DATE: 2002-03-05
DOCKET: C33460 and C33461

COURT OF APPEAL FOR ONTARIO

RE:

SHIVRAJ GILL (Plaintiff (Respondent) -and- ZURICH INSURANCE COMPANY (Defendant (Appellant))

BEFORE:

AUSTIN, MOLDAVER and MacPHERSON JJ.A.

COUNSEL:

David A. Zuber
For the appellant

John R. McCarthy and Joyce Chun
For the respondent

HEARD:

February 28, 2002

RELEASED ORALLY:

February 28, 2002

On appeal from the judgments of Justice Margaret Eberhard dated November 9, 1999 and May 24, 2000.

E N D O R S E M E N T

[1] The Appellant, Zurich Insurance Company, appeals from the judgments of Justice Eberhard dated November 9, 1999 and May 24, 2000. The grounds of appeal are that the trial judge erred in her analysis and conclusions on the issues of misrepresentation, waiver, quantum of damages and awarding solicitor and client costs.

[2] We need not decide whether the trial judge correctly analysed the misrepresentation issue. We would uphold her decision on the basis of waiver.

[3] In our view, the trial judge was correct in concluding that the common-law principle of waiver continues to apply to s. 17(3) of the Statutory Accident Benefits Schedule. We also agree with the trial judge that Zurich in fact waived its rights under this provision. When Zurich became aware of the alleged misrepresentations in the insurance application, it did not terminate the contract of insurance as it was entitled to under s. 8 of the policy. Rather, Zurich validated the contract and continued to accept premiums. We agree with Eberhard J. that Zurich’s conduct in this regard amounted to a clear waiver of its rights under s. 17(3) of the schedule.

[4] With respect to quantum, we are not persuaded that the trial judge erred in her analysis or conclusion. Accordingly, the appeal as to liability and quantum of damages is dismissed.

[5] On the issue of costs, the general rule is that costs on a solicitor and client basis should be awarded only in rare and exceptional circumstances: see Foulis v. Robinson (1978), 21 O.R. (2d) 769 (C.A.). In our view, this is not such a case. Even making allowance for the trial judge’s strong criticism of Zurich’s position on the damages question, the nature and number of misrepresentations on the insurance application clearly entitled Zurich to put the plaintiff to proof of her claim. Accordingly, we would grant leave, allow the appeal on the question of costs and award costs on a party and party basis.

[6] The respondent is entitled to the costs of the appeal which are fixed at $15,000 including disbursements and G.S.T.

Signed: “Austin J.A.”

“M. J. Moldaver J.A.”

“J. C. MacPherson J.A.”