COURT OF APPEAL FOR ONTARIO

CITATION: Lauzon v. AXA Insurance (Canada), 2013 ONCA 664

DATE: 20131031

DOCKET: C56684

MacPherson, Gillese and Hourigan JJ.A.

BETWEEN

Daniel Lauzon

Plaintiff (Appellant)

and

AXA Insurance (Canada), Darlene Skinner and Ron Williams

Defendants (Respondents)

and

The Corporation of the City of Waterloo

Third Party

Morris Manning, Q.C., for the appellant

Peter W. Kryworuk and Tyler A. Kaczmarczyk, for the respondents

Heard and released orally: October 29, 2013

On appeal from the order of Justice C. Stephen Glithero of the Superior Court of Justice, dated February 13, 2013.

By the Court:

[1] Mr. Lauzon is an insured homeowner whose property was damaged by a flood in January 2008. He made a claim against his insurer, AXA Insurance (Canada) (“AXA”), for the flood damage. He provided AXA with a proof of loss for approximately $172,000. However, the proof of loss provided only a summary of the heads of loss being claimed with some estimated costs. There was no documentation to support or explain the amounts claimed.

[2] AXA initiated the appraisal process under s. 128 of the Insurance Act, R.S.O. 1990, c. I.8 (the “Act”). Because Mr. Lauzon refused to attend an examination under oath or to answer any questions relating to the quantum of claimed losses, AXA moved for an order compelling him to be examined on the scope and quantum of his damages, and to produce documentation in support of his claim (the “Motion”). A second motion was also disposed of but that motion is not the subject of this appeal.

[3] By order dated February 13, 2013 (the “Order”), the Motion was granted and Mr. Lauzon was ordered to produce documentation in support of his claim and to submit to an examination on the scope and quantum of his damages.

[4] By order dated May 27, 2013 (the “Costs Order”), AXA was awarded costs of the Motion.

[5] Mr. Lauzon appeals. He claims that the motions judge lacked jurisdiction to make the Order because AXA’s invocation of the appraisal process extinguished its right to examine him. He also seeks to appeal the Costs Order.

[6] We do not accept these submissions and would dismiss the appeal.

[7] The motions judge gave thorough, compelling reasons for the Order. We agree with those reasons, which can be summarized as follows.

[8] The appellant’s proof of loss is “substantially deficient” and falls “far short” of that required.

[9] Statutory Condition 6 of the AXA policy requires the insured, where the loss or damage is covered by the contract, to give a complete inventory of the destroyed and damaged property and to give the details associated with the amount of the loss claimed. This was not done.

[10] Further, part ix of the Additional Conditions section of the AXA policy, entitled “Duties After Loss”, requires the insured to submit to examinations under oath. The fact that the insurer invoked the appraisal process in an attempt to resolve issues related to the loss does not oust its contractual right to compel the appellant to attend to be examined.

[11] If the appellant’s position were accepted, resort to the appraisal process would oust the insurer’s contractual right to examine the insured under oath, thereby effectively insulating the insured from having the quantum of his or her claim inspected. There is no basis on which to oust the insurer’s contractual right to examine the insured under oath on his or her claim.

[12] Further, the court has the jurisdiction to require Mr. Lauzon to attend for examination. Support for this can be found in Baig v. Guarantee Co. of North America (2007), 2007 ONCA 847, 88 O.R. (3d) 161 (C.A.).

[13] As well, the court has inherent jurisdiction to make such procedural orders as are necessary to give effect to the statutory appraisal scheme in the Act and to prevent an interpretation that flies in the face of the basic concepts of modern litigation, namely, to prevent adjudication by ambush, to promote efficient and meaningful discovery as a means of reaching a just result, and to equip both sides (as well as the umpire in the present case) with the information needed to present a full answer and defence.

[14] We would not accede to the appellant’s request that we grant leave to appeal the Costs Order.

[15] Leave to appeal a costs order will not be granted, save in obvious cases where the party seeking leave convinces the court that there are “strong grounds upon which the appellate court could find that the judge erred in exercising his [or her] discretion”: see Brad-Jay Investments Ltd. v. Village Developments Ltd.(2006), 2006 CanLII 42636 (ON CA), 218 O.A.C. 315 (C.A.), at para. 21.

[16] We see no basis for granting leave. The appellant has not shown any error in the motions judge’s exercise of discretion.

DISPOSITION

[17] Accordingly, the appeal is dismissed with costs to the respondent fixed at $7,000, inclusive of disbursements and applicable taxes.

Released: October 31, 2013 (“J.C.M.”)

“J.C. MacPherson J.A.”

“E.E. Gillese J.A.”

“C.W. Hourigan J.A.”