|
Insurance - Unconscionability. Emond v. Trillium Mutual Insurance Co.
In Emond v. Trillium Mutual Insurance Co. (SCC, 2026) the Supreme Court of Canada dismissed an appeal, here brought against an order in the Ontario Court of Appeal that "ordered that the cost of replacement payable under the insurance contract does not include the compliance costs" with building requirements imposed by the local conservation authority.
The court considers the contractual principle of 'unconscionability', here in an insurance context:[64] As Trillium rightly acknowledges, the doctrine of unconscionability already provides that insurance contract terms, properly interpreted, can be displaced for fairness reasons external to the interpretive exercise (R.F., at para. 139, citing Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69; see also Uber Technologies Inc. v. Heller, 2020 SCC 16, [2020] 2 S.C.R. 118). Relief on the basis of unconscionability “requires both some kind of unfairness and a substantively unfair transaction” (A. Swan, J. Adamski and A.Y. Na, Canadian Contract Law (4th ed. 2018), at §9.171 (emphasis in original)). As the Court noted in Uber, at para. 77:Where the weaker party did not understand or appreciate the meaning and significance of important contractual terms, the focus is on whether they have been unduly disadvantaged by the terms they did not understand or appreciate. These terms are unfair when, given the context, they flout the “reasonable expectation” of the weaker party or cause an “unfair surprise”. [Citations omitted.]
|
