Court of Appeal for Ontario

Date: 2001-09-04 Docket: C35199

Re: Daniel William Channer (Respondent/Appellant by Cross Appeal) –and– The Guarantee Company of North America (Appellant/Respondent by Cross Appeal)

Before: Osborne A.C.J.O., Finlayson and Weiler JJ.A.

Counsel: Douglas A. Wallace, for the appellant (respondent by cross appeal) Nigel G. Gilby, for the respondent (appellant by cross appeal)

Heard: August 27, 2001 Released Orally: August 27, 2001

On appeal from the order of Mr. Justice William A. Jenkins dated September 28, 2000.

Endorsement

[1] The insured, by way of application sought a declaration that:

a. the Full and Final Release signed on April 3, 1996 by the parties to the action is null and void;

b. the insurer failed to comply with the requirements of s. 9.1(2) of Ontario Regulation 664, R.R.O. 1990 as amended;

c. the insured delivered a written notice to the insurer, rescinding the settlement, in compliance with s. 9.1(4) of Ontario Regulation 664, R.R.O. 1990 as amended;

[2] One of the grounds for the application to set aside the release, or to declare it null and void, was that the insured lack capacity to give valid release and was subjected to undue influence.

[3] The insured and the insurer discussed and eventually agreed that the issue of the validity of the release should be dealt with on a motion under Rule 21. Before the return of the Rule 21 motion, and in the insurer’s factum filed on the motion, the insurer took the position that the issues of the insured’s capacity to provide a release and undue influence should not be dealt with on a Rule 21 motion, because the resolution of those issues was dependent on disputed facts.

[4] In our view, absent consent or an express order from the motion’s judge granting leave, issues the resolution of which depend on disputed facts, should not be dealt with on a Rule 21 motion. See Boutin v. Cooperators Lake Insurance Co. (1999), O.J. No. 64 (C.A.). Resolution of the capacity/undue influence issues was dependent on disputed facts and thus should not have been dealt with on a Rule 21 motion. Accordingly, in our view, the motion’s judge erred in dealing with the capacity and undue influence issues and in making the findings that he did on those issues.

[5] Acting appropriately within the confines of Rule 21, the motion’s judge concluded that in this case the insurer’s failure to comply with s. 9.1 of Ontario Regulation 780/93 constituted an irregularity which the motion’s judge held was not sufficient to permit the insured to rescind his release. This finding is the subject of the cross appeal by the insured.

[6] The insurer has conceded on the basis of this court’s recent judgment in Catania v. Scottish York Insurance Co. Limited (2001), O.J. 651 that the motion’s judge erred in reaching the conclusion he did in respect of the issue of the form and content of the release signed by the insured. That release, in the circumstances, is null and void, but not for the reasons found by the motion’s judge.

[7] Accordingly, the cross appeal is allowed with costs. In view of our disposition of the cross appeal, the appeal is moot and is dismissed as moot with costs.

"C. A. Osborne A.C.J.O."

"G. D. Finlayson J.A."

"Karen M. Weiler J.A."