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1. General
2. Res Judicata
3. Issue Estoppel
4. Issue Estoppel within Summary Judgment
4A. Cause of Action Estoppel
5. Stare Decisis
6. Waiver
7. Promissory Estoppel
8. Estoppel by Convention
9. Estoppel Against Public Authorities


1. General

'Estoppel' refers generally to the phenomenon of someone being stopped from exercising what they think is a right but which they have surrendered by past behaviour.

'Estoppel', as I use the term, includes several similar themes. There are both 'cause of action' and 'issue' estoppel, which some judges consider to be aspects of res judicata. Then there is the near-evidentiary use of the term in the day-to-day cut & thrust of business, whereby one may be held to a position against the beneficial term of a contract if one has acted overtly against it. Then there is stare decisis, the 'legal' counterpart of estoppel, acting to prevent the same legal issue from being re-litigated. I've even seen it arise in the recent development of summary judgment law.

'Estoppel' is truly a broad-based and important legal concept.

2. Res Judicata

. Apotex Inc. v. Schering Corporation

In Apotex Inc. v. Schering Corporation (Ont CA, 2018) the Court of Appeal decides not to apply the doctrine of issue estoppel on the facts of the case, and draws a parallel with the doctrine of issue estoppel and that of abuse of process:
IV: Analysis

[19] I would note, at the outset, that the scope of the “special circumstances” exception to issue estoppel constitutes a question of law. The standard of review is thus one of correctness: Housen v. Nikolaisen, 2002 SCC 33 (CanLII), [2002] 2 S.C.R. 235, at para. 8.

[20] The requirements of, and purpose behind, the doctrine of res judicata were thoroughly canvassed in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460. In that decision, Binnie J. reviewed the historical development of the doctrine and its component parts: cause of action estoppel and issue estoppel. He also reviewed the development of the doctrine of collateral attack.

[21] As set out in Danyluk at para. 25, the preconditions to the operation of issue estoppel are: (i) that the same question has been decided; (ii) that the judicial decision which is said to create the estoppel was final; and, (iii) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies. It is clear that those three preconditions are met in this case.

[22] However, Binnie J. went on in Danyluk to point out that the court retained a discretion not to apply the doctrine where to do so would work an injustice. More specifically, Binnie J. adopted the observation in British Columbia (Minister of Forests) v. Bugbusters Pest Management Inc. (1998), 1998 CanLII 6467 (BC CA), 159 D.L.R. (4th) 50 (B.C.C.A.) where Finch J.A. said, at para. 32:
It must always be remembered that although the three requirements for issue estoppel must be satisfied before it can apply, the fact that they may be satisfied does not automatically give rise to its application. Issue estoppel is an equitable doctrine, and as can be seen from the cases, is closely related to abuse of process. The doctrine of issue estoppel is designed as an implement of justice, and a protection against injustice. It inevitably calls upon the exercise of a judicial discretion to achieve fairness according to the circumstances of each case.
[23] Binnie J. added, at para. 67:
The objective is to ensure that the operation of issue estoppel promotes the orderly administration of justice but not at the cost of real injustice in the particular case.
[24] Finally, Binnie J. concluded with a statement of what he said was the most important factor in deciding whether issue estoppel ought to be applied in any given case. He said, at para. 80:
As a final and most important factor, the Court should stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice.
[25] The exercise of the discretion to apply issue estoppel was also the subject of the decision of this court in Minott v. O'Shanter Development Co. (1999), 1999 CanLII 3686 (ON CA), 42 O.R. (3d) 321 (C.A.). Of particular importance, for the purposes of this case, is the observation of Laskin J.A. at para. 51 where he said:
If the decision of a court on a point of law in an earlier proceeding is shown to be wrong by a later judicial decision, issue estoppel will not prevent relitigating that issue in subsequent proceedings. It would be unfair to do otherwise.

[38] For the reasons set out above, the appellants’ proposed amendments are also not barred by the doctrine of collateral attack. In Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII), [2003] 3 S.C.R. 77, the Supreme Court of Canada described issue estoppel and collateral attack as “particular applications of a broader doctrine of abuse of process” (at para. 22). Though not entirely interchangeable, the Supreme Court went on to hold the following, at para. 53:
The discretionary factors that apply to prevent the doctrine of issue estoppel from operating in an unjust or unfair way are equally available to prevent the doctrine of abuse of process from achieving a similar undesirable result.
As the application of collateral attack in this case would work the same injustice as issue estoppel, it should not be applied to block the proposed pleadings.

3. Issue Estoppel

. Lilydale Cooperative Limited v. Meyn Canada Inc.

In Lilydale Cooperative Limited v. Meyn Canada Inc. (Ont CA, 2019) the Court of Appeal expounded on the elements of issue estoppel:
(1) Did the motion judge err by applying the doctrine of issue estoppel?

[22] Issue estoppel is a branch of res judicata (the other branch being cause of action estoppel) which precludes the relitigation of issues previously decided in court in another proceeding: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII), [2003] 3 S.C.R. 77, at para. 23. There are three preconditions to invoking the doctrine of issue estoppel:
1) The issue must be the same as the one decided in the prior decision;

2) the prior judicial decision must have been final; and

3) the parties to both proceedings must be the same, or their privies: C.U.P.E. at para. 23, quoting from Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460, at para. 25.
[23] In C.U.P.E., an employee of the City of Toronto who worked as a playground supervisor was convicted of sexual assault of a boy under his supervision. When the employee grieved his dismissal by the City, the arbitrator determined that he was not bound by the findings of the criminal trial judge that formed the basis for the conviction and ordered the employee re-instated on the basis that he had not committed the sexual assault.

[24] One of the issues on the appeal was whether the doctrine of issue estoppel applied to preclude the arbitrator from making a different finding than the one made at the criminal trial. The stumbling block for applying issue estoppel was the third requirement: that the parties to both proceedings must be the same, or their privies, as the Crown and the City are not the same party nor is the City a privy of the Crown.

[25] In that context, the Supreme Court considered, and rejected dispensing with the third requirement of issue estoppel, known as “mutuality”, as has been done in some other jurisdictions, in order to be able to apply the doctrine. Arbour J. examined the rationales for and the consequences of abandoning the mutuality requirement in the United States. She concluded at para. 29:
What emerges from the American experience with the abandonment of mutuality is a twofold concern: (1) the application of the estoppel must be sufficiently principled and predictable to promote efficiency; and (2) it must contain sufficient flexibility to prevent unfairness. In my view, this is what the doctrine of abuse of process offers, particularly, as here, where the issue involves a conviction in a criminal court for a serious crime.
[26] Arbour J. observed that because the primary concern in that case was with the integrity of the criminal process rather than the traditional issue estoppel concerns such as costs and multiple vexatious proceedings, she was satisfied that issue estoppel did not apply. She stated at para. 32: “[f]or these reasons, I see no need to reverse or relax the long-standing application of the mutuality requirement in this case and I would conclude that issue estoppel has no application.”
. The Catalyst Capital Group Inc. v. VimpelCom Ltd.

In The Catalyst Capital Group Inc. v. VimpelCom Ltd. (Ont CA, 2019) the Court of Appeal stated this on issue estoppel:
[25] In Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460, at para. 25, the Supreme Court outlined the three requirements for issue estoppel:
1) The same question has been decided;

2) The judicial decision said to give rise to the estoppel is final; and

3) The parties to the judicial decision or their privies were the same persons as the parties to the proceeding in which the estoppel is raised or their privies.
Even if all three requirements are met, however, the court still has a residual discretion not to apply issue estoppel when its application would work an injustice: Danyluk, at paras. 62-63.
[26] The second and third of these requirements were not seriously contested in this court. Catalyst’s only argument on the third requirement is that parties can only be privies if the same question is involved in both proceedings. Catalyst does not argue that, should this court find that the same question is involved in both proceedings, the US Investors and Globalive were insufficiently connected to West Face to be its privies. Accordingly, the focus of these reasons is on the first requirement, that the question decided in the two proceedings be the same, as well as on the residual discretion.

[27] Different causes of action may have one or more material facts in common. Issue estoppel prevents re-litigation of the material facts that the cause of action in the prior action embraces: Danyluk, at para. 54. However, the question out of which the estoppel arises must be “fundamental to the decision arrived at” in the prior proceedings: Angle v. M.N.R., 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248, at p. 255. Accordingly, the question must be “necessarily bound up” with the determination of the issue in the prior proceeding for issue estoppel to apply: Danyluk, at paras. 24, 54.


[32] Canadian courts have consistently rejected the argument that a judicial finding is merely dictum or collateral because there was another sufficient basis for the judge’s decision. In Stuart v. Bank of Montreal (1909), 1909 CanLII 3 (SCC), 41 S.C.R. 516, the Supreme Court rejected the argument that a judicial finding that is “a distinct and sufficient ground for its decision [is] a mere dictum because there is another ground upon which, standing alone, the case might have been determined”: p. 534, per Duff J. (Fitzpatrick C.J. concurring), pp. 539-540, per Anglin J., quoting New South Wales Taxation Commissioners v. Palmer, [1907] A.C. 179 (P.C.), at p. 184. More recently, the Federal Court of Appeal held that a judge’s finding on one necessary element of a claim gave rise to issue estoppel even though the judge had earlier in his reasons reached a conclusion on another element that was sufficient to dispose of the claim: Pharmascience Inc. v. Canada (Health), 2007 FCA 140 (CanLII), 282 D.L.R. (4th) 145, at paras. 34-35.


[46] Catalyst argues that the motions judge erred in not exercising his residual discretion to permit Catalyst’s action to proceed. Relying on Danyluk, Catalyst argues that the motions judge’s analysis was cursory and that he erred in principle by failing to address the factors for and against the exercise of the discretion. Catalyst submits that applying issue estoppel results in an injustice to Catalyst because there has been no discovery of VimpelCom or UBS regarding the circumstances surrounding the sale of VimpelCom’s shares of Wind.

[47] I would not accept this argument. The court does have residual discretion, but its exercise is more limited in nature in this case because the Moyse Action was a court proceeding, not an administrative proceeding as in Danyluk: Danyluk, at para. 62. The passage in the motions judge’s reasons where he explicitly referred to residual discretion was brief. However, his conclusion, at para. 75, that Catalyst failed to put its “best foot forward” and is not entitled to a “second bite at the cherry” was reasonable. It must be read in light of the motions judge’s extensive reasons addressing Catalyst’s failure to advance its current claims in the Moyse Action and its attempt to re-litigate Newbould J.’s findings in the Moyse Action.

[48] Finally, I am not convinced that the application of issue estoppel in these circumstances would work an injustice. In Danyluk, the court found such an injustice because the appellant’s claim to employment commissions was never properly adjudicated due to procedural unfairness in the administrative proceedings the appellant pursued before commencing a civil action: para. 80. In contrast, in this case, Catalyst received a procedurally fair trial, the result of which this court upheld on appeal. While issue estoppel bars Catalyst from eliciting evidence and advancing new theories of liability against West Face, this is not a manifest injustice since Catalyst could have elicited that evidence and advanced those theories in the Moyse Action.
. Salasel v Cuthbertson

In Salasel v Cuthbertson (Ont CA, 2015) an issue was whether a plaintiff was precluded from claiming actual legal costs of a prior proceeding (to the extent that the earlier court had not awarded them) as damages in a subsequent proceeding. The lower court held that the earlier court's cost award set up an issue estoppel against such a claim. On issue estoppel generally the Court of Appeal stated:
[11] To invoke issue estoppel, a party must meet three pre-conditions: (i) the issue in the proceeding must be the same as the one decided in the prior decision; (ii) the prior judicial decision must have been final; and, (iii) the parties to both proceedings must be the same or their privies: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII), [2003] 3 S.C.R. 77, at para. 23. The appellants acknowledge that the decision of the Supreme Court of Canada in the Prior Proceedings was a final one, and they accept that for purposes of their claim for legal fees as damages that the parties in the Prior Proceedings and the present action were the same or privies.


[18] The appellants argue that the cost awards in the Prior Proceedings were not fundamental to the injunctive relief granted to Mr. Rasouli and therefore it is open to them to bring an action to recover legal costs as damages. In my view, the appellants’ position is incorrect and, instead, the following portions of the motion judge’s reasons accurately state the law on this point:
[27] An award of costs may not be the very subject matter of the litigation, but it is not incidental in the sense that the prior court did not specifically turn its mind to the issue … [T]he costs rulings form part of the conclusions “that were necessarily…determined in the earlier proceedings”: Danyluk v Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 SCR 460, at para 24.

[30] I agree with the authors of Clerk and Lindsell on Torts (20th ed.), 28-130, where they state definitively that, “[a] successful claimant cannot bring a fresh action against the defendant in order to recover as damages his ‘extra costs’, that is, the difference between the costs which the defendant was ordered to pay and the costs actually incurred…”. Courts across Canada have come to similar conclusions: See Humble v Vancouver Municipal & Regional Employees Union, 1989 CarswellBC 1299, at paras 86, 92, aff’d [1991] BCJ No 2995 (BCCA). This issue was addressed squarely by the Manitoba Court of Queen’s Bench in P&G Cleaners Ltd. v Johnson, [1996] MJ No 566 (Man QB), at para 17, which concluded that issue estoppel applies:
On the previous proceedings related to dispensing with Mr. Johnson’s consent, the issue arose as to whether he was entitled to solicitor and client costs of those proceedings based on the wording of Clause 5(a) above. I held that he was not entitled to solicitor and client costs. That is the precise issue which the respondent is seeking to re-litigate in these proceedings and is res judicata.

[20] Finally, the appellants submit that the motion judge erred by failing to consider whether he should exercise his residual discretion not to apply the doctrine of issue estoppel to the appellants’ claim for “extra costs”. As recalled by the Supreme Court of Canada in Penner v. Niagara Regional Police Services Board, 2013 SCC 19 (CanLII), [2013] 2 S.C.R. 125, at para. 35, even where the pre-conditions for issue estoppel are established, courts retain the discretion not to apply issue estoppel to ensure that no injustice results. Applying issue estoppel may work an injustice if the prior proceedings were unfair to a party or, even where they were not, if significant differences existed in the purpose, process and stakes of the two proceedings. The discussion in Penner took place in the context of whether any such significant differences existed between prior administrative proceedings and subsequent civil court proceedings such that it would work an injustice to apply the result of the former to the latter.
. College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario v. Federation of Ontario Traditional Chinese Medicine Association (Committee of Traditional Chinese Medicine Practitioners & Acupuncturists of Ontario)

In College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario v. Federation of Ontario Traditional Chinese Medicine Association (Committee of Traditional Chinese Medicine Practitioners & Acupuncturists of Ontario) (Ont CA, 2015) the Court of Appeal briefly set out the elements required for issue estoppel to apply to bar the re-arguing of an issue, and some useful comments on when parties are the 'same parties' for this purpose:
[3] In our view, the application judge did not err by refusing to entertain the appellants’ constitutional argument on the ground that it had been conclusively and finally determined against them in the prior proceeding. We agree with his conclusion that the required elements of issue estoppel were made out.

[4] The three preconditions for issue estoppel are:

1) the issue must be the same as the one decided in the prior decision;

2) the prior judicial decision must have been final; and

3) the parties to both proceedings must be the same or their privies.

See Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (CanLII), [2001] 2 S.C.R. 460, at para. 25.


[6] .... The applicable principle is that “litigation is conclusive upon issues actually brought before the court and upon any issues which the parties, exercising reasonable diligence, should have brought forward on that occasion”: Las Vegas Strip Ltd. v. Toronto (City) (1996), 1996 CanLII 8037 (ON SC), 30 O.R. (3d) 286 (Gen. Div.), aff’d (1997), 1997 CanLII 3841 (ON CA), 32 O.R. (3d) 651 (C.A.).


(3) Same parties

[9] The two individual appellants were parties to the Divisional Court proceeding as was the Federation of Ontario Traditional Chinese Medicine Association. All corporate appellants, except Committee of Certified Acupuncturists of Ontario, share the same registered address and they all share many of the same directors and officers, including the two individual appellants. In the context of these proceedings, this constitutes a sufficient degree of identification among the parties “to make it just to hold that the decision to which one was a party should be binding in the proceedings to which the other is a party”: Re EnerNorth Industries Inc., 2009 ONCA 536 (CanLII), 96 O.R. (3d) 1, at para. 62. In any event, even if the same parties requirement for issue estoppel is not strictly met, permitting the appellants to re-litigate the issue that was determined by the Divisional Court would amount to an abuse of process: see Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII), [2003] 3 S.C.R. 77, at para. 37.
. R v Dieckmann

In the criminal case of R. v. Dieckmann (Ont CA, 2017) the Court of Appeal sets out the basics for the doctrine of issue estoppel, and clarifies that it can operate not only with respect to fact-findings made in prior proceedings, but with respect to prior consent judgments:
[32] The trial judge described the applicable test for issue estoppel:

1) the same question was decided in the prior proceeding;

2) the judicial decision said to create the estoppel is final; and

3) the parties to the prior decision are the same persons as the parties to the proceedings in which the estoppel is raised.

She noted that if the preconditions were established, a court still had to determine whether, as a matter of discretion, issue estoppel ought to be applied.

[33] The trial judge dismissed the application on the basis that the consent judgment was not a decision on the merits and it was unclear that the issues in the two proceedings were the same.

[34] Ms. Dieckmann argues that the trial judge erred in finding that the test for issue estoppel was not met.

[35] Contrary to the trial judge’s conclusion, a consent judgment may be the basis for issue estoppel: Hardy Lumber Co. v. Pickerel River Improvement Co. (1898), 1898 CanLII 16 (SCC), 29 S.C.R. 211; and Re Ontario Sugar Co. (1911), 24 O.L.R. 332 (C.A.), leave to appeal to S.C.C. refused (1911), 1911 CanLII 8 (SCC), 44 S.C.R. 659.
. Phillion v. Ontario (Attorney General)

In Phillion v. Ontario (Attorney General) (Ont CA, 2014) the Court of Appeal considered a civil action emanating from an old murder conviction that, after an extended incarceration was sent to itself on a Reference. That Reference resulted in an Order for a new trial due to non-disclosure of evidence to the defence. After the Crown decided not to proceed with the new trial, the defendant sued in a range of torts, including "conspiracy, fraudulent and negligent misrepresentation, malicious prosecution, negligence and misfeasance in public office." Concerns of issue estoppel and abuse of process arose within the civil action. On the issue of issue estoppel the court found that the issues before it previously in the Reference were distinct from those of the tort action and as such found no issue estoppel emanating from the Reference:
[39] I now turn to the second error the motion judge made in concluding that it would be an abuse of process for the appellant to pursue a civil action for wrongdoing against the state authorities. She came to this conclusion based on her view that all of the issues had already been determined by the Court of Appeal on the reference. In particular, the motion judge emphasized that the court found no wrongdoing on the part of the authorities.

[40] However, that finding was made only for the purpose of deciding whether the newly discovered evidence could be admitted on appeal based on trial unfairness. The court did not consider whether the respondents breached any common law duty of care or whether they owed any such duty to the appellant.

[41] Most importantly, the Court of Appeal admitted the evidence on other grounds and then ordered a new trial. The court placed no restrictions on the conduct of that trial or on the issues that could be raised. Clearly, had the trial proceeded, the defence would have raised the alibi and the fact that Detective McCombie had concluded in 1968 that the appellant was not the murderer. The Crown would have led the evidence of how the alibi was discredited. It would have been open to the jury to accept, reject or have a reasonable doubt about the key issue that the Court of Appeal could not decide: whether the Trenton alibi had been discredited. If the jury did not believe that the alibi had been discredited by Detective McCombie, then the finding by the Court of Appeal that there was no duty on the Crown to disclose would itself be implicitly discredited.

[42] Without seeking to set out a general rule applicable to all references, the nature of the reference in this particular case was such that the findings of the court could not have been intended to bind a future hearing if a new trial was ordered.

[43] It follows that the same conclusion applies with respect to a civil action. It is also consistent with the fairness analysis recently adopted by the Supreme Court of Canada in Penner v. Niagara (Regional Police Services Board), 2013 SCC 19 (CanLII), 2013 SCC 19, [2013] 2 S.C.R. 125.

[44] In that case, Cromwell and Karakatsanis JJ. discuss two ways in which the operation of the doctrine of issue estoppel can be unfair to a party. The first is when the original proceeding was unfair. The second occurs when it is unfair to use the results of a prior proceeding to bar a subsequent proceeding. They note that fairness in this context is a much more nuanced inquiry. As an example, injustice can arise when “there is a significant difference between the purposes, process or stakes involved in the two proceedings”: Penner, at para. 42. In my view, a similar analysis applies here in the related context of abuse of process: see also the discussion in C.U.P.E., at para. 53.

[45] The reference was a unique proceeding initiated by the Minister of Justice for the purpose of inquiring into a possible wrongful conviction. Mr. Phillion had the onus of proof to either show trial unfairness or meet the Palmer test in order to have the newly discovered evidence admitted. However, to do that, he did not need to prove anything about the police or Crown motive or intent behind their failure to disclose. His focus was on satisfying the court that his conviction had to be set aside.

[46] The motion judge acknowledged that at the reference, Mr. Phillion did not impugn the integrity of Mr. Lindsay or Detective McCombie, but she stated that the court would nevertheless have had to find improper conduct on their part in order to agree with Mr. Phillion that they should have disclosed the 1968 McCombie Report. She reasoned that the court implicitly found that the respondents did not act out of malice. Therefore, she held that although the appellant did not raise that issue on the reference, because of the court’s implicit finding, he is now precluded from raising their intent in a subsequent civil action.

[47] Contrary to the motion judge’s finding, in my view, the specific purpose of the reference and the questions it addressed indicate that the stakes, purpose and process were entirely different from this civil action. It would therefore be unfair to preclude the appellant from bringing a civil action on the basis that he is bound by an implicit finding made on the reference that there was no malice.

[48] Finally, and in any event, the findings made on the reference with respect to the conduct of the Crown and police did not consider any issues of negligence or a common law duty of care, as alleged in the statement of claim.

Conclusion on Abuse of Process

[49] In my view, the order dismissing the action as an abuse of process must be set aside. Such orders are only to be granted in the clearest cases and only when allowing the action to proceed would bring the administration of justice into disrepute. The motion judge erred in law in concluding that this was a case of relitigation and that it justified the application of the doctrine of abuse of process.
On the issue of abuse of process, which arose due to the re-litigation of potentially common issues in both the Reference and the tort action, the court stated:
[29] The leading case on the doctrine of abuse of process is the Supreme Court of Canada’s decision in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII), 2003 SCC 63, [2003] 3 S.C.R. 77. Arbour J. explained, at paras. 35-37, that this doctrine represents the inherent and residual discretion to “prevent an abuse of the court’s process” when other doctrines such as issue estoppel may not be available. At para. 35, she adopted the words of McLachlin J. (as she then was) in R. v. Scott, 1990 CanLII 27 (SCC), [1990] 3 S.C.R. 979, at p. 1007, as follows:
[A]buse of process may be established where: (1) the proceedings are oppressive or vexatious; and, (2) violate the fundamental principles of justice underlying the community’s sense of fair play and decency. The concepts of oppressiveness and vexatiousness underline the interest of the accused in a fair trial. But the doctrine evokes as well the public interest in a fair and just trial process and the proper administration of justice.
[30] As it relates to this case, the doctrine has been applied to prevent relitigation when the requirements of issue estoppel cannot be met (as is the case here, because the parties to the two proceedings are not the same), but when “allowing the litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice”: C.U.P.E., at para. 37. The court emphasized that the focus of the doctrine of abuse of process is less on the parties and more on “the integrity of judicial decision making as a branch of the administration of justice”: C.U.P.E., at para. 43.

[31] In R. v. Mahalingan, 2008 SCC 63 (CanLII), 2008 SCC 63, [2008] 3 S.C.R. 316, at para. 42, McLachlin C.J. expressed the view that the doctrine of abuse of process is vague and variable, pointing out that the Supreme Court has said that “successful reliance on the doctrine will be extremely rare”. Importantly for this appeal, she stated further, at para 42, that:
To date, the doctrine has not been much used to protect against relitigation, and indeed there is authority for the proposition that relitigation, without more, simply does not reach the threshold required for a finding of abuse of process. [Citation omitted.]
[32] With respect to the motion judge, in finding that abuse of process should be applied in this case, in my view she fell into error in two respects. First, she failed to analyze the nature and purpose of the reference, including the specific question the court was asked to answer, in comparison with the issues raised in the civil claims. In that context, she erred in concluding that the issue whether the Trenton alibi had been discredited was a roadblock to the civil claim, and in taking an overly broad view of the findings of fact that she believed were made by the Court of Appeal on the reference.

[33] Second, in holding that on the reference the court made findings of fact that could not be revisited, she did not consider the effect of the remedy that the reference court ordered, which was a new criminal trial. At the new trial, all issues would have been open for decision by a jury, including, most importantly, whether the Trenton alibi had been discredited.

[34] Dealing with the first error, the statement of claim is broadly drafted. It seeks compensation in tort for the appellant’s conviction because information about an alibi was withheld from the defence. The court on the reference found that if the jury had been told about the Trenton alibi and about Detective McCombie’s evidence of how he discredited it, including the fact that the documentation and the car radio he took from Trenton had been lost by the time of the trial, they may have had a reasonable doubt about the appellant’s guilt.

[35] Accepting that at the time, the Crown did not have a positive obligation to disclose a discredited alibi, the police and Crown could arguably still be found liable to the appellant in tort. For example, had the detective not given misleading answers at the preliminary hearing about the extent of his investigation – answers that the Crown did not correct – the defence may well have learned about his 1968 report and his assertion that he later changed his view. Defence counsel would then have been able to explore the issue with the jury. As Moldaver J.A. stated, that information would have been “gold” in defence counsel’s hands.
. Plate v. Atlas Copco Canada Inc.

In Plate v. Atlas Copco Canada Inc. (Ont CA, 2019) the Court of Appeal held that findings made on a criminal sentencing hearing did not constitute issue estoppel for the purposes of tort merits:
(i) Punko

[44] As I have noted, the focus of the appellant’s argument is para. 11 of Punko:
Where a fact is necessary for the purpose of determining the appropriate sentence but is not express or implied in the jury’s verdict, the sentencing judge must make his or her own finding (s. 724(2)(b) Cr. C.). However, such a finding does not constitute a judicial determination on the merits of the case; rather, it constitutes a judicial determination only for the purpose of sentencing. [Emphasis added.]
[45] In order to understand what the court was saying in para. 11, it is important to understand the context of the case.

[46] In Punko, the Supreme Court considered the application of the doctrine of issue estoppel in the context of a multi-issue criminal jury trial. A prolonged investigation of the Hells Angels by the RCMP identified a number of possible criminal offences. Some of those offences were within the jurisdiction of the provincial Crown; others were within the jurisdiction of the federal Crown.

[47] The provincial offences proceeded to trial first. Four accused were tried on a number of offences, including offences allegedly committed for the benefit of, at the direction of, or in association with a criminal organization (i.e. the Hells Angels). The four accused were found guilty of a number of offences, but acquitted on all the criminal organization counts.

[48] Meanwhile, federal prosecutors charged two of the four accused with various drug-related offences and, on some of the counts, it was again alleged that they had done so for the benefit of, at the direction of, or in association with a criminal organization (i.e. the Hells Angels). The two accused argued that the Crown was estopped from leading evidence that the Hells Angels was a criminal organization, because the issue had been decided by the jury in the provincial prosecution. In making this argument, the accused referred to certain findings made by the sentencing judge in the provincial proceedings.

[49] Criminal issue estoppel is a narrow doctrine. It precludes the Crown from re-litigating those facts that were decided in favor of the accused at the earlier trial: Punko, at para. 7; citing R. v. Mahalingan, 2008 SCC 63 (CanLII), [2008] 3 S.C.R. 316, at paras. 22, 31, 33. The resolution of an issue in favor of the accused must be a “necessary inference from the trial judge’s findings or from the fact of the acquittal”: Punko, at para. 7; Mahalingan, at para. 52. Where the prior proceeding was before a jury, the finding in favor of the accused must be logically necessary to the jury’s verdict of acquittal: Punko, at para. 8; Mahalingan, at para. 53.

[50] Against this backdrop, Deschamps J. held that although s. 724(2)(b) of the Criminal Code permits a judge imposing sentence after a jury trial to “find any other relevant fact that was disclosed by evidence at the trial to be proven, or hear evidence presented by either party with respect to the fact”, such findings cannot be relied on in support of issue estoppel: Punko, at para. 19. Since the merits of the case in a jury trial “pertain to the issues the jurors can take into consideration in reaching a verdict” and issue estoppel applies “only where the unanimity of the jury on an issue can be discerned through reasoning based on logical necessity”, a finding under s. 724(2)(b) cannot ground issue estoppel: Punko, at para. 11. Deschamps J.’s statement, at para. 11, that a finding made under s. 724(2)(b) “does not constitute a judicial determination on the merits” (emphasis in original) but rather a “judicial determination only for the purpose of sentencing” must be understood in this context.

[51] Understanding para. 11 in context, Punko does not preclude the respondent from seeking to rely on findings made under s. 724(2)(b) in the context of this civil action: a finding under s. 724(2)(b) – while not a finding “on the merits” or relating to the accused’s criminal liability – is still a judicial finding.

[52] Punko also underlines the point that findings made in sentencing proceedings must be understood in context – and, in particular, in light of the statutory scheme that governs such findings. That point is consistent with Malik, to which I now turn.

(ii) Malik

[53] In Malik, the Supreme Court followed the lead of this court[6] and put to rest the so-called rule in Hollington v. F. Hewthorn & Co., [1943] 1 K.B. 587 (C.A.), which held that prior judicial findings or judgments were hearsay or opinion evidence and thus inadmissible in a subsequent judicial proceeding. Writing for the court, Binnie J. described, at para. 7, the general circumstances in which a prior judicial finding will be admissible in subsequent civil proceedings:
[A] judgment in a prior civil or criminal case is admissible (if considered relevant by the chambers judge) as evidence in subsequent interlocutory proceedings as proof of its findings and conclusions, provided the parties are the same or were themselves participants in the prior proceedings on similar or related issues. It will be for that judge to assess its weight. The prejudiced party or parties will have an opportunity to lead evidence to contradict it or lessen its weight (unless precluded from doing so by the doctrines of res judicata, issue estoppel or abuse of process).
[54] Although Malik considered the admissibility of a prior judgment in a subsequent interlocutory proceeding, its reasoning is not restricted to interlocutory proceedings: R. v. Jesse, 2012 SCC 21 (CanLII), [2012] 1 S.C.R. 716, at paras. 43-44. Malik has been applied in the context of final determinations on the merits in subsequent civil proceedings: see e.g. MacRury v. Keybase, 2017 NSCA 8 (CanLII), 411 D.L.R. (4th) 255; National Bank Financial Ltd v. Barthe Estate, 2015 NSCA 47 (CanLII), 359 N.S.R. (2d) 258; I.K.K. v. M.P., 2018 ONSC 2743 (CanLII), 8 R.F.L. (8th) 367; Deposit Insurance Corp. of Ontario v. Malette, 2014 ONSC 2845 (CanLII); and Kay v. Caverson, 2011 ONSC 4528 (CanLII), 5 C.L.R. (4th) 17, aff’d 2013 ONCA 220 (CanLII), 19 C.L.R. (4th) 213.

[55] In Binnie J.’s view, a “prior judicial decision between the same or related parties or participants on the same or related issues” is not “merely another controversy over hearsay or opinion evidence”: Malik, at para. 52. Rather, the “court’s earlier decision [is] a judicial pronouncement after the contending parties [have] been heard” having a “substantial effect on their legal rights”: Malik, at para. 52. In this vein, “the admissibility of prior civil or criminal judgments in subsequent civil proceedings, and the effect to be given to them, must be seen in the context of the need to promote efficiency in litigation and reduce its overall costs to the parties”: Malik, at para. 37. The rule in Hollington gave rise to unnecessary inefficiencies, and any resulting unfairness in admitting prior judicial findings into evidence could be addressed on a case-by-case basis: Malik, at para. 52.

[56] In this case, the motion judge identified the issues in the prior criminal proceedings as including “whether [the appellant] was guilty of the fraud charged and, once he was found guilty … what relevant aggravating and mitigating circumstances were present”: at para. 24. In the motion judge’s view, the findings of the sentencing judge were admissible in the summary judgment proceedings. He explained his reasoning, at paras. 30-31:
The fraudulent scheme pleaded in the statement of claim is the same fraudulent scheme described by [the sentencing judge] in the Decision on Sentencing. The fiduciary duty of [the appellant] toward the [respondent] pleaded in the statement of claim arises out of the same relationship as the fiduciary duty about which [the sentencing judge] made findings of fact. There is very clearly a large overlap of issues between the civil and criminal proceedings even if all the issues in the one were not present in the other and vice versa.

[The appellant] was of course a party to both proceedings and was, as I have indicated, vitally concerned in the criminal proceedings. While [the respondent] was not a party to the criminal proceedings per se, [the respondent] was the victim of the crime being tried.
[57] I agree that the sentencing judge’s findings, including those made under s. 724(2)(b) of the Criminal Code, were admissible on the summary judgment motion.

[58] The sentencing judge’s findings were relevant to the issues raised on the summary judgment motion. The appellant (as the criminal accused) and the respondent (as the complainant) were “parties” or “participants” in the prior criminal proceedings, which raised similar or related issues. Malik directs that lack of identity of issue goes to weight, not admissibility: at para. 43. At the sentencing proceedings, the extent of the appellant’s breach of trust was a relevant consideration, pursuant to s. 718.2(a)(iii) of the Criminal Code. It is in relation to this factor that the sentencing judge found the appellant to have breached a fiduciary duty to the respondent. Thus, the fact that the issues in the criminal proceedings were not identical to those in the civil proceeding did not operate as a bar to admissibility of the sentencing judge’s findings relative to the respondent’s breach of fiduciary duty.

4. Issue Estoppel within Summary Judgment

. Vanden Bussche Irrigation & Equipment Limited v. Kejay Investments Inc.

The case of Vanden Bussche Irrigation & Equipment Limited v. Kejay Investments Inc. (Ont CA, 2016), which superficially considers the law of interlocutory versus final Orders, primarily stands for the proposition that fact-findings made in a summary judgment motion (where the standard is whether there is a 'genuine issue for trial') are only binding at trial when the motion judge expressly declares them to be so in their reasons and/or the written Order. While not mentioning the issue estoppel theme of this new summary judgment development, it seems obvious to me:
[8] In Ashak v. Ontario (Family Responsibility Office), 2013 ONCA 375 (CanLII), this court, based on identical wording in the order, held at para. 7, that the order was not a final order because, “a decision under Rule 20 determines only that a genuine issue requiring a trial exists. Accordingly to the extent that a motion judge may purport to make findings of fact in reasons for judgment dismissing a Rule 20 motion, such findings do not have binding effect.”

[9] The court in Ashak further noted at paras. 8-11 that while a court has the power to make binding determinations of fact under rule 20.05 when dismissing a motion for summary judgment if a court proposes to exercise that power the motion judge should say so and the formal order should reflect that. A similar power to make a binding determination of law likely exists under rule 20.04(4), but again, if the motion judge purports to exercise that power, the judge should specifically invoke and reference the rule and the legal determination made should form part of the formal order.

[10] Since the decision in Ashak, there has been jurisprudence from our court explaining that in some cases to determine whether an order is truly final or interlocutory one needs to look at the reasons and determine whether a defendant has been deprived of a substantive right or defence that could resolve all or part of the proceedings: Walchuk, Estate Trustee and Houghton, [2015] O.J. No. 6492, at para. 14.

[11] In this case, the motion judge did not specifically invoke and reference the rule giving him the power to make a binding determination nor does the order taken out reflect any determination on the issue of the limitation period. Although the limitation period defence was the only issue before the motion judge and he purported to decide it, he also refused to grant summary judgment on the claim to the plaintiff and sent the matter on for trial. It does not appear that there would be any reason for him to do so unless he was of the opinion that there was a genuine issue requiring a trial respecting the limitation period.

[12] In the result, I have concluded that the motion judge’s determination that the limitation period had not run is not binding and is not a final order. Accordingly, were I to grant leave to file a notice of appeal, this court would not have jurisdiction to entertain the appeal and for this reason the motion is dismissed.

4A. Cause of Action Estoppel

. The Catalyst Capital Group Inc. v. VimpelCom Ltd.

In The Catalyst Capital Group Inc. v. VimpelCom Ltd. (Ont CA, 2019) the Court of Appeal the court states as follows on the doctrine of cause of action estoppel:
[49] The purpose of cause of action estoppel is to prevent the re-litigation of claims that have already been decided. As expressed by Vice Chancellor Wigram in Henderson v. Henderson (1843), 67 E.R. 313, at p. 319, it requires parties to “bring forward their whole case.” The court thus has the power to prevent parties from re-litigating matters by advancing a point in subsequent proceedings which “properly belonged to the subject of the [previous] litigation”.

[50] For cause of action estoppel to apply, the basis of the cause of action and the subsequent action either must have been argued or could have been argued in the prior action if the party in question had exercised reasonable diligence: Grandview v. Doering, 1975 CanLII 16 (SCC), [1976] 2 S.C.R. 621, at p. 638. That said, I accept Catalyst’s submission that it is not enough that the cause of action could have been argued in the prior proceeding. It is also necessary that the cause of action properly belonged to the subject of the prior action and should have been brought forward in that action: Hoque v. Montreal Trust Co. of Canada, 1997 CanLII 1465 (NS CA), 1997 NSCA 153, 162 N.S.R. (2d) 321, at para. 37, leave to appeal refused, [1997] S.C.C.A. No. 656; Pennyfeather v. Timminco Ltd., 2017 ONCA 369 (CanLII), at para. 128, leave to appeal refused, [2017] S.C.C.A. No. 279.

[51] Like issue estoppel, cause of action estoppel also requires a final judicial decision and that the parties to that decision were the same persons or the privies to the parties to the present proceeding: Pennyfeather, at para. 128; Canam Enterprises Inc. v. Coles (2000), 2000 CanLII 8514 (ON CA), 51 O.R. (3d) 481 (C.A.), at para. 21, rev’d on other grounds, 2002 SCC 63 (CanLII), [2002] 3 S.C.R. 307. As these requirements were not seriously contested before us, I will not discuss them further.


[55] ... In Hoque, at para. 37, Cromwell J.A. (as he was then) outlined several factors that are relevant to whether a matter should have been raised in a prior proceeding. These include the following:
1) Whether the second proceeding is a collateral attack against the earlier judgment;

2) Whether the second proceeding relies on evidence that could have been discovered in the past proceeding with reasonable diligence; and

3) Whether the second proceeding relies on a new legal theory that could have been advanced in the past proceeding.

[58] Nor am I persuaded that the different legal claims Catalyst has advanced in this action bar the operation of cause of action estoppel. I acknowledge that the existence of a “separate and distinct” cause of action is a factor that might weigh against applying cause of action estoppel: Hoque, at para. 37. However, as Sharpe J. (as he was then) held in Las Vegas Strip Ltd. v. Toronto (City) (1996), 1996 CanLII 8037 (ON SC), 30 O.R. (3d) 286 (Gen. Div.), at p. 297, aff’d (1997), 1997 CanLII 3841 (ON CA), 32 O.R. (3d) 651 (C.A.), the law does not permit the manipulation of the underlying facts to advance a new legal theory. Similarly, this court has held that cause of action estoppel bars “a subsequent lawsuit relating to the same loss being advanced on a different cause of action”: Lawyers’ Professional Indemnity Co. v. Rodriguez, 2018 ONCA 171 (CanLII), 139 O.R. (3d) 641, at para. 47, leave to appeal refused, [2018] S.C.C.A. No. 128 (Emphasis added).

5. Stare Decisis

. Canada (Attorney General) v Confédération des syndicats nationaux

In Canada (Attorney General) v Confédération des syndicats nationaux (SCC, 2014), the Supreme Court of Canada briefly considered the doctrine of stare decisis, partly in contrast with the doctrine of res judicata:
[24] Of course, the doctrine of stare decisis is no longer completely inflexible. As the Court noted in Bedford, the precedential value of a judgment may be questioned “if new legal issues are raised as a consequence of significant developments in the law, or if there is a change in the circumstances or evidence that fundamentally shifts the parameters of the debate” (para. 42). Where, on the other hand, the legal issue remains the same and arises in a similar context, the precedent still represents the law and must be followed by the courts (Bedford, at para. 46).

[25] Although relatively uncommon in Quebec civil procedure, the mechanism for dismissing actions at a preliminary stage on the basis of stare decisis is similar to the res judicata exception (art. 165(1) C.C.P.). Under both of them, the legal issues raised by the applicant must already have been clearly resolved by the courts. However, unlike res judicata, stare decisis does not necessarily require that the dispute be between the same parties. What must be established is that the issue is the same and that the questions it raises have already been answered by a higher court whose judgment has the authority of res judicata.

[26] In Canada v. Imperial Tobacco, Gascon J.A., as he then was, explained this as follows:
[translation] In this context, the manufacturers’ argument that this case is not res judicata, because Imperial was not decided by a court of competent civil law jurisdiction or because strict identity of parties, cause and object is not established, does not appear to me to be determinative. I see no need for further discussion of the distinctions the manufacturers raise with respect to these identities of parties, cause and object, which in their view refute the AGC’s res judicata argument. In my opinion, the appropriate principle to apply to resolve the issue is instead stare decisis.

The Superior Court should have held on the basis of stare decisis that it was bound by Imperial. The Supreme Court, by ruling as it did on the issue of the AGC’s immunity in relation to the course or principle of action challenged by the manufacturers, had in a sense barred the manufacturers’ actions in warranty by rendering them unfounded in law, even if the alleged facts were assumed to be true.

Stare decisis is a less stringent basis for an argument than res judicata, since it requires only a similar or analogous factual framework. Stare decisis is a principle “under which a court must follow earlier judicial decisions when the same points arise again in litigation” [Black’s Law Dictionary (9th ed. 2009), at p. 1537]. It applies, of course, to decisions of the Supreme Court, particularly in the area of public law as here, where the parties were involved in earlier litigation on the specific question at issue. [Emphasis added; paras. 125‑27.]

[45] In our opinion, it is clear that the unions’ action has no reasonable chance of success. On the basis of stare decisis, it is apparent that their main argument that the Consolidated Revenue Fund was indebted to the Employment Insurance Account is unfounded, and this conclusion dictates the outcome of the case. As a result, this Court’s decision in CSN v. Canada provides a complete, certain and final solution to the entire dispute that the unions are trying to revive. Their action was therefore properly dismissed by Perrault J. under art. 165(4) C.C.P.

6. Waiver

. High Tower Homes Corporation v. Stevens

In High Tower Homes Corporation v. Stevens (Ont CA, 2014) the Court of Appeal set out the essence of waiver:
[43] In Technicore Underground Inc. v. Toronto (City), 2012 ONCA 597 (CanLII), 354 D.L.R. (4th) 516, at para. 63, Gillese J.A., writing for the court, summarized the essentials of waiver as set out by the Supreme Court of Canada in Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490:
Waiver occurs when one party to a contract (or proceeding) takes steps that amount to foregoing reliance on some known right or defect in the performance of the other party. It will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of the deficiency that might be relied on and (2) an unequivocal and conscious intention to abandon the right to rely on it. The intention to relinquish the right must be communicated. Communication can be formal or informal and it may be inferred from conduct. The overriding consideration in each case is whether one party communicated a clear intention to waive a right to the other party.
. Bradfield v. Royal Sun Alliance Insurance

In Bradfield v. Royal Sun Alliance Insurance (Ont CA, 2019) the Court of Appeal usefully compared 'waiver by conduct' and [promissory] estoppel [next below]:
Waiver by Conduct

[30] Waiver and promissory estoppel are closely related: Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490, at para. 18.

[31] The principle underlying both doctrines is that a party should not be allowed to resile from a choice when it would be unfair to the other party to do so. Both require “knowledge” of the policy breach: Economical Insurance Group v. Fleming (2009), 2008 CanLII 112 (ON SC), 89 O.R. (3d) 68, at para. 31, aff’d 2009 ONCA 112 (CanLII), 69 C.C.L.I. (4th) 185, and Rosenblood Estate v. Law Society of Upper Canada (1989), 37 C.C.L.I. 142 (Ont. H.C.) at para. 53, aff’d 16 C.C.L.I. (2d) 226 (Ont. C.A.).

[32] Waiver will be found where:
“the party waiving had (1) full knowledge of the deficiency that might be relied upon; and (2) the unequivocal and conscious intention to relinquish the right to rely on the contract or obligation. The creation of such a stringent test reflects the fact that no consideration moves from the party in whose favour a waiver operates. An overly broad interpretation of waiver would undermine the requirement of contractual consideration”: Saskatchewan River Bungalows, at para. 20, and Economical Insurance Group, at para. 31.
[33] Knowledge can be inferred from conduct, but “that conduct must give evidence of an unequivocal intention to abandon rights known to the party waiving the right”: Canadian Federation of Students/Fédération canadienne des étudiant(e)s v. Cape Breton University Students’ Union, 2015 ONSC 4093 (CanLII), at para. 129.

[34] In Logel Estate v. Wawanesa Mutual Insurance Company, the insurer elected to defend the claim after receiving the accident report and the pathology report for a single car collision leading to a death: [2008] I.L.R. I-4744 (Ont. S.C.), aff'd 2009 ONCA 252 (CanLII), 70 C.C.L.I. (4th) 188. Those reports contained the evidence of the status of the insured’s licence and her physical condition. In Logel, the trial judge concluded at para. 21:
“that upon receipt they must have had knowledge of the facts including the status of Ms. Logel's licence and her physical condition, which gave rise to the exclusion of coverage. If they did not appreciate the significance of these facts they should have, before they elected to defend.” [Emphasis added.]
[35] In Logel, all facts necessary to establish knowledge were within the possession of the insurer. The insurer simply did not appreciate the significance of the facts before it elected to defend. In the face of this information, the court held that the insurer waived the breach by obtaining all the necessary information to enable it to be aware of a policy breach and deciding to defend the claim.

7. Promissory Estoppel

. High Tower Homes Corporation v. Stevens

In High Tower Homes Corporation v. Stevens (Ont CA, 2014) the Court of Appeal set out the essence of promissory estoppel:
[57] The Supreme Court set out the principles of promissory estoppel in Maracle v. Travelers Indemnity Co. of Canada, 1991 CanLII 58 (SCC), [1991] 2 S.C.R. 50 at p. 57:
The principles of promissory estoppel are well settled. The party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position.
[58] The promise can be inferred from the circumstances, but must be unambiguous: see Engineered Homes Ltd. v. Mason, 1983 CanLII 142 (SCC), [1983] 1 S.C.R. 641.

[59] Promissory estoppel is equitable relief. Therefore, the party seeking to invoke it must show that its “past record in the transaction is clean”: see Toronto (City) v. Polai, 1969 CanLII 339 (ON CA), [1970] 1 O.R. 483 (C.A.), at pp. 493-494; see also Servello v. Servello, 2014 ONSC 5035 (CanLII), 245 A.C.W.S. (3d) 330, at paras. 107-108, 117.
. Bradfield v. Royal Sun Alliance Insurance

In Bradfield v. Royal Sun Alliance Insurance (Ont CA, 2019) the Court of Appeal usefully compared 'waiver by conduct' [see above] and promissory estoppel:

[42] The essential elements of estoppel are that:
1. As in the case of waiver, the insurer must have knowledge of the facts that support a lack of coverage; and

2. Unlike waiver, there must be “a course of conduct by the insurer upon which the insured relied to its detriment.” Rosenblood Estate, at p. 18.
[43] In Rosenblood Estate, a credit union claimed its solicitor was dishonest, resulting in losses to the credit union. The credit union sued the solicitor, who was insured by the Law Society. The Law Society retained counsel to defend the claim against the solicitor. Two years later, the Law Society advised the estate that it was denying coverage on the grounds that the loss was caused by dishonesty, which was excluded from coverage, and that the insured solicitor was in breach of the policy by failing to give timely notice of possible claims.

[44] The court in Rosenblood held that the insurer was estopped from denying coverage, as the insurer had all of the relevant facts necessary to decide whether to defend the fraud claim but nonetheless elected to defend the claim.

[45] The insurer in Rosenblood should have appreciated the significance of the information in its possession that constituted a policy violation. Despite this information, it elected to defend the claim. The insured relied to its detriment on the insurer’s agreement to defend the claim. As such, the insurer was estopped from relying on a policy breach and was required to defend the claim.

8. Estoppel by Convention

. Teixeira v. Markgraf Estate

In Teixeira v. Markgraf Estate (Ont CA, 2017) a later-deceased person gifted a cheque to a friend just before her death, but the cheque was refused by the bank for insufficient funds (though the payor had adequate funds with the bank in other accounts). The friend sued the estate on the cheque, giving rise to the following considerations, firstly respecting gifting and then re the obscure doctrine of 'estoppel by convention':
[53] Estoppel by convention is an equitable doctrine that holds parties to the facts or law or other assumption they have agreed to as the basis for a transaction to which they are parties: Halsbury’s Laws of Canada, “Estoppel”, 1st ed. (Toronto: LexisNexis Canada, 2016 Reissue), at HES-55. The nature of estoppel by convention was discussed by the Supreme Court in Ryan v. Moore. Bastarache J., at para. 4, said that:
Estoppel by convention operates where the parties have agreed that certain facts are deemed to be true and to form the basis of the transaction into which they are about to enter. I
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