David S. Cherepacha

The appellant insurer appealed a trial judgment declaring the respondent insured entitled to indemnification under a fidelity insurance bond for losses caused by employee theft.

The insurer denied coverage on the basis that the insured made material misrepresentations in its renewal application regarding its cheque signing controls and failed to disclose its shift to a computerized cheque generating system.

The Court of Appeal allowed the appeal, finding that the insured made a material misrepresentation by stating that principals signed all cheques when, in fact, a computerized facsimile signature was used.

The Court also held that the insured breached its general obligation to disclose the significantly enhanced risk created by the new system.

The appellant appealed a motions judge's decision dismissing its claim against the respondents.

The motions judge found that the Ontario Energy Board had exclusive jurisdiction over the dispute, which centered on whether the respondent breached its license by failing to apply the Distribution System Code.

The Court of Appeal agreed that the fundamental issue—whether an agreement existed prior to November 1, 2000—was within the Board's exclusive jurisdiction under the Ontario Energy Board Act.

The action was deemed an attempt to circumvent the Board's decision, and the appeal was dismissed.