DATE: 20050707

DOCKET: C43034

COURT OF APPEAL FOR ONTARIO

RE:

CINDY PINDER and JOYCE PINDER (Applicants/Respondents) – and – FARMERS MUTUAL INSURANCE COMPANY (LINDSAY) (Respondent/Appellant)

BEFORE:

WEILER, MOLDAVER and LANG JJ.A.

COUNSEL:

Martin P. Forget

for the appellant

Robert W. Becker

for the respondents

HEARD & RELEASED ORALLY:

July 4, 2005

On appeal from judgment of Justice Michael Brown of the Superior Court of Justice dated January 6, 2005.

E N D O R S E M E N T

[1] On January 6, 2005, Brown J. granted an application brought by Cindy and Joyce Pinder and ordered Farmers Mutual Insurance Company to appoint an appraiser under s. 128(5) of the Insurance Act.

[2] The parties agree that because this is an application and as there was no other litigation extant at the time of the order of Brown J. it was a final order.

[3] The issue on this appeal is whether Brown J. erred in law by refusing to find that the Pinders breached Statutory Condition 4 rendering the policy void from the time of breach.

[4] The appellant submits that the onus is on the respondents to prove that there is a valid contract. Cindy Pinder swore an affidavit that a valid insurance policy was in existence at the time of the fire. The appellant argues that there was a material change in the risk and that, as a result, the policy is void. We do not agree that there is no issue that there was a material change in the risk. The appellant chose not to cross-examine Cindy Pinder on her affidavit and in our view, the issue of liability remains a live one.

[5] In this regard, we note as well that in the face of a breach of Statutory Condition 4, the insured has available to it the remedy of relief from forfeiture. We have no way of ascertaining whether such relief might be granted in this case. Thus, an added reason for ordering an appraisal is that although a court may ultimately find that the condition was breached, the court may exercise its discretion to grant relief from forfeiture.

[6] In view of our conclusion that liability remains a live issue, it is not necessary for us to construe the word “may” in s. 128(5). In particular, we need not decide whether a judge acting under that provision retains discretion to refuse to appoint an appraiser depending on the circumstances of the particular case.

[7] The application judge did not err in appointing an appraiser under s. 128(5) of the Insurance Act. The purpose of appraisal is to create a quick, inexpensive resolution of valuation issues. The appraisal process is available to the respondents.

[8] The appeal is therefore dismissed. Costs of the appeal are to the respondents fixed in the agreed amount of $4000 inclusive of GST and disbursements.

“K. M. Weiler J.A.”

“M. J. Moldaver J.A.”

“S. E. Lang J.A.”