James E. Dunn

Kin Canada and The Kinsmen Club of Oshawa (Applicants) brought an application seeking a declaration that their insurers, Ecclesiastical Insurance Office Public Company Limited and Certain Non-Marine Underwriters o/a Lloyd’s Of London and Lloyd’s Canada (Respondents), had a duty to defend them in an underlying lawsuit.

The underlying claim involved damages related to the discovery of underground oil storage tanks (USTs) on a property sold by The Kinsmen Club of Oshawa in 2005, with allegations of negligent misrepresentation and mismanagement, and vicarious liability against Kin Canada.

The court found that the pollution exclusion clauses in both insurance policies applied, as the true nature of the underlying claim was environmental pollution arising from leaking USTs and the failure to comply with regulatory requirements for their removal.

Consequently, the court dismissed the application, ruling that the duty to defend did not arise for either insurer.

The plaintiffs sought costs thrown away after a civil jury trial was adjourned due to the defendant's late filing of seven critical expert reports, in contravention of Rule 53.03.

The court found the adjournment was due to the defendant's fault or responsibility, entitling the plaintiffs to costs thrown away.

The court assessed the plaintiffs' bill of costs, applying a 35% discount due to lack of detail and the speculative nature of assessing costs thrown away, and ordered the defendant to pay $17,449.02 inclusive of HST and disbursements within 30 days.