The Burden Of Proof To Rectify A Contract: The Ordinary Civil Standard Applies

The issue

Rectification is an important equitable doctrine allowing courts to rewrite contracts that erroneously record the agreement reached by the parties. The basic requirements for rectification are well settled. Where there is a mutual mistake, the party seeking rectification must show (i) that the parties had a common continuing intention prior to the making of the document alleged to be deficient; (ii) that that intention remained unchanged or existed at the time when the document sought to be rectified was signed; and (iii) by mistake, the parties signed a document that did not accurately reflect their common intention.

However, the issue of the onus of proof applicable to this test has been the matter of recent uncertainty. Historically, reflecting a concern not to open the floodgates to rectification claims, the courts have required something more than the usual civil burden of proof - a standard not as high as the criminal onus, but most recently described as a standard of "convincing proof". But contradictory messages from the Supreme Court of Canada in recent years cast doubt on the traditional rule. In a leading rectification decision in 2002, the Supreme Court reiterated and applied the traditional rule. In a non-rectification case decided in 2008, the Supreme Court stated unequivocally that there is only one onus of proof applicable in all civil cases, namely the balance of probabilities standard. Since the 2008 case did not mention the 2002 decision, or indeed the issue of rectification at all, it was unclear whether the 2008 case implicitly overruled the 2002 decision on the onus of proof point.

In McLean v. McLean, the Ontario Court of Appeal concluded that there was an implicit overruling and that the normal civil standard now applies in rectification cases. In coming to this conclusion, the Ontario Court of Appeal joined the only other provincial appellate court to have considered the issue, and treated the point as somewhat self-evident in light of the Supreme Court's unequivocal statement in 2008 that there is only one civil standard of proof. However, in doing so, the Ontario Court of Appeal did not engage the policy issues that underlie the issue in the rectification context, and its methodology is somewhat questionable.

The contradictory messages from the Supreme Court of Canada

The Supreme Court of Canada's leading decision on rectification is Justice Binnie's judgment in Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, which undertook a comprehensive review of the doctrine. On...