Jeffrey A. Brown

Panasonic Canada Inc. brought an application for a declaration that its insurance claim with XL Specialty Insurance Company was subject to a $1.5 million USD retention and sought coverage for replacement laptops purchased as reasonable mitigation following a cyber-attack.

XL contended that a $3 million USD retention applied because the claim involved a "ransomware event" under Endorsement 23 of the policy.

The court found that Panasonic's claim attracted the lower $1.5 million USD retention, that the laptop purchases were reasonable and necessary mitigation expenses, and that the property damage exclusion did not apply.

The court granted Panasonic's application, save for six laptops that were not shown to be necessary.

The plaintiff, St. Joseph’s Hospital, commenced an action against the City of Thunder Bay for property damages allegedly caused by the addition of sodium hydroxide to the municipal water supply.

After a parallel class action was certified, the plaintiff decided to join the class proceeding, and the parties agreed to stay the individual action.

The City moved for costs thrown away regarding a document review and cancelled discoveries, while the plaintiff cross-moved for the costs of a prior case conference.

The court dismissed both claims, finding that the City failed to provide a Bill of Costs to support its claims and that the plaintiff's request was barred because the prior case conference endorsement was silent on costs.

The appellant sought to certify a class action against the municipality for property damage caused by pinhole leaks in copper plumbing, allegedly resulting from the addition of sodium hydroxide to the municipal water supply.

The motion judge certified the negligence claim but struck the nuisance claim, finding it barred by s. 449 of the Municipal Act, 2001, which precludes nuisance claims related to the escape of water from water works.

The Court of Appeal upheld the decision, agreeing that the nuisance claim was plainly and obviously barred by the ordinary meaning of the statute.

The Court also dismissed the appellant's argument that a breach of contract claim should have been certified, as it was not argued before the motion judge.

The respondents, facing multiple class actions related to the manufacture and distribution of opioids over a 20-year period, sought coverage for defence costs from their successive primary and excess liability insurers.

The application judge allowed the respondents to select a single primary insurer to fund the entire defence, permitted the exhaustion of self-insured retentions (SIRs) using payments from other insurers, granted relief from forfeiture for pre-tender defence costs, and required insurers to sign a Defence Reporting Agreement (DRA) to receive privileged defence information.

The Court of Appeal allowed the insurers' appeals in part, holding that defence costs must be allocated on a pro rata time-on-risk basis, that the insureds must exhaust each applicable SIR before an insurer's duty to defend is triggered, and that relief from forfeiture was unavailable for pre-tender costs.

The Court upheld the DRA requirement for insurers seeking to associate in the defence to mitigate reasonable apprehensions of conflict of interest.

The plaintiff brought a motion to certify a class action against the City of Thunder Bay for negligence and private nuisance, alleging that the City's addition of sodium hydroxide to the municipal water supply caused pinhole leaks in copper plumbing pipes, resulting in property damage.

The City brought a cross-motion to strike the nuisance claim, arguing it was barred by s. 449 of the Municipal Act, 2001, which provides immunity for nuisance claims connected to the escape of water from water works.

The court granted the City's motion to strike the nuisance claim, finding it was plainly and obviously barred by the statute.

The court granted the plaintiff's motion to certify the negligence claim, finding it met all the criteria under the Class Proceedings Act, 1992.

The defendants Mercedes-Benz and Mitsubishi brought a motion to dismiss the proposed class action for delay pursuant to s. 29.1 of the Class Proceedings Act, 1992.

The plaintiffs argued that the court had discretion not to dismiss the action and that all defendants must join the motion.

The court held that s. 29.1 is mandatory and does not require all defendants to join.

The action was dismissed against the moving defendants, but the court exercised its jurisdiction under s. 12 to order that the dismissal be set aside if the plaintiffs file a complete certification motion record within thirty days.

The moving parties, Hyundai Motor Company and Hyundai Auto Canada Corp., sought leave to appeal the order of Barnes J. dated June 10, 2022.

The Divisional Court dismissed the motions for leave to appeal.

Costs of $4,000 were awarded against each moving party, payable to the respondent within 30 days.

This grouped appeal concerned four applications seeking declarations that the appellant insurers had a duty to defend the respondent corporations against claims of property damage arising from condominium construction deficiencies.

The application judge found a duty to defend based on the "mere possibility" test and refused ex ante allocation of defence costs.

The Court of Appeal dismissed the insurers' appeal, affirming the application judge's findings that the "mere possibility" test applies to exclusions and that courts should not conduct a "trial within a trial" on duty to defend applications.

The court also upheld the order for pre-notification defence costs and dismissed a cross-appeal regarding the assessment of past defence costs.

The Applicants sought costs following a partial success in an application concerning insurance coverage, specifically the duty to defend and equitable allocation among insurers.

The court awarded full indemnity costs to the Applicants against AIG and Royal & Sun Alliance Insurance Company of Canada (RSA) for the duty to defend issue, finding the Applicants overwhelmingly successful on that point.

Costs related to the exhaustion of self-insured retentions (SIRs)/deductibles were deferred to a future trial of the issue, as neither party fully succeeded.

Zurich Insurance Company Ltd. was ordered to pay reduced costs due to its partial success on a specific "Single Retention Endorsement" interpretation.

The applicants sought declarations concerning insurers’ duty to defend multiple opioid class actions, the insureds’ right to select a single defending policy, allocation of defence costs, exhaustion of SIRs and deductibles, and the terms on which insurers could receive defence-side reporting.

The court held that, subject to exhaustion of the relevant SIRs or deductibles, each applicant could select any single policy under which there was a duty to defend, and the selected insurer was required to pay all reasonable defence costs associated with covered claims even if those costs also furthered uncovered claims.

Time-on-risk allocation was accepted only as an equitable mechanism among insurers with concurrent obligations, not as a basis to reduce contractual defence obligations owed to the insureds.

The court further held that pre-tender defence costs could attract relief from forfeiture, that disputed SIR exhaustion issues required a trial, and that insurers seeking privileged defence-side reporting had to maintain robust ethical screens through a defence reporting agreement because both party-based and coverage-based conflicts were present.

This appeal concerned an insurer's duty to defend its insured, Panasonic Eco Solutions Canada Inc., against two breach of contract claims in an arbitration.

The professional errors and omissions policy excluded contractual liability unless the liability would exist in the absence of the contract.

The application judge found a duty to defend one claim (Engineering Agreement) but not the other (Proceeds Agreement).

The Court of Appeal allowed the insurer's appeal and dismissed the insured's cross-appeal, finding no duty to defend either claim.

The court held that the liquidated damages claim under the Engineering Agreement was purely contractual and the sole remedy, thus falling within the exclusion.

The claim under the Proceeds Agreement was for a contractual debt, and related negligent misrepresentation and unjust enrichment claims were also not covered by the policy.

The plaintiff municipality sought a declaration that its insurers had a duty to defend it in relation to a Director's Order issued by the Ministry of the Environment and Climate Change regarding environmental contamination.

The defendant insurers brought a Rule 21 motion to determine whether the Director's Order constituted a 'civil action' under their respective liability policies.

The court held that a regulatory proceeding, including an appeal of a Director's Order to the Environmental Review Tribunal, is not a 'civil action' as defined by the Rules of Civil Procedure or the Courts of Justice Act.

Consequently, the insurers had no duty to defend the municipality.

The applicants, Distillery Parties and Rite-Air, sought declarations that their insurers, Temple Insurance Company and Aviva Insurance Company of Canada, had a duty to defend them under a Specific Project Wrap-Up Liability Insurance Policy.

The insurers denied the duty to defend, arguing that the alleged property damage was below the policy's $10,000 deductible, and thus no coverage was triggered.

The court held that the duty to defend is triggered by the mere possibility of a covered claim, regardless of whether the alleged damages exceed the deductible.

The court also rejected the insurers' request for an ex ante allocation of defence costs, stating that such allocation is premature and must be determined ex post facto based on actual legal expenses for exclusively uncovered claims.

Panasonic Eco Solutions Canada Inc. sought a declaration that its insurer, XL Specialty Insurance Company, owed it a duty to defend an underlying arbitration claim.

The arbitration involved claims for liquidated damages arising from an Engineering Agreement and damages from a Proceeds Agreement.

The insurance policy was an errors and omissions policy with a contractual liability exclusion.

The court granted the application for a duty to defend in respect of the liquidated damages claim, finding that the facts alleged could support a claim for negligence despite being pleaded as breach of contract.

However, the court dismissed the application for the Proceeds Agreement claim, determining it was purely contractual, a debt claim, or involved negligent misrepresentation of intent to pay, which fell within the contractual exclusion or the policy's exclusion for equitable relief.

XL was granted the right to control the defence of the liquidated damages claim.

Costs were ordered to be borne by each party due to divided success.

The applicant insurer sought a declaration that three other insurers had a duty to defend a construction company in an action for damages resulting from an allegedly defective mechanical system.

One insurer, AIG, denied a duty to defend based on faulty workmanship and loss of use exclusions.

The court found that the allegations in the statement of claim regarding consequential damage and loss of use were sufficiently broad to raise the possibility of coverage, triggering AIG's duty to defend.

The court further held that the defence costs should be allocated among the insurers on a 'time on risk' basis, rather than equally, and that a self-insured retention clause did not alter one insurer's obligation to contribute to defence costs at this stage.

The appellants appealed a trial judgment finding that Gabriel Kit Chun Fung knew or was willfully blind to the fact that he was purchasing stolen goods or goods fraudulently obtained by Nadia Minetto, the accounting manager of Wescom Solutions Inc. Between early 2012 and July 2014, Fung purchased approximately $6.2 million in iPhones and iPads from Minetto, who had fraudulently obtained them using Wescom's corporate credit card.

The trial judge divided the transactions into three stages and found Fung was not willfully blind in Stage 1, was willfully blind in Stage 2, and had actual knowledge in Stage 3.

The trial judge awarded damages of $5,094,767.72 plus interest.

The appellants argued the trial judge erred by applying an objective standard to the wilful blindness analysis and by making adverse credibility findings.

The Court of Appeal dismissed the appeal, finding that despite the trial judge's mischaracterization of the wilful blindness standard, the factual findings supported a subjective finding of wilful blindness.

The Moving Parties (Fuego Digital Media Inc., ProtocollS Inc., Fuego Digital Media QSTP-LLC, Karl Gretton, and Kevin Higgins) brought a motion to dismiss the action against them, arguing it was statute-barred, res judicata, or an abuse of process.

The Plaintiff (DAC Group (Holdings) Limited) brought a cross-motion to amend its claim to add Patricia Ruth Higgins as a party for a fraudulent conveyance claim and to seek a Certificate of Pending Litigation (CPL).

The court dismissed the Moving Parties' motion, finding that the claims were not plainly and obviously statute-barred, issue estoppel did not apply to the non-arbitration parties, and abuse of process was not clear at this stage.

The court granted DAC's cross-motion to add Patricia Ruth Higgins and permit a CPL, as Higgins and his wife consented.

The applicant sought to set aside an arbitration award, alleging the arbitrator breached the rules of natural justice and exceeded his jurisdiction.

The applicant argued the arbitrator unfairly denied an adjournment, admitted new expert evidence, altered the definition of disputed software, and improperly relied on a draft award provided by the respondent.

The applicant also contended the arbitrator lacked jurisdiction to grant injunctive relief against non-parties.

The Superior Court of Justice dismissed the application, finding no procedural unfairness or jurisdictional error, and ordered the recognition and enforcement of the arbitral award.

Nadia Minetto, an accounting manager, defrauded her employer, Wescom Solutions Inc. (WSI), by using its corporate credit card to purchase Apple products and reselling them.

Gabriel Fung, through his businesses GF International and Plus One Solutions, purchased over 10,000 Apple products from Minetto for $5.2 million in cash.

WSI obtained a consent judgment against Minetto and brought an action against Fung and his entities, alleging knowing receipt or wilful blindness to the fraudulent nature of the goods.

The court found that Fung was wilfully blind to the fact that the Apple products were stolen or fraudulently obtained from March 30, 2012, onwards.

Judgment was granted against Fung and his businesses for $5,094,674.72, plus interest, with a corresponding crossclaim for contribution and indemnity against Minetto.

The appellant brought an application for a declaration that an arbitrator had no authority to reopen an arbitration.

The application judge dismissed the application as premature, directing that the matter should proceed before the arbitrator first to create a complete record.

The Court of Appeal dismissed the appeal, finding no reason to interfere with the application judge's exercise of discretion, noting that the efficient operation of the arbitral process is best served by having an initial determination made by the arbitrator.