In a coverage dispute involving an insured, its insurance broker, and the insurer, the broker sought leave to amend its statement of defence to add a crossclaim against the insurer for a declaration that the insurer was required to defend and indemnify the insured.
The insured opposed the amendment, arguing that no independent cause of action existed between the broker and the insurer and that a prior settlement agreement eliminated any lis between them.
The court held that a crossclaim does not require an independent cause of action and may be advanced where parties share a legal relationship regarding a real issue in the litigation.
Because the question of insurance coverage directly affected the broker’s potential liability and remained unresolved despite the settlement agreement, there remained a sufficient lis between the broker and insurer.
Leave to amend was granted as the proposed pleading was legally tenable and caused no prejudice that could not be compensated by costs.
