John Nicholl

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, Jeff Mailloux, brought a motion under s. 29 of the Class Proceedings Act, 1992, for leave to discontinue a proposed class action against Nissan Canada Inc. with prejudice and without costs.

Nissan consented to the motion.

The class action concerned a products liability claim for pure economic losses related to defective Takata airbag inflators.

The motion for discontinuance was brought due to significant changes in the legal landscape regarding compensation for pure economic loss from negligent supply of faulty goods, which greatly diminished the prospects of a substantial economic recovery for the class members.

The court granted the motion, finding that the action was commenced for a proper purpose, putative class members were not prejudiced, and the proposed notice of discontinuance was satisfactory.

Following the dismissal of the applicants' insurance coverage application, the parties made written submissions on costs.

The respondent sought $100,000 based on a pre-hearing costs agreement, or alternatively $254,566.28 on a partial indemnity basis.

The applicants argued the agreement should not be enforced because the respondent's evolving position caused them to incur significant additional costs.

The court enforced the costs agreement, finding no breach or vitiating factors, and awarded the respondent $100,000 for the application plus $8,136 for the costs submissions.

The applicant restaurant chain sought a declaration of coverage under its commercial 'all risks' insurance policy for business interruption losses caused by government-mandated closures during the COVID-19 pandemic.

The applicant argued that coverage was triggered under the policy's civil authority and ingress/egress extensions.

The court dismissed the application, finding that the policy required 'direct physical loss or damage' to trigger coverage.

The court held that the COVID-19 virus and the resulting government orders did not cause direct physical loss or damage to the insured's property, and therefore the losses did not fall within the policy's coverage.

Tbaytel, the moving party, sought to strike an affidavit filed by Optiva Inc., the responding party, in connection with Optiva's pending motion for leave to appeal an arbitration award.

The affidavit, from J. Brian Casey, aimed to provide factual information regarding the public importance of issues raised in the leave to appeal motion, specifically concerning the availability of summary judgment in arbitration without consent and the arbitrator's use of case law.

The court partially granted the motion, striking parts of the affidavit that expressed opinions on the legal importance of issues or buttressed attacks on the correctness of prior decisions, while allowing factual descriptions of common arbitration practices to remain.

The appellant insurer appealed a judgment of the Superior Court of Justice regarding insurance policy interpretation.

The insurer argued that there was no "Claim" against an "Insured Person" for a "Wrongful Act" nor was there a "Loss" within the policy's definitions.

The Court of Appeal found no error in the application judge's interpretation of the governing principles or the policy language, and dismissed the appeal.

The respondent was awarded costs of $16,000.

Liberty Silver Corporation sought indemnification from Liberty Insurance Underwriters Inc. for legal costs incurred by its officers and directors during an investigation by the United States Securities and Exchange Commission (SEC) and the Ontario Securities Commission (OSC).

Liberty Insurance denied coverage, arguing the investigative order and subpoenas did not constitute a "Claim" against an "Insured Person" for a "Wrongful Act," and that Liberty Silver was no longer "legally obligated to pay" due to an assignment agreement.

The court found the investigative order was a "formal regulatory investigation" and thus a "Claim," and that a holistic interpretation of the policy meant "Wrongful Act" included matters giving rise to such an investigation.

The court also rejected arguments regarding the assignment agreement and statute of limitations.

The application for indemnification was allowed, and Liberty Silver's proposed allocation of defence costs was accepted.