Matthew Gervan

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.

An insurer (State Farm) sought to pursue a subrogated claim against fuel oil suppliers for contamination losses.

The central issue was whether the insurer could commence the action in the name of its bankrupt insured or whether it was required to proceed in the name of the trustee in bankruptcy.

The majority held that the insurer's subrogation rights do not create a proprietary interest in the cause of action itself, and that upon the insured's bankruptcy, the cause of action vested in the trustee.

Consequently, the insurer could not commence the action in the name of the undischarged bankrupt but should have proceeded in the trustee's name.

The majority dismissed the action.

A dissent would have remitted the matter to permit the insurer to regularize the action by substituting the trustee as plaintiff.

Homeowners’ insurer brought a fully subrogated action against fuel oil suppliers following a residential oil spill after indemnifying the insureds for remediation and property losses exceeding $800,000.

The insureds had filed for bankruptcy prior to the action being commenced.

The defendants moved for summary judgment arguing the insureds lacked capacity to sue because their causes of action vested in the bankruptcy trustee under the Bankruptcy and Insolvency Act.

The court held that once the insureds were fully indemnified, the insurer became dominus litis and was entitled to pursue the claim in the insureds’ names.

The Bankruptcy and Insolvency Act did not extinguish or override the insurer’s subrogation rights, and allowing the defendants’ motion would improperly allow an alleged wrongdoer to benefit from the existence of insurance.