Canada Insurance Lawyer & Attorney : Michael Thomas of Harper Grey Law Firm : British Columbia, Vancouver

The Insured’s vehicle collided with a tractor-trailer unit, which was illegally parked, so that it was obstructing the Insured’s path. Just prior to the collision, the Insured had attempted to pass the tractor-trailer on the driver’s side, but was unable to do so because of a vehicle approaching in the oncoming lane of traffic. The Insured’s son was seriously injured as a result of the accident and received statutory accident benefits from the insurer of the vehicle (the "First Party Insurer").

The First Party Insurer then sought indemnity for payment of these benefits from the insurer of the tractor-trailer unit (the "Second Party Insurer"). The dispute was submitted to a private Arbitrator who concluded that the Second Party Insurer was 100% responsible for the Insured’s loss pursuant to the provisions in the "Fault Determination Rules", enacted by Regulation under the Ontario Insurance Act. The arbitrator accordingly ordered the Second Party Insurer to indemnify the First Party Insurer to the extent that the latter had paid statutory accident benefits to the Insured’s son.

 It was from this decision that the Second Party Insurer appealed to the Ontario Supreme Court. In reviewing the Arbitrator’s decision, the Court held that the appropriate standard of review was that of correctness. The issue before the Court was then whether the Arbitrator had correctly interpreted and applied the Fault Determination Rules to the facts of the case. In particular, the Arbitrator had concluded that the fact situation before him was not fundamentally different from what was contemplated by Rule 17(2). This Rule essentially provides that where an automobile is illegally parked, stopped or standing when it is struck by another automobile, and if the accident occurs outside a city, town or village, the driver of the illegally parked automobile is 100 per cent at fault and the driver of the other vehicle is not at fault for the incident. The Arbitrator reasoned that while the oncoming car did play some role in the Insured’s accident, it did not change the situation so fundamentally that the Rule ought not to apply.

The Ontario Superior Court found that the Arbitrator was correct in applying Rule 17(2) to determine the respective fault of the two Insurers and dismissed the Second Party Insurer’s appeal. However, the Court disagreed with the Arbitrator’s approach and his qualification that the Fault Determination Rules ought to be applied unless the fact situation is "fundamentally different" than that contemplated by the Rules. The Court noted that, having found as a fact that the tractor-trailer was illegally parked when it was struck by the Insured’s vehicle and that the accident occurred outside a city, town, or village, the criteria of Rule 17(2) were satisfied and there was no need for further analysis.

The Motor Vehicle Accident Claims Fund (the "Fund") brought an action claiming that Progressive Casualty Insurance Co. of Canada ("Progressive") was obligated to pay accident benefits to Cuong Ngo, a passenger injured in a motor vehicle accident. Huu Thag Nguyen ("Mr. Nguyen"), the driver of the vehicle, died in the accident. Progressive had issued an automobile policy to Mr. Nguyen effective April 22, 1997. The monies in payment of the premiums were to be withdrawn by electronic funds transfer on the 22^nd day of each month. Mr. Nguyen’s bank subsequently advised Progressive that it would not process the May 22^nd payment. Progressive then sent Mr. Nguyen a notice of cancellation advising that unless he paid the sum of $339.76 by June 18, 1997, the policy would be cancelled. No monies were received, and Progressive cancelled the policy as of that date, and issued a cheque to Mr. Nguyen for $44.46 on July 8, 1997 representing a refund of the premium overpayment. The motor vehicle accident occurred on August 11, 1997.

Progressive argued that the Fund was unable to bring the action on the basis that the Dispute between Insurers Regulation, Reg 183/95, applied. The court found that it had jurisdiction to decide this case based on Allstate Insurance Co. of Canada v. Motor Vehicle Accident Claims Fund,[2007] No. 292 (C.A.) that changed the law on whether the Fund was an insurer on the eve of trial.

The Court found that the Fund bore the burden of demonstrating the Progressive policy was in force on August 11, 1997, but that Progressive also bore the burden to show that its purported termination was in accordance with the applicable statutory conditions. The Court found that Progressive attempted to remove the funds from Mr. Nguyen’s bank account one day later than was agreed to, and this constituted a breach of the agreement on the part of Progressive. Accordingly, Progressive had no basis to issue a notice of cancellation, and the policy was in force at the time of the motor vehicle accident.

Neighbouring homes were damaged in an explosion caused by the insured’s failed suicide attempt. The homeowners sued and obtained a judgment against the Insured, who did not defend the action. The judgment remained unsatisfied. The Plaintiffs brought an action pursuant to s. 132 of the Insurance Act seeking to have the judgment satisfied by the insurance policy. The Insured was charged with and pled guilty to an offence contrary to s. 436 of the Criminal Code, arson by negligence. The policy exclusions stated:

You are not insured for claims arising from bodily injury or property damage caused intentionally by you or at your direction or resulting from your criminal acts or omissions.

The Plaintiffs argued that the mere fact of a conviction did not trigger the operation of the exclusion. They argued that intention was a necessary component. They relied on s. 118 of the Insurance Act for this proposition. The Court referred to Non-Marine Underwriters, Lloyd’s of London v. Scalera, [2000] 1 S.C.R. 551 and R.E. v. Wawanesa Mutual Insurance Co., [2006] O.J. No. 904, and found that the wording of the policy at issue was clear and designed to exclude from coverage criminal conduct not requiring full mens rea. Therefore, the exclusion clause applied.

This was a motion by the Plaintiff, Mr. Lange, for a determination of a question of law pursuant to Rule 21.01(a). The question was whether the Plaintiff had a right of subrogation against the Defendant, Mr. Mann, for damages sustained to his camper trailer (the "Camper Trailer") and its contents. The parties were involved in a motor vehicle accident in which the Defendant collided with the Plaintiff who was towing his Camper Trailer.

The damage to the Plaintiff’s truck was paid under a motor vehicle liability policy; however, the damage to the Camper Trailer and its contents was paid under a Holiday Trailer/Park Model policy which is not a motor vehicle liability policy within the meaning of the Insurance Act (the "Act"). Section 278 of the Act provides that if an insurer makes any payment under a contract of insurance, it is subrogated to all rights of recovery of the insured against any person and may bring an action in the name of the insured to enforce those rights. The Camper Trailer was an "automobile" as defined by the Act and as such, the direct compensation provisions of the Act applied. Section 263(5)(b) of the Act eliminates the right of subrogation for payments made to a party insured under the direct compensation section but does not eliminate the right of subrogation for payments made to an insured pursuant to a policy of insurance other than a motor vehicle liability policy.

 The Court found that because the Holiday Trailer/Park policy under which the damage to the contents of Mr. Lange’s Camper Trailer was paid, was not a motor vehicle liability policy, the Plaintiff’s Insurer was not barred by s. 263 of the Act from advancing a subrogated claim arising out of such damages.

This was an application by the Defendant, Axa Insurance ("Axa"), seeking an Order pursuant to Rule 21.01(1)(b) striking out the Plaintiff’s claim on the grounds that it disclosed no reasonable cause of action, as the Plaintiff, Ms. McCauley, was excluded from coverage under the policy. The Plaintiff had been injured while riding as a passenger in a motor vehicle driven by the Defendant, Mr. Blagdon, and owned by the Defendant, Mr. Seys. Mr. Blagdon did not have the consent of the owner of the vehicle to operate it when the accident occurred. The Plaintiff commenced an action seeking damages against the driver, Mr. Blagdon, and the owner, Mr. Seys, as well as Axa.

Axa claimed that the Plaintiff was precluded from recovering damages from it under the O.P.C.F. 44R - Family Protection Coverage as a result of the wording of section 1.8.2 of O.A.P. No. 1 which stated that there was no coverage under the policy for an occupant of an automobile used or operated by a person in possession of the automobile without the owner’s consent. The issue was whether the Plaintiff should be entitled to coverage in circumstances where she was not knowingly an occupant of an automobile used or operated by a person in possession of the automobile without the owner’s consent.

The Court held that lack of knowledge that the automobile was being operated without the consent of the owner was not part of the plain, existing language of the provision and did not prevent the exclusion as set out in s. 1.8.2 of O.A.P. No. 1 from applying. As the Plaintiff’s claim was barred in law, the pleadings disclosed no reasonable cause of action and the action against Axa was dismissed pursuant to Rule 21.01(1)(b).

In April 1998, there was a mining disaster in Spain in which a tailings pond dam collapsed resulting in toxic waste contaminating a large amount of land. The mine was owned by a Spanish subsidiary of Boliden. The shares of Boliden plummeted in value. Shareholders of Boliden who had acquired their shares less than one year earlier in an initial public offering commenced class actions in Ontario and British Columbia against directors and officers of Boliden for alleged misrepresentations contained in the prospectus leading to the initial public offering. The class actions were settled. Boliden sued Liberty for defence costs of the class action estimated in excess of $3,000,000. Liberty denied coverage based upon a pollution exclusion clause in the D & O Policy.

The Statement of Claim in the underlying class actions alleged that Boliden had made misrepresentations with respect to the construction, maintenance and stability of the tailings dam. It was further alleged that misrepresentations had been made with respect to past seepage and leakage from the tailings pond. The D & O Policy contained an exclusion for "pollution loss", which was defined to mean a loss "resulting from or attributable to or in any way involving, directly or indirectly, the actual, alleged or threatened seepage, discharge, dispersal, release or escape of pollutants…". An endorsement to the policy also provided that where a claim was advanced against the directors and officers that was partly covered by the policy and partly not covered by the policy, 80% of defence costs would be allocated to the covered loss.

The Court set out the following principles applicable to the determination of a duty to defend:

1. Insurer’s duty to defend is governed by the pleadings in the underlying action;

 2. Coverage provisions in insurance policies should be construed broadly in favour of the insured and exclusion clauses should be interpreted strictly and narrowly against the insurer;

3. Where there are ambiguities in the policy, the reasonable expectations of the parties are to be given effect;

4. If there is ambiguity in a provision of an insurance contract, the contra proferentum doctrine resolves the ambiguity against the insurer.

The Court held that the wording of the pollution exclusion was ambiguous. In this case, the Court accepted that there would have been no litigation but for the escape of pollution that led to the decrease in values of the shares of Boliden. Therefore, it could be said that the allegations were "resulting from" or "involving, directly or indirectly" a claim for pollution loss. However, the claim was not for the actual loss caused by the pollution damage, but rather for damages for failing to disclose certain facts that constituted a misrepresentation. A number of the alleged misrepresentations did not specifically deal with the escape of pollutants. In the result, the Court held that the exclusion clause applied to some of the claims of misrepresentations, but not all of them. As a result, under the endorsement in the policy, Boliden was entitled to coverage for 80% of all its defence costs in connection with the class action litigation.

The Insured had a builder’s all-risk insurance policy with the Insurer that insured it against all risks of direct physical loss or damages in connection with the construction of a railway tunnel and also insured against the costs associated with delayed opening expenses.

During the course of construction of the tunnel, a tunnel boring machine ("TBM") failed to perform as anticipated, resulting in substantial loss and damage to the Insured and a delay in the opening of the new tunnel. The Insured made a claim under the policy which was denied by the Insurer on the ground that the TBM was faulty and that the policy excluded coverage for any loss or damage caused by faulty or improper design. The trial judge found that the design of the TBM was not faulty or improper, as the excess differential deflection that caused the failure was not foreseeable and that the exclusionary clause therefore did not apply. The trial judge awarded the Insured a significant sum under the policy.

 On appeal, the Court of Appeal was asked to consider whether the trial judge had erred in holding that the excess differential deflection that caused the TBM’s failure was not a foreseeable risk and that the faulty or improper design exclusion therefore did not apply. The Court of Appeal allowed the Insurer’s appeal, finding that the trial judge had erred in his conclusions. Specifically, the Court of Appeal noted that there was evidence given at trial, which the trial judge had ignored, to the effect that the designer of the TBM was aware that differential deflection posed a serious potential danger to the TBM’s sealing system. Further, the extent of this potential danger had been investigated by the designer and others on behalf of the Insured prior to the use of this machine on the tunnel project.

The Court of Appeal concluded that, contrary to the findings of the trial judge, the design of the TBM was inadequate to meet a known risk of possible failure of the TBM. As such, the design of the TBM was faulty and the exclusion in the policy applied. The Insurer was therefore entitled to deny coverage to the Insured on this basis. The Court of Appeal allowed the Insurer’s appeal and dismissed the Insured’s claim. The Insured’s cross-appeal was dismissed.

A representative Plaintiff, CE Design Ltd. (CE Design), brought an action against Health Craft Products Inc. ("Health Craft") in Illinois. Health Craft had a commercial general liability policy issued by ING Insurance Co. of Canada ("ING"). Health Craft and CE Design entered into a Settlement Agreement, which was approved by an Illinois Court. The Settlement Agreement provided that Health Craft consented to judgment against it in the amount of $543,000 USD and would assign to the Illinois Plaintiffs any rights it had under the ING policy. ING was not a party to the Settlement Agreement.

 ING brought an Application in Ontario for a declaration that that it was not required to defend nor indemnify Health Craft. The Court found that because the insurance contract was issued in Ontario and both ING and Health Craft carried on business in Ontario, the proper law of the contract was Ontario and there was a real and substantial connection to Ontario. The Court found that Ontario was also the forum conveniens on the basis that if Health Craft had brought a claim for coverage, the proper forum would clearly have been Ontario, and it was fair and equitable that the forum would continue to be Ontario since the assignee, CE Design, stood in the shoes of Health Craft.

This was an appeal by the Insurer from a motion judge’s finding that a teenager ("Ryan P.") was covered under his aunt and uncle’s home insurance policy despite being convicted of criminal negligence causing harm following an accident in which he accidentally shot Ryan E. in his father’s house. Following a trial, Ryan P. and his father were ordered to pay $800,000 in damages to Ryan E. When the judgment went unsatisfied, Ryan E. commenced proceedings against Wawanesa Mutual Insurance Co. ("Wawanesa") and Commercial Union of Canada ("Commercial"), the Insurers of Ryan P.’s aunt and uncle and his mother, respectively.

Wawanesa’s policy provided the Insured with broad coverage for damages arising from any bodily injuries or property damage arising out of personal activities anywhere in the world except where such damages were caused by an intentional act or criminal act. The issue therefore was whether criminal negligence causing bodily harm was a "criminal act" within the meaning of the exclusion clause.

Wawanesa argued that the criminal act exclusion clearly applied because Ryan P. had been convicted of criminal negligence causing bodily harm arising from the shooting. The motions judge rejected this argument finding that criminal negligence was not a criminal act but rather a subset of negligence.

The Court of Appeal disagreed finding that the phrase "criminal act" means any breach of the Criminal Code. The exclusion applied to injury "caused by any intentional or criminal act". If the criminal act had to be intentional, there would be no need to include the "or criminal act" wording in the policy. The exclusion applied even without proof of intention to cause the injury or damage so long as the act or omission that caused the harm was criminal in nature. In this case, it was undisputed that the injuries were caused by Ryan P.’s criminal act. Accordingly, the Court of Appeal allowed the appeal and held that the motion judge erred in finding that Ryan P.’s conviction for criminal negligence did not constitute a criminal act that was caught by the exclusion clause.

The Insured was an employee of the City of Toronto, which had a contract with the Insurer to provide health and disability benefits to City employees for injuries sustained in the course of their employment. The Insured, a truck driver and loader for the City, was injured in a motor vehicle accident that occurred during the course of his employment. He made a claim for long-term disability benefits from the Insurer, who denied the claim on the ground that the Insured had elected to proceed with a civil action against the other driver, rather than pursue his application for Workplace Safety and Insurance benefits ("WSIB").

The Insured had brought an action against the Insurer for payment of benefits under the policy, but before trial the Insurer sought a preliminary determination of the Insured’s entitlement to such benefits and the appropriate deductions assuming that entitlement was established. The motions judge held that the Insured was not entitled to receive LTD benefits from the Insurer because of his election to proceed with a civil action.

The Court of Appeal considered the relevant portions of the Insurer’s LTD plan and specifically Article 4, which provided for monthly benefits payable to an employee who was insured under the policy. Article 4 stated that the amount of monthly benefits payable to an employee would be reduced by any payment to which the disabled employee was entitled to under any Workers’ Compensation Act or under the disability benefit provisions of the Canada or Quebec Pension Plan. Article 4 further provided that in order to receive benefits under the Plan, the employee must make an application for any disability benefits for which he or she might be eligible under any Workers’ Compensation Act or comparative legislation or insurance provision, or under the Canada or Quebec Pension Plan. The Insured had made an application for WSIB benefits, but had then elected to proceed with a civil action against the third party driver, leaving his application for benefits outstanding.

The Court of Appeal considered the effect of s. 30 of the Ontario Workers’ Compensation Act, which provided that, depending on the amount of damages obtained by the Insured in the civil action, his application for WSIB benefits might still result in payment of some benefits to him. Accordingly, the Court concluded that the Insured was entitled to receive LTD benefits under the policy having met the condition precedent of making the application for benefits that he might be entitled to.

The Court of Appeal further concluded that the Insurer was entitled to reduce the monthly benefit payable to the Insured under the policy by the amount of any WSIB benefits to which he would have been entitled had he not elected to proceed with the civil action.

The Motor Vehicle Accident Claims Fund (the "Fund") paid benefits to the family of an accident victim and sought reimbursement either from Allstate Insurance or Manitoba Public Insurance. Both insurers denied coverage. The Fund then commenced arbitration pursuant to Ont. Reg. 283/95 which provides for arbitration of disputes between insurers. Allstate objected to the Arbitrator’s jurisdiction on the ground that the Fund was not an "Insurer". The Arbitrator concluded that he had jurisdiction and found that Allstate was liable for accident benefits because the victim of the accident was financially dependent on her mother and therefore, an insured person under her mother’s policy with Allstate. Allstate successfully appealed this decision and the Arbitrator’s award was set aside for lack of jurisdiction as the Fund was not an insurer. The Fund appealed this decision.

The Court allowed the Fund’s appeal and Arbitrator’s award was restored. The Court found that the purpose of the legislative scheme at issue was the prompt delivery of accident benefits to injured persons and the timely and cost-efficient resolution of disputes over who should pay those benefits. Based upon this analysis, the Court held that the term "insurer" should be interpreted to include the Fund for the purpose of resolving disputes over the payment of accident benefits. Therefore, where the Fund disputes its obligation to pay benefits, it must resolve that dispute in accordance with the arbitration process under the Regulation.

The appeal rose out of a dispute between the Fund and Manitoba Public Insurance Fund and Kingsway General Insurance Company over the payment of accident benefits. Two days before the accident, Kingsway had cancelled its policy of insurance because of insufficient funds in the Insured’s bank account to pay the monthly premium. When Kingsway later refused to pay accident benefits to the Insured, the Fund paid them and sought reimbursement at an arbitration. The arbitration was conducted under Ont. Reg. 283. The Arbitrator concluded that there was a "significant nexus" between the Insured and Kingsway. As a result,this nexus, under s. 2 of the Insurance Act Regulations, Kingsway was required to pay accident benefits and then dispute its obligation to do so. The Arbitrator ordered Kingsway to pay the injured person’s accident benefits permanently because of its breach of s. 2. The Appeal Court judge held that the arbitration was not conducted under Reg. 283 because the Fund was not an "insurer" within the meaning of the Regulation. He held that it was an arbitration by agreement under the Arbitration Act. The appeal judge accepted that Kingsway ought to have paid accident benefits pending the arbitration but held that the arbitration agreement did not authorize the order for Kingsway to pay benefits permanently for a breach of s. 2 of the Regulations. He remitted that dispute to the Arbitrator to determine whether Kingsway was an "insurer". This decision was appealed by the Fund.

The appeal was allowed in part. The Court found that the arbitration was conducted under Reg. 283 as the Fund was an "insurer" under this Regulation. The Court rejected the Fund’s argument that the court judge erred when he found that the Arbitrator had not found Kingsway to be an insurer at the time of the accident. The Court of Appeal upheld the ruling of the court judge, concluding that the Arbitrator did not determine the question of whether Kingsway was an insurer when the accident occurred. That question was properly remitted back to the Arbitrator.

The Plaintiff was a rehabilitation clinic which provided services to the two Insureds who had been injured in a car accident. The Insurer had insured the Insureds’ vehicle and was responsible for paying statutory benefits under the no-fault part of the policy. The Plaintiff submitted treatment plans with estimated costs for both of the Insureds to the Insurer in March of 2003. By letter, the plans were approved and the treatment began. However, the letter approved the treatments on the condition that the Plaintiff submit their account first to another insurer, and if that insurer failed to pay any or part of the account, the Insurer would pay the rest. The Plaintiffs did not follow these instructions and sent the invoices only to the Insurer. On May 14, 2003, the Plaintiff received a telephone call from the Insurer stating that the treatment approval had been withdrawn. The Court found that there was no requirement under the Insurance Act that a Third Party submit a billing for statutory benefits to anyone other than the Insured or the Insurer. The Court also rejected the Insurer’s argument that the Insured gave false information which voided his coverage, since section 233(2) provided that that defence was not applicable under the statutory accident benefit schedule. The Court then found that section 258(1) precluded the Plaintiff’s action against the Insurer, because until there is a judgment against the Insured, there is no cause of action on which the Plaintiff could sue to have insurance money applied. The Action against the Insurer was commenced prematurely.

The Insured was involved in a single motor vehicle accident in the state of Vermont. He was employed as a truck driver and driving a tractor trailer that was not owned by him, was licensed and registered in Ontario, and was insured by Royal & Sunalliance Insurance Co. ("Royal") under a motor vehicle insurance policy issued in Ontario. The Insured also owned a private passenger vehicle which was licensed and registered in Ontario and was insured by Wawanesa Mutual Insurance Co. ("Wawanesa") under a motor vehicle policy issued in Ontario. The Insured claimed statutory accident benefits under the Statutory Accident Benefits Schedule of theOntario Insurance Act, R.S.O. 1990, c. I.8 and by virtue of section 268(2) of the Act, his recourse was against Wawanesa as the owner of his own passenger vehicle. Wawanesa paid the statutory accident benefits to the Insured, and then claimed indemnification from Royal under section 275 of the Act. Section 275 provides that an Insurer responsible under subsection 268(2) for the payment of statutory accident benefits is entitled to indemnification from the Insurers of the automobiles involved in the incident which gave rise to the responsibility. Royal argued that it was not obligated to indemnify Wawanesa on the grounds that the law of Vermont applied, and there were no loss transfer provisions in that jurisdiction.

The arbitrator applied the ruling in Tolofson v. Jensen, [1994] 3 S.C.R. 1022 and found that section 275 applied because "to have the insurer be forced to pay accident benefits pursuant to Ontario law and an Ontario contract for an accident in Vermont, and then forbid it from recovering the costs of those benefits which it would be allowed to do under Ontario law (loss transfer), has all the hallmarks of injustice". The Court agreed with the arbitrator’s finding, but disagreed with the arbitrator’s reasoning. The Court found that Tolofson v. Jensen was inapplicable to the situation, as that case dealt with the law in relation to a tort claim occurring in another jurisdiction. Relying on Unifund Assurance Co. Insurance Corp. of British Columbia, [2003] 2 S.C.R. 63, the Court found that the issue between Wawanesa and Royal was not a tort claim; rather, Wawanesa’s claim was a statutory claim under 275 of the Act, and constituted a separate and distinct claim from any underlying tort claim. The statutory claim was governed by the provisions of the Ontario Insurance Act.

On May 12, 2006, the Reasons for Judgment were released in this case. Subsequently, but prior to a formal Order or Judgment being issued in the case, the Supreme Court of Canada released its decision in Fidler v. Sun Life Assurance Co. of Canada, [2006] S.C.J. No. 30. Rowe brought an Application requesting that the Court vary its decision by awarding and fixing consequential damages resulting from the breach of the disability policy.

The Court reviewed the decision in Fidler, and noted that the Supreme Court of Canada accepted the “peace of mind exception” to the general rule against recovery from mental distress and contract breaches. The Supreme Court of Canada indicated that the Court must be satisfied that: 1) that an object of the contract was to secure a psychological benefit that brings mental distress upon breach within the reasonable contemplation of the parties; and 2) that the degree of mental suffering caused by the breach was of a degree sufficient to warrant compensation.

In this case, Rowe sought to add a claim for aggravated damages in the amount of $100,000 for mental distress. Rowe also sought $600,000 for consequential damages, including damages related to the sale of Rowe’s home and damages related to the reduction of his investment portfolio. The Court was satisfied that Rowe suffered mental distress as a result of the breach of contract and that such distress was significant and deserving of compensation. The Court assessed the damages for mental distress in the amount of $30,000.

The Court declined to allow Rowe to amend his claim to seek $600,000 for consequential damages, including damages relating to the sale of Rowe’s home and the reduction of his investment portfolio. The Court noted that Rowe failed to adduce substantive evidence to substantiate the financial losses. Further, the Court held that as this was a group disability insurance policy, consequential financial losses (for example, the cashing in of RRSPs or the selling of one’s home) might well exceed the claim for disability benefits and that this would significantly stretch the concept of what was in the reasonable contemplation of the parties at the time of the making of the contract. The Court held that the damages for financial loss arising out of the collapsing of RRSPs or the sale of a home could not be considered damages which arise naturally in the context of the group disability insurance contract. As a policy consideration, an extension of the circumstances when such consequential damages could be awarded may cause business people to be wary of dealing with persons with mental disabilities for fear of exposure to claims for damages much higher than the value of the contract. The Court accepted Unum’s submissions that the awarding of consequential damages relating to the specific financial loss suffered by a plaintiff due to an incorrect decision to deny or terminate benefits would lead to potentially unlimited and unpredictable liability for disability insurers.

The CGL Policy at issue provided that CUMIS, the Insurer, would "pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as compensatory damages because of bodily injury". This coverage was subject to the Policy’s exclusion clauses, one of which stated that injury or damage arising out of the ownership, use or operation by or on behalf of any insured of any automobile, or to which any motor vehicle liability policy is in effect or required by law to be in effect, is excluded. The Insured argued that the facts of the case were analogous to those in Derksen v. 539939 Ontario Ltd., [2001] 3 S.C.R. 398. The Court in that case held that there were two concurrent causes of action - one relating to work site cleanup and one to the operation of a truck. The Court rejected this analogy, finding that Derksen was a "failure to load" case, whereas the case at bar involved the failure to secure. The Insured also argued that because the Policy’s watercraft exclusion and aircraft exclusion contained the words "loading or unloading" in addition to "use and operation", "use and operation" by virtue of the interpretative tool of expressio unius, did not include loading or unloading. The Court found some merit in this argument of interpretation. However, the Court concluded that the clause excluding coverage for bodily injury with respect to which any motor vehicle liability policy is in effect or is required by law to be in effect was determinative, and excluded coverage. The Court found that there was authority holding that the loading or unloading of a vehicle fell within the phrase "use or operation" of an automobile, and as such, would fall under the terms of a motor vehicle liability policy that is in effect or is required by law to be in effect. The Insurer, therefore, did not owe the Insured a duty to defend.

This was an appeal from the Motion Judge’s decision allowing an appeal of an Arbitrator’s decision finding that the Insured was not principally dependent on his mother for care when he was involved in a motor vehicle accident that left him quadriplegic. The Motions Judge had found that because the Insured was living with his mother, who had acted as his bail surety at the time of the accident, he was principally dependent on her for care.

The issue on appeal was which Insurer would be liable to the Insured for statutory accident benefits; his mother’s Insurer, the Applicant, or the Insurer of the vehicle that the Insured occupied at the time of the accident. The Ontario Insurance Act provided that the Insured’s first recourse was against his mother’s Insurer if he was dependent on her for financial support.

The Court of Appeal confirmed the Arbitrator’s finding that while the mother had some control over the Insured, he was not under her care. The mere fact of control over an individual’s conduct did not in all circumstances result in a relationship of dependent care.

In addition, the Court of Appeal held that the Arbitrator’s decision primarily involved a question of fact and ought to be given deference, unless it was clearly unreasonable.

The Insurer settled the claim without notice to, or the consent of, the Insured. Judgment in favour of the injured party was obtained against the Insurer, but not against the Insured. The Court held that the plain language of s. 258(1) of the Insurance Act, R.S.O. 1990, c. I.8 provided for the application of insurance money in or towards satisfaction of a judgment recovered against the Insured. The section read:

Any person who has a claim against an Insured for which indemnity is provided by a contract evidenced by a motor vehicle liability policy, even if such person is not a party to the contract, may, upon recovering a judgment therefor in any province or territory of Canada against the Insured, have the insurance money payable under the contract applied in or towards satisfaction of the person’s judgment and of any other judgments or claims against the Insured covered by the contract and may, on the person’s own behalf and on behalf of all persons having such judgments or claims, maintain an action against the Insurer to have the insurance money so applied."

The Court held that absent an agreement between the Insurer and the Insured, the recovery of a judgment was a prerequisite to any entitlement under s. 258(1) to access available insurance monies. The Court held that the scheme envisioned by s. 258 contemplated the balancing of an insurer’s right to minimize its exposure to a tort claimant with an insured’s right to be protected against unreasonable settlements by its insurer. The Court then set aside the summary judgment of the motions judge.

The Trial Judge dismissed the Insured’s action against his Insurer, but left the action against his lawyer untouched.

On appeal, the Court of Appeal upheld the Trial Judge’s decision finding that the Insured’s reliance on his lawyer’s advice was not a reasonable excuse for failing to file his claim with the Insurer in time. The Trial Judge was entitled to conclude that the Insured had an alternative to the action against his Insurer in the form of an action against his lawyer and as such, would not suffer significant hardship from the dismissal of his action against the Insurer.

Of note, the Ontario Court of Appeal commented that relief from forfeiture is an equitable remedy and is purely discretionary, therefore requiring an examination of all relevant facts.

The Defendants argued that the Ministry knowingly participated in a trial fraught with risk and was a full participant in the litigation. The Court noted that the Ministry did no more than forward a few pieces of correspondence and did not attend or participate in the trial in any way. Accordingly, the Trial Judge could not have found that the Ministry was an equal partner in the litigation and to assess costs against the Ministry in the manner requested by the Defendants would be unfair and unreasonable. The Court of Appeal therefore dismissed the appeal.

This was an appeal by the Defendant, Wawanesa Mutual Insurance Co. ("Wawanesa") from a cost award after a jury dismissed the Plaintiff’s claim. The Plaintiff had claimed against its insurer, Wawanesa, for negligent, unfair and deceptive acts and practices in the adjustment of their insurance claim following a fire that destroyed their home. The Ministry of Health and Long-term Care (the "Ministry") had brought a subrogated claim against the Defendants for the cost of insured services received by the Plaintiffs following the fire; however, the claim was withdrawn half-way through the trial. The trial judge fixed Wawanesa’s costs at $565,000 and those of the remaining Defendants at $490,000. While the Defendants had sought to have costs awarded jointly and severally against the Plaintiffs and the Ministry, the trial judge held that only the adult Plaintiffs were liable for the Defendants’ costs.

The issue was whether the Ministry should pay the costs of the successful Defendants. The Ministry had joined the action to pursue their subrogated interest for $8,057 that represented health benefits received by the Plaintiffs following the fire. The Ministry did not attend at trial nor did it participate in any way.

On July 11, 2003, Jennifer Currie ("Currie") was injured in a motor vehicle accident in the State of Michigan and, as a result, required emergency medical services in Michigan. At the time of the accident, Currie was insured under two policies: (1) a standard Ontario automobile policy issued by Aviva Canada Ltd. ("Aviva") and (2) a travel insurance policy issued by RBC Travel. Currie contacted RBC Travel and made an emergency claim for medical expenses. RBC Travel paid the total claim in the sum of $23,960.82 on behalf of Currie. RBC Travel then brought the within proceeding for reimbursement by Aviva of the amount paid on behalf of Currie. On application for summary judgment, the motions judge found that both the RBC Travel policy and the Aviva policy provided primary coverage. As a result, the motions judge’s view was that section 268(6) of the Insurance Act, R.S.O. 1990, c.I.8 applied. That section provides that an automobile policy is "excess to any other insurance not being automobile of the same type". The motions judge concluded that RBC Travel was solely responsible to pay Currie’s medical expenses. RBC Travel appealed that decision.

The Court of Appeal compared the wordings of the respective policies noting that the RBC Travel policy clearly specified that the travel insurance was excess to both Provincial Health Insurance and any other insurance or benefits plan under which the insured was covered. In contrast, the Aviva policy, in the form of the standard Ontario automobile policy known as OAP1, provided only that payment was not required under the policy for that portion "for which payment is reasonably available to the insured person under any insurance plan …." The Court noted that the language of the two policies was not easily reconciled.

The Court cited from the case of In Travel Insurance Co-Ordinators v. ING Halifax Insurance Co. (2001), 57 O.R. (3d) 406 (Sup. Ct.) aff’d [2002] O.J. No. 3566 (C.A.) where the Court was asked to consider section 268(6) of the Insurance Act in the context of conflicts between travel insurance and statutory accident benefit coverage. In Travel Insurance ("Travel Insurance"), the Court stated:

…The subsection must, in my opinion, be read as making the SAB excess to any other insurance which is, by its own terms, bound to provide ‘first dollar coverage’. Since the applicant’s policy is, by its own terms, a second payor, s. 268(6) has no effect.

In this case, the Court found that the plain meaning of the RBC Travel policy wording clearly lead to the conclusion that the Travel Policy provided excess coverage where other coverage existed for the same loss. As the RBC Travel Policy, by its own terms, did not provide first payor coverage, the Court held that s. 268(6) had no application. In the result, the appeal was allowed and the decision of the motions judge was set aside.

On October 21, 2003, the Court granted summary judgment in favour of UWO and various individual Defendants against Guardian. The Court had declared that Guardian owed a duty to defend UWO in respect of the action and that Guardian had failed to honor that duty. The Court had ordered that UWO was entitled to be compensated for the expenses incurred by it in defending the main action prior to trial, at trial, and up to the time of the commencement of the appeal from the trial judgment. In the course of judgment, the Court had indicated that Guardian would be entitled to a credit with respect to portions of UWO’s claim for defence costs which UWO had received in a settlement with the other Third Party Insurers. Guardian brought an application for a determination of whether it could claim credit for these costs.

On the application, UWO argued that Guardian was not entitled to receive the credit as the funds received from the other Third Party Insurers were attributable to the legal defence costs incurred by UWO in defending the action, not in prosecuting the Third Party action which was the subject of these proceedings. UWO further submitted that the money obtained by UWO from the Third Party Insurers only indemnified UWO for costs incurred over a certain time period and that such costs had not been claimed against Guardian. The Court was satisfied that UWO had not been over-indemnified by the Court award against Guardian. As a result, there was no reason in equity for the Court to intervene as requested by Guardian to deduct the credit from the award that UWO obtained against Guardian. In the result, Guardian’s application for credit was dismissed.

In the result, the Plaintiff’s claim was dismissed.

The Respondent Insured was injured in a car accident on April 7, 1999 and was eligible to receive statutory accident benefits from the Appellant Insurer under the Insurance Act, R.S.O. 1990, c. I.8 (the "Act") and the Statutory Accident Benefits Schedule - Accidents On Or After November 1, 1996 O. Reg. 403/96 (the "SABS"). In accordance with the SABS, he was assessed for catastrophic impairment at a Designated Assessment Centre ("CAT DAC") where it was determined that he had suffered a catastrophic impairment in the accident and was therefore entitled to a higher level of certain benefits. In order to dispute this finding, the Appellant Insurer first initiated mediation in accordance with the Act. After the mediation failed, the Insurer commenced an action for a declaration that the Insured had not suffered a catastrophic impairment. The Insured then brought a motion under Rule 21 to strike the Insurer’s claim on the basis that the Act did not allow an Insurer to bring such an action.

The Court found that the Act and the provisions formed a complete Code for dispute resolution which could work effectively and fairly for all parties. The Court found that Insurers were not entitled to apply to the Court for a Declaration regarding catastrophic injury. Rather, the legislation provided a remedy for Insurers who disagreed with the outcome following a CAT DAC.

This action was the result of a motor vehicle accident. The Insured was driving and owned the car; her husband and two sons were passengers. All were seriously injured. The driver of the other vehicle involved in the accident was intoxicated, uninsured, and entirely at fault. However, one of the passengers, Travis Gostick, was not wearing his seatbelt and the driver was negligent in not ensuring he was properly secured. She was therefore jointly liable with the driver of the oncoming car for his injuries.

The Insured’s vehicle was insured under a standard automobile insurance policy issued by Royal & Sun Alliance Insurance Company of Canada. The policy had a third party limit of $1,000,000. The driver had paid an additional premium to obtain the OPCF 44R Family Protection Coverage endorsement with a limit of $1,000,000. The policy also contained a provision that said the maximum liability was the amount by which the limit of family protection coverage exceeded the total of all limits of motor vehicle insurance of the inadequately insured motorist and any other person jointly liable with that motorist.

The Insurer submitted that because the driver was jointly liable for Travis Gostick’s damages, and the third party liability limits were being paid to him, no payment was available under the Family Protection Coverage. It argued that if payment were available, that would result in a total recovery for family members of $2,000,000 in spite of the family having chosen to purchase only $1,000,000 of coverage.

The Court applied the ruling in Craig v. Allstate Insurance Co. of Canada, [2002] O.J. No. 2124, and held that the Family Protection Coverage attached because: (1) the Plaintiffs could have no resort to Ms. Morrison’s third party liability coverage; (2) the Plaintiffs were in the category of those to whom the endorsement was designed to give relief, that is, those injured by default exclusively of an inadequately insured driver; and (3) the words of the endorsement did not require or invite interpretation contrary to the intention of the endorsement.