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Estoppel - Estoppel by Representation. SIR Corp. v. Aviva Insurance Company of Canada
In SIR Corp. v. Aviva Insurance Company of Canada (Ont CA, 2023) the Court of Appeal considers an 'estoppel by representation' argument, here where an insurance company had granted coverage in a prior similar claim:[105] On January 17, 2020, St. John’s, Newfoundland and Labrador, declared a state of emergency, due to hurricane-force winds and extreme snowfalls, and ordered all businesses to close. The state of emergency remained in effect for approximately nine days. SIR’s Jack Astor’s restaurant in St. John’s suffered some food spoilage and business losses, and SIR made a claim under Clause 15. Aviva paid SIR’s claim.
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[112] SIR cites Ontario v. St. Paul Fire and Marine Insurance Company, 2021 ONSC 7786, at paras. 15-16, 18 and 24, aff’d on other grounds 2023 ONCA 173, 480 D.L.R. (4th) 30, for the requirements to establish estoppel by representation in an insurance case. Specifically, it cites the case for the proposition that the insured must prove that the insurer made a representation to the insured and the insured relied on the representation and acted to its potential detriment as a consequence. The representation may be implied from conduct, but the insured must nonetheless prove that it was made: Ontario v. St. Paul Fire, at paras. 15‑16.
[113] SIR’s articulation of the elements of estoppel by representation is not entirely accurate. In Ryan v. Moore, 2005 SCC 38, [2005] 2 S.C.R. 53, at para. 5, the Supreme Court of Canada described estoppel by representation:Estoppel by representation requires a positive representation made by the party whom it is sought to bind, with the intention that it shall be acted on by the party with whom he or she is dealing, the latter having so acted upon it as to make it inequitable that the party making the representation should be permitted to dispute its truth, or do anything inconsistent with it. [Emphasis added.] [114] Clause 15 requires that the order be “given as a direct result of loss or damage of the type insured by this policy, or threat thereof.” The order giving rise to the St. John’s claim was given as the result of a major snowstorm. Damage to property is insured by the Policy and a snowstorm can be the direct cause of physical damage to property. In contrast, the Orders were not given as a direct result of loss or damage to property, or threat thereof. The cause of the safety concerns underlying the St. John’s order and the Orders is different.
[115] It is clear from the application judge’s reasons that she was not satisfied that Aviva impliedly represented that it would cover SIR for food spoilage and business losses any time closure of its business was mandated by an order of a civil authority concerned about public safety, regardless of whether the order was “given as a direct result of loss or damage of the type insured by [the] policy, or threat thereof.” Further, even if Aviva made such a representation, SIR has not established, on this record, that it was made with the intention that SIR should act on it: see Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2021 ONCA 201, 32 R.P.R. (6th) 1, at para. 139, leave to appeal refused [2021] S.C.C.A. No. 176. . Fram Elgin Mills 90 Inc. v. Romandale Farms Limited
In Fram Elgin Mills 90 Inc. v. Romandale Farms Limited (Ont CA, 2021) the Court of Appeal set out the doctrine of estoppel by representation:(1)Governing Legal Principles
[134] In Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co., 1970 CanLII 3 (SCC), [1970] S.C.R. 932, at pp. 939-40, the Supreme Court stated that the essential factors giving rise to estoppel by representation are:(1) a representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made;
(2) an act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made; and
(3) detriment to such person as a consequence of the act or omission. [135] More recently in Ryan v. Moore, at para. 5, the Supreme Court referred to its much earlier decision in Page v. Austin (1884), 1884 CanLII 6 (SCC), 10 S.C.R. 132, at para. 164, to describe the doctrine of estoppel by representation as follows:Estoppel by representation requires a positive representation made by the party whom it is sought to bind, with the intention that it shall be acted on by the party with whom he or she is dealing, the latter having so acted upon it as to make it inequitable that the party making the representation should be permitted to dispute its truth, or do anything inconsistent with it.
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