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Contracts - Waiver. BelairDirect Insurance Company v. Continental Casualty Company
In BelairDirect Insurance Company v. Continental Casualty Company (Ont CA, 2023) the Court of Appeal considers waiver in an insurance context:[22] We did not call on Belair to respond on the issue of waiver because, given the unchallenged circumstance that Belair was mistaken in its initial belief that Mr. Sarantakos was insured under his mother’s policy at the time of the accident, Continental cannot demonstrate that the requirements of waiver are satisfied. Waiver requires “full knowledge of rights” and “an unequivocal and conscious intention to abandon them”: Trial Lawyers Association of British Columbia v. Royal & Sun Alliance Insurance Company of Canada, 2021 SCC 47, 163 O.R. (3d) 398, at para. 75, citing Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490, at p. 500. Belair’s mistaken belief that Mr. Sarantakos was covered under its policy could not constitute full knowledge of its rights. . Rabin v. 2490918 Ontario Inc.
In Rabin v. 2490918 Ontario Inc. (Ont CA, 2023) the Court of Appeal considered the law of contractual waiver:[27] The doctrine of waiver was explained by Major J. in the following oft-cited passages of Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490, at pp. 499-500:Waiver occurs where one party to a contract or to proceedings takes steps which amount to foregoing reliance on some known right or defect in the performance of the other party [citations omitted]. The elements of waiver were described in Federal Business Development Bank v. Steinbock Development Corp. (1983), 42 A.R. 231 (C.A.), cited by both parties to the present appeal (Laycraft J.A. for the court, at p. 236):The essentials of waiver are thus full knowledge of the deficiency which might be relied upon and the unequivocal intention to relinquish the right to rely on it. That intention may be expressed in a formal legal document, it may be expressed in some informal fashion or it may be inferred from conduct. In whatever fashion the intention to relinquish the right is communicated, however, the conscious intention to do so is what must be ascertained. Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. The creation of such a stringent test is justified since 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. . Capital Sports v. Trinity
In Capital Sports v. Trinity (Div Court, 2022) the Divisional Court considered acquiescence, which it equated with 'waiver':[79] Acquiescence is an equitable doctrine that arises when a party has knowledge of an issue (here, Gowlings acting for Capital Sports, adverse to Trinity) and refrains from taking steps to address the breach. The term acquiescence is sometimes used interchangeably with waiver: e.g., Serniak v. Teitel, 2004 CanLII 9130 (Ont. C.A.), Sheriff v. Apps, 2012 ONSC 565. The respondents submit that while acquiescence was raised before the motion judge, waiver was not, and should not be raised now. In this case, I see no material difference.
[80] The motion judge found that Trinity did not acquiesce based on the evidence of Mr. Ruddy, because of the evidence that Gowlings acted for RLG at a later stage, and because there was “no evidence” of detrimental reliance.
[81] Contrary to the discussion in the reasons for decision, Mr. Ruddy’s evidence demonstrates acquiescence. Knowing that Gowling was going to continue to act for Capital Sports, including in disputes with Trinity, Mr. Ruddy decided not to object. He was the principal of Trinity. His is the only evidence on this point. Finding that his evidence supported an opposite finding was a palpable and overriding error.
[82] Further, there was evidence of detrimental reliance. There was ample evidence that Gowlings continued to act for Capital Sports, and the privileged documents created are the very subject of the motion for production. Important steps proceeded with Gowlings acting against Trinity, most notably the mediation, to the knowledge of Trinity. Given the fundamental importance of solicitor-client privilege, the expectation of confidentiality in privileged communications is more than sufficient to show detrimental reliance.
[83] I conclude that the motion judge erred in regard to acquiescence. Trinity did acquiesce and cannot now seek production of documents when the parties were adverse, commencing in May 2016. There is then the later period of time, when Gowlings took some steps for RLG. Again, Trinity acquiesced to Gowlings being put forward in that way despite acting for Capital Sports against Trinity. Mr. Ruddy’s reason for not objecting is consistent with these events. He decided not to object because he was intent on keeping the joint venture alive. . Jack Ganz Consulting Ltd. v. Recipe Unlimited Corporation [no para #'s]
In Jack Ganz Consulting Ltd. v. Recipe Unlimited Corporation (Ont CA, 2021) the Court of Appeal set out some basics of contractual waiver [no para numbers available]:One party to an agreement may choose to forego reliance on a contractual right but only where the party making the choice has full knowledge of the right and makes an unequivocal and conscious decision to forego that right with full understanding of the consequences. The court must apply a stringent test before finding unilateral waiver of a contractual right because “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 Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490, at p. 500.
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The motion judge correctly noted that parties can by their conduct, demonstrate that they do not intend to be bound by clauses in an agreement notwithstanding a clause in the agreement that requires changes to be executed in writing: Colautti Construction Ltd. v. City of Ottawa (1984), 1984 CanLII 1969 (ON CA), 46 O.R. (2d) 236 (C.A.); see also Shelanu Inc. v. Print Three Franchising Corp. (2003), 2003 CanLII 52151 (ON CA), 64 O.R. (3d) 533 (C.A.), at paras. 50-60. . Campbell v. 1493951 Ontario Inc.
In Campbell v. 1493951 Ontario Inc. (Ont CA, 2021) the Court of Appeal defines 'waiver':[12] A waiver involves a knowing relinquishment of rights. “Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them”: Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490 at para. 20. The application judge was entitled to find that since 149 was misled by Mr. Campbell into believing that an exemption existed for his business, the requirements for a waiver were not established and the waiver argument could not succeed. Mr. Campbell was the source of the misleading misinformation. It did not matter whether he believed it. . 2324702 Ontario Inc. v. 1305 Dundas W Inc.
In 2324702 Ontario Inc. v. 1305 Dundas W Inc. (Ont CA, 2020) the Court of Appeal reviewed the law of waiver:[13] The next issue was whether the landlord had waived the need for strict compliance. At para. 55, the application judge found that the two requirements of waiver that the Supreme Court set out in Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490, had not been met: 1) a full knowledge of rights; and 2) an unequivocal and conscious intention to abandon those rights. He concluded, from the lack of further discussion between the parties about rental rates following the November 3, 2017 emails, that “[t]he ready inference […] is that the [respondent] stopped discussing it as [the appellant] stopped pushing for it because [the appellant] had not given the required written notice”: at para. 55.
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[21] Moreover, we see no basis to interfere with his application of the test for waiver from Saskatchewan River Bungalows. The appellant never sent its best offer and there were no further negotiations after the expiry of the option period, as in the three cases referred to by the appellant: Directors Film Co. v. Vinifera Wine Services Inc. (1998), 1998 CanLII 14658 (ON SC), 38 O.R. (3d) 212 (Gen. Div.); Petridis v. Shabinsky et al. (1982), 1982 CanLII 1829 (ON SC), 35 O.R. (2d) 215 (H.C.); and Doral Holdings Ltd. v. Bargain Books Ltd., [1994] O.J. No. 3103 (Gen. Div.). The respondent did nothing to indicate that it was abandoning its right to expect a written notice of renewal within the notice period. . North Elgin Centre Inc. v. McDonald's Restaurants of Canada Limited
In North Elgin Centre Inc. v. McDonald's Restaurants of Canada Limited (Ont CA, 2018) the Court of Appeal states the principle of contractual waiver:[8] The principle of waiver provides that if one party leads another party to believe that its strict legal rights under a contract will not be insisted upon, intending that the other party will act upon that belief and the other does so, then the first party may not afterwards insist on its strict legal rights when it would be inequitable to do so: Petridis v. Shabinsky, 1982 CanLII 1829 (ON SC), 35 O.R. (2d) 215 (H.C.), at para. 20.
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[10] For the revocation of a waiver to be effective it must provide reasonable notice to the receiving party: Petridis, at para. 20. To qualify as reasonable, the notice must make clear that the party who granted the waiver will insist upon the strict enforcement of its legal rights. The notice must also afford the opposite party an opportunity to cure any defect resulting from its reliance on the waiver. . 1418885 Ontario Ltd. v. 2193139 Ontario Limited
In 1418885 Ontario Ltd. v. 2193139 Ontario Limited (Ont CA, 2018) the Court of Appeal cited it's earlier decision on contractual waiver:[10] The motion judge cited this court’s decision in Technicore Underground Inc. v. Toronto (City), 2012 ONCA 597 respecting the requirements to establish that a party has waived a right under a contract. More specifically, the motion judge referred to the following observation of Gillese J.A., at para. 63: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. . Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co.
In Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co. (SCC, 1994) the Supreme Court of Canada set out the elements of waiver, here in an insurance contract: Waiver occurs where one party to a contract or to proceedings takes steps which amount to foregoing reliance on some known right or defect in the performance of the other party: Mitchell and Jewell Ltd. v. Canadian Pacific Express Co., 1974 ALTASCAD 18 (CanLII), [1974] 3 W.W.R. 259 (Alta. S.C.A.D.); Marchischuk v. Dominion Industrial Supplies Ltd., 1991 CanLII 59 (SCC), [1991] 2 S.C.R. 61 (waiver of a limitation period). The elements of waiver were described in Federal Business Development Bank v. Steinbock Development Corp. (1983), 42 A.R. 231 (C.A.), cited by both parties to the present appeal (Laycraft J.A. for the court, at p. 236):The essentials of waiver are thus full knowledge of the deficiency which might be relied upon and the unequivocal intention to relinquish the right to rely on it. That intention may be expressed in a formal legal document, it may be expressed in some informal fashion or it may be inferred from conduct. In whatever fashion the intention to relinquish the right is communicated, however, the conscious intention to do so is what must be ascertained. Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. The creation of such a stringent test is justified since 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.
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The appellant submits that, whereas the right to compel timely payment is clearly waived where premium payments are received and deposited by an insurance company after the expiry of the policy grace period (Duplisea v. T. Eaton Life Assurance Co., 1979 CanLII 191 (SCC), [1980] 1 S.C.R. 144; Anguish v. Maritime Life Assurance Co. (1987), 1987 ABCA 77 (CanLII), 51 Alta. L.R. (2d) 376 (C.A.), leave to appeal refused, [1988] 2 S.C.R. vii), a mere demand for payment beyond the grace period is insufficient. Support for that proposition is found in McGeachie v. North American Life Assurance Co. (1893), 20 O.A.R. 187 (C.A.), aff'd (1893), 1893 CanLII 21 (SCC), 23 S.C.R. 148, and in Northern Life Assurance Co. of Canada v. Reierson, 1976 CanLII 156 (SCC), [1977] 1 S.C.R. 390. In both cases, this Court concluded that a demand for payment was equivocal or insufficient to give rise to a waiver. However, in some circumstances a demand for payment may constitute waiver. The nature of waiver is such that hard and fast rules for what can and cannot constitute waiver should not be proposed. The overriding consideration in each case is whether one party communicated a clear intention to waive a right to the other party.
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Waiver can be retracted if reasonable notice is given to the party in whose favour it operates: Hartley v. Hymans, [1920] 3 K.B. 475; Charles Rickards Ltd. v. Oppenhaim, [1950] 1 K.B. 616; Guillaume v. Stirton (1978), 1978 CanLII 1844 (SK CA), 88 D.L.R. (3d) 191 (Sask. C.A.), leave to appeal refused, [1978] 2 S.C.R. vii. As Waddams notes, the "reasonable notice" requirement has the effect of protecting reliance by the person in whose favour waiver operates: The Law of Contracts, supra, at paras. 604 and 606. It follows that a notice requirement should not be imposed where reliance is not an issue: ibid. at para. 606. In the present appeal, the respondents were not aware of Maritime's waiver until they received the November letter, along with the lapse notice and late payment offer, in April 1985. It follows that they did not rely on Maritime's waiver. In such circumstances, Maritime was not required to give any notice of its intention to lapse the policy. The statement that "this policy has lapsed", contained in the February lapse notice, took effect on its terms. . 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: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. . Meridian Credit Union Ltd. v. Chijindu
In Meridian Credit Union Ltd. v. Chijindu (Ont CA, 2019) the Court of Appeal had this to say about waiver in this case:[3] Accepting monthly payments did not amount to waiver under the terms of the mortgage, which provides that the mortgagee may waive default in writing, nor did accepting payments meet the legal test for waiver, laid down in Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490, which requires inter alia the communication of an unequivocal and conscious intention to abandon the right to rely on the deficiency or default. The motion judge found that acceptance of three payments did not satisfy that test and her conclusion is amply supported by the record.
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