Martel Building Ltd. v. Canada
T-1273-93
Teitelbaum J.
9/12/93
13 pp.
Action in tort for damages for negligent misrepresentation, unlawful interference with economic relations and legitimate business expectancy, failure to negotiate in good faith -- Motion to strike -- 10-year lease agreement commencing September 1, 1983 -- In March, 1991 negotiations for lease renewal commencing -- Plaintiff dealing exclusively with representatives of Real Estate Division, Public Works Canada (PWC) -- Through October, November 1992 Real Estate Division (RED) continuing to expressly indicate preparedness to negotiate final agreement -- Plaintiff negotiating on understanding and belief RED having authority and mandate to negotiate renewal -- While negotiations still ongoing and without notice to plaintiff, Accommodations Branch of PWC, having arms-length relationship with RED, deciding to proceed with tender process for leasing premises -- Plaintiff orally accepting rental rate stipulated by defendant -- Defendant's representative indicating prepared to recommend renewal of lease -- On November 26, 1992 plaintiff informed PWC not accepting its offer -- Motion to strike claims for unlawful interference with economic relations and legitimate business expectations and failure to negotiate in good faith as failing to disclose reasonable cause of action -- Motion allowed in part -- Elements required for tort of interference with economic relations and legitimate business expectancy set out in Ontario Store Fixtures Inc. v. Mmmuffins Inc. (1989), 70 O.R. (2d) 42 (H.C.) -- Requiring valid and enforceable contract between plaintiff and third party, and defendant causing breach of that contract -- Unlawful act and interference of third party essential -- Statement of claim alleging unlawful act by Accommodations Branch of PWC -- Accommodations Branch not third party as both Accommodations Branch and RED considered as one -- If contract between plaintiff and defendant, and contract breached as result of actions of Accommodations Branch, defendant responsible for contractual damages, not for damages for interference with economic relations and legitimate business expectancy -- "Unlawful interference with economic relations and legitimate business expectancy" struck from statement of claim -- Court not absolutely convinced plaintiff not having cause of action for failure of defendant to negotiate in good faith -- Plaintiff negotiated in good faith and expected PWC would also negotiate in good faith for renewal of existing lease -- Existence of 10-year lease distinguishing Cineplex Corp. v. Viking Rideau Corp. (1985), 28 B.L.R. 212 (Ont. H.C.); MacDougall v. St. Peters Bay (Community) (1992), 100 Nfld. & P.E.I.R. 45 (S.C.T.D.) where no previous contract existed.