Paul C. Dawson

Oscar Furtado appealed a decision denying him Directors and Officers insurance coverage and relief from forfeiture.

The Ontario Securities Commission (OSC) initiated an investigation against Furtado's real estate development business, Go-To, during the policy period.

While a confidentiality order initially prevented disclosure to the insurer, the law changed in December 2019 to permit such disclosure.

Furtado was explicitly notified of this change in February 2021 but did not report the investigation to Lloyd's Underwriters until February/March 2022, after the OSC commenced formal proceedings.

The Court of Appeal upheld the application judge's finding that Furtado's failure to report the investigation once legally permitted constituted non-compliance with a condition precedent to coverage, rather than imperfect compliance.

Consequently, relief from forfeiture was unavailable, as granting it would extend coverage beyond the bargained-for terms of the claims-made and reported policy.

The appeal was dismissed.

The applicant sought relief from forfeiture for late notice of a claim under a Directors and Officers' Liability Policy, arguing imperfect compliance.

The respondent denied coverage, asserting non-compliance with a condition precedent.

The court found the applicant's delay in notifying the insurer, after the Securities Act amendment permitted disclosure, constituted a substantial breach and caused prejudice to the insurer in a claims-made policy.

Consequently, relief from forfeiture was not available, and the application was dismissed.