• About
  • Offices
  • Careers
  • News
  • Students
  • Alumni
  • Payments
  • EN | FR
Background Image
Bennett Jones Logo
  • People
  • Expertise
  • Knowledge
  • Search
  • FR Menu
  • Search Mobile
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
View all
Practices
Corporate Litigation Regulatory Tax View all
Industries
Energy Infrastructure Mining Private Equity & Investment Funds View all
Advisory
Crisis & Risk Management Public Policy
View Client Work
International Experience
Insights News Events Subscribe
Arbitration Angle Artificial Intelligence Insights Business Law Talks Podcast Class Actions: Looking Forward Class Action Quick Takes
Economic Outlook New Energy Economy Series Quarterly Fintech Insights Quarterly M&A Insights Sustainability & the CIO
People
Offices
About
Practices
Industries
Advisory Services
Client Work
Insights
News
Events
Careers
Law Students
Alumni
Payments
Search
Subscribe

Stay informed on the latest business and legal insights and events.

LinkedIn LinkedIn Twitter Twitter Vimeo Vimeo
 
Blog

BC Court of Appeal Confirms that the Duty of Honest Performance Does Not Extend to Pre-Contractual Dishonesty

April 08, 2025

Written By Edward Hulshof and Adam Walji

Stay Up-To-Date

Read the most recent Class Action Quick Takes and stay informed with the latest key developments, trends and strategies in the class action arena by subscribing to receive future insights.

Read the latest
Subscribe

In Ocean Pacific Hotels Ltd. v Lee, 2025 BCCA 57, the Court of Appeal for British Columbia confirmed that the duty of honest performance in contract does not extend to pre-contractual negotiations.

The plaintiffs are representatives of current and former employees who signed offers of casual employment that replaced their contracts of regular employment with Ocean Pacific. The agreements provided that employees would continue to receive extended benefits coverage "subject to and in accordance with the terms and conditions of the applicable plans and policies and the continued approval of [Ocean Pacific’s] carrier." In January 2021, extended benefits coverage terminated for most employees that had opted for casual employment.

The plaintiffs alleged that Ocean Pacific breached the duty of honest performance by intentionally withholding during negotiations information regarding health benefit coverage. In addition to common issues relating to an alleged breach of contract, the chambers judge certified three common issues concerning the alleged breach of the duty of honest performance:

  1. Did the defendant intentionally mislead the Class members about the limited continuation of their benefits?
  2. If so, did that conduct amount to a breach of the defendant’s duty of honest performance of its contractual obligations toward Class members?
  3. If so, what remedies are the Class members entitled to?

Ocean Pacific appealed the chambers judge's conclusion that Ocean Pacific's alleged breach of the duty of honest performance disclosed a reasonable cause of action. The Court of Appeal observed that the contractual duty of honest performance applies to the performance of a particular contract. It held that the duty does not extend to precontractual negotiations.

The Court cautioned that expanding the duty of honest performance to pre-contractual negotiations would balloon the remedies available for breach of contract "exponentially" and, importantly, without regard for whether the defendant intended to induce the other party to enter into the agreement.

In the result, the Court allowed the appeal, setting aside the chambers judge's certification of the three common issues relating to the alleged breach of the duty of honest performance, but granted the plaintiffs leave to amend their claim to plead a breach of the duty of honest performance in respect of the existing employment agreements at the time of negotiations of the casual employment agreements.

Have time to read more?

  • The Court held that the idea that pre-contractual dishonesty can satisfy the "direct link" requirement of contractual performance was counterintuitive because it is difficult to conceive how a duty to perform a contract honestly can arise before that contract exists; and
  • The Court concluded that there was no need to expand the contractual duty of honest performance to capture pre-contractual negotiations because the torts of negligence and fraudulent misrepresentation provide adequate remedies.

Please note that this publication presents an overview of notable legal trends and related updates. It is intended for informational purposes and not as a replacement for detailed legal advice. If you need guidance tailored to your specific circumstances, please contact one of the authors to explore how we can help you navigate your legal needs.

For permission to republish this or any other publication, contact Amrita Kochhar at kochhara@bennettjones.com.

Download PDF

Authors

  • Edward W. Hulshof Edward W. Hulshof, Associate
  • Adam  Walji Adam Walji, Associate

Related Links

  • Insights
  • Media
  • Subscribe

Recent Posts

Blog

Q&A on Cybersecurity and Family Enterprises: How to [...]

May 23, 2025
       

Blog

British Columbia Grapples With Evidentiary Issues [...]

May 22, 2025
       

Blog

Screening By the Authorizing Judge: Québec Court of [...]

May 22, 2025
       

Blog

Court of Appeal Cuts Off Speculative Product Liability Claims

May 22, 2025
       

Blog

The Ontario Court of Appeal Clarified When Class Actions [...]

May 22, 2025
       
Bennett Jones Centennial Footer
Bennett Jones Centennial Footer
About
  • Leadership
  • Diversity
  • Community
  • Innovation
  • Security
Offices
  • Calgary
  • Edmonton
  • Montréal
  • Ottawa
  • Toronto
  • Vancouver
  • New York
Connect
  • Insights
  • News
  • Events
  • Careers
  • Students
  • Alumni
Subscribe

Stay informed on the latest business and legal insights and events.

LinkedIn LinkedIn Twitter Twitter Vimeo Vimeo
© Bennett Jones LLP 2025. All rights reserved.
  • Privacy Policy
  • Disclaimer
  • Terms of Use
Logo Bennett Jones