COURT FILE NO.: 25/04
DATE: 20041029
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LANE, MEEHAN AND PITT JJ.
B E T W E E N:
ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA, CEDAR-MAC HOLDINGS LIMITED and JACK LECHCIER-KIMEL
Plaintiffs (Respondents)
- and -
LOMBARD CANADA LTD., CGU INSURANCE COMPANY OF CANADA, and ALLIANZ INSURANCE COMPANY OF CANADA
Defendants
(Allianz Insurance Company of Canada, Appellant)
Chris Stribopoulos, for the Plaintiffs/ Respondents
Renée Vinett, for the Defendant, Allianz Insurance Company of Canada
HEARD: October 29, 2004
LANE J.: (Orally)
[1] Allianz Insurance Company of Canada appeals from the order of Madam Justice Speigel, dated June 27, 2003, granting an appeal from the order of Master Linton, dated January 24, 2003, wherein Master Linton ordered that Allianz’s underwriting file was not relevant and need not be produced for discovery. The matter comes before us by leave of C. Campbell J. who granted leave to appeal.
[2] Allianz requests that the order of Madam Justice Speigel, requiring Allianz to produce the underwriting file that it developed in connection with the issuance of the policy in question as part of its productions, be set aside.
[3] The action involves a claim by Royal and its co-plaintiffs to recover the sums which it has expended to defend and settle an action brought against Cedar-Mac and Mr. Kimel by York Region Condominium Corporation No. 772, for damages arising from a water problem that occurred at the condominium’s premises. The allegation is that Allianz ought to have responded to the claim and therefore should bear its share of the costs and the coverage payment.
[4] Allianz insured the condominium under a commercial general liability policy and also under a director’s and officer’s liability policy. At the time the Allianz policy was issued, the insured was actively suing its former director, Mr. Kimel, for, inter alia, negligence in failing to disclose to the Condominium Corporation certain information which he had, in his capacity as the guiding mind and director of Cedar-Mac, a company wholly or substantially owned by him.
[5] Following the settlement of the underlying action in January, 1999, the respondents commenced this action in 1999 seeking indemnity for the defence costs. The issue is whether the claim advanced by the respondents falls within the terms and coverages contained in the Allianz policy.
[6] The respondents brought a motion before Master Linton to compel Allianz to answer undertakings and refusals on discovery. One of the questions, question 14, sought production of the Allianz underwriting file. Master Linton held, but gave no reasons, that production of those documents did not meet the “semblance of relevance test” and therefore the file need not be produced.
[7] The respondents appealed the order of Master Linton to Madam Justice Speigel, who ordered production of the underwriting file on the grounds that it was relevant to the interpretation of the Allianz policy. In so doing, she referred to the file as one that “could be relevant” rather than dealing with the semblance of relevance test which the cases show is the appropriate test. The semblance of relevance test involves a present outward appearance of relevance.
[8] In our view, Madam Justice Speigel did not apply the correct test. But the appeal is, as always, from the result and not from the reasons. In the unusual circumstances of this case where there are allegations as to knowledge possessed at the time of the issuance of the policy by the insured; and as to the knowledge of the insurer; and where Mr. Kimel was at all material times associated with both the Corporation, the insured and its adversary, we are unable to say that Madam Justice Speigel was clearly wrong to find that the documents in the underwriting file should be produced. One of those documents, production of which was refused until the argument before us, when counsel admitted it was relevant, was the application for the policy which, by the terms of the policy is expressly made a part of the policy, and clearly should have been produced. No doubt there are other documents in the file and in our view, in these circumstances, the whole file has a semblance of relevance and was properly ordered produced. The appeal is therefore dismissed.
[9] I have endorsed the appeal book: “The appeal is dismissed for reasons dictated in Court. The respondent will have costs fixed at $4,000 inclusive.”
LANE J.
MEEHAN J.
PITT J.
Date of Reasons for Judgment: October 29, 2004
Date of Release: November 4, 2004
COURT FILE NO.: 25/04
DATE: 20041029
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LANE, MEEHAN AND PITT JJ.
B E T W E E N:
ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA, CEDAR-MAC HOLDINGS LIMITED and JACK LECHCIER-KIMEL
Plaintiffs (Respondents)
- and -
LOMBARD CANADA LTD., CGU INSURANCE COMPANY OF CANADA, and ALLIANZ INSURANCE COMPANY OF CANADA
Defendant
(Allianz Insurance Company of Canada, Appellant)
ORAL REASONS FOR JUDGMENT
LANE J.
Date of Reasons for Judgment: October 29, 2004
Date of Release: November 4, 2004