COURT OF APPEAL FOR ONTARIO
CITATION: McCartney v. CDSPI Advisory Services Inc., 2026 ONCA 578
DATE: 20260811
DOCKET: COA-25-CV-1260
Roberts, Coroza and Pomerance JJ.A.
BETWEEN
Dr. Judy McCartney Mazen Dagher and Dr. Judy McCartney M Dagher Dentistry Professional Corporation
Plaintiffs (Respondents)
and
CDSPI Advisory Services Inc.**, Aviva Insurance Company of Canada*, Aviva General Insurance Company* and Aviva Canada Inc.*
Defendants (Appellants*/Respondent**)
AND BETWEEN
Dr. Alexandra Ociepa et al.
Plaintiffs (Respondents)
and
Aviva Insurance Company of Canada
Defendant (Appellant)
AND BETWEEN
Dr. Peter H. Olejarz and Olejarz Dentistry Professional Corporation
Plaintiffs (Respondents)
and
Aviva Insurance Company of Canada
Defendant (Appellant)
AND BETWEEN
Dr. Bradley S. Templeman et al.
Plaintiffs (Respondents)
and
Aviva Insurance Company of Canada
Defendant (Appellant)
AND BETWEEN
Ketan Mistry and Dr. Ketan Mistry Dentistry Professional Corporation
Plaintiffs (Respondents)
and
Aviva Insurance Company of Canada
Defendant (Appellant)
Daniel Murdoch and Sam Dukesz, for the appellants, Aviva Insurance Company of Canada, Aviva General Insurance Company and Aviva Canada Inc.
John J. Adair, David Ionis, Michael A. Currie and Nicole J. Kelly, for the respondents, Dr. Judy McCartney and Dr. Judy McCartney Dentistry Professional Corporation
William E. Pepall and Rebecca Shoom, agents to Lax O’Sullivan Lisus Gottlieb LLP and Adair Goldblatt Bieber LLP, counsel for the respondents, Dr. Judy McCartney and Dr. Judy McCartney Dentistry Professional Corporation
Elizabeth Bowker and Avi Sharabi, for the respondent, CDSPI Advisory Services Inc.
Tim Gleason and Megan Phyper, for the respondents, Dr. Alexandra Ociepa et al., Dr. Peter H. Olejarz and Olejarz Dentistry Professional Corporation, Dr. Bradley S. Templeman et al., and Ketan Mistry and Dr. Ketan Mistry Dentistry Professional Corporation
Heard: June 25, 2026
On appeal from the orders of Justice Edward M. Morgan of the Superior Court of Justice, dated July 18, 2025 and September 2, 2025, with reasons reported at 2025 ONSC 4250.
[1] This appeal deals with the partial settlement disclosure rule, as it applies to class proceedings.
[2] The appellants, Aviva Insurance Company of Canada, Aviva General Insurance Company of Canada, and Aviva Canada Inc. (collectively, “Aviva”), offered business interruption insurance to dentists and dental corporations as part of “Triple Guard” insurance policies. These policies were marketed and sold by CDSPI Advisory Services Inc. (“CDSPI”). Prior to March 13, 2020, dentists who held a Triple Guard policy could, by paying an additional premium, increase their pandemic outbreak coverage up to an aggregate limit of $5,000 per day or $100,000 per year. However, it is alleged that, on March 13, 2020, the right to increase pandemic coverage was cancelled and all requests by policyholders to exercise that right were refused.
[3] This spawned various actions against CDSPI, including individual actions and a class action. I will refer to the plaintiffs in the individual actions as the “individual actions plaintiffs”. The individual actions plaintiffs alleged that CDSPI was negligent in providing services as an insurance broker and breached its contractual obligations by failing to promptly inform them of their right to increase their pandemic coverage limits under the policies issued by Aviva. Aviva was not a party to any of the individual actions against CDSPI in Ontario[1].
[4] Aviva objected to being added to the individual actions against CDSPI and therefore new actions were commenced against it[2] (the “Aviva actions”). After examinations for discovery were completed in the CDSPI individual actions, the individual actions plaintiffs commenced the Aviva actions, alleging, among other things, that it had unlawfully terminated their rights to increase their pandemic coverage limits.
[5] In September 2022, a class action proceeding was commenced against both Aviva and CDSPI (“the class action”), arising from the same facts and asserting causes of action similar to those pleaded in the individual actions against CDSPI and in the Aviva actions.
[6] The individual actions plaintiffs and CDSPI then engaged in settlement discussions, initially with respect to the individual actions against only CDSPI. Counsel for CDSPI advised that it had no means of satisfying a judgment beyond the limits of its liability insurance. The settlement with the individual action plaintiffs would leave no coverage to fund a settlement or judgment arising out of the class action.
[7] In March 2023, counsel for the individual actions plaintiffs entered into a non-disclosure agreement with counsel to the plaintiffs in the class action and CDSPI concerning CDSPI’s financial information. It was understood that CDSPI’s insurance limits would be entirely exhausted by the individual actions, either by settlement or by judgment. The class action representative plaintiff thus began negotiating and, on June 12, 2024, eventually agreed to terms of a settlement with CDSPI in the class action. This settlement provided that the class would secure cooperation from CDSPI, including access to relevant CDSPI documents and evidence, in exchange for a full and final release. Aviva received a copy of this settlement the same day it was executed. A settlement agreement for the individual actions was negotiated separately and signed on January 12, 2024. Aviva received a copy of this settlement on August 28, 2024.
[8] The settlement between the individual actions plaintiffs and CDSPI was made contingent on approval of the proposed settlement with CDSPI in the class action.
[9] Pursuant to sections 27.1(1) and (3) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the “CPA”), the class action representative plaintiff and CDSPI sought court approval of the proposed settlement. Aviva, as a defendant in the class action, participated in the hearing, and brought its own motion to stay the proceedings. Relying on this court’s previous decision in Handley Estate v. DTE Industries Limited, 2018 ONCA 324, 421 D.L.R. (4th) 636, Aviva sought a stay of proceedings of the class proceedings against it primarily on the basis of its assertion that it did not receive timely disclosure of the proposed class action settlement, to which, it argued, it was entitled. Aviva also sought stays of each of the Aviva actions on the same grounds.
[10] The motion judge approved the settlement in the class action and denied Aviva’s motions for a stay. On the latter point, he ruled: 1) that the partial settlement rule (then reflected in the Handley Estate case) did not apply to class proceedings, given the CPA’s settlement approval regime and the statutory requirement for court approval of any settlement; and 2) that Aviva did not have a right to disclosure of the settlement of the individual actions, because Aviva was not a party to those proceedings. Accordingly, he rejected Aviva’s assertion that untimely disclosure of either settlement resulted in an abuse of process.
[11] Aviva appeals from those determinations. It seeks an order setting aside the dismissal of the stay motions, and granting a permanent stay of the Aviva actions, as well as the class action as against Aviva. Aviva also seeks an order setting aside the approval order and rejecting the partial settlement in the class action.
[12] For the reasons to follow, I would dismiss the appeal.
A. ISSUES
[13] The appellant raises the following issues:
(1) Whether the abuse of process doctrine as set out in Handley Estate (i) applies to class proceedings, and (ii) can be extended across separate actions;
(2) Whether the motion judge erred in finding that the class action settlement agreement was immediately disclosed to Aviva;
(3) Whether the motion judge erred in granting the approval motion; and
(4) Whether the motion judge erred in the costs order.
B. ANALYSIS
OVERVIEW
[14] Aviva argues that it was entitled to a stay of the proceedings against it because it did not receive timely disclosure of the class action settlement between the class action representative plaintiff and CDSPI. It further argues that it was entitled to disclosure of the settlement between the individual actions plaintiffs and CDSPI. Aviva submits that this is the case notwithstanding that the rule in Handley Estate has been recently overturned by this court in 1086289 Ontario Inc. (Urban Electrical Contractors) v. Welland (City), 2026 ONCA 352. because Welland (City) and the provisions of r. 49.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 still require immediate disclosure and apply to class proceedings.
[15] I see no error in the motion judge’s finding that the rule in Handley Estate, which required immediate disclosure of partial settlement agreements, did not apply to class proceedings because the Class Proceedings Act provides for its own disclosure regime. Handley Estate is no longer good law, having been overturned by this court in Welland (City). Nonetheless, it remains the case that the CPA has its own provisions that facilitate disclosure of partial settlements in class proceedings. In accordance with the CPA settlement approval process, Aviva received timely, and arguably immediate, disclosure of the proposed settlement between the class action representative plaintiff and CDSPI.
[16] As for the settlement between the individual actions plaintiffs and CDSPI, I agree with the motion judge that Aviva was not entitled to disclosure of this settlement because Aviva was not a party to those actions. In any event, if there was a disclosure obligation, Aviva was aware of both the class and individual settlements, and made submissions about both at the settlement approval hearing. Finally, I see no merit to Aviva’s argument that the respondents engaged in deceit and concealment. Aviva has failed to demonstrate an abuse of process or, for that matter, any other basis for a remedy.
[17] I will elaborate on these conclusions in the reasons that follow.
1. DISCLOSURE OF PARTIAL SETTLEMENTS IN CLASS PROCEEDINGS
THE MOTION JUDGE’S DECISION
[18] The motion judge observed that, pursuant to s. 27.1 of the CPA, class action settlements require court approval, and are not binding unless and until such approval is obtained. Non-settling parties may be participants in approval hearings. On this basis, the motion judge held that the rule in Handley Estate does not apply to class proceedings. As he put it at para. 40:
Accordingly, there is no Handley Estate concern that the non-settling party may be left in the dark about a change in the action. The protections afforded to the non-settling party are far more fulsome in the class action context than in an individual action. As counsel for the [class action representative plaintiff] observed in his argument, given the statutory context in which class action settlements take place, it is no surprise that no Ontario case has applied the common law partial settlement rule in Handley Estate to an action governed by the CPA. The Handley Estate rule exists for non-class actions precisely because those actions have no equivalent protection such as that provided by section 27.1 of the CPA.
[19] The motion judge went on to find that, in any event, there was no untimely disclosure or non-disclosure to Aviva of the class action representative plaintiff’s settlement of the class action with CDSPI. Aviva was served with the motion materials filed in the settlement approval hearing and was a full participant in the hearing. He continued, at para. 42:
The CPA makes clear that there was no enforceable class action settlement between the [class action representative plaintiff] and CDSPI at any time prior to the approval motion, and, in fact, there will be no enforceable settlement until the present judgment is released by the court. The Handley Estate rule is not applicable to class actions since the statutorily required court approval process subsumes that rule. But it is equally important here that Aviva was never deprived of any information about the settlement to which it had a right, and so although the Handley Estate rule is not formally applicable to this context, the Handley Estate principle of timely disclosure once the settlement is finalized and in place has been fully honoured. [Emphasis in original.]
THE RULE IN HANDLEY ESTATE IS NO LONGER GOOD LAW
[20] At the time of the proceedings below, the rule in Handley Estate governed the disclosure of partial settlements to non-settling parties. This rule stipulated that, if a partial settlement “change[d] the adversarial landscape”, the failure to disclose immediately to a non-settling party was automatically deemed an abuse of process, whether or not it resulted in unfairness or prejudice, or undermined the integrity of the administration of justice. The rule further stipulated that, in the event of non-disclosure, a stay of proceedings was the only remedy, thus curtailing the remedial discretion that would allow the court to tailor a remedy to the circumstances of the case.
[21] In the recent case of Welland (City), this court overturned the rule in Handley Estate, finding it to be a jurisprudential outlier. It could not be reconciled with the framework that has historically governed the doctrine of abuse of process. The doctrine of abuse of process is concerned with that which is unfair, improper, prejudicial, and/or oppressive and vexatious: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at para. 35. The doctrine “engages the inherent power of the court to prevent misuse of its proceedings in a way that would be manifestly unfair to a party or would in some way bring the administration of justice into disrepute”: R. v. Varennes, 2025 SCC 22, 504 D.L.R. (4th) 583, at para. 53, citing Saskatchewan (Environment) v. Métis Nation – Saskatchewan, 2025 SCC 4, 500 D.L.R. (4th) 279, at paras. 33-36.
[22] The key features of the abuse of process doctrine are discretion and flexibility. The rigid rule in Handley Estate was the antithesis of this approach. In Welland (City), this court set aside the rule, replacing it with an approach that more faithfully reflects the nuances of the abuse of process doctrine. Neither a finding of abuse of process, nor the remedy of a stay, is automatic. The court must take a holistic view of the circumstances to determine whether there has been an abuse, and, if so, how it can best be remedied.
[23] As this court explained in Welland (City), at para. 16:
Neither the question of whether there has been an abuse of process, nor the question of remedy, is determined by categorical considerations. The question of whether there has been an abuse of process depends upon a host of factors, including the existence of prejudice, and the impact of the conduct on the repute of the justice system. The remedy for an abuse of process depends on, among other things, the nature of the abuse, the character of the prejudice and the extent to which the aggrieved party can be adequately redressed by something less draconian than the termination of the case. In some cases, a stay will flow from a showing of prejudice to the integrity of the administration of justice alone.
RULE 49.14 OF THE RULES OF CIVIL PROCEDURE
[24] The recently enacted r. 49.14 of the Rules of Civil Procedure, which came into force on June 16, 2025, deals with a plaintiff’s obligation to promptly disclose a partial settlement in certain but not all civil proceedings. This court explained in Welland (City) at paras. 39 to 45 that r. 49.14 was created to respond to a number of significant concerns with the application of the Handley Estate rule. These concerns included the rule’s unduly harsh and automatic effect and its unclear and uneven application, which has led to “a whole host of unnecessary litigation”: Welland (City), at para. 45.
[25] As this court further stated in para. 7 of Welland (City), r. 49.14, and the common law doctrine of abuse of process are consistent with one another because the rule “reflects and reinforces the discretionary and proportionate approach that properly governs this area”. This court went on to note that: “Rule 49.14 clarifies the scope and timing of disclosure obligations and provides for a range of remedial responses, thereby avoiding the rigid consequences associated with the Handley Estate rule”: paras. 7 and 51. While r. 49.14 adds technical details as to when a partial settlement agreement must be disclosed, a breach of the timelines in the rule does not automatically give rise to a remedy. Under r. 49.14, both the finding of an abuse of process and any resulting remedy remain in the discretion of the judge.
THE CPA FACILITATES DISCLOSURE OF PARTIAL SETTLEMENTS IN CLASS PROCEEDINGS
[26] The motion judge did not have the benefit of the Welland (City) decision. At the time he decided the case, the rule in Handley Estate was still good law. In his reasons, the motion judge explained why the Handley Estate rule did not apply to class proceedings. Even though Handley Estate has been overturned, the motion judge’s reasons continue to carry persuasive force. Neither the rule in Handley Estate, nor the new r. 49.14 apply to class actions, given the specific provisions in the CPA.
[27] It is helpful to step back and reflect on the mischief sought to be addressed by the rule in Handley Estate, and, moving forward, r. 49.14. The concern is that a non-settling party may be unaware of an agreement that adversely affects its position in the litigation. The disclosure requirement ensures that the non-settling party is aware of any binding settlements reached by other parties to the litigation.
[28] That being the animating concern, it is directly and effectively addressed by the provisions of the CPA. As noted by the motions judge, the CPA contains its own mechanism for ensuring that a party to the class proceeding (i.e., a non-settling defendant) is not kept in the dark about a class settlement to which it is not a party, but which affects its interests.
[29] Under the CPA, there is no binding settlement unless and until it has been approved by the court: ss. 27.1(1) and (3). Significantly, on a motion for approval of a settlement, the non-settling party will not only receive disclosure of the proposed settlement but may have the right to participate in the approval hearing. This offers more protection than the rule in Handley Estate did. It addresses the very mischief sought to be addressed by the partial settlement disclosure rule, namely that a non-settling party may not be aware of a settlement agreement that adversely affects its position in the litigation. In this case, Aviva was given full opportunity to contest the proposed settlement in the hearing before the motion judge. It had notice of the proposed settlement and, by virtue of the motion judge’s decision, it had disclosure of the fact that the settlement had been approved.
[30] It has long been understood that, when a settlement is subject to court approval, the underlying considerations motivating a disclosure requirement may not arise: see CHU de Québec-Université Laval v. Tree of Knowledge International Corp., 2022 ONCA 467, 162 O.R. (3d) 514, at paras. 4, 68-70. First, unlike conventional settlement agreements, a settlement that requires court approval is not binding until such approval is obtained. Second, when a non-settling party receives notice of the court approval hearing, this alerts the non-settling party to the proposed settlement, before it becomes a binding agreement.
[31] Rule 49.14 itself treats court-approved settlements differently than it does other settlement agreements. Rule 7.08 of the Rules of Civil Procedure governs settlements made by or against a party under a disability and requires that such settlements be approved by the court. In contrast to the timeline for disclosure of other partial settlements, r. 49.14(8) provides that a settlement under r. 7.08 be disclosed within seven days of the filing of the motion for court approval, not when the agreement is reached. This is eminently sensible. Until there is court approval, there is no binding agreement. Notice of the approval hearing therefore equates with notice of the proposed settlement.
[32] While the CPA is not explicitly referenced, r. 49.14(2) expressly provides that r. 49.14 applies “only to the extent that a statute or a court order provides otherwise”. The CPA is a separate statute governing class proceedings that “provides otherwise” with respect to settlements under the Act. As noted by the motions judge, s. 27.1(1) of the CPA provides that, “[a] proceeding under this Act may be settled only with the approval of the court”. Section 27.1(3) provides that, “[a] settlement under this section is not binding unless approved by the court”. Section 27.1(7) obliges the moving party on a motion for approval of a settlement to make full and frank disclosure of all material facts. Finally, s. 27.1(8) requires the court to consider whether notice of the settlement approval hearing should be given to non-settling parties. It provides that:
The court shall consider whether notice of a hearing of a motion for approval of a settlement should be given under section 19 [notice to protect interests of affected persons], and whether such notice should include,
(a) a statement of the purpose of the hearing;
(b) the process for objecting to the approval of the settlement;
(c) any other prescribed information; and
(d) any other information the court considers appropriate.
[33] As provided in r. 49.14(2), in the context of class actions, the provisions of the CPA supersede the more general Rules of Civil Procedure with respect to settlements. In any event, the settlement provisions of the CPA are not inconsistent with r. 49.14 because the latter rule does not require disclosure of partial settlement agreements prior to court approval. Rule 49.14(1)(d) clarifies that the rule applies to settlement agreements that are “binding on the parties to the agreement”. A class settlement is not binding unless and until it receives court approval, per the CPA.
AVIVA RECEIVED TIMELY DISCLOSURE OF THE CLASS SETTLEMENT
[34] Aviva not only received disclosure of the proposed class settlement but was given a full opportunity to oppose the settlement through its participation in the settlement approval hearing.
[35] The disclosure to Aviva went well beyond the protections of the CPA. As noted by the motion judge, Aviva was kept apprised of the settlement negotiations between the class plaintiff and CDSPI. As the motion judge found in para. 12 of his reasons:
The record contains evidence demonstrating that, while Aviva and its counsel were not party to the settlement negotiations between the [class action representative plaintiff] and CDSPI, counsel for Aviva was advised that the discussions were taking place and was kept apprised of their status; the fact that Aviva’s counsel was updated on a periodic basis about the state of the negotiations is related in an affidavit by Aviva’s own counsel. In addition, the Court itself was advised in January 2024 that settlement discussions were ongoing between the [class action representative plaintiff] and CDSPI, as set out in a case conference endorsement dated January 9, 2024. No part of the settlement process took Aviva by surprise.
[36] Aviva also received a copy of the proposed settlement on the very day that the agreement was signed by the class plaintiff.
[37] It was open to the motion judge to find that Aviva received disclosure of all that it was entitled to, and more. This ground of appeal must fail.
NO ENTITLEMENT TO DISCLOSURE OF THE SETTLEMENT IN THE INDIVIDUAL ACTIONS
[38] Aviva argues that it was entitled to disclosure of the settlement between the individual actions plaintiffs and CDSPI (as distinct from the class action and the class settlement). Aviva argues, as it did before the motion judge, that the individual actions were so linked to the class action that there was effectively a single settlement that applied to all of the proceedings. The motion judge rejected this argument, as do I.
[39] Aviva was not entitled to notice of the settlement in the individual actions because it was not a party to those actions. The fact that the individual actions settlement was conditional on approval of the class action settlement did not merge the agreements or create a single joint settlement. The individual action and class action settlements remained separate agreements reached in separate actions involving separate parties. It will be recalled that Aviva objected to being joined as a defendant in the individual actions brought against CDSPI. As the motion judge put it at para. 50: “‘Courts of equity’ – or, for that matter, courts of law – 'do not allow litigants to have their cake and eat it too’: Servus Credit Union Ltd. v. Miller, 2012 ABQB 765, [97 C.B.R. (5th) 137], at para. 38”.
[40] In any event, while Aviva was not entitled to disclosure of settlements in the individual actions, it received such disclosure. By the time of the approval motion, Aviva was aware, not only of the class action settlement, but also of the individual actions settlement between CDSPI and the individual actions plaintiffs, and was able to make submissions about both agreements.
[41] The motion judge put it persuasively at paras. 56-57 of his reasons:
Accordingly, on its own, the Individual [Actions] settlement is not disclosable to Aviva as a non-party to the action being settled. Likewise, the Class Action settlement is disclosable to Aviva in the context of the settlement approval motion, which has been appropriately done. Aviva has no rights to enforce under either settlement agreement standing on their own, and thus has no rights to enforce if the two are considered together. Without putting too hard an edge on the point, and with the greatest of respect to Aviva and its counsel, the answer to Aviva’s stay motion is a matter of basic arithmetic:
0 [zero] disclosure claim in the Individual Actions settlement + 0 [zero] disclosure claim in the Class Action settlement = 0 [zero] disclosure rights denied.
To the extent that anything needed to be disclosed to Aviva, it was all properly disclosed in the lead up to the Class Action settlement approval motion. There was no disclosure obligation with respect to the Individual Actions settlement as Aviva is not a party to those actions; and, in any case, that settlement agreement was also disclosed well in advance of the settlement approval motion and formed a central part of Aviva’s argument in that motion.
THE CLAIMS OF DECEIT AND CONCEALMENT
[42] Aviva argues on appeal that it is entitled to a stay because the individual and class plaintiffs engaged in acts of deceit and concealment. These assertions are without foundation.
[43] First, Aviva suggested in oral submissions that the individual and class plaintiffs sought to avoid a stay by fraudulently representing there to be two settlement agreements when there was just one. This argument must be rejected. First, for the reasons set out above, there were two settlements. The settlement of the class action was separate from the settlement of the individual actions. Second, this particular allegation was not advanced before the motion judge. In my opinion, it would be unfair to the respondents and contrary to the interests of justice to entertain Aviva’s argument for the first time on appeal: see Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130, at paras. 18-19.
[44] Aviva further alleges that the individual and class plaintiffs failed to disclose that the insurance proceeds in the possession of CDSPI had not, at the time of the court approval motion, been paid out. The record discloses that it was made abundantly clear to Aviva, and to the court, that, at the time of the approval hearing, CDSPI had not yet paid the proposed settlement to the individual actions plaintiffs. What was clear was that the individual actions plaintiffs had a priority claim over the insurance proceeds and that, once those proceeds were paid, CDSPI’s insurance fund would be exhausted. This was at the crux of the approval motion. The class action representative plaintiff was aware that CDSPI would not be able to fund a monetary settlement to the class. Accordingly, the settlement of the class action proposed that CDSPI offer financial disclosure and other cooperation in exchange for a full and final release.
[45] There was no deceit or concealment, and no improper withholding of information by the class action representative plaintiff, the individual actions plaintiffs, or CDSPI.
2. APPROVAL OF THE SETTLEMENT: THE BAR ORDER
[46] Aviva submits that the motion judge erred by approving the class action settlement that contains a term precluding Aviva from claiming over against CDSPI, irrespective of the potential for claims brought by class members who opt out of the class action settlement or by the individual plaintiffs who elect not to participate in the settlement (“the bar order”). Aviva argues that it is prejudiced by the bar order because it subjects Aviva to potential joint liability without the right to claim over against CDSPI, even though CDSPI may claim over against Aviva. Aviva further argues that the motion judge erred in failing to address this prejudice in his reasons.
[47] I see no error in the motion judge’s decision to approve the settlement on terms including the bar order. He applied well-settled principles in concluding that the terms of the class action settlement fell within the zone of reasonableness. As for the bar order specifically, he found that the settlement resulted in no real or practical economic prejudice to Aviva. Whether or not the class action settlement is approved, the entire $10 million in CDSPI’s insurance coverage will be paid out to the individual plaintiffs and there will be no more money available for the class action settlement. As a result, CDSPI’s “financial well will have already run dry” when the class action is partially settled against them. As he put it at paras. 67-68 of his reasons:
If the [class action representative plaintiff] and class are successful at trial, CDSPI’s financial well will have already run dry; and if it is dry for the [class action representative plaintiff and class], it will be equally dry for Aviva if it were to claim over against CDSPI for contribution and indemnity. Thus, while the bar order protecting CDSPI is in theory a limitation on rights that Aviva would otherwise have, it is a justifiable limitation under the circumstances. From an economic point of view, it barely, if at all, changes Aviva’s circumstances or chances of achieving financial participation by CDSPI.
In all, I see no rationale for interfering with a proposed settlement due to notional prejudice to the non-settling Defendant that has little practical import.
[48] As for potential claims by the class action members and individual plaintiffs who opt out, the bar order does not change Aviva’s economic exposure. If Aviva is found to be jointly liable with CDSPI for those claims, Aviva will have no practical recourse against CDSPI because its well will still be dry. That CDSPI may claim over against Aviva for those claims causes no prejudice to Aviva if Aviva is found to be jointly liable with CDSPI.
[49] Aviva does not dispute that the individual plaintiffs have priority to the $10 million in insurance proceeds. Nor was there any evidence put before the motion judge that CDSPI had other sources of funds. Although it was given confidential, “for counsel’s eyes only” disclosure of CDSPI’s financial state, Aviva never sought to put that information before the motion judge.
[50] I would reject this ground of appeal.
3. COSTS
[51] Finding Aviva unsuccessful on both its challenge to the settlement approval and its motions for stay, the motion judge ordered Aviva to pay costs of the class action plaintiffs, the individual actions plaintiffs, and CDSPI on a partial indemnity basis. I will refer to these parties collectively as “the respondents” in the paragraphs that follow.
[52] Aviva submits that the motion judge made reversible errors in ordering costs in this manner.as such. Aviva argues that the motion judge erred in principle by failing to discount the costs awarded to reflect that: 1) the respondents were required under the CPA to bring the settlement approval motion regardless of Aviva’s opposition; and 2) Aviva was substantially successful in its motion to compel answers and documentary production from the respondents.
[53] I am not persuaded that there is any basis to disturb the motion judge’s discretionary costs order.
[54] I start with reference to the high threshold that Aviva must meet to permit appellate interference. This court recently summarized the test for leave to appeal costs in Ghahsareh v. Ehsani, 2025 ONCA 795, at para. 3:
The test is stringent. There must be strong grounds upon which the appellate court could find that the judge erred in exercising her discretion. Discretionary costs decisions should only be set aside on appeal if there is an error in principle or if the award is “plainly wrong”. [Citations omitted.]
[55] Aviva has not satisfied these criteria.
[56] First, while the respondents were required under the CPA to bring the settlement approval motion, there is no question that, absent Aviva’s very strong opposition, the respondents’ costs would not have been as elevated. The motion judge captured the nature of the hard-fought motion as follows:
The stakes in this set of motions were high. Aviva’s challenge, if successful, would have terminated all of the actions against it, with no room for any amendment or other step that could reinstate those claims. Accordingly, Aviva’s position prompted all of the other parties to invest substantial resources in fending off the challenge and in obtaining the relief that they sought.
[57] Aviva was certainly entitled to oppose the settlement approval motion; however, it cannot now complain that it must bear the costs consequences of doing so. There is no reason to depart from the ordinary result that costs follow the event. As the motion judge stated, “[h]aving mounted a challenge focused on undermining the Class Action plaintiffs’ settlement with CDSPI, Aviva has put itself in the relatively uncommon position of being liable for the costs of the approval motion.”
[58] Nor would I accede to the argument that the motion judge erred in not reducing the costs award to reflect Aviva’s success on its undertakings and production motion. The motion judge’s endorsement on that motion does not grant costs to Aviva. As case management judge, the motion judge was intimately familiar with the conduct of this case. It was open to him to decide that Aviva’s costs on that motion should be balanced against the costs incurred by the respondents, consistent with the respondents’ complete success on the approval and certification motion.
[59] The motion judge carefully considered the relevant factors to arrive at the costs award which he found was fair and proportionate. He committed no error in principle. His costs award is therefore owed considerable deference on appeal: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2005] 1 S.C.R. 303, at para. 27; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 19.
[60] For these reasons, I would not grant leave to appeal the costs award.
C. DISPOSITION
[61] For these reasons, I would dismiss the appeal.
[62] As agreed by the parties, costs are awarded to the respondents as follows: $50,000 to class counsel (for the class action representative plaintiff et al.); $25,000 to the individual plaintiffs; and $10,000 to CDSPI.
Released: August 11, 2026 “L.B.R.”
“R. Pomerance J.A.”
“I agree. L.B. Roberts J.A.”
“I agree. S. Coroza J.A.”
1Both Aviva and CDSPI are parties to an individual action started in Vancouver, but this claim was not in issue on the motion before Morgan J.
2There were no settlements negotiated in the parallel individual actions brought against Aviva.