Brandon Cook

The decision addresses whether coverage for Extra Expense and Professional Fees under insurance policies issued to two Ontario summer camps is subject to the $1,000,000 sublimit in the Infectious Disease Extension, following business interruption due to COVID-19.

The court finds that both Extra Expense and Professional Fees are subject to the $1,000,000 sublimit, rejecting the plaintiffs’ arguments for additional coverage.

The court also addresses principles of insurance contract interpretation and the onus of proof in such disputes.

Following a split decision on motions, the defendant sought $1,500 in costs for responding to relief the plaintiffs abandoned during submissions.

The plaintiffs argued for no costs, citing financial hardship.

The court ordered the plaintiffs to pay $500 in costs for the abandoned claims, but deferred payment until the final disposition of the action to avoid creating a barrier to the proceedings.

The defendant brought a motion for costs thrown away after the plaintiffs' counsel cancelled examinations for discovery in August 2020 for personal reasons, and after the defendant aborted rescheduled discoveries in November 2020.

The plaintiffs brought a cross-motion to compel the defendant to attend discovery.

The court ordered the plaintiffs' counsel to personally pay $400 in costs thrown away for the August cancellation.

However, the court found the defendant was not justified under Rule 34.14(1) in aborting the November discoveries due to the plaintiff's alleged lack of preparation.

Both parties were ordered to reattend examinations for discovery.

Following a successful appeal where the appellant was awarded $429,329.18, the parties made written submissions on trial costs.

The appellant sought $100,000, while the respondent sought to retain its trial costs or apply a 25 percent reduction based on divided success on the issues.

The Court of Appeal held that costs should follow the event and awarded the appellant its trial costs fixed at $100,000 all-inclusive, declining to apply Rule 49 or apportion costs by issue.

The appellant's banquet hall suffered significant damage following an unusually severe rainstorm.

The insurer paid the $500,000 limit under a sewer backup endorsement but denied coverage under a flood endorsement and for business interruption losses.

The trial judge dismissed the appellant's claims.

On appeal, the Court of Appeal held that the trial judge erred in importing a surface water exclusion into the flood endorsement, finding that the massive influx of water constituted a flood.

The appellant was awarded $429,329.18 under the flood endorsement based on a prior appraisal award.

The court upheld the dismissal of the claims for business interruption losses, extra-contractual damages, and professional fees.

The plaintiff, a wedding and convention center, sued its insurer for damages caused by a major rainstorm, claiming under sewer back-up and flood endorsements, and for business interruption, extra-contractual, and punitive damages.

The court found that only the sewer back-up endorsement applied, for which the policy limit of $500,000 had already been paid.

The flood endorsement did not apply as the damage was caused by "Surface Water" (rain pooling on the ground), which was explicitly excluded and not covered by the endorsement's definition of "flood" (overflow of a body of water).

The business interruption claim was dismissed because the business did not cease operations, and any alleged loss of revenue was attributed to the plaintiff's decision to remain open against the insurer's advice to mitigate damages.

Claims for extra-contractual and punitive damages were also dismissed due to the absence of a breach of contract by the insurer and lack of exceptional misconduct.

In the first phase of a bifurcated trial, the court addressed whether a 16-year-old G1 driver, Nihad Ismail, had his father Sherif's express or implied consent to operate his vehicle, and whether Sherif Ismail negligently entrusted the vehicle to Nihad.

Nihad was involved in a motor vehicle accident while driving his father's car without permission.

The court found no evidence of express or implied consent, noting Nihad's subjective belief that he lacked permission and the absence of prior unauthorized use known to the father.

The court also dismissed the claim of negligent entrustment, finding that the element of "entrustment" was not established as there was no direct giving of the chattel from owner to operator.

Consequently, Sherif Ismail was not held vicariously liable under the Highway Traffic Act.