Ocean Pacific, operator of the Pan Pacific Hotel, reclassified 156 employees from regular to casual status in 2020 due to COVID-19. The respondents accepted, believing their health benefits would continue. Benefits were later discontinued.
They alleged Ocean Pacific dishonestly withheld information about the temporary nature of benefits, breaching the duty of honest performance.
The chambers judge certified common issues related to breach of contract and punitive damages. Ocean Pacific appealed the certification of the duty of honest performance claims.
Decision & Key Findings
Appeal Allowed in Part: The Court found that pre-contractual dishonesty cannot support a claim for breach of the duty of honest performance, as established in Bhasin v. Hrynew and Callow v. Zollinger.
Certification Overturned: The duty applies to contract performance, not misrepresentations inducing contract formation. Claims should be pursued as fraudulent or negligent misrepresentation, not breach of contract.
Amendment Allowed: Respondents may amend their claim to allege breach of the duty of honest performance in relation to their original employment contracts.
Remitted to Chambers Judge: The matter is referred back to determine if the amended pleadings meet certification standards.
No Cost Order: No costs awarded under the Class Proceedings Act.
