M. Gordon Hearn

The defendants brought a motion to set aside default judgments and noting in default.

The court found the default judgments were irregularly obtained because the plaintiff's claim for damages was unliquidated, requiring additional evidence beyond the statement of claim to fix the amount owing.

Consequently, the default judgments were set aside as of right.

However, the court exercised its discretion to decline setting aside the noting in default, citing the defendants' significant responsibility for delay and their "wait and see" approach to the litigation.

The plaintiff was directed to bring a motion for default judgment before a judge.

The appellant, an unsecured business creditor, sought a constructive trust over funds held by the Receiver of a bankrupt company, arguing the bankrupt was unjustly enriched by the unauthorized sale of the appellant's shipping containers.

The motion judge dismissed the claim, finding no direct connection between the proceeds of the sales and the funds held by the Receiver.

On appeal, the Court of Appeal upheld the dismissal for the majority of the funds, confirming that a constructive trust requires a direct link between the property and the unjust enrichment.

However, the Court allowed the appeal in part, imposing a constructive trust over $27,244 that was directly traceable to the unauthorized sale of five containers shortly before the receivership.

The appellant insurer appealed a trial judgment finding that an all risks insurance policy covered damage to the respondent marina's forklift caused by a disgruntled former employee.

The Court of Appeal upheld the trial judge's finding that the exclusion clause relied upon by the insurer was ambiguous and should be interpreted narrowly against the insurer (contra proferentem).

The appeal was allowed in part, on consent, only to reduce the damages awarded to the $50,000 limit under the simplified rules.

The insured stored its boat at a marina, which subsequently sold the boat to an innocent third party without the insured's knowledge or consent.

After unsuccessfully suing the third party, the insured claimed against its all-risk insurance policy for the direct physical loss of the boat.

The insurer denied coverage, arguing the loss was due to the transfer of title rather than a physical loss.

The Court of Appeal dismissed the insurer's appeal, holding that the marina's unlawful conversion was the proximate cause of the loss and constituted a fortuitous, direct physical loss covered by the policy.