Court File and Parties

COURT FILE NO.: CV-16-561894 DATE: 2019/05/02

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

THE LION BAR & GRILL LTD. and THANUSHAN BALASINGHAM Plaintiffs

• and - APRIL CANADA INC. and 2360880 ONTARIO LTD. Defendants

Counsel: Odette Fraser, for the Defendants

Heard: May 1, 2019.

Before: PERELL, J.

Reasons for Decision

A. Introduction

[1] April Canada Inc. brings a summary judgment motion to have the action of the Plaintiffs The Lion Bar & Grill Ltd. and Thanushan Balasingham dismissed as against it.

B. Facts

[2] The Plaintiff, Thanushan Balasingham for Ajax, Ontario, is the owner of the co-Plaintiff, The Lion Bar & Grill Ltd., an Ontario Corporation that operated a pub on Brock Street North in Whitby.

[3] Following an application for insurance, four Underwriters agreed to provide the Plaintiffs a commercial insurance policy to the Lion Bar & Grill. (Policy No. T06295).

[4] The four subscribing Underwriters for the insurance policy were: (1) Lloyd’s Underwriters under Agreement No. B1191CR140149B(AF) (25% share); (2) Lloyd’s Underwriters under Agreement No. B1191CR140150B(AC) B1191 (25% share); (3) Northbridge Insurance (25% share); and (4) Temple Insurance Co. (Property) 2014 under Contract No. Temple 2014 (25% share).

[5] The Defendant, April Canada Inc., which is an Ontario corporation, is a wholesaler of insurance products. April Canada was the wholesaler of the insurance policy provided to the Plaintiffs.

[6] April Canada was an intermediary; there is no contract or legal relationship between April Canada and the Plaintiffs.

[7] The coverage provided by the insurance policy included property insurance coverage. The policy covered the period from December 5, 2014 to December 5, 2015. The policy was then amended on August 31, 2015.

[8] On October 8, 2015, there was fire at the Lion Bar & Grill. The fire loss was reported to Underwriters by Mr. Balasingham, who sought coverage under the insurance policy.

[9] The Underwriters appointed Henry Scullion of the independent insurance adjusting firm ClaimsPro to investigate the loss. The Underwriters accepted that the loss fell within coverage under the insurance policy.

[10] Although a proper proof of loss claim form was not submitted, the Underwriters assessed the fire loss claim and paid in full for claims of: (a) debris removal - $13,893.28; (b) stock - $15,000; (c) business interruption - $28,291; (d) equipment - tenant’s improvements - $959.30; (e) equipment – electronics - $3,766.95 and $3,121.71; and (f) equipment - restaurant equipment - $8,430.

[11] The stock loss exceeded the available insurance limit of $15,000, and a settlement in this amount was reached between counsel for the Plaintiffs and counsel for Underwriters.

[12] Underwriters retained an independent accounting firm, Matson, Driscoll & D’Amico, to calculate the business interruption loss of the plaintiffs. The Underwriters agreed to make payment to the Lion Bar on the basis of the maximum available coverage under the policy, which was twelve months from the date of loss.

[13] The Lion Bar was entitled to payment, on actual cash value basis, for the restoration cost of any damaged electronics and restaurant equipment, to the extent that the restaurant equipment and/or electronics could be repaired. The estimate from The Newtron Group for the restoration of the damaged electronic equipment was $3,766.95. The total value of the electronic items that were deemed unrepairable was $4,865 on a replacement cost basis. The policy provided coverage only for actual cash value, not replacement cost. Applying the policy’s depreciation factor of 7.7/12 and based on the remaining term of the lease at the time of the fire, the valuation of the loss was $3,121.71.

[14] The policy provided coverage for the cost of restoring damaged restaurant equipment. The estimated restoration cost from Relectronic-Remech, was $8,430.

[15] On October 8, 2015, the same day as the fire, the Plaintiffs sued April and the Defendant, 2360880 Ontario Ltd., for damages arising out of the fire loss. The action was brought before the Underwriters had completed their investigations and it was continued after the Plaintiffs received the payments described above.

[16] April Canada brings a summary judgment motion to have the action dismissed. It submits that the action is not viable because April Canada is not a proper party and rather it is the Underwriters that ought to have been sued, but, in any event, April Canada submits there is no claim because the Plaintiffs have been paid in full for all claims arising out of the fire loss that were covered by the insurance policy.

[17] The action was commenced before the submission of a sworn proof of loss, which actually never occurred. There never was a refusal to extend coverage or to pay under the policy. April Canada submits that the action should never have been brought.

[18] The Plaintiffs did not file responding materials. They adduced no evidence to suggest that the amounts paid out under the insurance policy were incorrect, miscalculated, or insufficient in any way. The Plaintiffs mounted no defence to the summary judgment motion and did not appear to oppose the motion although duly served.

[19] Accordingly, April Canada is entitled to a judgment dismissing the action as against it with costs of $10,000, all inclusive.

Perell, J.

Released: May 2, 2019