COURT OF APPEAL FOR ONTARIO
RE: KENNETH JAMES AND JAMES & ASSOCIATES (Applicants/Appellants) – and – LAWYERS’ PROFESSIONAL INDEMNITY COMPANY (Respondent/Respondent in Appeal)
BEFORE: LABROSSE, DOHERTY and BLAIR JJ.A.
COUNSEL: V. Ross Morrison for the appellants
Warren H.O. Mueller, Q.C. for the respondent
HEARD & RELEASED ORALLY: November 24, 2006
On appeal from the judgment of Justice Edward P. Belobaba of the Superior Court of Justice, dated January 10, 2006.
E N D O R S E M E N T
1This appeal involves the interpretation and application of the “mortgage broker exclusion” and the “notwithstanding clause” of the Professional Liability Insurance Policy, which is provided to all Ontario lawyers by their insurer, LawPro.
2The appellant appeals the decision of the motion judge that the appellant was not entitled to defence cost coverage in actions relating to legal services provided by the appellant in transactions in which he acted for all parties – the purchasers, the vendors and the mortgagees. The mortgagees were the appellant’s clients and relatives.
3The motion judge found that LawPro made its decision to refuse to defend on reasonable grounds and he also found that the decision was correct.
4In our view:
the allegations made in the pleading that the appellant “arranged” all the mortgages;
the appellant’s admission in his statement of defence in another action;
the findings of Justice Marchand on the summary judgment motion which were based in part on James’s evidence that James had “arranged” all mortgages at issue; and
the admissions of the appellant that he acted as a “middle man” or “intermediary”,
all support the motion judge’s conclusion that the appellant arranged the mortgage transactions as an intermediary between the parties in conjunction with the transaction.
5In our view, the motion judge was correct in concluding that the claim falls within the “mortgage intermediary exclusion.” We adopt his reasons.
6The appeal is dismissed with costs fixed at $11,500, all inclusive.
“J.M. Labrosse J.A.”
“Doherty J.A.”
“R.A. Blair J.A.”