



COURT OF APPEAL FOR ONTARIO

CITATION: D.L.G. & Associates Ltd. v. Minto Properties
    Inc., 2015 ONCA 705

DATE: 20151022

DOCKET: C59891

Doherty, Lauwers and Huscroft JJ.A.

BETWEEN

D.L.G. & Associates Ltd.

Plaintiff (Appellant)

and

Minto Properties Inc.

Defendant (Respondent)

Shawn Laubman and Christine Muir, for the plaintiff (appellant)

Adam Grant and Alyssa Caverson, for the defendant (respondent)

Heard: June 29, 2015

On appeal from the order of Justice P. Perell of the
    Superior Court of Justice, dated December 16, 2014, reported at 2014 ONSC 7287.

Doherty J.A.:



I



[1]

This is an appeal from an order striking most of the claims advanced by
    the appellant as disclosing no reasonable cause of action.  I agree that some
    of the claims were properly struck.  I would hold, however, that the motion
    judge erred in striking the negligent misrepresentation claim and the claim
    that the respondent was estopped from relying on the covenant to insure in the
    lease in respect of the damages caused by the second of the two sewer backups. 
    In my view, those pleadings cannot be struck at this stage.


II



the assumed facts

[2]

The motion judge properly took the facts as pleaded by D.L.G. for the
    purposes of the motion.  He also considered the contents of the lease and a
    Lease Amending Agreement, as both documents were referred to in the pleadings. 
    The relevant facts can be summarized as follows.

[3]

The respondent, Minto Properties Inc. (Minto) owned a property at 2177
    Yonge Street in Toronto.  In February 2011, the appellant, D.L.G. &
    Associates Ltd. (D.L.G.), agreed to lease a part of the property.  D.L.G.
    planned to operate a restaurant on the premises.  The lease commenced on July
    15, 2011 and D.L.G. opened the restaurant.

[4]

In October 2011, a sewer backup caused by a backward surge in the main
    line accepting drainage from the rented premises caused extensive damage to the
    restaurant premises.  D.L.G. was forced to close the restaurant for extensive repairs. 
    It turned out that the backup was caused by a drainage pipe that did not meet the
    standards set by the
Building Code Act
, S.O. 1992, c. 23.

[5]

D.L.G. recovered under its insurance policy.  Minto agreed to cover
    additional costs associated with cleanup and reconstruction.  The restaurant eventually
    reopened in December 2011.

[6]

As a result of the first sewer backup, D.L.G.s insurer removed sewer
    backup coverage from D.L.G.s insurance policy.  D.L.G. notified Minto of the
    cancellation.  At no time after learning of the cancellation did Minto require
    D.L.G. to obtain new coverage for sewer backup.

[7]

After the first flood, Minto undertook to D.L.G. that it would repair
    and maintain the plumbing system.  Unbeknownst to D.L.G., Minto did not take
    the steps necessary to correct the defects in the plumbing system that had
    caused the first sewer backup.

[8]

In April 2012, D.L.G. and Minto entered into a Lease Amending
    Agreement.  The agreement reduced the amounts that had been payable by D.L.G.
    under the lease while the necessary repairs were being made.  The Lease Amending
    Agreement also provided that D.L.G. would release and forever discharge Minto
    from any and all actions, causes of action, claims and demands, for damages,
    restitution, compensation, proprietary interests, loss of injury, howsoever
    arising which may have been sustained by D.L.G. in any manner prior to the
    date of the Amending Agreement.

[9]

A second sewer backup occurred in September 2012.  The restaurant closed
    again.  It never reopened.

[10]

In
    October 2012, D.L.G. notified Minto that it was in breach of the lease for
    failing to take steps to repair the plumbing after the first sewer backup. 
    D.L.G. also advised Minto that if D.L.G.s franchisor cancelled the restaurant franchise,
    D.L.G. would treat the lease as terminated.  Minto responded that it was not in
    breach of the lease and that D.L.G. was in arrears on its rent payments.

[11]

The
    franchisor terminated D.L.G.s franchise in November 2012.  D.L.G. advised
    Minto that it was in breach of the lease and purported to terminate the lease. 
    Minto responded by declaring that D.L.G. was in breach of the lease for
    non-payment of rent and it, too, purported to terminate the lease.

[12]

D.L.G.
    commenced this action in July 2013.  D.L.G. claimed damages for fraudulent and
    negligent misrepresentation, breach of the terms of the lease and negligence.  Minto
    denied liability and counterclaimed, principally for amounts owing for back
    rent.


III



the motion

[13]

In September 2014, Minto brought a motion pursuant to r. 21 to strike all
    of the claims as failing to disclose a reasonable cause of action.  Minto
    argued that:

·

D.L.G.s covenant in the lease to obtain all risk insurance
    coverage precluded recovery by D.L.G. for damages caused by the sewer backups;

·

The limitation of liability clauses in the lease excluded Minto
    from any liability for damages caused by the sewer backups;

·

Minto did not waive compliance by D.L.G. with any of the terms of
    the lease;

·

The Lease Amending Agreement in April 2012 released Minto from
    any pre-existing claims that D.L.G. might have against Minto.

[14]

The
    motion judge held that the fraudulent misrepresentation claim could proceed to
    trial (paras. 64-70) and that the effect of the release executed by D.L.G. as
    part of the Lease Amending Agreement on the fraud claim should also be
    determined at trial (paras. 93-102).  Minto does not challenge either holding.

[15]

The
    motion judge found that it was plain and obvious that the covenant to insure in
    the lease barred D.L.G.s claims for breach of contract, negligence and
    negligent misrepresentation (paras. 50-58) and that Minto had not waived the
    covenant by its acknowledgment that D.L.G.s insurer had terminated the sewer
    back-up insurance after the first incident (paras. 59-63). The motion judge
    went on to consider whether, assuming the covenant to insure could be regarded
    as an exclusion clause, the principles in
Tercon Contractors Ltd. v.
    British Columbia (Minister of Transportation and Highways)
, 2010 SCC 4,
    [2010] 1 S.C.R. 69, precluded Minto from relying on the provision. After a
    careful analysis (paras. 72-91), the motion judge determined that it was plain
    and obvious that the enforceability of the covenant to insure was not negated
    by the principles described by the Supreme Court of Canada in
Tercon
.


IV



The covenant to insure

[16]

D.L.G.
    in para. 7.1 of the lease undertook to obtain all risks insurance which
    specifically included insurance for sewer back-up. D.L.G. accepts that a
    claim in negligence against Minto for failure to properly maintain the plumbing
    is barred by the covenant to insure, but submits that it is not plain and
    obvious that the covenant also bars a claim based on Mintos breach of its quiet
    enjoyment and good repair obligations under the lease.

[17]

D.L.G.
    argues that a trial is necessary to properly interpret the covenant to insure
    in the context of the entire agreement.  I do not accept this argument. The
    covenant to insure focuses on risk and the responsibility as between D.L.G. and
    Minto for losses covered should the identified risks materialise during the
    term of the agreement. The provision is not concerned with the legal
    characterization of claims for losses arising out of the materialization of the
    risks.

[18]

D.L.G.s
    submission runs aground on this courts judgment in
Madison Developments
    Ltd. v. Plan Electric Co.
(1997), 36 O.R. (3d) 80 at para. 9. Carthy J.A.,
    speaking of a situation in which the landlord had covenanted to insure against
    all risks said:

The law is now clear that in the landlord-tenant relationship,
    where the landlord covenants to obtain insurance against the damage to premises
    by fire, the landlord cannot sue the tenant for a loss by fire caused by the
    tenants negligence.
A contractual undertaking by one party to secure
    property insurance operates in effect as an assumption by that party of the
    risk of loss or damage caused by the peril to be insured against. This is so
    notwithstanding a covenant by the tenant to repair which, without the
    landlords covenant to insure, would obligate the tenant to indemnify for such
    a loss. This is a matter of contractual law not insurance law
, but of
    course, the insurer can be in no better position than the landlord on a
    subrogated claim.
The rationale for this conclusion is that the covenant to
    insure is a contractual benefit accorded to the tenant, which, on its face,
    covers fire with or without negligence by any person
. There would be no
    benefit to the tenant from the covenant if it did not apply to a fire caused by
    the tenants negligence. [Emphasis added.]

[19]

The
    language from
Madison
applies here. A covenant to insure is one of
    several provisions within a lease which allocates risk as between the parties
    to the lease. The allocation of risk is presumably reflected in the rent to be
    paid. A covenant to insure would hardly serve the purpose of risk allocation if
    it were read as allocating the risk to the tenant if the landlord was
    negligent, but to the landlord if the same act amounted to a breach of a
    provision in the lease, e.g. the obligation to maintain and repair. As almost
    any act of negligence would also be a breach of the obligation to maintain and
    repair, the interpretation urged by the appellant would effectively put the risk
    on Minto despite D.L.G.s obligation to obtain all risks insurance.

The enforceability of the covenant to insure

[20]

D.L.G.
    submits that the covenant to insure is an exclusion clause and is unenforceable
    under the principles set down in
Tercon
. In my view, the covenant to
    insure cannot be read as a clause excluding Minto from liability it would
    otherwise carry but for the clause. Instead, the covenant to insure assigns
    risk for certain losses by requiring that the tenant, D.L.G., obtain insurance
    coverage for those losses:
Smith v. T. Eaton Co.
, [1978] 2 S.C.R. 749
    at 756,
St. Lawrence Cement Inc. v. Wakeham & Sons Limited
(1995),
    26 O.R. (3d) 321 at paras. 37-39 (C.A.).

[21]

As
    I am satisfied that the covenant to insure cannot be read as an exclusion
    clause, I need not address the enforceability of that clause. I would, however,
    observe that in the context of a negotiated lease between arms-length
    commercial entities I see little room for an argument that a covenant to
    insure, whether directed at the landlord or the tenant, could be viewed as
    unconscionable.

[22]

Nothing
    in the pleadings alleges any inherent unfairness in placing the burden of
    obtaining all risks insurance on D.L.G.  I reject the argument that the
    relationship between D.L.G. and Minto during the lease negotiations was one of
    unequal bargaining power because Minto had knowledge about the plumbing that
    D.L.G. did not have.  Nothing in the pleadings suggests that D.L.G. could not
    have made the relevant inquiries and conducted the necessary inspections to
    obtain whatever information about the plumbing it deemed necessary.  Although D.L.G.s
    claim that it relied on fraudulent/negligent misrepresentations by Minto gives
    rise to tort claims against Minto, it does not provide the basis for the
    assertion that D.L.G. was in a position of unequal bargaining power during the
    lease negotiations: see also the reasons of the motion judge at paras. 85-89.

The misrepresentation claims

[23]

D.L.G.
    alleges both fraudulent and negligent misrepresentations.  D.L.G. alleges
    misrepresentations that induced it to enter into the lease with Minto and it
    alleges different misrepresentations after the first sewer backup that induced
    D.L.G. to continue to operate under the lease and attempt to restart its
    restaurant business.  These misrepresentation claims are founded in tort and
    are not premised on any obligations created by the terms of the lease.

[24]

D.L.G.
    alleged that during the negotiations which led to the lease, Minto represented
    that the plumbing in the unit to be rented was in good order and that there had
    been no prior flooding in the unit.  D.L.G. alleged that both representations
    were false and that the unit had been flooded as a result of a sewer backup
    during the prior tenants occupation.  D.L.G. alleged that Minto either knew
    the representations were false, or did not care whether the representations
    were false.  Alternatively, D.L.G. contends that Minto made the representations
    negligently and that it owed a duty of care to D.L.G.  D.L.G. asserts that it relied
    on the representations made by Minto when entering into the lease.

[25]

D.L.G.
    also alleged misrepresentations by Minto after the first sewer backup.  D.L.G. maintained
    that Minto represented that it had carried out the necessary repairs and
    reconstruction of the plumbing and would maintain the plumbing in good repair
    going forward.  D.L.G. alleged that it relied on those representations to
    reopen the restaurant and continue the lease.  D.L.G. alleged that Minto did
    not make the repairs as it had represented and that the failure to do so led to
    the second sewer backup and flood.

[26]

The
    motion judge held (at paras. 42-44) that D.L.G. had advanced a legally viable
    fraudulent misrepresentation claim although the pleading of the claim was
    somewhat deficient.  In holding that it was not plain and obvious that the
    covenant to insure foreclosed the fraudulent misrepresentation claim the motion
    judge said at paras. 64-65:

In other words, the covenant to insure may exculpate
    liability for the risks and claims for which insurance is to be obtained but it
    is not plain and obvious that the insurance in this case was meant to cover
    damages for fraudulent misrepresentation.

I emphasize that I am not deciding that the covenant to insure
    does not cover a fraudulent misrepresentation or that the property or income
    damages consequent upon a fraudulent misrepresentation were not covered by the
    covenant to insure, but the
Cummer-Yonge Investments
line of cases
    does not appear to have addressed this type of claim, which goes more to the
    formation of the contract than it does to the performance of it.  And, it is
    also worth noting that a fraudulent misrepresentation claim may have a different
    doctrinal approach to damages and a different measure of damages than a breach
    of contract claim.  In any event, it is not plain and obvious that the covenant
    to insure precludes D.L.G.s fraudulent misrepresentation claim.

[27]

The
    motion judge also held (para. 102) that it was not plain and obvious that the
    release executed by D.L.G. as part of the amendment to the lease foreclosed the
    fraudulent misrepresentation claim.

[28]

The
    motion judge did not deal separately with the negligent misrepresentation claim. 
    In his analysis, he treated that claim no differently than the breach of
    contract and negligence claims advanced by D.L.G.:
e.g.
see para. 58. 
    The motion judge also did not distinguish between the alleged
    misrepresentations made prior to the parties entering into the lease, and those
    made after the first sewer backup.

[29]

D.L.G.
    submits that the motion judges analysis of the fraudulent misrepresentation
    claim quoted above (para. 28) applies equally to the negligent
    misrepresentation claim.  D.L.G. submits that the negligent misrepresentation
    claim, like the fraudulent misrepresentation claim, is based on alleged
    tortious conduct that occurred outside of the lease.  D.L.G. submits that the covenant
    to insure allocates risk in the performance of the lease and does not impact on
    claims based on tortious conduct that predated the lease, or are unrelated to any
    obligations or rights created by the lease.

[30]

In
    response, Minto submits that the motion judges analysis precluding a claim of
    negligence in the face of the covenant to insure is equally applicable to a
    claim of negligent misrepresentation.  Minto also relies on the entire
    agreement clause in para. 13.5 of the lease.  That paragraph provides:

This lease and its schedules and riders, if any, set forth the
    entire agreement between [Minto] and [D.L.G.] with respect to the premises and
    there are no representations, agreements or understandings between them other
    than is set out in this lease.  This lease supersedes and revokes all previous
    negotiations, arrangements, letters of intent, offers to lease, lease
    proposals, brochures, representations and information conveyed whether orally
    or in writing between the partiesThis lease and its schedules and riders may
    not be modified except by agreement in writing executed by [Minto] and
    [D.L.G.].

[31]

Setting
    aside Mintos argument based on the entire agreement clause in the lease for
    the moment, it is arguable that Mintos liability for negligent
    misrepresentation, like its liability for fraudulent misrepresentation, is not
    precluded by the covenant to insure in the contract.  The covenant to insure
    was intended to assign risk within the operation of the contractual
    relationship between D.L.G. and Minto.  The alleged tortious conduct, be it
    fraudulent or negligent, occurred outside of that relationship.  It is not
    plain and obvious to me, setting aside the entire agreement clause, that the
    terms of the contract demonstrate that the parties intended to exclude Mintos
    potential liability for any negligent misrepresentations that induced D.L.G. to
    enter into and/or continue the tenancy.

[32]

The
    entire agreement clause argument made by Minto requires a separate
    consideration of the misrepresentations made by Minto before the lease was
    entered into and those made after the first sewer backup.

[33]

The
    reach of the entire agreement clause is a matter of interpretation and the
    wording of the clause is of primary importance.  It is arguable that absent
    very clear language, the entire agreement clause does not apply prospectively
    to representations made after the contract was entered into by the parties: see
Shelanu Inc. v. Print Three Franchising Corp.
, [2003] O.J. No. 1919 at
    paras. 48-50 (C.A.); M.G. Ogilvie Entire Agreement Clauses: Neither Riddled
    Nor Enigma, (2008) 87 Can. B.R. 625 at 633, 642; A. Swan, J. Adamski,
Canadian
    Contract Law
, 3rd ed (2012) at p. 600.  It is not plain and obvious that
    the entire agreement clause should immunize Minto from liability for
    post-contract misrepresentations.

[34]

Nor
    does the language in the entire agreement clause requiring that any modification
    to the lease be in writing, make it plain and obvious that claims based on
    negligent misrepresentations made after the lease was entered into must fail. 
    A determination of whether those misrepresentations stand apart from the terms
    of the lease and are therefore not a modification of the terms of the lease,
    cannot be decided within the narrow confines of a pleadings motion.

[35]

Finally,
    nothing in the terms of the Lease Amending Agreement clearly makes the entire
    agreement clause in the lease applicable to negligent misrepresentation claims
    based on representations made after the first flood.  The Lease Amending
    Agreement provides that all provisions of the lease continue in full force and
    effect.  Those words, however, do not assist in interpreting the provisions of
    the lease and specifically do not assist in determining whether the entire
    agreement clause applies prospectively to misrepresentations made after the
    lease was entered into.

[36]

Minto
    stands on firmer ground in relying on the entire agreement clause to preclude
    any possible liability based on negligent misrepresentations made before the
    lease was entered into by the parties.  Entire agreement clauses in contracts
    negotiated at arms length by commercial entities are often read as excluding
    liability for alleged negligent misrepresentations that were said to have
    induced one party to enter into the contract,
e.g.
see
No. 2002 Taurus
    Ventures Ltd. v. Intrawest Corp.
2007 BCCA 228, [2007] B.C.J. No. 812, at
    para. 59;
McNeely v. Herbal Magic Inc.
, 2011 ONSC 4237, 89 B.L.R.
    (4th) 226, at para. 16-19; Ogilvie Entire Agreement Clauses: Neither Riddle
    nor Enigma at p. 636-637.  Some of the cases exclude liability as a matter of
    contractual interpretation, and some read the entire agreement clause as
    negating any possible reliance on the pre-contract representations.

[37]

None
    of the cases, however, involve motions to strike claims based on the
    pleadings.  They arise out of trial decisions or decisions made on motion for
    summary judgment.  The courts have looked to a variety of interpretive aids in
    considering the potential application of an entire agreement clause to
    pre-contractual misrepresentations: see J.D. McCamus:  The Law of Contract, 2
nd
ed 2012, Irwin Law Inc., at 365-66.  The courts have considered:

·

the language used in the entire agreement clause;

·

the relationship of the parties when the contract was
    consummated;

·

the sophistication of the parties;

·

the nature of the negotiations;

·

the language of other terms of the contract and specifically the
    extent to which allowing or precluding a negligent misrepresentation claim
    would be inconsistent with the other terms of the agreement.

[38]

Taurus
provides a good example of the kind of analysis that has led courts to conclude
    that an entire agreement clause forecloses a party to the contract from
    successfully advancing a negligent misrepresentation claim.  In holding that
    the entire agreement clause foreclosed the plaintiff from successfully
    advancing a claim that it had been induced to enter into the contract by
    negligent misrepresentations, the court said, at para. 59:

The parties were both sophisticated, commercial entities.  Mr.
    Houghton had extensive experience in real estate development, was a player in
    the Whistler real estate market, and had dealt extensively with Intrawest.  The
    contract was not a standard adhesion contract.  It included, in the Disclosure
    Statement, a detailed description of not only lot 13, but the Kadenwood
    development and the responsibilities and obligations of the various parties
    involved in the development including Intrawest, the owners of the lots in the
    development, and the strata corporation.  Mr. Houghton read the disclosure
    statement before Taurus entered into the contract.  He had personal contact
    with Intrawest representatives both before and after he purchased lot 13.  He
    had ample opportunity to ask questions and seek answers to any concerns he had
    about the details of the development of Kadenwood.  In these circumstances,
    where the contract was clearly intended to govern the relationship between the
    parties, it would not accord with commercial reality to give no effect to the
    entre agreement clause in determining whether Taurus can claim a tort remedy.

[39]

The
    evidentiary detail necessary to decide whether an entire agreement clause
    precludes reliance on pre-contractual negligent misrepresentations is not
    available on a motion to strike based on the pleadings.  It may be that Minto
    can convince a trial judge or a judge on a summary judgment motion that just as
    in
Taurus
at para. 59
,
    it would not accord with commercial reality to give no effect to the entire
    agreement clause in deciding whether a tort claim for negligent
    misrepresentation based on pre-contractual representations should succeed.  The
    argument is premature at this stage.

The waiver/estoppel claim

[40]

D.L.G.
    pleaded that after the first sewer backup, Minto had agreed to cover the costs
    of cleanup, repairs and reconstruction, and to investigate and fix the problems
    that had led to the first sewer backup.  D.L.G. further pleaded that it told
    Minto that its insurer had refused to provide sewer backup coverage after the
    first sewer backup.  According to D.L.G., Minto:

[a]cknowledged and accepted the continuation by D.L.G. of its
    tenancy under the lease with correspondingly reduced insurance coverage.  At no
    time after learning of the cancellation by D.L.G.s insurer did the defendants
    [Minto] require D.L.G. to obtain new coverage for sewer backup.

[41]

D.L.G.
    pleaded that as a consequence of Mintos conduct after the first sewer backup, Minto
    could not rely on the covenant to insure in the lease in respect of damages
    flowing from the second sewer backup.  D.L.G. pleaded acquiescence, waiver and
    equitable or promissory estoppel.

[42]

The
    motion judge concluded that neither waiver nor estoppel could assist D.L.G.
    (paras. 59-63).  In doing so, he briefly examined the individual circumstances
    relied on by D.L.G. in support of its waiver and estoppel arguments.  For
    example, he determined that Mintos apparent acquiescence in D.L.G.s continued
    tenancy despite its inability to obtain sewer backup insurance coverage did not
    constitute waiver (para. 60).

[43]

Counsel
    for Minto relies on the motion judges reasons and on para. 10(5)(a) of the
    lease.  That paragraph reads:

The waiver by the landlord of any breach of any provision of
    this lease is not deemed to be a waiver of that provision or any subsequent
    breach of it or of any other provision of this lease. The subsequent acceptance
    of any rent or other amount by the landlord is not deemed to be a waiver of any
    provision of this lease or of any proceeding breach by the tenant of any
    provision of this lease, even if the landlord had knowledge of the proceeding
    breach.
No provision in this lease nor any breach of any provision (whether
    or not continuing or recurring) is deemed to have been waived by the landlord
    unless that waiver is expressly set out in writing and signed by the landlord
. 
    [Emphasis added.]

[44]

Minto
    submits that the waiver and the estoppel argument are one and the same.  Absent
    any claim of a written waiver, and there is none, Minto submits that it is
    plain and obvious that D.L.G. cannot rely on waiver or estoppel to prevent the
    operation of the covenant to insure in the lease.

[45]

The
    waiver clause presents a formidable obstacle to D.L.G.s waiver/estoppel claim. 
    However, it is not plain and obvious that an estoppel argument based on Mintos
    conduct after the first sewer backup cannot succeed.  Waiver under the terms of
    the lease cannot necessarily be equated with the broader equitable doctrine of
    promissory estoppel.  As Professor McCamus has observed, promissory estoppel is
    a more expansive version of the waiver doctrine:  McCamus:  The Law of
    Contract, at p. 287.

[46]

A
    party relying on promissory estoppel to escape an obligation that the party
    would otherwise have must show three things:

·

A pre-existing legal relationship between the parties;

·

A promise or assurance, express or implied, by one party to the
    other that it would not hold the other party to the performance of an
    obligation imposed under the pre-existing legal relationship; and

·

Reliance on the promise or assurance by the other party who acts
    in some way to change its position because of the promise or assurance:  see
Maracle
    v. Travellers Indemnity Co. of Canada
, [1991] 2 S.C.R. 50 at 57; B.
    MacDougall, Estoppel, 2012 LexisNexis Canada Inc., at pp. 303-304, 310-14.

[47]

The
    facts as pleaded provide a basis for the factual determinations necessary to
    support a promissory estoppel claim.  Consequently, it is not plain and obvious
    on the pleadings that the claim cannot succeed.  Clearly, the entire
    agreement provision and the strict waiver provision in the lease will be
    relied on by Minto to refute D.L.G.s assertion that Minto is estopped by its
    conduct from relying on the covenant to insure.  The terms of the agreement may
    be particularly important in respect of the reliance requirement:  see
Marble
    Trend Ltd. v. Sir Wynne  Hylands Inc.
, [2004] O.J. No. 3127, at paras. 99-100
    (S.C.), affd by [2005] O.J. No. 3730 (C.A.); MacDougall, Promissory Estoppel
    at p. 325.  Similarly, D.L.G.s reliance on conduct as the basis for the
    promissory estoppel rather than any express assurance or promise made by Minto
    could pose additional forensic problems for D.L.G.  These and any other
    evidentiary problems D.L.G. may encounter are battles to be fought at some
    later stage in this litigation.


V



conclusion

[48]

I
    agree with the motion judge that the fraudulent misrepresentation claim should
    proceed.  I would allow D.L.G.s negligent misrepresentation claim to stand,
    and would allow D.L.G.s assertion that Minto is estopped from relying on the
    covenant to insure in respect of damages caused by the second sewer backup to stand. 
    I would also hold that the effect of the purported release on any of D.L.G.s
    claims cannot be resolved on the pleadings motion.  Finally, I would extend the
    leave to amend the claim granted to D.L.G. by the motion judge in respect of
    the fraud claim to all of the claims that remain alive.

[49]

After
    judgment was reserved, the parties helpfully advised the court that they had
    reached an agreement on costs.  Their agreement, however, assumed that one side
    or the other would be entirely successful on the appeal.  Success has been
    divided.  Hopefully the parties can come to an agreement as to the appropriate
    disposition of costs having regard to the divided success.  If they cannot, the
    parties should exchange and file costs submissions of no more than 4 pages
    within 30 days of the release of these reasons.

Released:
October 22, 2015
    (D.D.)

Doherty
    J.A.

I
    agree. P. Lauwers J.A.

I
    agree. Grant Huscroft J.A.


