Logel Estate v. Wawanesa Mutual Insurance Company, 2009 ONCA 252

CITATION: Logel Estate v. Wawanesa Mutual Insurance Company, 2009 ONCA 252

DATE: 20090320

DOCKET: C49500

COURT OF APPEAL FOR ONTARIO

Doherty, MacPherson and MacFarland JJ.A.

BETWEEN:

John Wayne Charles Buck as Litigation Administrator of the Late Lori D. Logel

Applicant (Respondent)

and

The Wawanesa Mutual Insurance Company

Respondent (Appellant)

P.M. Ledroit, for the appellant

Robert F. Seiler, for the respondent

Heard and released orally: March 19, 2009

On appeal from the order of Justice Lack of the Superior Court of Justice dated September 17, 2008.

ENDORSEMENT

[1] The appellant, Wawanesa Mutual Insurance Company, appeals the decision of Lack J. of the Superior Court of Justice dated September 17, 2008 declaring that it had waived the breach of statutory condition 4(1) in the automobile insurance policy of its client Lori Logel.

[2] Ms. Logel was killed in a single car accident. Her passenger Bryan Gill was seriously injured. He sued the estate of Ms. Logel. Ms. Logel’s blood alcohol level at the time of the accident was 143 mg/100 ml. This contravened the terms of her G2 driver’s licence which required that her blood alcohol level be zero when she was operating a motor vehicle.

[3] Wawanesa’s position on the motion was that Ms. Logel’s breach of the statutory condition of her policy meant that its contractual liability for third party liability policy limits of $1,000,000 was voided, thus potentially limiting Gill to a maximum recovery of $200,000 under the Wawanesa policy.

[4] The motion judge held that Wawanesa’s interpretation of the terms of the policy was correct but that Wawanesa’s conduct from January 2002 to August 2005 constituted “a continuing election that amounted to a waiver by conduct of Ms. Logel’s breach.”

[5] The appellant contends that the motion judge erred by concluding that it had waived its rights under the policy. He accepts that the appellant had full knowledge of the facts that would give rise to waiver in these circumstances. He submits, however, that the trial judge erred in finding waiver based on her determination that the appellant “should have” appreciated the significance of these facts. The appellant argues that only a “conscious intention” to abandon its rights under the policy will suffice for waiver. In addition, the motion judge erred by presuming prejudice to the respondent flowing from the appellant’s delay in asserting its right.

[6] We disagree. Looking at the trial judge’s reasons as a whole, we are satisfied that she properly inferred an intention to abandon the right to rely on the policy breach from its conduct over a 3 ½ year period.

[7] The appellant filed its Statement of Defence in July 2002. In the following three years, the action proceeded through discoveries, production and settlement discussions, including the dismissal of the action against two parties. Not until August 2005 did the appellant raise the potential coverage issue. In these circumstances, the motion judge was entitled to apply what Holland J. said in the factually similar case Rosenblood Estate v. Law Society of Upper Canada, 1989 CanLII 4221 (ON SC), [1989] O.J. No. 420 (S.C.), aff’d. 1992 CanLII 15594 (ON CA), [1992] O.J. No. 3030 (C.A.), namely, that “[i]n the present case the insurer finally took an off coverage position but … much too late.” Moreover, in the context of the appellant electing to defend the action and taking many steps with respect to its defence over a three year period, it seems obvious, as it was to Holland J. and this court in Rosenblood Estate, that the respondent would be prejudiced if the appellant were allowed to raise a coverage issue three years into the action.

[8] The appeal is dismissed. On consent, costs are left to the parties.

“Doherty J.A.”

“J.C. MacPherson J.A.”

“J. MacFarland J.A.”