship between the duty to negotiate in good faith and specific performance [Québec]
Even where specific performance is the default remedy under the Civil Code of Québec, it can be difficult to enforce the duty to negotiate in good faith by way of specific performance. In 2177 23rd Avenue Holdings v. Pival International inc.,3 a tenant's commercial lease...
