Woodman’s Welding & Machining Ltd. v. Charlie Cooke Insurance Agency Ltd., 2024 NBKB 059
Reading Time: 4 minutes (approx.)
By: Sarah Richard (Articled Clerk)
Woodman’s Welding & Machining Ltd. (“Plaintiff)” obtained business interruption coverage from Northbridge General Insurance Corporation through their agent, Charlie Cooke Insurance Agency Ltd. (“Defendant”). The coverage was recommended during an annual review in 2019 by D. Loveless of Charlie Cooke Insurance, who suggested adding “Business Interruption Actual Loss Sustained” (“BIALS”) to their existing policy.
The Plaintiff claimed that the Defendant negligently misrepresented the nature of the coverage provided, believing that in case of interruption it would cover their “gross monthly income” for 12 months, but it actually covered the “actual loss sustained.” After a fire in October 2020, the Plaintiff discovered the disparity and filed a claim against the Defendant for damages due to negligent misrepresentation.
The court recounted the five elements, established by the Supreme Cout of Canada in Queen v. Cognos Inc., [1993] 1 SCR 87, that must be proven successfully to establish a claim for negligent misrepresentation. These elements are:
- there must be a duty of care based on a “special relationship” between the representor and the representee;
- the representation in question must be untrue, inaccurate, or misleading;
- the representor must have acted negligently in making a misrepresentation;
- the representee must have relied, in a reasonable manner, on the negligent misrepresentation; and,
- the reliance must have been detrimental to the representee in the sense that damages resulted.
In response, the Defendant sought summary judgment, arguing that the Plaintiff failed to establish a genuine issue requiring a trial. The court reviewed extensive evidence, including affidavits from both sides and policy documents. It concluded that the Plaintiff did not substantiate its claims of negligent misrepresentation. The court found no evidence that the Defendant had made misleading representations or acted negligently. Furthermore, the Plaintiff did not prove they relied on the Defendant’s advice in a reasonable manner or suffered damages as a result of any misrepresentation.
The court emphasized that the Plaintiff’s misunderstanding of the policy’s terms did not constitute negligent misrepresentation by the Defendant. It noted that the coverage provided by Northbridge aligned with industry standards for business interruption insurance, despite the Plaintiff’s expectations. Therefore, the court granted summary judgment in favor of the Defendant, dismissing the claim.
