Sébastien A. Kamayah

Three consolidated applications concerning the duty of various insurers to defend Ontario in connection with a bridge collapse in Elgin County in 2018.

Ontario sought orders requiring Aviva Insurance Company of Canada and Royal & Sun Alliance Insurance Company of Canada to defend two related lawsuits and to share defence costs equally.

The insurers argued they had no duty to defend or, alternatively, that defence costs should be allocated on a "time on risk" basis.

The court found that Aviva and RSA owed a duty to defend based on the allegations of property damage to anchor rods occurring during their respective policy periods, despite the loss of use occurring after the policies expired.

The court rejected the "all sums" approach and adopted a "time on risk" allocation, requiring Aviva to pay 5.5% and RSA to pay 11.1% of defence costs.

The secondary applications by Aviva and RSA against AIG and St. Paul were dismissed as moot.

This decision concerns the interpretation of an insurance policy following a flood at the City of Thunder Bay’s wastewater pollution control plant.

The central issue was whether increased repair costs required by building code upgrades were subject to a $10 million sub-limit.

The court found that the policy was unambiguous and that the sub-limit applied to all code compliance costs, rejecting the City’s argument that broader coverage was available.

The court also addressed costs, awarding the insurers $25,000.

This appeal addressed whether two insurers, AIG and Lloyd's, had a duty to defend a mutual policyholder (the City of Timmins) in a progressive property damage claim.

The key issues were the role of "premature" evidence in duty to defend analysis, the interpretation of an "Expected or Intended Injury" exclusion clause, and whether a "crystallizing event" (an AMEC Report) triggered this exclusion.

The Court of Appeal upheld the application judge's decision, finding that the AMEC Report was "premature" evidence and not a "crystallizing event" that would negate Lloyd's duty to defend.

The court affirmed that the underlying claim was based on negligence, not intentional conduct, and therefore the exclusion clause did not apply, triggering Lloyd's duty to defend.

The applicant and respondents both provided professional liability insurance to a nurse facing a disciplinary complaint from the College of Nurses of Ontario.

Both insurers acknowledged a duty to defend.

The applicant sought an order that the respondents share the defence costs equally, arguing their 'other insurance' clauses were irreconcilable.

The court found that the 'other insurance' clause in the applicant's policy only applied to claims for compensatory damages ('professional incidents'), not disciplinary complaints.

Therefore, the clauses could be read together, making the applicant the primary insurer for the disciplinary complaint.

The application was dismissed.

This endorsement concerns a request to reconsider a costs disposition made on July 27, 2021.

The moving party for the reconsideration (respondents in the underlying appeal) had their costs submissions filed late and not forwarded to the panel.

The court reviewed the submissions but found no reason to vary the original costs order, confirming the previous disposition.

AIG Insurance Company of Canada brought an application seeking equitable contribution from Lloyd's Underwriters towards the cost of defending the City of Timmins in an underlying property damage action.

AIG and Lloyd's provided consecutive liability insurance policies to the City.

Lloyd's denied coverage, arguing the damage was not an 'occurrence' or fell under the 'expected or intended' exclusion due to a preliminary engineering report received by the City.

The court found the engineering report was not definitive enough to crystallize the loss or make the ongoing damage expected or intended.

The court held that the underlying claim raised a mere possibility of coverage, triggering Lloyd's duty to defend, and ordered Lloyd's to pay 50% of the defense costs.

AIG Insurance Company of Canada sought substantial indemnity costs against The Corporation of the City of Markham and Lloyd’s Underwriters following a motion for reconsideration of an appeal decision.

The court found the reconsideration motion to be entirely without merit, having put AIG to needless expense.

Consequently, the court awarded AIG $13,000 in substantial indemnity costs, inclusive of disbursements and taxes, payable forthwith.

The respondents (moving parties on the motion) sought reconsideration of a Court of Appeal decision rendered 15 months prior.

The motion was dismissed as lacking merit, with the court emphasizing the principle of finality.

Reconsideration is rarely granted, especially when the moving party has already unsuccessfully sought leave to appeal to the Supreme Court of Canada on the same arguments, which was dismissed.

This appeal concerns a dispute between two insurers, AIG Insurance Company of Canada and Lloyd's Underwriters, regarding their respective duties to defend the City of Markham in a personal injury action.

The application judge had found AIG solely responsible for the defence and denied AIG the right to participate in the defence.

The Court of Appeal allowed the appeal, holding that both AIG and Lloyd's had a concurrent duty to defend the City, and must share defence costs equally, subject to reallocation at the conclusion of the action.

Furthermore, the Court found that AIG has a right to participate in the defence, including retaining and instructing counsel, provided a "split file" protocol with additional safeguards is implemented to manage potential conflicts of interest.

The City of Markham brought an application seeking a declaration that AIG had a duty to defend it in an underlying personal injury action, and that the City was entitled to appoint independent counsel at AIG's expense due to a conflict of interest.

AIG conceded the duty to defend but disputed the right to independent counsel, pre-tender costs, and argued Lloyd's should share defence costs.

The court found a reasonable apprehension of conflict of interest, entitling the City to independent counsel.

The court denied pre-tender costs based on policy wording and held AIG responsible for all defence costs, including uncovered claims, subject to a right of reimbursement from Lloyd's.

In this addendum to a previous judgment, the Court of Appeal amended its declaration regarding the duty to defend under commercial general liability policies.

The court removed Royal & Sunalliance Insurance Company of Canada from the declaration, as it had settled prior to the appeal.

The court also removed a stipulation regarding a Professional Services Exclusion, which the insurers had withdrawn reliance upon.

Finally, based on a prior agreement between the parties, the court vacated its previous costs award and directed submissions for full indemnity costs.

The appellants appealed a motion judge's decision that their insurers had no duty to defend them in an underlying action regarding defective septic systems.

The Court of Appeal found that the motion judge erred by applying the 'Your Work' exclusion after correctly identifying that the underlying pleadings raised the mere possibility of consequential damages.

Because consequential damages are not excluded by the 'Your Work' exclusion, the mere possibility of such claims triggered the insurers' duty to defend.

The appeal was allowed and a declaration compelling the insurers to provide a defence was granted.

The defendants brought a motion for an order compelling the plaintiff to produce certain documents, specifically correspondence with its property and liability insurer and insurance broker, and all relevant insurance policies.

The plaintiff did not oppose the production of insurance policies but resisted the production of correspondence, arguing irrelevance.

The court granted the production of the insurance policies but dismissed the request for correspondence, finding that the defendants' pleadings did not establish the relevance of such documents to the issues in the action or the pending summary judgment motion, characterizing the request as a "fishing expedition."

The applicant, who operated a wood shavings business, was sued for negligence after a tree he was cutting down fell and injured the plaintiff.

The applicant sought a declaration that his homeowner's insurer (Northbridge) and his commercial general liability insurer (Economical) had a duty to defend the action.

The court held that Northbridge had no duty to defend because the tree cutting was an occasional pursuit undertaken for financial gain, falling squarely within the policy's business exclusion.

However, the court found that Economical had a duty to defend because the policy covered the applicant as a sole owner of a business, and it was possible the tree cutting arrangement did not constitute a joint venture or partnership that would fall outside coverage.

The applicant's request to appoint independent counsel was dismissed as premature.

The moving party sought an order compelling the insurer and broker defendants to produce additional documents and deliver a further and better affidavit of documents in an action concerning insurance coverage and alleged breach of the duty of utmost good faith.

The dispute arose after the insurer denied coverage relating to failures of transformers in solar installations, and the plaintiff alleged the defendants conducted an inadequate investigation and acted in bad faith.

The court held that the agency agreement between the insurer and broker, the underwriting file, and the claims and investigation files were relevant to issues of coverage and bad faith and therefore producible.

The court further found that the defendants failed to properly establish claims of solicitor‑client privilege and litigation privilege and ordered more particularized privilege schedules.

The motion was granted and the defendants were ordered to produce the requested documents and communications within 30 days.

On motions under Rule 21, the court considered insurance coverage issues arising from alleged failures of valves installed in condominium HVAC systems that led to flooding claims.

The court held that the duty to defend could be determined on the pleadings and policy wording, notwithstanding unresolved factual disputes relating to waiver, estoppel, misrepresentation, fortuity, and exclusions.

Reading the underlying claims broadly and drawing reasonable inferences, the court found a mere possibility that the defective valves deteriorated progressively from installation through failure, thereby constituting property damage during both insurers' policy periods.

Continental's motion denying any duty to defend was dismissed, and declarations were granted that the claims potentially fell within both policies, with Continental bound to defend.