BARRIE COURT FILE NO.: CV- 19-553

DATE: 2019-11-18

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BEST LIFESTYLE RESIDENCE INC.

Applicant

– and –

COUNTY OF SIMCOE SOCIAL AND COMMUNITY SERVICES

Respondent

Counsel: Osborne G. Barnwell, for the Applicant Faren Bogach and Paul Conrod, for the Respondent

HEARD: September 13 and October 4, 2019

REASONS ON APPLICATION

CHRISTIE J.

OVERVIEW

[1] At the outset, the parties must be properly identified, so as to avoid any confusion in the course of these reasons. The parties to these proceedings are, actually, Best Lifestyle Incorporated, which operates a care facility called Best Lifestyle Residence, and the Corporation of the County of Simcoe, which has simply been incorrectly named in the title of proceedings.

[2] For many years, the Applicant, Best Lifestyle Inc. (“BLI”), has provided a necessary and important service in the community of Coldwater, Ontario. Since 2005, BLI has been operating Best Lifestyle Residence Inc. and, thereby, providing long-term and short-term accommodation and support to persons in need, including the elderly and individuals with health challenges and special needs. Residents who may not fit the criteria for other care homes have been welcomed to Best Lifestyle Residence. Shortly after its inception in 2005, BLI were approved as a service provider under the Domiciliary Care Program, which is funded by the Province to subsidize placements in private care homes for individuals who require assistance with daily living. Service agreements have been renewed year to year between BLI and the County to allow this relationship to continue.

[3] In early 2019, the Corporation of the County of Simcoe, who run the Domiciliary Care Program, decided not to renew the services agreement with BLI. BLI were advised of this on February 20, 2019. The Service Agreement in force at the time had a term end date of March 31, 2019.

[4] The Applicant submitted that the decision of non-renewal on the part of the County was taken in bad faith, as the reasons given were devoid of merit. The Applicant argued, having enjoyed the benefit of the services agreement rolling forward for the past fourteen years, they had a legitimate expectation that it would continue to benefit from the extension of the agreement for another year if it complied with the terms of that agreement. The Applicant submitted that they fulfilled the terms of the agreement. The Applicant takes the position that, as a result of this legitimate expectation of being treated fairly and having the service agreement continue, it proceeded to invest in the business with a long-term focus of caring for the residents in a dignified and safe manner.

[5] The Applicant, BLI, sought the following relief from this court:

1. Declaration that the Respondents acted in bad faith;
2. Declaration that BLI did not breach the contact, warranting the non-renewal; and
3. Direction that the Respondent must, in good faith, enter into discussions with the Applicant to continue providing care for the residents which it funds and to honor the terms of the contract either by renewal or under new terms of a new contract.

[6] The Corporation of the County of Simcoe also brought an application for relief seeking the following:

1. A declaration that the Services Agreement terminated on March 31, 2019;
2. In the alternative, an order that the Agreement terminated on April 23, 2019, being sixty days after February 22, 2019;
3. In the further alternative, an order that the Agreement terminates on the date of such order;
4. In the further alternative, an order that the Agreement terminates sixty days after the date of such order.

[7] The questions to be answered by this court are:

1. Did the County owe a duty of good faith to BLI?
2. Did the County demonstrate bad faith in not renewing the contract with BLI? If so, is BLI entitled to damages?
3. Did BLI breach the contract with the County, warranting the non-renewal?
4. Can or should this court direct the parties to enter into good faith discussions and to either renew the contract or enter into a new contract?
5. When does / did this services agreement end?

[8] In order to answer these questions, the facts need to be examined in some detail.

FACTS

Domiciliary Care Program

[9] Pursuant to the Housing Services Act, 2011, S.O. 2011, c. 6, Sched. 1, the Provincial Ministry of Municipal Affairs and Housing has established the Community Homelessness Prevention Initiative, which allows the County to implement an affordable housing and homelessness prevention strategy for the County of Simcoe. As a result, the Corporation of the County of Simcoe administers the Domiciliary Care Program (“the Program”) for vulnerable senior citizens and at-risk individuals who are not able to live independently. The Program also provides temporary shelter for individuals waiting for other placements. Much of the Domiciliary Care Program funding comes from the provincial government, with the remainder supplied by the county.

[10] Financial need is a pre-requisite for eligibility to the Program. The subsidy does not attach to the facility but rather to the resident. In order to receive the subsidy, the resident applies for the domiciliary care program and to the participating facility of their choice. The resident is only eligible for the subsidy if they reside in a participating facility. The resident can transfer to another participating facility without losing the subsidy.

[11] Under this Program, the County contracts with service providers to facilitate funding to eligible individuals who reside at certain privately-owned residential facilities. The County implements the Program by way of service agreements with the service provider. The service provider must adhere to standards and operating procedures for the Program which are set out in the Domiciliary Program Standards and Operational Procedures, and include, but are not limited to:

1. Compliance and proof of compliance with current health, fire, building and zoning regulations;
2. Standards for accommodation, health and safety, food safety, and nutrition;
3. Standards for emergency procedures;
4. Standards for adequate staffing;
5. Annual proof of insurance with a minimum coverage of $5,000,000 per occurrence;
6. The facility must have an incident reporting policy with defined procedures for documentation and procedures to report serious occurrences involving both domiciliary residents and non-domiciliary residents to the County [emphasis added]

Audits and inspections are conducted to ensure compliance.

[12] The County administers the Program by providing a subsidy, or “top-up”, to each domiciliary resident, who also have income sources of their own. Each services agreement includes a daily rate, representing the total amount required to cover all of a residents costs for a single day for things such as meals, recreational activity, room and board, and transportation, which is then used to calculate the amount of the subsidy required as well as set an amount each month as a personal needs allowance (“PNA”). The amount of the subsidy is calculated by taking the daily rate multiplied by the amount of days the resident is at the participating facility during the month, and then subtracting the resident’s other sources of income. The subsidy is paid to the participating facility to provide specific services for the resident that are set out in the services agreement and attached service description schedule. The service provider may also be responsible for the PNA depending on the ability of the resident to manage their own finances. The PNA is for the residents’ personal expenses and discretionary spending and is not to be used for costs incurred by the participating facility.

Best Lifestyle

[13] Best Lifestyle Incorporated operates a care facility called Best Lifestyle Residence in Coldwater, Ontario. The corporation profile report shows an incorporation date of March 2, 2005. The principals of Best Lifestyle Inc. and registered owners of the facility are Pauline Christian and Harold Christian. Pauline Christian is the president and CEO of Best Lifestyle Incorporated, a role which she has held since the inception of the company. In her examination at page 4, she described her role as follows:

…More or less the oversight. Not – operationally, I help lay procedures and processes. I interface with, you know, anything to do with bills or contracts or any kind of procedural stuff I’m involved with. I’m very active in my community locally and nationally as it relates to advocating for youth and small business owners, especially in the black community. So most of my life is spent that way.

Harold Christian, her spouse, who resides at the facility, is the senior Vice President. He is very involved in the daily operation of Best Lifestyle Residence. Harolyn Foster, the daughter of Pauline and Harold Christian, is the vice president of operations and is also at the facility the majority of the time. She was described as the person with the “hands-on, day-to-day feel for the business”. D’Juvayne Christian, the son of Pauline and Harold Christian, is the “director in training”. He was responsible for liaising with the fire department on various issues. The Christian family have invested significant time and capital into the residence over the years.

[14] In her examination, Pauline Christian explained that they purchased this residence because it was already an approved Domiciliary Care Program service provider. She stated that they did not apply to be a part of the Domiciliary Care Program, rather the property was already part of the Program. (Q 116-177 of the examination of P. Christian) This would not appear to be accurate, as in or around early 2005, Best Lifestyle submitted an application to the County and were approved to become a participating facility in the Program.

[15] The residence originally had three operating floors and housed about 40 beds. However, in or around 2014, the Township of Severn Fire Department insisted that the third floor be closed due to a lack of a sprinkler system on the third floor, which also had no fire escape.

[16] From April 2005 until March 31, 2019, Best Lifestyle was a participating facility under the Domiciliary Care Program. Just prior to the commencement of these proceedings, the number of beds at the residence was 28, with 12 of those beds being residents who participated in the Program. The number of Program residents has varied over the years from a low of 8 in 2007 to a peak of 23 residents in mid-2013. Since 2016, the number of Program residents at the facility have steadily decreased from approximately 20 residents in late 2016 to 12 residents at the time of this application.

[17] Throughout many of these years, the person at the county that Best Lifestyle communicated with was primarily Doriano Calvano. Mr. Calvano was the Manager of Social Policy and Planning at the County.

Service Contracts / Services Agreements

[18] Each year since 2005, the County and Best Lifestyle executed an annual service contract or services agreement setting out the terms of the Domiciliary Care Program funding for that year. Each contract or agreement contained a mutual termination clause allowing either party to terminate the agreement on 60 days’ written notice. Prior to 2017, each service contract was valid until it was either superseded by a new agreement or it was terminated. There was no specified term end date.

[19] Beginning in 2017, the services agreement between the County and BLI had defined term end dates. The reason for this change was not clear.

[20] In mid-2017, the County and BLI entered into a services agreement that was effective from January 1, 2017 until December 31, 2017. This replaced a previous service contract that the parties had executed earlier that year.

[21] In 2018, the County and BLI entered into a services agreement for a three-month period from January 1, 2018 to March 31, 2018, in an effort to align the terms of the annual services agreements with the fiscal year end.

[22] The service contract / services agreements were not negotiated contracts, but rather were prepared by the County and submitted to the service provider as a take-it-or-leave-it agreement.

2018 Services Agreement

[23] In 2018, the County and BLI entered into a services agreement. Pursuant to the 2018 services agreement, the funding was for a term of April 1, 2018 to March 31, 2019 and provided in part as follows:

4. The Service Provider agrees to spend the Allocated Funds and to provide the Services in accordance with the Approved Budget and to provide the Services in accordance with and in a manner that meets the performance requirements and service level targets set out in the attached Service Description Schedule(s) and Service Data Schedule(s) (collectively referred to herein as the “Program”), as well as in accordance with the policies, guidelines and requirements of the Municipality and those of any government ministry or agency which are applicable to the Allocated Funding or the Program as such policies, guidelines and requirements are communicated to the Service Provider from time to time by the Municipality.

5. The Service Provider is aware that the funding under this Agreement is approved as one time funding, and any future payments or funding from the Municipality will be considered based upon continued availability to the Municipality of additional funding, assessment of needs identified within the community, and the Service Provider’s compliance with the terms and conditions of this Agreement.

6. This Agreement will be in force from April 1, 2018 until March 31, 2019 (the “Term”) or until it is terminated in its entirety by either party hereto by giving sixty (60) days’ written notice. In the event of termination, the Service Provider will refund forthwith to the Municipality any monies advanced by the Municipality that have not, to date, been expended in accordance with the Approved Budget.

These terms were identical to those found in the previous two service agreements, except for the term dates. In clause 9 of the agreement, also found in the earlier agreements, there was reference to audits and operational reviews which could occur in order to ensure compliance.

[24] In addition to those terms set out above, the agreement provided further clauses regarding termination with or without notice. Sections 14.1 and 14.2 state as follows:

14.1 Either party may terminate this Agreement in whole or in part with respect to the provision of any particular service upon sixty (60) days’ notice to the other party. If the Agreement is terminated in part, all obligations with respect to the provision of all other services continue in full force and effect. Notwithstanding the sixty (60) days’ notice, the Municipality reserves the right to terminate the Agreement immediately for use of Allocated Funds by the Service Provider which is not strictly in accordance with this Agreement.

14.2 The Municipality reserves the right at its exclusive option to immediately and without further notice, cancel this Agreement, or part thereof, without further liability of any kind:

(a) For failure by the Service Provider to complete this Agreement in a timely manner;

(b) For failure by the Service Provider to meet described service levels targets as required by this Agreement;

(c) For any breach of any condition of this Agreement by the Service Provider;

(d) For unsafe or hazardous work practices of the Service Provider;

(e) For failure to respond to lawful requests of the Municipality;

(f) For failure to remedy defects or deficiencies in the Services provided after being given notice to do so; and

(g) For any Act of God event which lasts longer than thirty (30) days.

These terms were also found in the two prior service agreements.

[25] There was no right of renewal or extension referred to in the contract. There was also no minimum notice period required for non-renewal mentioned in the contract.

[26] Further, clause 25 of the 2018 Services Agreement contained a waiver of breach provision which stated as follows:

The failure of the Municipality to insist upon a strict performance of any of the agreements, terms covenants and conditions hereof shall not be deemed a waiver of any rights or remedies that the Municipality may have and shall not be deemed a waiver of any subsequent breach or default in any of such agreements, terms, covenants and conditions. The Municipality may at any time insist upon strict compliance with this Agreement regardless of past conduct or practice with this or any other Service Provider.

This was also included in the two previous service agreements.

[27] Finally, the 2018 Services Agreement also included an “entire agreement” provision at clause 29.1.

[28] Attached to the 2018 Services Agreement was a Service Description Schedule setting out certain requirements for funding under the Domiciliary Care Program, including:

• To provide permanent accommodation and some supports to daily living, including, three proper meals, laundry, transportation to appointments, social and recreational activities, medication supervision, and general supervision
• To account for the personal needs allowance.
• To provide certain documentation, including verification that the facility meets with all local municipal zoning and planning by-laws, has been approved by the local Fire Department, has been approved by the Simcoe County District Health Unit, confirm domiciliary care beds within facility, annual written plan summarizing the facility’s emergency management and business continuity plan in the event that residents cannot be returned to the facility, and any further documentation requested upon reasonable notice.

The Service Description Schedule also makes it clear that the service providers must adhere to the 2015 Domiciliary Program Standards and Operational Procedures document.

[29] In her examination, Pauline Christian suggested that she did not review the contracts in any detail. The exchange went as follows:

Q 384: -- you just signed them and sent them back?

A: Yeah. Because there’s always been a rollover for the last 14 years.

Q 385: Sure. And did you ever get legal advice on the contract? Did you ever have a lawyer look at it?

A: No. Because the only time I had was when I was faced with this situation.

Q 386: Okay. So before that –

A: Yeah. Because I had no reason. Why am I going to – you know, if I’ve been handed something –

Q 387: Did you know that there was a 60 day termination clause in there?

A: Only when this thing became a legal issue. And if I knew, I would be more cautious about borrowing $300,000 to do sprinklers because I would have to know where the money’s going to come from.

Q 397: And I understand that from since 2017 they were term contracts, so it had a start and an end date. Were you aware of that?

A: No. I just know that I signed it every year and they asked me to provide insurance or fire this or whatever certificates. So it’s just a process. But I never knew that it was a threat that at some point it would just be pulled from under your feet.

This response seemed unusual given Ms. Christian’s background, involvement with government and legislation, and her previous answer that her role in the company was “anything to do with bills or contracts or any kind of procedural stuff I’m involved with”.

Alleged compliance issues

[30] In 2013, the Province of Ontario made changes to the Ontario Fire Code, O. Reg. 213/07. These changes were not specific to service providers of the Domiciliary Care Program, but rather applied more broadly to facilities that provided care to residents, including BLI. The changes included new requirements for a fire safety plan, approved annual fire drills, a fire alarm monitoring system, and an upgraded sprinkler system. These changes had specific effective dates.

[31] BLI was advised of the Fire Code changes by the Township of Severn Fire and Emergency Services in April 2014. In a letter dated April 1, 2014, Dianne Kyle, Fire Prevention Officer for Severn Fire and Emergency Services wrote to Harold Christian and advised of the items that pertained to the Best Lifestyle residence and the compliance dates. The sprinkler system upgrade had to be in place and operative by January 1, 2019. At the cross-examination, Pauline Christian suggested that she had never seen this letter, however when asked specifically when she knew about the sprinkler system requirement and whether she knew in 2014, she stated:

“I know about the sprinkler system because I’m engaged in government and I know new legislation….so I knew about the sprinkler system, but does it impact my facility? Now you have to dig deeper to find impacts….” [Transcript of the cross-examination of Pauline Christian at Q 624-625.]

As previously stated, these Fire Code changes applied to Best Lifestyle Residence regardless of whether they were a participant in the Domiciliary Care Program. Ms. Christian did not admit this during her examination, rather she stated at Q600:

“Because all I would do is sell the property. I would not go down the road of borrowing $300,000 if I did not have half of the revenue being subsidized. I wouldn’t….I would not have installed it if I knew that Simcoe was going to pull their subsidy…”

[32] On October 3, 2017, Georgian Bay Fire & Safety Ltd., attended at Best Lifestyle to conduct an annual service call and inspection of the facility’s fire safety systems. The inspection revealed several deficiencies, including smoke detectors needed replacing, heat detector needed replacing, emergency lights needed repair and issues with the ULC monitoring. These deficiencies were rectified in February 2018 and subsequently the County was notified of these corrections, however, not until mid March 2018, after the County reached out to BLI three times.

[33] On April 12, 2018, the Severn Fire Services again advised Best Lifestyle of the January 1, 2019 deadline for sprinklers to be installed at the facility. The letter dated April 12, 2018 from Dianna Kyle to Best Lifestyle Residence stated:

During the last inspection on May 2, 2017 we discussed the up-coming deadline for sprinklers at 6 Reinbird Street and have since forwarded you a government link that may assist in funding this project.

By January 1, 2019 the building at 6 Reinbird Street (Best Lifestyles) must meet the requirements of Ontario Fire Code, Article 9.7.5.1. I have enclosed a copy of the requirements and compliance schedule for your review.

To date there has not been an application for a building permit for this to be completed. Due to the length of time to complete this project, I recommend you begin the process as soon as possible to avoid a business closure on January 1st, 2019.

[34] Pauline Christian admitted in cross-examination that they did not get the permits for the sprinkler system installation until October 2018. (Q 831-832)

[35] On May 29, 2018, a fire code inspection was conducted at Best Lifestyle by the Township of Severn and fire inspectors noted some violations of the Ontario Fire Code, including:

• An emergency light on the second floor was not functioning
• Some records were not available or produced at the time of the inspection
• No fire emergency procedures were found posted at the time of the inspection

The letter from Dianne Kyle, dated May 30, 2018, summarizing the non-compliance stated in part:

During the inspection, you were asked to produce several records for fire drills, staff training, monthly checks for emergency lights and exits and you were unable to produce them.

The records you were able to produce illustrated a fire protection system check, test and inspect with several “fails” noted. However, you did not provide the records for correction of these tests. All records must be available and stored within the building for the purpose of follow-up and organization of timely maintenance.

I suggest you create a binder for this purpose for review during the inspection…

This letter was copied to Doriano Calvano at the County.

[36] On October 23, 2018, County staff attended at the Best Lifestyle facility to conduct an annual audit. On October 29, 2018, Kate Hunter, Program Supervisor, Community and Program Development with the County, wrote to Pauline Christian, following that attendance, and a number of concerns that had been discussed at the audit were outlined in the letter including:

1. Appropriate staff members were not in attendance at the audit on October 23, 2018 to respond to specific issues;
2. Compliance issues regarding the installation of the sprinkler system remained outstanding;
3. Inadequate lighting in common areas and hallways were observed;
4. Absence of records from the Simcoe Muskoka District Health Unit since May 2016;
5. Required evidence that other fire code issues from May 2018 had been addressed;
6. Concerns raised in 2018 Domiciliary Care Satisfaction Surveys; and
7. Concerns regarding disbursement of PNA benefit.

The letter also indicated that on November 28, 2018, County staff members would return to the facility to conduct the portions of the audit that could not be completed on October 23, 2018 due to unavailable staff and documentation. The letter was copied to Doriano Calvano.

[37] On October 26, 2018, Dianne Kyle, the Fire Prevention Officer with the Township of Severn that had been in communication with Best Lifestyle, advised Kate Hunter at the County that Best Lifestyle would not be compliant regarding the installation of the sprinkler system by January 1, 2019.

[38] On October 30, 2018, Georgian Bay Fire & Safety Ltd conducted an annual service call to inspect fire safety systems at Best Lifestyle and noted some deficiencies. Specifically, the smoke detectors needed to be replaced and the ULC monitoring needed repair. Both of these items were mentioned in the inspection report from the year prior, which is confusing given that the suggestion was that the October 2017 deficiencies were corrected in February 2018.

[39] On November 12, 2018, the Simcoe Muskoka District Health Unit conducted a food safety inspection of Best Lifestyle. The inspection concluded that with respect to “food general”, things were “satisfactory – no immediate action required by PHI”, however determined the risk rating to be “high”. Some compliance issues were noted, such as:

• Fail to maintain records of pest control measures taken
• Fail to retain pest control records for one year

It is of note that included with these documents in the application record was a food safety report with an inspection date of January 31, 2018, which noted “action required” and stated:

• Failed to ensure premises cleaned / swept to prevent food contamination. Ensure basement area is organized and cleaned.

[40] On November 28, 2018, County staff re-attended at Best Lifestyle as they stated they would in their letter of October 29, 2018. Present from the County were Doriano Calvano, Kate Hunter, Nicole Charlebois and Steve Sleep. Ms. Christian stated in her affidavit sworn March 21st, 2019 at paragraph 18 that “it was acknowledged at that meeting that there were no major concerns whatsoever about the care the residents were receiving. What occupied the discussions was the new Regulations which were coming on starting January 1, 2019 with respect to fire safety matters and installing a sprinkler system.” Ms. Christian agreed in her examination, however, that a number of issues were discussed at that meeting, including the fact that serious occurrence reports needed to be filed for all residents regardless of whether they were part of the Domiciliary Care Program. (Q365-366 of the examination of P. Christian) A copy of the audit and compliance form prepared from that meeting listed a number of areas of non-compliance, including:

1. Failure to maintain proper pest control documentation – some suggestions were made for BLI to complete a monthly checklist given the procedure that they were following;
2. Failure to display food handler certification – At that time three people at BLI held a food handler certification. It was suggested that the certificates be posted;
3. Fire safety issues – BLI stated that deficiencies with emergency lighting from May 2018 had been rectified. BLI also advised that clutter in the basement was removed. With respect to the sprinkler system, it was clear that the deadline of January 1, 2019 would not be met, however the permit had been received and they were awaiting funds to commence the renovations;
4. Faulty boiler – the boiler had been purchased and was scheduled to be installed November 29, 2018;
5. Need to establish and document care plans for residents – BLI was advised about what was needed to be included in care plans;
6. Failure to properly document PNA – The accounting for the PNA at that time was by keeping receipts only. BLI was advised that they were required to keep a ledger showing funds in and out.
7. Requirement to submit “Serious Occurrence Reports” – BLI was advised that these reports must be filed even if the client is not a Domiciliary Care resident.
8. Satisfaction surveys were reviewed with BLI – concerns were raised with respect to residents’ ability to talk to staff about their care. There were recommendations to provide ongoing training to staff.

In her examination, Ms. Christian stated the following about this meeting:

Q 469: So at the audit, did you get the audit compliance tool? That’s at Exhibit P of Exhibit 2 of this examination. There’s an audit compliance tool.

A: Yeah, I know.

Q 471: Okay. I just wanted to make sure you heard my question.

A: Yeah. Was it sent to me because normally when we do it, I get a blank sheet and they have a blank sheet and then they – you know, as we go through it, you know, so I’m not sure if a copy was sent to me. But I know that I had a copy, like a work – like a worksheet like this and we would go through and they would – you know, they would ask me questions just like we had done before.

Q 472: So you went through – you remember going through –

A: Uh-huh

Q 473: -- at that meeting this checklist?

A: Yeah

Ms. Christian did, specifically, recall talking about the pest control record keeping.

[41] Harolyn Foster was also at that November audit meeting. She recalled that the sprinkler system was discussed, along with the PNA, and whether they were using a ledger to track the PNA, as well as satisfaction surveys (See Q 146-151) Ms. Foster stated at Q 230 that Nicole Charlebois had mentioned to her that it was better to use a ledger when the residents are signing off on their PNA money, because Ms. Charlebois received complaints that the monies were not going to the residents.

[42] On December 3, 2018, Harolyn Foster contacted Dianne Kyle by text message to let her know that the fire alarm system had gone down that day and that they called for repair but no one had shown up. Ms. Foster asked Ms. Kyle if there was another way to do the drill without the alarm or whether they would have to postpone. Ms. Kyle responded suggesting that they do it in the new year and that she was going to let dispatch know that the system was down.

[43] On Wednesday, December 5, 2018, Dianne Kyle, Fire Prevention Officer wrote to Kate Hunter at the County to advise that the alarm system at BLI had been down since Monday and that they were on “Fire Watch”.

[44] On December 7, 2018, Dianne Kyle, Fire Prevention Officer wrote to Kate Hunter at the County to update her on the alarm system, noting that the system was still not up and running, but steps were being taken, and also stated in part as follows:

…Based on the comments from your meeting by Pauline, it appears they will be taking longer to reach compliance. I will be contacting my advisor at the Ontario Fire Marshals Office for direction. You may have to find alterative locations for the clients you have at this residence. No worries until January though. But I would advise you to have a back-up plan or perhaps…

I will keep you posted.

Due to the ongoing alarm system issue, the Township revoked Best Lifestyle’s Fire Safety Plan on December 13, 2018. This led to some non-compliance issues and three Inspection Orders were issued outlining the contraventions: alarm system failure, failure to conduct annual fire drill, and Fire Safety Plan unapproved.

[45] By December 17, 2018, the alarm system had been repaired and Ms. Kyle attended at BLI to inspect the system. The Inspection order relating to the alarm system failure was rescinded. The other two Inspection Orders remained.

[46] On December 17, 2018, County staff members Doriano Cavalano and Kate Hunter attended at Best Lifestyle Residence. At that meeting, Mr. Calvano advised Ms. Christian that she had to “step in” regarding the sprinkler system installation, that she had to be at the facility more often, and that she needed to make sure the sprinkler system got done. (Q 69-73 of examination of Pauline Christian). Mr. Calvano told her that “if the Fire Department is happy, then Simcoe County will be happy”. Ms. Hunter advised Ms. Christian that the County was considering terminating the 2018 Service Agreement due to non-compliance with fire safety requirements, in particular the Inspection Orders issued. The County instructed BLI to remedy the non-compliance by January 30, 2019, or else it would terminate the 2018 Service Agreement. During her examination, Ms. Christian agreed that she was advised that the County had almost terminated the agreement (Q 692). Mr. Calvano told Ms. Christian that she had to be best friends with Dianne Kyle, Fire Prevention Officer, and to get the sprinkler in, because once the sprinkler system was in and working, they could approve more clients. (Q699) There was no agreement to extend the time for installation of the sprinkler system.

[47] By the time of the December 17, 2018 meeting, the architectural drawings were complete, a contractor / project manager was secured, and the building permit had been received from the Township of Severn. As far as Ms. Christian was concerned, the only thing that was standing in the way was second mortgage funding for the project.

[48] On December 31, 2018, Pauline Christian wrote an email, which was sent just after midnight on January 1, 2019, to Dianne Kyle and Jim Oakley, Fire Prevention officers, and copied to various people at the County, as well as others. It stated in part as follows:

Further to our ongoing meetings and conversations, I write this letter to formalize the willingness of all parties to work with the Management of Best Lifestyle Residence and Brantville Construction Company over the next 90 days max (expected completion to be much earlier), to install the required Sprinkler System to meet the Amended Provincial Fire Code, effective January 1, 2019.

Undoubtedly, we are aware that as of January 1, 2019 we will automatically fall into the non-compliance category and that the Fire Department will need to carry out certain duties. However, we want to assure you that we are not taking your understanding of the matter, reasonability and community spirit for granted.

Based on BLR’s plans and critical path set out to install the Sprinkler System before January 1, 2019, this delay should not have happened, however, unforeseen circumstances happened outside of our control (which is being handled at a different level) which created a setback in out delivery of the project. Consequently, we have provided an Interim Augmented Fire Support / Detection Plan during the delay, to ensure extra precautionary measures are in place to provide a safe home for our residents at 6 Reinbird Street, Coldwater.

The letter then sets out in point form the interim plan. It was determined at the examination of Ms. Christian that the “unforeseen circumstances” were financial issues.

[49] The January 1, 2019 deadline for the sprinkler system to be installed and operational, as established in the Ontario Fire Code, was, obviously, not met.

[50] On January 2, 2019, Kate Hunter, on behalf of the County, responded in a letter to Ms. Christian and stated as follows:

The County of Simcoe attended your facility on Monday December 17, 2018 to discuss fire safety concerns specifically relating to Domiciliary Care Program residents at Best Lifestyle Residence Inc.

During our attendance at Best Lifestyle Residence Inc,. you were informed that the County of Simcoe was very close to immediately terminating your Social and Community Services Agreement dated May 22, 2018.

You were advised that as a result of fire safety concerns and Inspection Orders identified and documented by Severn Fire and Emergency Services, specifically: fire alarm system failure, an unapproved Fire Safety Plan and the absence of required annual fire drill, the County of Simcoe was considering terminating your Service Agreement pursuant to Section 14.2(d) and (e)…

It was discussed with you that as a result of Severn Fire and Emergency Services rescinding the Inspection Order relating to fire alarm system failure, the County of Simcoe decided against terminating your Service Agreement at this time.

However, it was stressed to you that the County of Simcoe does have a responsibility on behalf of Domiciliary Care Program residents to ensure that domiciliary homes meet applicable standards and to ensure that residents obtain a quality of life that supports safe and healthy living to support individual rehabilitation goals. As such, you were informed that you are required to comply with the outstanding Inspection Orders relating to an unapproved Fire Safety Plan and the requirement to complete your annual fire drill within the prescribed timeline of January 30, 2019. Failure to comply with these outstanding issues may result in the termination of your Service Agreement.

This letter was copied to Doriano Calvano.

[51] On January 2, 2019, the Severn Fire and Emergency Services issued an Inspection Order against the BLI facility in relation to the sprinkler system and provided an extension until March 29, 2019.

[52] In early January 2019, Doriano Calvano retired. Prior to his retirement, he reported to Janice Janssen, the Director of Children and Community Services at the Corporation of the County of Simcoe, who had taken this portfolio in 2015 or 2016. At the time of the examination of Ms. Janssen on May 9, 2019, Mr. Calvano’s position was still vacant. She explained that Kate Hunter did not replace Mr. Calvano, however, Ms. Hunter also reported directly to Ms. Janssen. Ms. Janssen explained in her examination at Q43 that Kate Hunter was a supervisor responsible for oversight to the domiciliary care program and also supportive housing programs and initiatives in the community, which she commenced in September 2018. Ms. Hunter reported to Mr. Calvano until his retirement.

[53] On January 4, 2019, Dianne Kyle wrote to BLI concerning the need to set up a day for a fire drill before the end of January. Pauline Christian responded to this email on the same day, asking that her son, D’Juvayne, arrange a date for the fire drill prior to the end of January.

[54] On January 17, 2019, Dianne Kyle wrote an email stating:

I haven’t heard from you in regards to the Fire Drill which is due by the end of January. The only date I now have available is January 29th, 2019 at 10:00 a.m. To avoid further costly enforcement, this must be completed by January 30th, 2019.

Please arrange the appropriate staffing for this date and confirm the time so I am able to arrange a crew to assist.

It is not clear who this email was written to, however, D’Juvayne Christian responded on the same day:

I spoke about with everyone earlier today. January 29th is best for us as well. We will have the appropriate staff.

[55] On January 24, 2019, Ms. Hunter of the County wrote an email to Pauline Christian asking when construction of the sprinkler system would begin and asked whether a contracting team had been selected to complete the installation. On January 25, 2019, Ms. Christian responded:

Re the installation of the Sprinkler, my contractor is aware of the timelines and is confident that we will be able to meet the new deadlines.

He is out of the country and should be returning next week. He advised me before he left that he has workmen assigned to the project (I have seen signs of their presence around the facility) and was working with them to ensure everyone understands the urgency, and will make themselves available to get the project done in a reasonable turn around, to meet the deadline of March 29 or before.

So in the next couple of weeks we should have a clearer critical path for us to move forward, ensuring we are meeting deadlines.

I will keep you abreast of the developments.

[56] On January 28, 2019, Kate Hunter responded to Ms. Christian in an email stating:

Thank you for providing us with an update of your anticipated timelines relating to the sprinkler installation. Please ensure that you continue to provide us with updates as the work progresses.

[57] According to Ms. Janssen, the extension on the sprinklers until the end of March was not an agreement with the County. She stated (Q 126):

A: If you’re talking about the end of March date, we were not part of that consensus. That was a discussion between Best Lifestyle and the fire authorities. We had said to Best Lifestyle, we absolutely want that sprinkler system in by January 30th. And I can find that record in one of our exhibits.

Ms. Janssen agreed that she was aware that there was an agreement between Best Lifestyle and the fire authorities to extend the time for the sprinkler installation to the end of March. Ms. Janssen did not point to anything in the record to establish that the County expressed to BLI that the sprinkler had to be in by the end of January. The deadline for the end of January was clearly with respect to the other Fire Code issues.

[58] On February 7, 2019, Kate Hunter and Steve Sleep attended at Best Lifestyle to meet with Pauline Christian to discuss various issues. At that time, there were no signs of construction or that any progress had been made in bringing the sprinkler system into compliance with the Fire Code. Other concerns were noted about the premises that were unrelated to the sprinkler system, such as a broken tile that could create a trip hazard and a tarp on the roof. Also, there was only one staff member observed despite the fact that the fire watch required a minimum of three staff members. Ms. Christian agreed in her examination that issues regarding a resident of BLI, who was not a member of the Program, were discussed at length (Q 745). She also stated at Q746:

…I think at that meeting Kate had got two calls or she said we evicted two people….And I said, we have never evicted anyone because I do not believe in eviction when it comes onto people – like the people we serve.

Ms. Christian did not consider this a formal meeting; she did not think they even sat down. Ms. Christian did agree that there was a tarp on the roof as it was being fixed to prepare for the sprinkler system.

[59] On February 8, 2019, the County wrote an email to a number of individuals announcing the retirement of Doriano Calvano.

[60] Around this time, the County decided not to renew or enter into a new services agreement with BLI. Janice Janssen, the Director of Children and Community Services for the County, made the decision, in consultation with others at the County. On February 20, 2019, Mr. Sleep and Ms. Hunter attended at BLI to advise Ms. Christian of this fact. Ms. Hunter was also to advise Ms. Christian that the County would continue to pay subsidies to BLI until the term of the 2018 Services Agreement ended on March 31, 2019, whether or not the Program residents remained at the facility.

[61] Ms. Janssen testified that the “most concerning part” for her was the sprinkler system, although she pointed to many other issues that caused concern such as the need for an approved fire plan, the requirement to complete the annual fire drill, not having or proving in a timely fashion proper documentation, and other unsafe or hazardous practices, such as inadequate lighting, chipped tiles and a leaking roof. She described it as a “pattern of non-compliance”. Ms. Janssen admitted that she was receiving this information from others as opposed to observing any non-compliance on her own.

[62] Later in her testimony, it was suggested to Ms. Janssen that she arrived at her decision to not renew this contract in five months, from September 2017 to February 2018. Ms. Janssen stated as follows at Q: 571:

I would – okay, do you want my response because that’s not accurate. Issues with the fire safety piece started coming up back in ’17. I’ve already spoke to that. Doriano did bring that to my attention. I think what I would say is that Doriano retired. There were concerns that were cited and investigated and we sought compliance. We didn’t see that happening. The fire piece on its own, in my mind, stands as significant enough. But we had a lot of other concerns, and learned after he left that this had been patterned and that this type of non-compliance had been occurring for some time.

[63] Nicole Charlebois also filed an affidavit on these proceedings and was cross-examined. Ms. Charlebois was the discretionary additional benefits unit caseworker for the County of Simcoe from 2016 onward. With respect to BLI, she would oversee the subsidies for the residents that were residing at the facility. As part of her job, she would often request updated information from the facilities in order to update a client’s income and monthly accommodation cost. It is of note that in the examination of Nicole Charlebois, the following exchange took place:

Q 103: Did they [BLI] cooperate with you when you asked them to supply information?

A: Sometimes.

Q: And did they have explanations to you when they failed to cooperate with you?

A: Sometimes.

Q: Okay. So do you have any specific memory of the sometimes when they didn’t?

A: Often I would have to send emails – like on a repeat because information wasn’t provided, if I asked for health cards or notices of assessments.

Q: Right. And would you agree with me that this is – isn’t this a normal thing in your work, that, you know, dealing with people in other – other homes, isn’t that normal that you send a request, they wouldn’t respond and you have to send another request?

A: No.

Q: It’s only with Best Lifestyle that you have to send more than one request?

A: Yes

A: Yeah, so I have to make lists with Best Lifestyle for information that I have requested. Where when I have to send stuff to other facilities, it’s – I don’t normally have to send off a request every single month for the same thing.

Ms. Charlebois testified that she reported this to her supervisor. Her supervisor was Mr. Sleep. She stated that some information she would eventually receive from BLI, whereas some requested information was never received at all.

[64] On February 20, 2019, the County sent a letter to Pauline Christian confirming the County’s decision not to renew the Services Agreement. It stated in part as follows:

Unfortunately, Best Lifestyle Incorporated has not observed all of the requirements necessary to continue as a Service Provider for the County of Simcoe. As previously outlined, the County of Simcoe had identified the following issues relating to non-compliance of your Service Agreement:

• Non-compliance of Ontario Fire Code
• Concerns identified relating to the level of care being provided
• Omission of providing Serious Occurrence Reports
• Omission of submitting required documentation
• Concerns relating to the disbursement of Personal Needs Allowance
• Inadequate staffing levels
• Physical issues with the building

Please be advised that pursuant to Section 5 and 6 of the Service Agreement, effective April 1, 2019, the Municipality will not be renewing a new Service Agreement.

While this list is very general in nature, most, if not all, of these issues had been raised at earlier points in time, as evidenced in the chronology above.

[65] On February 22, 2019, the County prepared a letter to the Domiciliary Care Program residents at BLI advising of its decision to cease subsidizing placements at the BLI facility. The letter does not set out any reasons for this decision, however, the letter does indicate:

The County of Simcoe has a responsibility on behalf of Domiciliary Program clients to ensure that domiciliary residential homes meet applicable standards and to ensure that residents obtain a quality of life that supports safe and healthy living to support individual rehabilitation goals.

At this time, we would like to make you aware that should you wish to remain subsidized by the County of Simcoe Domiciliary Program, we will not be able to continue to fund on your behalf at your current residence effective April 1, 2019. As a result, should you wish to remain subsidized under the Domiciliary Program, we will accommodate your request to relocate to another approved domiciliary provider within Simcoe County.

We want to advise that we are not mandating you to move to a new residence. It is your decision whether or not you chose to remain at Best Lifestyle Incorporated. However, should you decide against relocating to an approved domiciliary provider within Simcoe County, you will be responsible to pay Best Lifestyle Incorporated full market rent effective April 1, 2019.

These letters were ultimately delivered to the residents at BLI. Only three of the domiciliary program residents at BLI chose to move to another participating facility, one of which had already intended to move for other reasons unrelated to any compliance issues. Ms. Christian, in her affidavit, stated that this had resulted in $58,176.00 of lost yearly revenue.

[66] Counsel for BLI communicated with the County on several occasions after the letter of February 20, 2019, requesting reconsideration and providing further information about the concerns raised. For example on February 27, 2019, counsel wrote a lengthy email to Janice Janssen, copied to Kate Hunter.

[67] On March 4, 2019, Janice Janssen wrote a letter to counsel for BLI to respond to his letter of February 27, 2019. The letter expressed the county’s appreciation to Best Lifestyle, but stated:

However, as concerns have increased over the past few years, and most specifically within the last year, the county of Simcoe is not prepared to renew Best Lifestyle’s Service Agreement.

The County’s decision is based on much more than an ‘information gap’ and to that end I respectfully provide the following for your review…

The letter then provides seven areas of concern which led to their decision not to renew the contract. With respect to Ontario Fire Code issues, the letter stated: “The County of Simcoe has been closely monitoring their adherence to this timeline and are not comfortable with the lack of progress in this regard.” In the conclusion of the letter it stated:

The County of Simcoe cannot reverse its decision to not renew the Best Lifestyle Incorporated Services Agreement while still fulfilling its obligations as the Service Manager for the Domiciliary Care Program…

On the same day, counsel for BLI briefly responded but requested further time to respond in more detail.

[68] On March 5, 2019, prior to receiving a detailed response from counsel for BLI, Ms. Janssen sent an email to counsel for BLI and stated:

Our decision regarding the County’s Service Agreement with Best Lifestyle was not made lightly. We had many discussions with the Operator, with a sincere desire to see issues rectified.

While I certainly respect your advocacy on behalf of Ms. Christian, this email is to confirm that the decision stands. The County will not be renewing its Service Agreement with Best Lifestyle.

[69] On March 5 and 7, counsel for BLI sent further email correspondence to Ms. Janssen in an effort to have the County reconsider and also to respond to the issues raised in the earlier correspondence.

[70] On March 7, 2019, Zarah Walpole, Director of Legal Services for the County, advised counsel for BLI that even though the 2018 Services Agreement did not contain a notice period for non-renewal, Ms. Walpole recommended to the county that BLI continue to receive funds through the Care Program until April 22, 2019 so that BLI could enjoy the notice period stipulated in the termination clause. The letter stated in part as follows:

BLI was advised of the County’s decision not to renew its Services Agreement for Domiciliary Care on February 20, 2019. The notice of non-renewal was provided in accordance with section 5 of the Services Agreement, which does not include a required time frame for notice. Notice was provided as soon as a decision was made. No procedural unfairness occurred.

However, I acknowledge that section 14.1 of the Services Agreement also includes a “without cause” termination provision that provides either party may terminate the agreement upon 60 days’ notice to the other party. I note the potential confusion that could be (and evidently was) created as a result of the difference between termination and non-renewal. As a result, I have recommended to the County that BLI receive Allocated Funds to April 22, 2019, being 60 days from the original notice of non-renewal. I agree that BLI should receive the benefit of the more fulsome clause.

[71] Again, on March 8, 11, 12, 2019, counsel for BLI wrote and sent an email, this time to Ms. Walpole. On March 13, 2019, Ms. Walpole responded stating in part as follows:

The current Services Agreement with BLI expires on March 31, 2019. I want to reaffirm the County’s position that it will not be renewing the Services Agreement for the 2019 / 2020 year.

Staff at the County are willing to meet with you and your client to explain the basis for its decision not to renew the agreement and to discuss steps to ensure a smooth transition for the domiciliary care residents of the home. However, the decision not to renew the Services Agreement has been made and we are not open to a negotiation with respect to that decision.

[72] In her examination, on May 17, 2019, Ms. Christian confirmed that the sprinkler system was still not commissioned at the facility. (Q 768-770). She stated that work had commenced in the latter part of February 2019. (Q838)

Earlier Court Proceedings

[73] On March 26, 2019, Justice G.P. DiTomaso made an order on consent with respect to serving materials and cross examinations. A further order was made, not on consent, that the Respondent would continue funding 12 beds at BLI until April 22, 2019, inclusive, without prejudice, pending further order of the court. Costs were reserved.

[74] When the matter returned for a hearing in June, it was determined that the matter was in fact a long motion and it was ultimately heard for the better part of two days.

LEGAL ANALYSIS

Issue 1: Did the County owe a duty of good faith to BLI?

[75] The services agreement at issue in this case is clearly worded and must guide the parties conduct. Several things are to be noted about this agreement:

1. There is no automatic renewal in this agreement. In fact, there is no reference to renewal at all, apart from the reference to the possibility of continued funding in clause 5;
2. The agreement has a specific term – from April 1, 2018 to March 31, 2019;
3. Either party is permitted to terminate the agreement upon 60 days’ written notice. No cause is required;
4. The County is entitled to ensure compliance with the services agreement on a regular and ongoing basis;
5. The agreement may be terminated by the County immediately for cause;
6. This is not a negotiated agreement, but rather, one prepared by the county and presented to the potential service provider as a “take-it-or-leave-it” proposal. If the service provider wishes to be a service provider, the terms of the services agreement are final and must be agreed to. However, of course, a facility can choose whether they wish to be a service provider under these terms;
7. There is an “entire agreement” clause;
8. There is a “waiver of breach” clause.

The Applicant submitted, however, that there is much more to this relationship than the words in this agreement. For 13 years, the contracts / service agreements have been renewed. As issues arose between the parties, they would work through them. The Applicant argued that the conduct of the parties demonstrates the intention underpinning this services agreement and that even though the agreement does not say so, there was a reasonable expectation that the services agreement would continue year to year. The Applicant encouraged this court to view the conduct of the parties as representing the intention, not the written words of this agreement: See Colautti Construction Ltd. v. City of Ottawa (1984), 1984 CanLII 1969 (ON CA), 46 O.R. (2d) 236 (C.A.); Shelanu Inc. v. Print Three Franchising Corp, (2003) 2003 CanLII 52151 (ON CA), 64 O.R. (3d) 533 (C.A.) at para. 54.

[76] This is clearly a contract of adhesion as referred to in Shelanu at para. 58-59. Further in Shelanu, the court explained the difference between a fiduciary duty and a duty of good faith:

[69] There is at least one important difference between the duty of good faith and a fiduciary duty. If, for example, A owes a fiduciary duty to B, A must act only in accordance with B's interests when A exercises its powers or exercises a discretion arising out of the relationship: see York Condominium Corp. No. 167 et al. v. Newrey Holdings Ltd. et al. (1981), 1981 CanLII 1932 (ON CA), 122 D.L.R. (3d) 280 (Ont. C.A.) at 289, leave to appeal to the Supreme Court of Canada refused [1981] 1 S.C.R. xi; Hodgkinson v. Simms, 1994 CanLII 70 (SCC), [1994] 3 S.C.R. 377. If, on the other hand, A owes a duty of good faith to B, A must give consideration to B's interests as well as to its own interests before exercising its power. Thus, if A owes a duty of good faith to B, so long as A deals honestly and reasonably with B, B's interests are not necessarily paramount: see for example Mason v. Freedman, 1958 CanLII 7 (SCC), [1958] S.C.R. 483.

[77] It has also been held by the courts that parties should deal fairly with each other in order “not to nullify the reasonable expectations” that the parties have “fostered”. CivicLife.com Inc. v. Canada (Attorney General), 2006 CanLII 20837 (ON CA), [2006] O.J. No. 2474 (C.A.) para. 18. In CivicLife at para. 52, the court also made it clear that an entire agreement clause does not preclude the expectation that the parties would act in good faith. The court has a discretion to refuse to enforce such a clause where to do so would be “unconscionable, unfair or otherwise contrary to public policy”. See Guarantee Co. of North America v. Cordon Capital Corp. [1993] 3 S.C.R. 423.

[78] In Muhammad v. Mental Health Program Services of Metropolitan Toronto, [2006] O.J. No. 3337 (S.C.), affirmed at 2008 ONCA 322, there had been a lengthy relationship between the parties. Not-for-profit agencies would liaise with municipal and provincial government who would provide some funds that would be channelled to the owners of certain homes as a subsidy for residents with a mental disorder who met certain criteria. The owners of these homes, Mr. Muhammed being one who had two such homes, contracted with the agency in return for subsidies, and the owners agreed to maintain certain standards and adhere to various requirements. The contract provided for 90 days' notice of termination, that owners were required to keep mortgages in good standing and that consent to assignment of the contract could be unreasonably withheld by Habitat. Muhammad stopped paying his mortgage on one of his houses and the house was repossessed. Habitat terminated its contract with Muhammed on the other house, giving 54 days' notice. Muhammad brought an action. The court stated:

[46] It is Habitat's position that the proper construction of the notice period as set out in section 20(a) must be limited by the time remaining in the particular contract, which was 54 days at the time the notice was given. For the reasons that follow, I disagree. The plaintiff, under the contract, was entitled to 90 days' prior written notice. Habitat had entered into a new contract with the plaintiff annually since 1991. While this fact could not operate so as to extend the notice period beyond the 90-day period stipulated by the contract, the pattern of continuous contractual relations did give rise to a reasonable expectation of Mr. Muhammad that, subject to 90 days' prior written notice, Habitat would enter into a new contract with him. Reasonable expectations of contracting parties have been discussed in cases that dealt with a claim for a breach of the duty of good faith. The content of the duty of good faith depends on the "reasonable expectation" of the parties at the time of the breach and reasonable notice be given to a contracting party if the other contracting party intends to end their long-term contractual relationship. In Mesa Operating Ltd. Partnership v. Amoco Canada Resources Ltd., supra Shannon J. said, "the common law duty to perform in good faith is breached when a party acts in bad faith, that is, when a party acts in a manner that substantially nullifies the contractual objectives or causes significant harm to the other, contrary to the original purposes or expectations of the parties."

In other words, if there was a reasonable expectation of renewal, which there was in Muhammad, then the contracting party must be given only what they are entitled to under the contract, which was 90 days’ prior written notice. The court was clear, however, that the parties were not entitled to something more than what the contract provided. The duty of good faith did not extend that far.

[79] In Bhasin v. Hrynew, 2014 SCC 71, at paras. 63- 65, the Supreme Court of Canada discussed the principle of good faith as an “organizing principle” and that it is “not a free-standing rule, but rather a standard that underpins and is manifested in more specific legal doctrines and may be given different weight in different situations”. The organizing principle of good faith is “simply that parties must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily” and to have “appropriate regard to the legitimate contractual interests of the contracting partner”. The Court stated:

[73] …I would hold that there is a general duty of honesty in contractual performance. This means simply that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract. This does not impose a duty of loyalty or of disclosure or require a party to forego advantages flowing from the contract; it is a simple requirement not to lie or mislead the other party about one's contractual performance. Recognizing a duty of honest performance flowing directly from the common law organizing principle of good faith is a modest, incremental step. The requirement to act honestly is one of the most widely recognized aspects of the organizing principle of good faith: see Swan and Adamski, at s. 8.135; O'Byrne, "Good Faith in Contractual Performance", at p. 78; Belobaba; Greenberg v. Meffert (1985), 1985 CanLII 1975 (ON CA), 50 O.R (2d) 755 (C.A.), at p. 764; Gateway Realty, at para. 38, per Kelly J.; Shelanu Inc. v. Print Three Franchising Corp. (2003), 2003 CanLII 52151 (ON CA), 64 O.R. (3d) 533 (C.A.), at para. 69. For example, the duty of honesty was a key component of the good faith requirements which have been recognized in relation to termination of employment contracts: Wallace, at para. 98; Honda Canada, at para. 58.

See also: Greater Vancouver Sewerage and Drainage District v. Wastech Services Ltd., 2019 BCCA 66, [2019] B.C.J. No. 236 (C.A.)

[80] BLI was entitled to honesty in contractual performance as it was explained in Bhasin. The County was not permitted to lie or otherwise knowingly mislead BLI about matters related to the performance of the contract. It is the view of this court that nothing of this nature happened in this case. The duty of good faith does not extent beyond matters directly linked to the performance of the contract. The 2018 Services Agreement did not contain a right or option to renew by either party. The court must be guided by the terms of the contract. The court must not extend the duty of good faith so far as to “read in” a right of renewal where one clearly does not exist, but simply where one of the parties assume a renewal will take place given the history. This would expand the notion of a duty of good faith in a manner not intended by the Supreme Court of Canada. The fact that renewals of the services agreement had occurred in the past does not change the clearly worded terms of the services agreement.

[81] It is worth noting that in Bhasin there was an auto-renewal clause, specifically the contract would automatically renew at the end of the three-year term unless one of the parties gave six months’ written notice to the contrary. Even in that context, the court stated:

[90] It is not necessary in this case to define in general terms the limits of the implications of the organizing principle of good faith. This is because it is unclear to me how any broader duty would assist Mr. Bhasin here. After all, the contract was subject to non-renewal. It is a considerable stretch, as I see it, to turn even a broadly conceived duty of good faith exercise of the non-renewal provision into what is, in effect, a contract of indefinite duration. This in my view is the principal difficulty in the trial judge's reasoning because, in the result, her decision turned a three year contract that was subject to an express provision relating to non-renewal into a contract of roughly nine years' duration. As the Court of Appeal pointed out, in my view correctly, "[t]he parties did not intend or presume a perpetual contract, as they contracted that either party could unilaterally cause it to expire on any third anniversary": para. 32. Even if there were a breach of a broader duty of good faith by forcing the merger, Can-Am's contractual liability would still have to be measured by reference to the least onerous means of performance, which in this case would have meant simply not renewing the contract. Since no damages flow from this breach, it is unnecessary to decide whether reliance on a discretionary power to achieve a purpose extraneous to the contract and which undermined one of its key objectives might call for further development under the organizing principle of good faith contractual performance.

This would suggest that even if there was a breach of the duty of good faith, the result would be to look to the contract and provide the least burdensome correction to the problem. In this case, even though the service agreement does not provide for it, the County paid BLI until April 22, 2019, in effect giving them 60 days notice, as the contract sets out for termination. This was not required in the context of non-renewal, however, it was certainly a showing of good faith in the manner described in Bhasin.

[82] It is the view of this court that the services agreement has very plain language. There is no ambiguity. Ms. Christian is very educated, follows legislation, and is involved with government. Ms. Christian claims to have not read the agreement, which is questionable given that this was part of her role for BLI according to her own testimony. Given her background and education, this court has no doubt that she understood the terms of this contract.

[83] There was nothing in this case that suggested the parties intended to automatically renew the contract without regard for the conduct of the parties, in fact, the contract states the opposite. Further, the entire agreement clause in this Services Agreement at clause 29.1 is different than Shelanu. This Agreement covers what happens after the contract is signed – “…no agreement or understanding varying the terms and conditions hereof shall be binding on either the Municipality or the Service Provider unless an amendment to this Agreement is issued and duly signed by their respective authorized representatives.”

[84] Despite the longevity of this relationship, the duty of good faith should not extend so far as to force parties to negotiate the renewal of new contracts in perpetuity simply because they have done so in the past, especially where the terms of the contract are specifically fixed and where there is no automatic renewal provision. There was no entitlement to renewal in this case.

[85] The term of the 2018 Services Agreement was from April 1, 2018 until March 31, 2019. For a variety of reasons, the County decided not to renew that agreement. In deciding not to renew, there was no contractual obligation or duty being performed. Therefore, the decision not to renew would have no duty of good faith requirement.

Issue 2: Did the County demonstrate bad faith in not renewing the contract with BLI? If so, is BLI entitled to damages?

[86] This court has concluded that no duty of good faith existed in the context of the decision not to renew the contract. In the event that the Court is wrong about the existence of the duty of good faith in these circumstances, there will now be a consideration of whether the County acted in bad faith in not renewing the contract.

[87] In oral argument, this court questioned counsel for the Applicant as to whether his position was that this was really termination disguised as non-renewal. Initially, he said that this was not his position and that he had no basis upon which to make that argument. However, after a lunch break, counsel clearly took the opposite position, and stated that this was precisely his submission, and that in fact this was termination disguised as non-renewal. He stated that if, in fact, this was non-renewal, the County would have simply let the contract expire without sending the letter they did on February 20, 2019.

[88] Counsel even suggested the possibility of racial discrimination on the part of persons at the County as being a motive for the non-renewal.

[89] It is the view of this court that there is absolutely no evidence of racial discrimination in this case. Counsel was not able to point to any evidence in this regard, other than simply a feeling he had given the way the circumstances had unfolded. This is not sufficient to demonstrate racial discrimination.

[90] Counsel for BLI questioned Ms. Janssen at the examination about possible racial discrimination motives. At Q 604:

Q: So, Ms. Janssen, you advised me that you didn’t know that the Christians were AfriCanadians as we call them. Is that correct? You didn’t know”

A: Until Kate came back and told me that she had been on site to advise that we were not renewing the agreement. And at that time she said that Ms. Christian cited allegations of racism. And at that time, I said why. So that just doesn’t hold water.

[91] It is the view of this court that there was simply no basis for the Applicant to suggest that a motive behind the non-renewal of the Agreement was one of racial discrimination.

[92] Another issue raised by counsel for the Applicant was that Ms. Janssen relied on hearsay information in making her decision not to renew the contract. She came into the job of Director in 2016 and had no previous personal interaction with the Christian family. Frankly, this is quite common in any business structure. The person making the ultimate decision is not typically the one gathering the information. It is the view of this court, however, that Ms. Janssen is entitled to rely on the information being provided to her through various sources in order to inform her decision. Much of the history is documented in correspondence to and from BLI. Not to mention the fact that the Christian family admitted, in many instances, that the allegations were made and the conversations took place as Ms. Hunter and others suggested. The position of BLI, however, was more focused on the fact that they were continually working toward making things right or that circumstances were not as they seemed, such as in attending to the bank with one of the residents. The fact was that someone from BLI did attend the bank with a resident and they explained the reason for this occurrence. However, that does not change the fact that there were issues along the way, which the Applicants acknowledge, that caused the County to be rightfully concerned, such as:

1. The Applicants do not deny that the construction on the sprinkler system had not started in early February.
2. The Applicants do not deny that there were various Inspection Orders issued for Fire Code violations, other than the sprinkler system.
3. The Applicants do not challenge the fact that they were not keeping a ledger for the PNA, but rather were keeping receipts.
4. The Applicants do not challenge the fact that there was a tarp on the roof in February and that work was being done on the roof.
5. The Applicants do not challenge the fact that they did not provide serious occurrence reports in a timely fashion, however, they blame this on a misunderstanding (In fact, despite the clear wording of the 2015 Domiciliary Program Standards and Operational Procedures, counsel still, erroneously, takes the position that this only applies to residents who are members of the Program).
6. The Applicants do not challenge that documents were not readily available when requested on occasion.

[93] In fact, Harolyn Foster, who was in charge of much of the day to day operation of the business stated in her affidavit:

11. What I notice is that the non-compliance complaints listed by Ms. Janssen, go back some years. Why would this be? Why would someone with whom you have had a relationship of trust and in which each of you trying your best and you are thinking let bygones be bygones and then all of a sudden, whatever has been forgiven in the past (all buried) and settled become the basis or reason for wanting to leave the relationship…

12. The point is that here we (Best Lifestyle) are thinking that we are progressing down the road, making new grounds, new relationships, new understanding of compromise etc, and then, because you wish to get rid of me, you revert to my past sins although we agree either by agreement or conduct that those past item are no longer of concern. Now it is being demanded that I reach back in the past to address what happened back then…

Clearly there is an acknowledgement by Harolyn Foster that some things could have been done better by BLI.

[94] The Applicant suggested that this court draw an adverse inference, given that Kate Hunter was a critical witness and did not provide an affidavit. While the Court agrees that it might have been helpful to hear from Kate Hunter directly on some points, the absence of her evidence does not require an adverse inference to be drawn. Ms. Janssen, in consultation with others, made the decision not to renew the contract. In doing so, she relied on information relayed to her by other people, but also relied on information supported by a number of other sources, including email correspondence and other documentation. Many of the things that Ms. Janssen outlined as being problematic in her correspondence of February 20, 2019, are things that had been previously raised by the County with BLI, as admitted by BLI. While BLI may take the position that these things were more minor than what was indicated or that these things had been corrected, this does not change the fact that this history existed. One must also keep in mind that this was a non-renewal as opposed to a termination. BLI was not required to show cause as to why they were not renewing the contract. Surely, by doing the courtesy of providing some reasons for their non-renewal does not then put them in a situation of absolute proof of every circumstance put forward. Again, however, many of these concerns were demonstrated in other ways, aside from simply reliance on Kate Hunter.

[95] As previous quoted from paragraph 73 of Bhasin, the duty of honest contractual performance does not impose a positive duty of loyalty or disclosure on a party to a contract, nor does it require a party to forego advantages flowing from the contract. Therefore, if the County did not show loyalty or provide information to BLI, this could not be considered a breach of the duty of good faith, and, therefore, could not be seen as bad faith.

[96] The fairly recent decision of CM Callow Inc. v. Zollinger 2018 ONCA 896 discussed the duty of good faith in the context of contract renewal. The court stated as follows:

[15] Putting the case for the respondent at its highest, then, the appellants decided to terminate the winter contract and chose not to inform the respondent until some months later, in order not to jeopardize the respondent's performance of the summer contract. Not only did the appellants fail to inform the respondent of their decision to terminate, but they actively deceived Callow as to their intentions and accepted the "freebie" work he performed, in the knowledge that this extra work was performed with the intention/hope of persuading them to award the respondent additional contracts once the present contracts expired.

[16] In our view, these findings may well suggest a failure to act honourably, but they do not rise to the high level required to establish a breach of the duty of honest performance.

[17] It is clear from Bhasin that there is no unilateral duty to disclose information relevant to termination: at para. 73. Unlike Bhasin, this was not a case in which the contract would renew automatically, nor were the parties required to maintain an ongoing relationship. The appellants were free to terminate the winter contract with the respondent provided only that they informed him of their intention to do so and gave the required notice. That is all that the respondent bargained for, and all that he was entitled to.

[18] The duty of honest performance in this case required that the parties be honest with each other concerning matters "directly linked to the performance of the contract" (Bhasin, at para. 73) -- that is, linked to the winter contract then in effect. It did not limit the appellants' freedom concerning future contracts not yet negotiated or entered into. Communications between the parties may have led Mr. Callow to believe that there would be a new contract, but those communications did not preclude the appellants from exercising their right to terminate the winter contract then in effect.

[19] The trial judge's decision that the minimum standard of honesty included a requirement to address performance issues, provide prompt notice, or to refrain from representations in anticipation of the notice period had the effect of substantially modifying the appellant's right to terminate the contract -- a key term of the contract. This goes beyond what the duty of honest performance requires or permits.

[97] BLI argued that the facts in CM Callow, demonstrating a relatively short-term relationship, were obviously different in the sense that, here, the Applicant and Respondent had been in a relationship for over 13 years with a services agreement that was “rolled forward” every year. With all due respect, this difference does not make the holding in CM Callow distinguishable. Further, in this case, even with earlier service contracts, without a specified term, it appears there were new written agreements made regularly. Even more important, however, is that in 2017, the services agreements started having specific term end dates. There was no automatic rollover as the Applicant suggested, but rather a decision by the parties to enter into a new services agreement. This change indicated a clear intention on the part of the parties to have fixed term agreements, as opposed to the contracts in the past with no fixed end date. While I agree that the length of the relationship here is different than that in CM Callow, this does not change the fact that like in CM Callow, the contracts did not renew automatically, nor were the parties required to maintain an ongoing relationship.

[98] Similar to CM Callow, the duties of good faith and honest contractual performance do not require the County to give BLI reasons for its decision to not continue the relationship, because there was no right or option for renewal and reasons were not required by any term of the agreement. However, the County did provide reasons to BLI in the termination letter of February 20, 2019. They also continued to engage with counsel to expound upon those reasons when requested to do so. Counsel for the County even agreed to a meeting to expound further upon the reasons. Finally, the County decided to pay BLI up to April 22, 2019 to ensure that BLI received the benefit of a full 60 day notice period, even though it was not entitled to one. Having given the reasons that it was not required to give surely does not put the County in a more onerous position to justify those reasons.

[99] It is the view of this Court that the issues had simply been piling up over 2017 and 2018 and, while some of those issues were being addressed, some were not. Also, issues were not always dealt with as quickly as the County would have liked. As Ms. Janssen stated at Q 319:

I think it’s part of a process. I think though that process has been ongoing over ’17 and ’18 and we haven’t seen the kind of reciprocity we need to see in terms of working to comply.

[100] Ms. Janssen had no reason to explain herself at all. There is absolutely no requirement in the services agreement that Ms. Janssen or anyone from the County provide a reason for not renewing. She could have simply said they were not renewing the contract. However, Ms. Janssen provided BLI with her reasons so that they would understand that her decision was not arbitrary. There were reasons for her decision and she provided those reasons, even though not required to do so. Even though BLI takes a different position on some of these issues, that does not detract from the County’s right not to renew the contract when it came to its natural end. The fact is that Ms. Janssen did not terminate the services agreement for cause. Therefore, she is under no obligation to justify any cause.

[101] There is no evidence that the County lied or attempted to mislead BLI. The fact is they might have been content to wait until the end of March if they saw progress on the sprinkler project. However, when they attended on February 7, 2019, they did not see progress on the project which is consistent with the testimony of Ms. Christian that construction on the sprinklers did not start until the later part of February. Frankly, even if the County did lead them on to believe the relationship would continue and the agreement would be renewed, CM Callow would suggest that is still proper.

[102] While the Applicant may have relied on the fact that this contract would simply be rolled over from year to year, this was not the agreement that the County made with them. Further, by late 2018 and early 2019, they were certainly aware that there were a number of problems and that the County had come close to terminating the agreement. BLI knew:

1. That the County was closely monitoring the sprinkler system installation;
2. That the County was closely monitoring other ongoing fire code violations that had occurred;
3. That the County was questioning their bookkeeping of the PNA payments;
4. That the County was questioning their submission of serious occurrence reports; and
5. That the County was questioning some of their record keeping practices.

While BLI may not agree that they were doing anything wrong, they certainly knew that the County was not satisfied with some of their conduct. With respect to the sprinkler system, despite having been aware of this issue since April 2014, by early February 2019, past the date required by the Fire Code, no actual work on the sprinkler system had been commenced. This lack of progress alone would seem to justify the County’s decision not to renew. Lack of attention to fire code concerns, as evidenced by the slow progress on the sprinkler system and other issues, are serious. The lives of many people are at risk when fire codes are not adhered to, and any delay can have unimaginable consequences.

[103] The fact that the County was unwilling to reverse their decision after February 20, 2019 is of no consequence. By that time, the history already existed. Clearly the County of Simcoe was not happy with the progress of the sprinkler system installation, in addition to a myriad of other factors that had piled up over time. The explanations provided by counsel to try to repair the situation did not change the history. The damage to the relationship had already occurred. Clearly the County had lost faith in BLI’s ability to continue in the Domiciliary Care Program. The County has an obligation to ensure that the service providers are ones that they feel with fully comply at all times with the mandate of the Program. Service providers under such a program have no right to continue in the program. It is a privilege to be approved as such a service provider. When given this privilege, rules and policies should be followed, otherwise, losing this privilege will be the obvious consequence.

[104] To suggest that the Christian family had no opportunity to defend the allegations made by the County simply denies the facts of this case. There were numerous chances given to BLI to satisfy the County on various issues. For example:

• The County did not simply terminate the contract when the sprinkler system was not installed by the Fire Code due date of January 1, 2019. Rather, the County continued to monitor the progress. However, there was never any expressed agreement from the County to allow an extension until March 29, 2019. The county was aware that this was the date given by Fire Services and they were monitoring the situation themselves.
• The County did not simply terminate the contract when other Fire Code violations were raised but rather continued to be patient while BLI worked with fire services
• The County did not simply terminate the contract when they had concerns about the accounting for the PNA payment, but rather demonstrated and suggested a better way to do record keeping.
• The County did not simply terminate the contract when they had concerns about the serious occurrence reports not being provided, but rather reminded BLI that these reports must be filed for all residents as per the standards that they should have been well aware of after so many years.

The fact is, however, that when County staff went to the residence in early February and saw little to no progress on the sprinkler system and a number of other issues that still existed, they clearly felt that enough was enough. Given that the agreement was coming to its natural end at the end of March, they clearly saw this as a time to make a clean break, by deciding to simply let it end and not renew. However, instead of sitting silently until the end of March and then not renewing, on February 20, 2019, nearly 40 days before the end of the contract, they notified BLI that they would not be renewing – something that they were not required to do.

[105] Just looking at 2017 – 2019, the following issues existed:

• Fire code and fire safety non-compliance – deficiencies noted in October 2017, May 2018 and October 2018; in December 2018, the fire alarm malfunctioned and they were placed on a “fire watch”; also December 2018, Severn Fire Services issued 3 inspection orders for a faulty alarm system, failing to complete fire drill, and failing to have an approved fire safety plan;
• County concerns during audit on October 23, 2018 – appropriate staff were not present to respond to requested documents or identify policies and procedures; sprinkler system still not installed, inadequate lighting, absence of food safety and residential facility inspection reports, concerns regarding accounting for PNA disbursements;
• County concerns during audit on November 28, 2018 – the November 12, 2018 food safety inspection, Fire Code issues, maintenance issues, failure to document care plans and PNA disbursements, and need to submit serious occurrence reports;
• BLI’s repeated failure and delay in providing documentation required under the Program Standards and Service Description Schedule as commented on by Nicole Charlebois;
• On February 7, 2019, County staff noted the lack of progress on the sprinkler system (no construction was yet underway), inadequate staffing, broken tile in facility and a tarp on the roof.

[106] The Applicant is correct in stating that the audits were meant to create a dialogue between the parties to optimize service, as contemplated by the terms of the Services Agreement. However, this does not mean that the County must continually provide suggestions for better performance and never have the ability to sever the relationship when it deems it to be appropriate. The County did not sever this relationship at the first indiscretion or error. No one is perfect. There are bound to be issues from time to time that need to be rectified and one might expect the County to show some consideration or flexibiliy. However, this record demonstrates that the County repeatedly showed consideration for BLI. Ms. Foster admitted that Mr. Calvano was very reasonable with BLI for years. There is also evidence that others at the County were trying to be patient with BLI to allow them to become compliant. However, at some point it became too much for the County to tolerate. The County must be entitled to make reasonable decisions about who is and who is not a service provider.

[107] It must be remembered that the County was giving public funds to for-profit care homes to help the ultimate end user, who are the residents. The funding attaches to the resident, not to the care home. There are standards and procedures that must be followed because of the vulnerability of most, if not all, of the residents, who are the true beneficiaries of this Program.

[108] It is the view of this court that not only is there no evidence of bad faith, in fact, the County demonstrated good faith by:

1. Repeatedly reminding BLI of upcoming deadlines and expectations;
2. Regularly meeting with BLI to explain their concerns;
3. Warning BLI in December that they had come close to termination for Fire Code issues;
4. Providing reasons for not renewing the contract, even though they were not required to provide reasons;
5. Paying BLI until April 22, 2019, which provided them with a 60 day notice period that the service agreement did not require.

[109] There was absolutely no bad faith exhibited by the County and, therefore, no remedy is warranted.

Issue 3: Did Best Lifestyle breach the agreement with Simcoe County, warranting the non-renewal?

[110] There is no need to decide whether or not Best Lifestyle breached the agreement with Simcoe County, as the agreement was not terminated for cause. The agreement was simply not renewed, which was the option of either party to the agreement.

[111] Having said that, however, the Fire Code violations, on their own would seem to be a clear breach of the services agreement. This is a care facility where vulnerable persons reside. The fact that a Fire Code violation exists, however temporary, is still a situation that puts vulnerable persons at risk, and amounts to non-compliance with the service agreement and service description schedule.

Issue 4: Can or should this court direct the parties to enter into good faith discussions and to either renew the contract or enter into a new contract?

[112] The findings above make this analysis unnecessary, yet, it will be touched on briefly as there is a disagreement as to the nature of the relief being sought by the Applicant.

[113] The Applicant argued that the court should set aside the refusal to roll over the contract and direct that the Respondent, in good faith, enter into discussions, and to either renew the contract or enter into a new contract. The Applicant claimed that this was not a request for a mandatory permanent injunction as the Respondent suggested but rather characterized this relief as a mandatory order requiring the parties to take some action. The Applicant relied on the cases of City Front Developments Inc. v. Toronto Catholic District School Board, [2007] O.J. No. 901 (S.C.); affirmed at [2008] O.J. No. 3652 and Frasca Estate v. Pisani, [2008] O.J. No. 1064 (S.C.) to establish that this request would be for a mandatory order requiring the performance of certain acts.

[114] On the other hand, the Respondent argued that this was a request for a permanent mandatory injunction. In order to obtain such relief, pursuant to 1711811 Ontario Ltd. v. Buckley Insurance Brokers Ltd, 2014 ONCA 125, at para. 79-80, the Applicant would need to establish:

1. Its legal rights; and
2. Whether an injunction is an appropriate remedy.

Irreparable harm and balance of convenience are not, per se, relevant to the granting of a final injunction, although those issues may also come into play. See also: Cambie Surgeries Corp. v British Columbia (Medical Services Commission), 2010 BCCA 396 at paras. 27-28.

[115] This Court agrees with the Applicant that the relief sought would amount to a request for a mandatory order. Having said that, however, the following considerations would go against any such order being made:

1. There would need to be a consideration of the wording in the 2018 Services Agreement to determine whether BLI would be entitled to the relief sought. In this case, the agreement was unambiguous and written in plain and clear language. There is no reference in the services agreement to a right or option to renew or enter into a new services agreement after expiration. In Seidel v. Telus Communications Inc. 2011 SCC 15, the Court stated:

[2] The choice to restrict or not to restrict arbitration clauses in consumer contracts is a matter for the legislature. Absent legislative intervention, the courts will generally give effect to the terms of a commercial contract freely entered into, even a contract of adhesion, including an arbitration clause …

Given the wording of this contract and the guidance from the Supreme Court of Canada, there would appear to be no reason to read something into the contract that was simply not in the plain text.

2. The services agreement in this case is so clear and in fact cuts against the argument of reasonable expectation based on past practice of renewal. Section 5 states:

The Service Provider is aware that the funding under this Agreement is approved as one time funding, and any future payments of funding from the Municipality will be considered based upon continued availability to the Municipality of additional funding, assessment of needs identified within the community, and the Service Provider’s compliance with the terms and conditions of this Agreement.

The term of the agreement is explicitly set out in section 6 as April 1, 2018 until March 31, 2019. There is nothing ambiguous about this wording.

3. Despite the longevity of this relationship, BLI should not have held such an expectation of renewal, based on the wording of the contract, but more importantly based on the discussions that had taken place about their lack of compliance.

4. Forcing the County to continue to negotiate toward a renewed contract against their judgment would be an inappropriate exercise of authority on the part of the Court. It is for the County to decide whether applicant service providers meet the requirements to participate in the Domiciliary Care Program. It is for the County to decide whether the service provider is compliant with its terms. The County is in the best position to make these decisions on a day to day basis –not the Court.

5. The Court should generally be very reluctant to force people into negotiations, and even more reluctant to force people into agreements and contracts that they do not freely choose. The County has expressed numerous concerns about BLI’s compliance with various policies and procedures. The County must be permitted to reasonably choose, based on valid criteria, which service providers are best suited for the role.

6. Such relief would lead to an indefinite relationship being forced upon these parties, which contradicts the defined term of this agreement. Even though the Applicant was not seeking a supervision order, this indefinite relationship would likely require ongoing supervision by the court. This ongoing, never-ending litigation must be discouraged. In Thibodeau v. Air Canada 2014 SCC 67, the court stated:

[128] Ongoing judicial supervision will be appropriate in some cases, as discussed in Doucet-Boudreau. However, absent compelling circumstances, the courts generally should not make orders that have the almost inevitable effect of creating ongoing litigation about whether the order is being complied with. This is particularly so in this case given the statutory powers and expertise of the Commissioner to identify problems in relation to compliance with the OLA and to monitor whether appropriate progress is being made in implementing measures to correct them: ss. 49 to 75.

The same can be said about the expertise of the County to identify problems in relation to compliance with the Domiciliary Care Program standards.

[116] There would be absolutely no reason for this court to direct the parties in such a fashion. Simcoe County should be free to decide who to contract with in order to fulfill their mandate. This Court should not force the County to fund residents in a facility that is not compliant with the policies and procedures, including the Ontario Fire Code, causing concern for the health and safety of the residents. This Court should not force parties to continue to negotiate a contractual relationship against the terms of the contract agreed to by the parties.

Issue 5: When does / did this service agreement end?

[117] Having determined that there was no duty of good faith owed in these circumstances, no bad faith on the part of the County, and no authority for this court to force continued contractual negotiations between the parties, this court now turns to the Application brought by the County to determine when the Services Agreement came to an end.

[118] This would seem to be a simple question to answer. The Services Agreement came to an end when it said it came to an end – March 31, 2019. There is nothing ambiguous about this language. There is nothing in the contract about renewal or any notice or reasons required if a party choses not to renew. While there are notice requirements for termination, this is not a termination. This is non-renewal.

[119] The letter from Janice Janssen on February 20, 2019 is very clear:

Please be advised that pursuant to Section 5 and 6 of the Service Agreement, effective April 1, 2019, the Municipality will not be renewing a new Service Agreement.

CONCLUSION

[120] The Application brought by BLI is dismissed. The Application brought by the County is only for clarification as to the end date of the service agreement. The end date was March 31, 2019.

[121] If the parties are unable to agree as to costs of this application, the court will accept written submissions on costs, which shall be no more than three pages in length, excluding supporting documentation, and which shall be provided to the court office in hard copy or by email no later than November 22, 2019.

[122] This court does not question the passion and dedication of BLI and the Christian family to address homelessness in Simcoe County, and to provide valuable service to their communities, and very much hopes that this will continue despite this court’s ruling.

Justice V. Christie

Released: November 18, 2019