Court of Appeal for Ontario

Date: 2025-06-04
Docket: COA-24-CV-0236
Panel: Paciocco, Monahan and Wilson JJ.A.

Between

Joe Hesch, Hailey Cristina Marie Hesch, by her Litigation Guardian, Joe Hesch, Tristen Matthew Alfred Kerr, by his Litigation Guardian, Mary Evans, Robert Lawrence Evans, Mary Evans and Curtis Want
Plaintiffs

and

Greggory Langford, Pafco Insurance Company (Appellant), and Kent and Essex Mutual Insurance Company (Respondent)
Defendants

Counsel:
Sandi J. Smith, for the appellant
Bruce Mitchell, for the respondent

Heard: January 14, 2025

On appeal from the judgment of Justice Thomas A. Heeney of the Superior Court of Justice, dated January 31, 2024, with reasons reported at 2024 ONSC 614.

Overview

[1] On January 3, 2017, Ashley Kerr died tragically after a vehicle driven by an uninsured motorist, Greggory Langford, crossed into her lane and collided with her vehicle, in which she was the sole occupant.

[2] Joe Hesch, who was Ms. Kerr’s long-time spouse, their two dependent children, and Ms. Kerr’s mother, stepfather, and brother, brought claims for loss of care, guidance, and companionship under Part V of the Family Law Act, R.S.O. 1990, c. F.3.

[3] In addition to Mr. Langford, two insurance companies that the plaintiffs looked to for their damages, the appellant Pafco Insurance Company (“Pafco”), and the respondent Kent and Essex Mutual Insurance Company (“Kent”), were made defendants in the action. Pafco had issued a standard Ontario Automobile Policy (“OAP-1”) for Ashley’s vehicle that included family protection coverage in the amount of $1,000,000 in an optional 44R endorsement (“44R”). Kent had insured Joe’s vehicle through an OAP-1 that also included a 44R family protection coverage endorsement. A 44R family protection coverage endorsement provides insurance to eligible claimants for damages they are entitled to receive from uninsured and underinsured motorists.

[4] Pafco crossclaimed against Kent, claiming that pursuant to Joe’s 44R endorsement Kent was the priority insurer or, in the alternative, was required to pay a pro rata share of the damages.

[5] On December 15, 2020, all parties to the action other than Mr. Langford, who had already been noted in default, entered into minutes of settlement in which Pafco agreed to pay the plaintiffs a settlement amount of $950,000 on the understanding that its priority dispute between Pafco and Kent remained to be determined. Pafco paid the settled amount, and when Pafco and Kent were unable to resolve Pafco’s claim for contribution, Pafco brought a motion for a determination of coverage under the Kent policy, as well as a determination that Kent is required to pay a pro rata share. As the motion progressed, Pafco acknowledged that it was responsible under the OAP-1 that it had issued to Ashley to pay the first $200,000 in damages, which is the limit of the mandatory uninsured motorist coverage that the policy carried. During the oral hearing it revised its position further, arguing that the Kent policy is the priority policy for the portion of the settlement funds that were attributable to Joe’s claim.

[6] On January 31, 2024, the motion judge dismissed Pafco’s motion against Kent. Pafco is now appealing that decision.

[7] The sole ground of appeal Pafco raises is that the motion judge erred in his interpretation of s. 1.6(a)(ii) of the 44R by finding that Ashley was not an “insured person”. It argues that as the result of this misinterpretation, the motion judge erroneously concluded that Kent is not required to contribute anything to the plaintiffs’ damages.

[8] Since the 44R endorsement is a standard form contract and the interpretation of s. 1.6(a)(ii) is precedential, the appropriate standard of review on the appeal is correctness.

[9] For the reasons that follow, I would allow Pafco’s appeal. In my view, the motion judge misinterpreted s. 1.6(a)(ii). Correctly interpreted, Ashley was an insured person under Joe’s 44R Family Protection Coverage endorsement with Kent, making all plaintiffs eligible claimants under that endorsement.

[10] In my view, Joe’s 44R endorsement through Kent provides priority coverage for Joe’s excess damages, beyond his share of the $200,000 that was payable pursuant to the uninsured motorist coverage in Ashley’s OAP-1. However, there is no priority coverage available for the claims made by the other plaintiffs. Pursuant to the terms of the 44Rs, Pafco and Kent are each responsible to pay, pro rata, for the damages attributable to each of the other plaintiffs beyond their respective shares of the $200,000 uninsured motorist coverage available under Ashley’s OAP-1. Kent must reimburse Pafco for its share of these payments. I would leave it to the parties to determine the precise allocations, failing which this matter may be returned to the motion judge for determination.

Analysis

The Motion Judge Misinterpreted s. 1.6(a)(ii)

[11] The motion judge determined that all plaintiffs were “eligible claimants” under Ashley’s Pafco 44R. This decision is not in dispute. He then rendered the contentious part of his decision by finding that none of the plaintiffs were eligible claimants under the Joe’s 44R endorsement because, in his view, Ashley was not an “insured person” under that endorsement.

[12] Section 1.6 of the 44R endorsement defines “insured person”. Subsection 1.6(a)(ii) is the material provision. It states, in its relevant part:

1.6 “insured person” means
(a) the named insured and his or her spouse and any dependent relative of the name [sic] insured and his or her spouse, while
(ii) an occupant of any other automobile except where the person leases the other automobile for a period in excess of 30 days or owns the other automobile, unless family protection coverage is in force in respect of the other automobile

[13] The motion judge accepted that Ashley was Joe’s spouse and that s. 1.6(a)(ii) was the operative subsection because she was “an occupant of any other automobile” at the time of the accident, being a vehicle other than the vehicle that Joe had insured. This being so, Ashley would have been an insured person under Joe’s 44R, unless subject to a policy exclusion. However, the motion judge found based on what he concluded to be the clear language of s. 1.6(a)(ii), supported by the definition of “other automobile” in the OAP-1 and the decision in Kahlon v. ACE INA Insurance, 2019 ONCA 774, that “there are two [exclusions][1] to whether any specific ‘other automobile’ will qualify under this definition”, namely: (1) “except where the person leases the other automobile for a period in excess of 30 days or owns the other automobile”, and (2) “unless family protection coverage is in force in respect of the other automobile”. He found that Ashley was disentitled from coverage under Joe’s 44R by each of these two exclusions because she owned the automobile she was driving, and family protection coverage was in force in respect of her own automobile.

[14] With respect, I do not accept the motion judge’s conclusion that s. 1.6(a)(ii) creates two distinct exclusions to the coverage that would otherwise be available when a person listed in s. 1.6(a)(ii) is in an occupant of another vehicle. In my view, the sole exclusion to coverage that s. 1.6(a)(ii) creates operates where the occupant of the other automobile “leases the other automobile for a period in excess of 30 days or owns the other automobile”. However, that exclusion does not apply (and coverage is therefore provided) if “family protection coverage is in force in respect of the other automobile”.

[15] In a decision that, in fairness, was not brought to the motion judge’s attention, Parslow v. Old Republic Insurance Co. of Canada, 2002 CarswellOnt 5176 (Ont. S.C.), aff’d 2003 CarswellOnt 1958 (Ont. C.A.), this court has already affirmed the interpretation that I am advancing.

[16] Mr. Parslow was attempting to rely on a family protection coverage endorsement on his personal vehicle to recover excess damage caused to him by an underinsured driver when he, Mr. Parslow, was operating his work vehicle. However, the insurance policy for the work vehicle did not carry a family protection coverage endorsement. Mr. Parslow argued that s. 1.6(a)(ii) excludes coverage where an otherwise insured person is an occupant of another automobile that they own if family protection coverage is in force in respect of the other automobile. He submitted that since there was no family protection coverage on the work vehicle, he was not caught by that exclusion from coverage and could therefore rely on the family protection coverage endorsement on his personal vehicle. The judge who decided the motion in Parslow flatly rejected this interpretation of s. 1.6(a)(ii). Notably, he then went on to describe the correct interpretation of s. 1(6)(a)(ii) by explicitly accepting the submission made by State Farm, the insurance company that had issued the family protection endorsement on Mr. Parslow’s personal vehicle:

A named insured is not insured under his first policy when he is an occupant of another automobile if he owns the other automobile and he does not have under insurance coverage on the other automobile. He is covered by his under insurance on the first policy if he also has under insurance coverage with the policy of insurance on the second automobile. [Emphasis added.]

[17] This interpretation, of course, is contrary to the interpretation arrived at by the motion judge in this case and aligns with the interpretation I am advancing.

[18] Significantly, when this court rejected an appeal from the motion judge’s decision in Parslow it left no doubt that it affirmed not only the result he had arrived at, but also his reasoning. It said so explicitly: “We agree with the reasons of the motion judge and therefore dismiss the appeal”. That reasoning includes the motion judge’s interpretation of s. 1.6(a)(ii). It is arguable that this court’s decision in Parslow is binding as a matter of horizontal stare decisis and settles the issue now before us, given that this court explicitly adopted the reasoning of the lower court in Parslow on a matter essential to the resolution of the case, namely, the proper interpretation of s. 1.6(a)(ii). However, neither this case nor its precedential effect was argued before us, so I will not express a view on whether this decision governs the issue on appeal. At the very least, the decision is strongly persuasive and, as I will explain, I would not depart from it.

[19] Industry commentators interpreting s. 1.6(a)(ii) and its materially similar predecessor provisions also support the Parslow interpretation and not the interpretation the motion judge arrived at in this case: see, for example, John Newcombe, The Standard Automobile Policy Annotated (Toronto: Butterworths, 1986) at p. 195; H. Barry Starr, “Standard Endorsement Form 42 and the Standard Endorsement Form 44”, County of Carleton Law Association, Civil Litigation Updated 1984, November 23, 1984, at pp.14-15; Daniel Strigberger and Andrew Mercer, Auto Insurance Coverage Law in Ontario, 2nd ed. (Toronto: LexisNexis Canada, 2021) at p. 167.

[20] In my view, the motion judge failed to arrive at this conclusion because he misapplied the principles of interpretation. The governing principles for the interpretation of insurance policies were reaffirmed in Kahlon, at paras. 38-39:

Where the language of the policy is unambiguous, the court gives effect to clear language, reading the contract as a whole. However, where the language is ambiguous, the court applies general rules of contract construction. The interpretation of the language should be consistent with the reasonable expectations of the parties, so long as the interpretation can be supported by the text of the policy. The court avoids interpretations that would give rise to an unrealistic result, or that would not have been in the contemplation of the parties when they entered into the insurance contract.

The rules of construction are to be applied in order to resolve ambiguity, not to create ambiguity where there is none. When the application of the rules of construction fails to resolve an actual ambiguity, courts will construe the policy contra proferentem – against the insurer. The corollary is that coverage provisions are interpreted broadly, and exclusion clauses narrowly.

[21] In my view, contrary to the conclusion of the motion judge, the clear meaning of s. 1.6(a)(ii), when interpreted in context, unambiguously provides for a single coverage exclusion, not two distinct exclusions. That sole exclusion operates where the occupant of the other automobile “leases the other automobile for a period in excess of 30 days or owns the other automobile”, but that exclusion does not apply, and coverage is available, if “family protection coverage is in force in respect of the other automobile”. It is helpful to reproduce the provision again before explaining how the principles of interpretation of insurance policies impel this conclusion:

1.6 “insured person” means
(a) the named insured and his or her spouse and any dependent relative of the name [sic] insured and his or her spouse, while
(ii) an occupant of any other automobile except where the person leases the other automobile for a period in excess of 30 days or owns the other automobile, unless family protection coverage is in force in respect of the other automobile [Emphasis added.]

[22] According to the grammatical sequence of clause (ii), the term “unless” naturally qualifies the thing described in the clause that is immediately before it and cannot sensibly be read as qualifying the thing described two clauses before it. Put otherwise, the word “unless” introduces a qualification to the ownership exclusion to coverage, and not to the coverage itself. To achieve the interpretation the motion judge did, the word “unless” would have to be read as though it means “or unless”, which it does not say. If s. 1.6(a)(ii) was intended to contain two distinct coverage exclusions this could have been easily achieved by assigning each exclusion its own enumerated subclause or by adding a disjunctive term such as “or” between the two clauses. Instead, the drafters merged the clauses together separated only by a comma, used different terms in introducing each of the clauses (“except where”, and “unless”), and then situated the word “unless” immediately after a clearly identified exclusion. In my view, the only reasonable interpretation that emerges is the one I describe as the correct interpretation in paragraph 14, above. I am therefore persuaded that the motion judge’s interpretation is not supported by the clear meaning of s. 1(6)(a)(ii).

[23] In my view, the motion judge’s reliance on the context of the words used in the clause is also problematic. He concluded that his interpretation of s. 1.6(a)(ii) is supported by the contract as a whole, because of s. 2.2.3 in the OAP-1. Section 2.2.3 describes the coverage that spouses have under the OAP-1 when driving other automobiles, and it includes an exclusion in Special Condition 5 which states that: “For all coverages, except Accident Benefits, the other automobile cannot be an automobile that you or anyone living in your dwelling owns or regularly uses” (emphasis added). The motion judge reasoned that since this exclusion is “virtually identical to the first [exclusion] in s. 1.6(a)(ii)” it reinforces his interpretation of s. 1.6(a)(ii).

[24] With respect, it is not entirely clear to me whether the motion judge was simply concluding that the harmony between the two exclusions reinforced his interpretation of s. 1.6(a)(ii), or whether he was of the view that Special Condition 5 of s. 2.2.3 of the OAP-1 applies pursuant to s. 22 of Joe’s 44R. Although the motion judge stopped short of explicitly stating that Special Condition 5 of the OAP-1 applies to the 44R, the possibility that he was concluding that it does is raised by the fact that he reproduced s. 22 while describing s. 2.2.3’s reinforcing effect, and said this case was “stronger” than Kahlon. As I will explain below, Kahlon dealt with the application of terms in the OAP-1 to a 44R endorsement and held that a definition contained in the OAP-1 applied to 44R coverage because the 44R endorsement did not say differently. Section 22 of the 44R, describing itself as a “change form”, provides in relevant part:

“22… Except as otherwise provided in this change form, all limits, terms, conditions, provisions, definitions and exclusions of the Policy shall have full force and effect.”

[25] In my view, whichever line of reasoning the motion judge followed, his conclusion that the exclusion in Special Condition 5 of s. 2.2.3 of the OAP-1 reinforces his interpretation is problematic. If Special Condition 5 of s. 2.2.3 of the OAP-1 governs the meaning of s. 1.6(a)(ii) it would denude s. 1.6(a)(ii) of all utility. Not only would the application of Special Condition 5 render the “first exclusion” entirely redundant, but the “second exclusion” the motion judge identified would never be needed since coverage would already be excluded by s. 2.2.3, regardless of whether the other vehicle had family protection coverage.

[26] It is important to note that Special Condition 5 and s. 1.6(a)(ii) use different language, suggesting that they are intended to bear different meanings. I agree with the motion judge that the Special Condition 5 clearly denies all of the coverage provided for in the OAP-1 to claimants who occupy their own vehicles. However, s. 1.6(a)(ii) provides otherwise relating to coverage under the 44R. As I have explained, based on its plain language it does provide coverage in some cases where the claimant is the occupant of their own vehicle, namely where that other vehicle has its own family protection coverage. Pursuant to s. 22 of the 44R, s. 1.6(a)(ii) therefore governs, rather than Special Condition 5. This is sensible. In exchange for the additional premium paid for the family coverage endorsement on both vehicles, the 44R endorsement operates as a change form and provides underinsured motorist coverage even in situations where the OAP-1 would not have provided primary insurance coverage, namely, where the person occupying their own vehicle also has a family protection coverage endorsement.

[27] Not only am I persuaded that Special Condition 5 gives no reinforcement to the motion judge’s conclusion, but in my view the other provisions in that standard form 44R endorsement that give material context to the meaning of s. 1.6(a)(ii) point away from the motion judge’s interpretation. Most notably, s. 1.6(b) of the 44R endorsement explicitly provides that an officer, employee, partner, or their spouse driving another vehicle that they, and not the named insured, own will be an insured person under the 44R coverage on a corporate vehicle, “provided family protection is in force in respect of the other automobile” (emphasis added). Why would family protection coverage for the other automobile be a condition precedent to underinsured motorist coverage where the insured vehicle is a corporate vehicle, but a disqualification to underinsured motorist coverage where the insured vehicle is personally owned? The short answer is that the two provisions do not work differently and in this absurd way; in both cases insurance will be available if and only if the occupant’s own vehicle has family protection coverage.

[28] Meanwhile, s. 7(i), describes the coverage under a 44R endorsement as excess “to the family protection coverage of another motor vehicle policy”. If the presence of family protection coverage on the other vehicle excluded coverage, then s. 7(i) would never apply. Similarly, s. 18 provides rules that “apply where an eligible claimant is entitled to payment under family protection coverage under more than one policy”. Those rules would have no application, either, if family protection coverage was to exclude coverage on the other vehicle. A term of a contract should not be interpreted to render other terms of the contract meaningless. The interpretation arrived at by the motion judge does so.

[29] With respect, the motion judge’s contextual analysis of the meaning of s. 1.6(a)(ii) is flawed.

[30] I also disagree with the motion judge’s conclusion that the Kahlon decision supports his conclusion. As I have intimated, Kahlon simply decided that, although s. 22 would have given the 44R endorsement paramountcy over a term provided in an insurance policy had the 44R change form “otherwise provided”, it does not do so when it comes to coverage for heavy commercial vehicles; the 44R endorsement neither addresses the exclusion of coverage for heavy commercial vehicles, nor does it purport to define “other automobile”. Since the coverage exclusion for heavy commercial vehicles in the OAP-1 is not qualified or contradicted by the 44R endorsement, it takes full force and effect pursuant to s. 22, depriving Mr. Kahlon of the 44R coverage he was seeking. Kahlon is therefore an illustration of a case where a different outcome is not “otherwise provided” in a 44R relative to an OAP-1. However, it does not assist in discerning whether s. 1.6(a)(ii) provides two distinct coverage exclusions or only one. To be sure, Lauwers J.A. did refer in Kahlon, at para. 71, to s. 1.6(a)(ii) but he did so to illustrate that the 44R endorsement uses the term “other automobile” differently than Special Condition 5 does. And he did make the general observation in Kahlon, at para. 68, that the “portability [of 44R coverage] is limited.” However, neither of these observations illuminate the proper outcome in this case. The decision that does address the proper interpretation of s. 1.6(a)(ii) is Parslow, and it is contrary to the conclusion the motion judge reached.

[31] I am therefore persuaded that on its plain meaning and when read in context s. 1.6(a)(ii) unambiguously provides coverage to the persons listed in s. 1.6(a) when they are driving their own vehicles, provided their vehicle has a 44R endorsement of its own. Since s. 1.6(a)(ii) is not ambiguous, it must be given this plain meaning without consideration of the principles of interpretation that apply in cases of ambiguity. For completeness, I will nonetheless address those principles because I am persuaded that even if s. 1.6(a)(ii) had been ambiguous, it could not be given the interpretation the motion judge arrived at.

[32] First, the interpretation I am advancing achieves a commercially realistic outcome that is consistent with the realistic expectations of the parties. In Parslow, at para. 14, the motion judge made an observation that explains why it is commercially reasonable for s. 1.6(a)(ii) to require both vehicles to have family protection coverage before a policy purchased for one vehicle will apply where an insured person is occupying another vehicle. He explained that if an insured person could rely on the 44R coverage on another family vehicle when driving a family vehicle that does not itself have 44R coverage, “[i]t would permit a person to obtain under insurance coverage on several automobiles by obtaining under insurance coverage on only one automobile.” He also offered an observation that explains how coverage in this situation meets the reasonable expectations of the parties. Specifically, he noted that, in contrast, it would be unfair if “[a] person who had under insurance coverage on two motor vehicles could not obtain the excess of his damages sustained when he was injured while he was an occupant of a motor vehicle from the policy of insurance for which he had paid a premium on another motor vehicle.”

[33] In contrast, the interpretation that the motion judge arrived at in this case would lead to what in my view are perverse outcomes that are neither commercially reasonable nor within reasonable expectations. On the interpretation the motion judge gave to s. 1.6(a)(ii), if one of Ashley’s children had been injured in her car, they would not be an “insured person” under Joe’s 44R because they were travelling in a car that had separate family protection coverage, even if that separate family coverage was insufficient to cover their damages and even though the family had paid for family protection insurance on both vehicles. And had Joe been injured in Ashley’s car, he could not look to his own 44R coverage because he was an occupant of another automobile that had its own family protection coverage, even if the family protection coverage on that other vehicle was inadequate. The motion judge’s interpretation would therefore produce the very unfairness Parslow described.

[34] Relatedly, the contra proferentem rule would also have prevented the motion judge’s interpretation, had s. 1.6(a)(ii) been ambiguous. Exclusions are to be interpreted narrowly, construed against the insurer: Kahlon, at para. 41. They are not to be construed in a way that limits coverage. The motion judge’s interpretation does the latter.

[35] I am therefore persuaded that Ashley was an insured person under Joe’s 44R endorsement while operating her vehicle at the time of the accident, therefore the plaintiffs are eligible claimants against that policy. I would find that the motion judge erred in holding otherwise.

The Coverage Priorities

[36] Kent argues that Ashley’s OAP-1 policy is first loss insurance pursuant to s. 277 of the Insurance Act, R.S.O. 1990, c. I.8, which provides that “a valid owner’s policy” is first loss insurance and “any other valid motor vehicle liability policy is excess insurance only.” They submit that since Ashley’s Pafco policy is a valid owner’s policy coverage under s. 277, Joe’s 44R is not required.

[37] It is true, as Pafco now recognizes, that pursuant to s. 277 Ashley’s OAP-1 policy is first loss insurance for the $200,000 in uninsured motorist coverage that it carries. However, the Insurance Act does not provide underinsured motorist coverage, and therefore it does not apply to coverage under an optional 44R endorsement: Pilot Insurance Company v. Sutherland, 2007 ONCA 492, at paras. 32-36. As Sharpe J.A. noted in Benson v. Walt, 2018 ONCA 172, at para. 13: “Subsection 277(1) deals with the priorities as between primary motor vehicle insurance policies and its reach does not extend to any and every type of policy that might have to respond once the policy limits of applicable motor vehicle policies are exhausted” (emphasis added). Where there is a priority dispute between two 44Rs, a court must therefore look to their provisions, not to s. 277.

[38] In the alternative, Kent argues pursuant to s. 7(i) of the 44R that any coverage from its 44R is excess coverage and therefore there is nothing for it to contribute. Section 7(i) of the 44R provides that “the amount payable … to an eligible claimant” under 44R endorsement is “excess to amounts of another motor vehicle liability policy”. This submission is also incorrect. By its terms, s. 7 addresses the amount of insurance available to an eligible claimant, not the amount of insurance provided by the policy as a whole: see Keelty v. Bernique, at para. 23. Ashley’s OAP-1 provided only $200,000 in coverage that was legally available to the plaintiffs, through its uninsured motorist coverage. The two 44Rs must therefore be looked to for the excess over the $200,000 that Pafco must pay eligible claimants under the primary policy, in this case $750,000. The share of that $750,000 excess insurance that each eligible claimant can look to under the 44R endorsements is the amount of the damages that they are each entitled to that exceed their proportionate share of the $200,000 uninsured motorist coverage provided by Ashley’s OAP-1: see McGrath v. Arshad (2008), 79 M.V.R. (5th) 158 (Ont. S.C.).

[39] For the reasons I have provided, Joe is an eligible claimant under both Ashley’s Pafco 44R endorsement and his own 44R endorsement. Section 18(a)(ii) of the 44R endorsement applies to resolve which insurer must pay him. It provides:

18. The following rules apply where an eligible claimant is entitled to payment under family protection coverage under more than one policy:
    (ii) if he or she is not an occupant of an automobile, such insurance in any policy in the name of the eligible claimant is first loss insurance and any other such insurance is excess.

[40] Since the Kent policy is in Joe’s name, it is the first loss insurance for his damages that exceed his share of the $200,000 coverage available under Ashley’s OAP-1 uninsured motorist coverage. Kent alone is responsible for Joe’s excess claim.

[41] The remaining plaintiffs do not have 44R policies in their names, so s. 18(a)(ii) does not apply to them. But they too are eligible claimants under both Ashley’s Pafco 44R endorsement and Joe’s Kent 44R endorsement since Ashley was an insured person under both policies. Since neither policy designates first loss insurance in their case, s. 18(d) governs. It provides in relevant part:

18. The following rules apply where an eligible claimant is entitled to payment under family protection coverage under more than one policy:
    (d) all applicable excess family protection coverage shall be similarly apportioned on a pro rata basis….

[42] Pursuant to this provision, Pafco and Kent bear pro rata responsibility for excess damages payable to the remaining plaintiffs beyond their share of the $200,000 uninsured coverage that is available to them under Ashley’s OAP-1.

Conclusion

[43] I would allow the appeal and set aside the motion judge’s decision. I would order the respondent Kent to pay to the appellant Pafco the share of the damages attributable to Kent that Pafco has paid, according to the principles I have described. If the parties cannot settle on the amount that Kent must pay, Pafco may bring a motion for the motion judge to settle the amounts that it is entitled to.

[44] As agreed between the parties, Kent is to pay $5,000 in costs in the appeal to Pafco, inclusive of disbursements and applicable taxes.

Released: June 4, 2025

“David M. Paciocco J.A.”
“P.J. Monahan J.A.”
“D.A. Wilson J.A.”

[1] The motion judge used the word “exception” to describe what, in my view, should be referred to as an “exclusion”.