Back To Basics: A Refresher On The Fundamentals Of Contractual Interpretation

As the new school year kicks off, the Ontario Court of Appeal's recent decision in RBC Dominion Securities Inc. v. Crew Gold Corporation, 2017 ONCA 648 serves as a handy study guide for lawyers looking to brush up on Contracts 101.

Crew Gold Corporation ("Crew"), a public gold mining company, and RBC Dominion Securities Inc. ("RBC") entered into an agreement for the provision of investment banking services related to a sale of the company. Under the agreement, RBC was entitled to fees for work performed plus a success fee payable on completion of a "Transaction", which was defined broadly in the agreement.

While the agreement was in force, Crew was the subject of a takeover, which had not been anticipated by either party. RBC's offer to assist Crew with the takeover was refused, and Crew ultimately terminated the agreement. Although RBC was not involved in the takeover, it claimed to be entitled to the success fee because the takeover fell within the definition of "Transaction". Crew refused to pay the success fee, and RBC sued.

The trial judge found that...