Palpable and overriding error, unless error of law or standard form
The Manitoba Court of Appeal has applied the Canadian Supreme Court's ruling that the the standard of review of a trial judge's interpretation of a contract is on the standard of palpable and overriding error unless there is an extricable question of law or the contract is a standard form. If either of the latter, the standard of review is correctness: Corydon Village Mall Ltd v TEL Management Inc [2017] FICR 9.
Extricable questions of law include the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor.
Standard form contracts are where there is no negotiation and one party effectively says "take it or leave it". They can also be where the contract is widely used.
A landlord refused a tenant’s request to change the use of premises to a prohibited use and the tenant sued. The trial judge found that a prohibited use is an exception to the obligation of the landlord not to unreasonably withhold consent to a change of use request.
There had been some negotiation and consideration of the contents of the lease by the tenant, particularly at the offer to lease stage, and there was no evidence that the wording in the lease or the clause was similar to leases in other shopping malls.
The judge's decision that a prohibited use is an exception to the obligation of the landlord not to unreasonably withhold consent to a change of use request did not involve a palpable and overriding error or an extricable question of law.
Read the full head note here: [2017] FICR 9.
