Court of Appeal for Ontario

Date: 2019-10-25 Docket: C66517

Panel: MacPherson, Pepall and Lauwers JJ.A.

Between

La Rose Bakery 2000 Inc. Plaintiff (Appellant)

and

Intact Insurance Company and Unity Realty & Insurance Inc. Defendants (Respondents)

Counsel

Mauro Marchioni, for the appellant

Jeffrey R. Goit, for the respondent Intact Insurance Company

Lesley E. Albert, for the respondent Unity Realty & Insurance Inc.

Heard: October 21, 2019

On appeal from: the judgment of Justice Thomas R. Lederer of the Superior Court of Justice, dated December 12, 2018, with reasons reported at 2019 ONSC 236.

Reasons for Decision

[1] Introduction

The appellant, La Rose Bakery 2000 Inc., appeals from the December 12, 2018 judgment dismissing its action against the respondent, Intact Insurance Company ("Intact"), seeking coverage for losses resulting from an ice storm in December 2013.

A. Background Facts

[2] The appellant operates a commercial bakery in a shopping plaza in Etobicoke. A power outage occurred in December 2013. There was no physical damage to the plaza or to the bakery, and no repairs to any buildings or structures were needed. Power was restored without any intervention by the owner of the plaza or the appellant.

[3] The appellant made a claim under its policy of insurance with Intact but Intact refused coverage. The appellant then commenced an action against Intact for payment for losses relating to stock spoilage and business interruption. Intact defended, relying on exclusions in the policy.

[4] The appellant also sued Unity Realty & Insurance Inc. ("Unity"), the insurance broker, for damages for negligence for failing to ensure that the appellant was properly insured. Unity denied liability pleading that the policy provided appropriate coverage in accordance with the appellant's needs and available products. It cross-claimed against Intact for contribution and indemnity relying on the contents of the appellant's statement of claim against Intact.

[5] Intact moved for summary judgment seeking a dismissal of the appellant's claims against it. The motion was served on Unity but it took no position and did not appear on the return of the motion. However, Unity did agree with Intact that if the summary judgment motion were successful, it would consent to a dismissal of its cross-claim against Intact. Counsel for the appellant was so advised but this fact was not brought to the motion judge's attention.

B. Motion Judge's Decision

[6] The motion judge determined that the exclusionary clauses governing stock spoilage and business interruption in the policy precluded coverage for the losses claimed. He accordingly granted summary judgment dismissing the appellant's action against Intact.

C. Grounds of Appeal

[7] The appellant appeals from that order.

[8] First, it submits that the motion judge erred by disregarding the principles relating to partial summary judgment described in Butera v. Chown, Cairns LLP, 2017 ONCA 783, 137 O.R. (3d) 561, and its progeny.

[9] We disagree.

[10] The motion disposed of the entire action between the appellant and Intact. In addition, as noted by the motion judge, Unity, a party to the litigation, had been served with the summary judgment motion material, and would be bound by the outcome. There was no real risk of duplicative proceedings or inconsistent factual findings. The action was readily bifurcated and the cost of the litigation would be reduced, not increased. Furthermore, although not before the motion judge, Unity had agreed to consent to a dismissal of its cross-claim against Intact based on the outcome of the summary judgment motion. Summary judgment in favour of Intact was appropriate in these circumstances.

[11] Second, the appellant submits that the motion judge erred in his interpretation of the insurance policy and in deciding the motion in the absence of expert evidence.

[12] The motion judge found that the exclusion clauses precluded coverage. The exclusion for the stock spoilage claim stated that coverage did not cover loss or damage resulting from partial or total interruption to the supply of electricity, arising from loss or damage to any electrical transmission lines or distribution lines or their supporting structures, except for those located on the "premises". The appellant concedes that the loss or damage was to electrical transmission lines or distribution lines or their supporting structures. Intact filed evidence that supported its position that the loss or damage was to lines or structures not located on the premises. As such, it was open to the motion judge to conclude that the exclusion provision applied to exclude coverage for the stock spoilage. The appellant failed to file evidence that showed that the loss or damage occurred on its premises. It was incumbent on the appellant to put its best foot forward. The motion judge did not err in interpreting the policy without the benefit of expert evidence.

[13] Similarly, the motion judge's conclusion that the exclusion provision precluded coverage for business interruption losses is unassailable.

[14] For these reasons, the appeal is dismissed. As agreed by the appellant and the respondent, the appellant shall pay costs to the respondent fixed in the amount of $5,000 inclusive of disbursements and applicable tax. There will be no order of costs relating to Unity.

"J.C. MacPherson J.A."

"S.E. Pepall J.A."

"P. Lauwers J.A."