Lawrence G. Theall

This decision concerns the interpretation of an insurance policy following a flood at the City of Thunder Bay’s wastewater pollution control plant.

The central issue was whether increased repair costs required by building code upgrades were subject to a $10 million sub-limit.

The court found that the policy was unambiguous and that the sub-limit applied to all code compliance costs, rejecting the City’s argument that broader coverage was available.

The court also addressed costs, awarding the insurers $25,000.

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.

This appeal addressed whether relief from forfeiture is available to an insured under a professional liability insurance policy when the claim was not reported to the insurer during the policy period.

The Court of Appeal affirmed the application judge's finding that the policy was a "claims made and reported" policy, meaning that reporting the claim within the policy period was a condition precedent to coverage.

As coverage was not triggered due to the late reporting, relief from forfeiture was not available.

The court clarified that the principle from *Stuart v. Hutchins* remains undisturbed by *Kozel v. Personal Insurance Co.*, maintaining the distinction between non-compliance with a condition precedent and imperfect compliance.

The appellant insurer appealed a decision that found it had a duty to pay defence costs for the respondents in underlying lawsuits.

The insurer had denied coverage based on alleged material misrepresentation in the insurance application regarding the source of financing for the respondents' real estate development companies.

The Court of Appeal found that the failure to disclose syndicated mortgages as the financing source constituted a material misrepresentation by omission, triggering an exclusion clause in the D&O insurance policies.

The appeal was allowed, and the insurer was declared to have no duty to pay defence costs and was entitled to recover previously advanced funds.

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.

This appeal concerned a motion judge's order regarding a class action.

The core issues were whether a discontinued cause of action and defendants could be added to an existing class action (the Martin action) and whether that action would then be governed by the old Class Proceedings Act, 1992, or the amended Act.

The motion judge had ordered the "recast" Martin action to proceed under the amended Act and denied leave to add a party (MicroPort Orthopedics Inc.) based on limitations.

The Court of Appeal found that the motion judge erred in ordering the Martin action to be governed by the amended Act, as Section 39 of the amended Act clearly dictates that actions commenced before October 1, 2020, remain under the old Act.

The court also found an error in dismissing the motion to add MicroPort Orthopedics Inc. based on the Limitations Act, stating that limitation periods are typically individual issues in class actions.

The appeal and cross-appeal were allowed in part, clarifying that the Martin action continues under the old Act, and a re-filed Rowland action (including MicroPort Orthopedics Inc.) would proceed under the amended Act.

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' custom-built home and garage encroached significantly onto the plaintiffs' neighbouring property.

The plaintiffs sought a mandatory injunction for the removal of the encroachment.

The defendants admitted trespass but sought an equitable remedy allowing them to retain the land, and brought a third-party claim against the builder, surveyor, and municipality for negligence and breach of contract.

The court declined to order an injunction, finding it would be oppressive to the defendants and that the injury to the plaintiffs was small and compensable by money.

The court ordered the severance and transfer of the encroached land to the defendants for compensation.

The court also found all three third parties liable for the encroachment, apportioning fault 70% to the builder, 15% to the surveyor, and 15% to the municipality, and ordered them to fully indemnify the defendants.

The applicants sought a declaration that the respondent insurer had a duty to defend them in an underlying action alleging misappropriation of funds from syndicated mortgages.

The insurer had denied coverage, arguing the applicants made a material misrepresentation in their insurance application regarding their source of financing.

The court found that the email relied upon by the insurer lacked detail and precision, and the insurer failed to clarify the ambiguous answers.

The court concluded there was no misrepresentation and ordered the insurer to resume defending the applicants and pay their incurred defence costs on a full indemnity basis.

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 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.

This motion addressed whether a main action and a third-party action, stemming from a property dispute involving an encroaching structure, should be heard concurrently or sequentially.

The Plaintiffs sought a combined hearing, while the Defendants and Third Parties preferred separate proceedings.

The court, emphasizing judicial efficiency and fairness, determined that the intertwined factual and legal issues, particularly concerning the appropriate equitable remedy for the admitted trespass and the allocation of financial responsibility among all parties, necessitated a single, consolidated trial.

The motion for concurrent hearings was granted to avoid multiplicity of actions and the risk of inconsistent findings.

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.

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 brought a motion for leave to amend their Amended Notice of Application to add Sentry Insurance Company, Teva Canada Limited, and National Union Fire Insurance Company of Pittsburgh, PA as respondents.

The proposed respondents consented to the relief sought.

The court granted the motion on consent, with the application against the newly added parties to be adjourned to a later date.

The applicants brought a motion to compel the representative of Liberty Mutual Insurance Company to answer questions refused during cross-examination and to reattend.

Prior to the hearing, the parties settled the motion on consent.

The court granted the relief sought in accordance with the draft order.

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.

The applicant sought to determine whether an order granting a conditional stay of enforcement of an arbitration award was final or interlocutory, as this determination established jurisdiction.

The arbitration concerned ownership of software, with the arbitrator awarding ownership to the respondent, granting injunctive relief, and ordering costs exceeding $1.5 million.

The applicant commenced an application to set aside parts of the award.

The application judge granted a conditional stay of enforcement pending the disposition of the application, conditioning the stay on monthly payments of $25,000.

The court determined that the stay order was interlocutory because the merits of the underlying application remained to be determined and the matter was pending under the relevant statutory provisions.

The third party plaintiffs, who installed septic systems in a residential subdivision, were sued by the builder after 35 systems failed and had to be replaced due to non-compliant filter sand.

After settling the main action, the installers brought a third party claim against the aggregate supplier who provided the filter sand, alleging breach of contract and negligence.

The court found the supplier breached an implied warranty of fitness under section 15 of the Sale of Goods Act because the sand did not meet Ontario Building Code specifications.

The court awarded the installers their settlement costs and legal fees as damages, but apportioned fault, reducing the damages by 16.5% to account for the installers' own design and installation errors.

The negligence claim was dismissed due to a lack of expert evidence establishing the standard of care for manufacturing filter sand.

In this addendum to a previous judgment, the Court of Appeal amended its declaration regarding the duty to defend under commercial general liability policies.

The court removed Royal & Sunalliance Insurance Company of Canada from the declaration, as it had settled prior to the appeal.

The court also removed a stipulation regarding a Professional Services Exclusion, which the insurers had withdrawn reliance upon.

Finally, based on a prior agreement between the parties, the court vacated its previous costs award and directed submissions for full indemnity costs.