Court of Appeal for Ontario

Citation: Lloyd's Underwriters, 2017 ONCA 858

Date: 2017-11-07

Docket: C62885

Judges: Sharpe, Rouleau and Fairburn JJ.A.

Between

The Lawyers' Professional Indemnity Company Applicant (Appellant/Respondent by way of cross-appeal)

and

Lloyd's Underwriters Respondent (Respondent/Appellant by way of cross-appeal)

Counsel

Stephen Cavanagh, for the appellant/respondent by way of cross-appeal

Heather Gray, for the respondent/appellant by way of cross-appeal

Heard and Released

Heard and released orally: November 2, 2017

On appeal from: the judgment of Justice Martin S. James of the Superior Court of Justice, dated October 5, 2016, with reasons reported at 2016 ONSC 6196, [2017] I.L.R. I-5919.

Reasons for Decision

[1] The appellant argues that the application judge erred in finding that the insurance policy issued by the respondent was excess to the policy issued by the appellant. In its submission, the application judge erroneously arrived at this conclusion by applying the Minnesota approach to resolve whether a policy is excess to another policy. Pursuant to that approach, the court asks which of the insurers intended more clearly to insure the particular risk. The Minnesota approach has been rejected by the Supreme Court of Canada in Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, [2002] 2 S.C.R. 695.

[2] In our view, the application judge did not apply the Minnesota approach to determine whether the respondent's policy was excess to the appellant's. The application judge understood that he was called upon to interpret the terms of the two relevant insurance policies. It is based on the terms of the policies that he found that the respondent's was specifically made excess to the appellant's.

[3] Further, the appellant's policy acknowledges that other policies, specifically arranged to apply as excess insurance over the appellant's policy, were to be treated as being excess policies. We see no error in the application judge's analysis.

[4] The fresh evidence tendered in this case makes it clear that the underlying claim against the insured has since been settled within the limits of the appellant's policy. As a result, we need not address the issues raised in the cross-appeal and express no view as to the application judge's disposition of those issues.

[5] Consequently, both the appeal and the cross-appeal are dismissed. Costs to the respondent fixed in the amount of $8,000, inclusive of disbursements and applicable taxes.

Robert J. Sharpe J.A.

Paul Rouleau J.A.

Fairburn J.A.