agreement being clear and unambiguous — Term that HST would be
added to settlement amount not being implied into agreement.
The plaintiff supplied parts and services to GM Canada. When GM Canada terminated its relationship with the plaintiff, the plaintiff commenced an action for
damages for breach of contract and unjust enrichment. The parties entered into
a settlement agreement which provided for payment by the defendants to the
plaintiff of “$7 million (inclusive of interest and costs, including disbursements)”.
The plaintiff brought a motion asking the court to imply a term in the agreement
requiring the defendants to add HST to the agreed amount.
Held, the motion should be dismissed.
The parties were sophisticated. They did not raise or decide the issue of HST in
the settlement negotiations. The language used to express the settlement was
clear and unambiguous. The agreed-upon $7 million figure was simply a lump
sum; no attempt was made to allocate it to particular heads of damages. The claim
included heads of damages that were clearly non-taxable. It could not be said that
the agreement lacked commercial efficacy without the implied term, or that the
term was so obvious as to go without saying in the eyes of an objective person.
There is no commercial custom or usage in settlement agreements generally, or in
the settlement of cases arising out of supply arrangements in particular, that
assisted the plaintiff. The defendants had no reason to go behind the plaintiff’s
offer to ask what matters the plaintiff had considered in making it or how the
plaintiff allocated it. It could not be said that they took advantage of an obvious
error in failing to do so.
Adamson v. Steed,  O.J. No. 1835, 2008 ONCA 375, 165 A.C.W.S. (3d)
1074; Neinstein v. Marrero,  O.J. No. 1595, 61 C.L.R. (3d) 273, 157 A.C. W.S.
(3d) 284, 2007 CanLII 13939 (S.C.J.), consd
75 Eglinton Avenue East Limited Partnership v. 222485 Ontario Inc.;
Travelbrands Inc. (Re),  O.J. No. 2812, 2017 ONSC 3161,  G.S. T.C. 38,
281 A.C.W.S. (3d) 77 (S.C.J.); Ravelston Corp. (Re),  O.J. No. 3764, 
G.S. T.C. 125, 2006 G. T.C. 1276, 151 A.C. W.S. (3d) 354 (S.C.J.), distd
Statutes referred to
Excise Tax Act, R.S.C. 1985, c. E-15, ss. 165(1) [as am.], 182 [as am.], (1) [as am.]
MOTION to imply a term in a settlement agreement.
Gavin MacKenzie and Jesse Harper, for plaintiff/moving party.
Robert B. Bell, for respondents General Motors of Canada Limited and General Motors Company.
 DUNPHY J.: — When is it appropriate to imply into a settlement agreement a term that HST will be added to the agreed settlement amount when neither party raised or discussed the issue
of HST in settlement negotiations?
 I dismissed from the bench the plaintiff’s motion to imply
a term in a settlement agreement requiring the defendants to
add HST to the agreed lump sum settlement amount. In so
doing, I indicated that I would provide written reasons. These
are those reasons.