DATE: 20040601

DOCKET: C40681

COURT OF APPEAL FOR ONTARIO

RE:

LOMBARD GENERAL INSURANCE COMPANY (Applicant (Respondent in Appeal) – and – CGU INSURANCE COMPANY OF CANADA (Respondent (Appellant in Appeal))

BEFORE:

MOLDAVER, GILLESE and BLAIR JJ.A.

COUNSEL:

Harvey Poss

for the appellant

William S. Chalmers

for the respondent

HEARD & ENDORSED:

May 31, 2004

On appeal from the judgment of Justice Keith A. Hoilett of the Superior Court of Justice dated August 22, 2003.

A P P E A L B O O K E N D O R S E M E N T

[1] We agree with Hoilett J. that the CGU policy is a primary policy. We would simply refine that determination by defining it, more accurately, as a primary policy with an excess coverage clause. No issue is taken with the determination that the second Lombard policy is a true umbrella policy. In such circumstances, the law is clear that the primary policy with excess coverage ranks ahead of the umbrella policy. (See Trenton Cold Storage Ltd. v. St. Paul Fire and Marine Insurance Co., [2001] O.J. # 1835 Ont. C.A.)).

[2] We see no merit in the arguments that Lombard did not have standing to bring the application or that the issues in question were not appropriately dealt with by way of application.

[3] We would however, vary paragraph 1 of the judgment in issue by deleting it and replacing it with the wording found in paragraph 1 of Tab 25 of the Appeal Book. In all other respects, the appeal is dismissed.

[4] Costs to the respondent fixed at $9,000 inclusive of GST and disbursements.