Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Commercial law - Corporations - Associations - Joint ventures - Financing - Governance - Mutual control or management - Fiduciary duty - Ownership of assets - Whether a party to a contract can be deprived of existing contractual rights or relieved of existing contractual obligations by attempting to negotiate a variation or termination of that contract - Whether parties to an existing contract lose contractual rights absent a concluded agreement varying or terminating the contract - Whether a party can lose its right to enforce an existing contract by failing to expressly rely upon and affirm its terms in negotiations and dealings with other parties to the contract - What test should be applied to determine whether a particular set of negotiations can have an impact on existing contractual rights - Whether it is appropriate for the courts to create a situation where no contract governs a relationship previously governed by a contract because the parties have unsuccessfully tried to negotiate new terms to govern their relationship.

Iwasykiw, Jacyk, and Matukas were sophisticated businessmen who had known each other for a long time. Along with their companies, they were parties to a joint venture agreement to develop and sell land. The venture was the subject of a joint venture agreement dated in 1991. In 1996, their lender demanded repayment of US$3.8 million. When it became apparent that Matukas, Gramat, Iwasykiw and Jedfro would not be paying their share of the note, Jacyk offered to use Prombank Investments Ltd. to purchase an assignment of the loan on precise repayment terms. The assignment specified that foreclosure would occur if the note was not paid within 90 days. Iwasykiw did not agree to Jacyk's terms, but "took no meaningful steps to raise the money for his share through the many assets that were available to him." When Prombank's terms were not met, it foreclosed.

Iwasykiw and Jedfro (the "Applicants") sued the Respondents for breach of the joint venture agreement and related relief. Jacyk and Matukas launched counterclaims. Jacyk and Iwasykiw both died between discovery and trial, but their estates carried on the litigation. The trial judge dismissed the action and their estates appealed. The Court of Appeal dismissed the appeal.