In the recent decision from the Ontario Court of Appeal (“ONCA”), Jack Ganz Consulting Ltd. v. Recipe Unlimited Corporation, 2021 ONCA 907, the ONCA set aside the decision of the motion judge which dismissed the plaintiff’s claim on a motion for summary judgment brought by the respondent.
The ONCA opined that the motion judge made an error in law by finding that the appellant had waived the auto renewal provision of the consulting agreement that forms the basis of the dispute.
The motion judge’s decision stems largely from the appellant’s representative’s email in which he stated “Let this email serve to remove the auto renewal from the contract”. The motion judge found that this email resulted in a waiver of the auto renewal provision of the consulting agreement by the appellant, and that the waiver was accepted by the respondent in a subsequent email.
Though the ONCA conceded that a party to a contract “may choose to forego reliance on a contractual right”, the ONCA advised that in order to do so that party must make that choice with “full knowledge of the right” and must make an “unequivocal and conscious decision to forego that right with full understanding of the consequences”.
Citing a leading Supreme Court of Canada decision, Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490, the ONCA advised that before finding unilateral waiver of a contractual right, a court must “apply a stringent test” because “no consideration moves from the party in whose favour a waiver operates” (i.e. the party benefiting from the waiver has not provided any corresponding benefit to the party unilaterally waiving its right).
The ONCA found that it is not clear from the record that the appellant had “full knowledge” of its rights or “an unequivocal and conscious intention to abandon those rights”. The ONCA also found that the appellant was asked to remove the auto renewal provision as a favour to the respondent. Thus, the circumstances of the case did not evidence a proper “waiver for no consideration” in accordance with the doctrine set out in the Saskatchewan River Bungalows decision.
As a result, the ONCA set aside the summary judgment decision of the motion judge and referred the matter to trial.
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