J. Stephen Cavanagh

The appellants appealed the dismissal of their action against an insurer (Ivari) for failure to disclose a reasonable cause of action under Rule 21.01(1)(b).

The original action alleged breach of contract, breach of fiduciary duty, and negligence related to an unsuitable financial retirement plan involving life insurance.

The motion judge dismissed the claim, finding no duty owed by the insurer regarding product suitability and refusing leave to amend.

The Court of Appeal found the motion judge erred by treating the Rule 21 motion as a summary judgment, and by concluding there was a general principle that insurers never owe a duty regarding product suitability.

While agreeing the pleadings were deficient in distinguishing duties among defendants, the Court found no reason to deny leave to amend, as the proposed claims were tenable and there was no prejudice.

The appeal was allowed in part, restoring the action against the respondent and granting leave to amend the statement of claim.

The court reconsidered its previous decision to decline scheduling a summary judgment motion due to the significant and indefinite delays in civil trials caused by the COVID-19 pandemic.

Initially, the court deemed a trial more efficient, but the changed circumstances rendered trial scheduling unrealistic for the foreseeable future.

Consequently, leave was granted to the defendants to bring a summary judgment motion under Rule 20 to test insurance defences, as this mechanism was now considered more efficient for streamlining issues given the prolonged trial backlog.

Directions were provided for electronic filing and virtual hearing protocols.

The appellant appealed from a partial summary judgment that limited the respondents' liability to $2 million pursuant to a liability cap in a personal services contract.

The appellant argued the motion judge erred in interpreting the contract by relying on subsequent conduct of the parties and in extending the liability cap to respondents who were not parties to the original contract.

The Court of Appeal upheld the motion judge's interpretation, finding no error in principle and affirming that the contract was extended to apply to the construction phase and that the liability cap was intended to benefit all respondents.

In a bifurcated trial concerning construction damage, the damages phase was completed and the main action settled, leaving only the crossclaims for the liability phase.

The cross-claimants brought a motion to compel the defendant developer to answer questions refused on discovery regarding insurance coverage.

The developer brought a motion for a declaration that the judge who presided over the damages phase was seized of the liability phase.

The court granted the refusals motion, finding the questions relevant to the amended pleadings.

The court dismissed the motion regarding the seized judge, holding that a bifurcated trial consists of two separate trials and the judge is not seized of the second phase as a matter of law; judicial scheduling remains within the discretion of the Regional Senior Justice.

In a bifurcated trial concerning construction damage, the damages phase was completed and the main action settled, leaving only the crossclaims for the liability phase.

The cross-claimants brought a motion to compel the defendant developer to answer questions refused on discovery regarding insurance coverage.

The developer brought a motion for a declaration that the judge who presided over the damages phase was seized of the liability phase.

The court granted the refusals motion, finding the questions relevant to the amended pleadings.

The court dismissed the motion regarding the seized judge, holding that a bifurcated trial consists of two separate trials and the judge is not seized of the second phase as a matter of law; judicial scheduling remains within the discretion of the Regional Senior Justice.

This decision addresses costs following an unsuccessful motion by Tega Homes Developments Inc. to strike amended defences to cross-claims filed by Goodeve Manhire and Paterson Group.

The court had previously permitted the amendments, finding no unfair prejudice.

Tega sought costs for the motion and for "thrown away" trial preparation, alleging delay and an attempt to relitigate insurance coverage.

The court rejected Tega's arguments, noting the amendments were made in accordance with case management directions and that Tega was unsuccessful in resisting them.

Insufficient evidence was presented to demonstrate wasted trial preparation directly attributable to the pleading amendments.

Consequently, the responding parties, Goodeve Manhire and Paterson Group, were awarded costs on a partial indemnity scale, fixed at $12,600.00 and $5,400.00 respectively, payable by Tega Homes Developments Inc.

The defendant Tega brought a motion to strike amended defences to crossclaims delivered by co-defendants Goodeve Manhire and the Paterson Group.

The co-defendants had previously relied on deemed defences under Rule 28.05(2) but sought to file detailed defences due to a changed litigation landscape, including settlements and insurance coverage issues.

The court treated the motion as one for leave to amend under Rule 26.01.

Finding no non-compensable prejudice to Tega and noting the expanded scope of the action, the court dismissed the motion to strike and granted leave to amend the defences to crossclaims nunc pro tunc.

The insured brought a motion for partial summary judgment seeking a declaration that her action for statutory accident benefits was not statute-barred under s. 281.1 of the Insurance Act.

The insurer had terminated income replacement benefits following insurer examinations but failed to comply with mandatory procedural requirements under ss. 37 and 42 of the Statutory Accident Benefits Schedule, including failing to request a new disability certificate and failing to provide examination reports to the health practitioner who completed the disability certificate.

The court held these provisions were mandatory and that the insurer’s non-compliance meant the termination of benefits was not properly effected.

Because a proper refusal had not been given, the limitation period under s. 281.1(1) of the Insurance Act had not been triggered.

The court granted partial summary judgment declaring the action was commenced within the limitation period.

Following the dismissal of a Rule 21.01(3)(d) motion to strike a third party claim as frivolous, vexatious, and an abuse of process, the court addressed the quantum of costs payable.

The responding party sought partial indemnity costs exceeding $13,000, while the moving parties argued the hours claimed were excessive and invoked the principle of proportionality under Rules 1.04(1.1) and 57.01(1)(0.b) of the Rules of Civil Procedure.

The court considered the complexity of the privity and insurance coverage issues, the significance of the motion’s potential impact on the broader litigation, and evidence of duplication in preparation time by junior counsel.

Balancing proportionality and the importance of the issues, the court fixed partial indemnity costs at a reduced amount.

Costs of $7,000 plus disbursements and taxes were ordered payable forthwith.

Engineering consultants brought a motion under Rule 21.01(3)(d) of the Rules of Civil Procedure to dismiss a third party claim for contribution and indemnity arising from alleged design deficiencies in a warehouse concrete slab.

The moving parties argued that the contractor’s covenant in the main construction contract to obtain wrap‑up liability insurance barred any claim against them and that they could rely on a principled exception to the doctrine of privity to benefit from that covenant.

The court held it was not plain and obvious that the alleged losses would have been covered by the contemplated insurance or that the contract intended to extend such benefits to the engineers.

The pleadings disclosed a potential claim for contribution and indemnity relating to defective design and workmanship.

The motion to dismiss the third party claim as frivolous, vexatious, or an abuse of process was therefore dismissed.

The fourth party brought a motion seeking particulars of allegations made against it in a fourth party claim and an extension of time to deliver a defence.

The court reviewed the purposes of pleadings and particulars under the Rules of Civil Procedure, emphasizing that particulars are ordered only where necessary to permit the responding party to plead intelligently and where the information is not already within that party’s knowledge.

In the context of a multi‑party construction dispute involving third and fourth party claims, the court held that it would be unreasonable to require a third party to particularize allegations more fully than the pleadings already advanced against it.

Limited particulars were ordered regarding which specifications were allegedly breached and who should have been notified of alleged problems.

The moving party also received an extension of time to deliver its defence.

A third party brought a motion under Rule 21.01(1)(b) of the Rules of Civil Procedure to strike a third party claim for contribution and indemnity on the basis that it disclosed no reasonable cause of action.

The moving party argued that there was no contractual relationship with the defendant in the main action and therefore no basis for liability, and further that the damages claimed were not the same.

The court applied the generous “plain and obvious” test governing motions to strike and reviewed the scope of third party claims under Rule 29.01.

It held that it was arguable the parties owed each other a duty of care in negligence arising from their roles in the same construction project and that the claim could also constitute an independent claim arising from the same transaction.

Because it was not plain and obvious that the claim disclosed no reasonable cause of action, the motion to dismiss the third party claim was refused.