Fenos v. Manulife, 2019 ONSC 6861

COURT FILE NO.: CV-16-24044; CV-16-24044-A1; CV-17-25007

DATE: 20191127

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CV-16-24044 and CV-16-24044-A1

EZIO FENOS Plaintiff

– and –

FACCA INCORPORATED Defendant

– and –

THE MANUFACTURERS LIFE INSURANCE COMPANY Third Party

COUNSEL: Donald W. Leschied, for the Plaintiff David Cowling, for the Defendant, Facca Incorporated Gordon Jermane, for the Third Party, The Manufacturers Life Insurance Company

HEARD: October 2, 2019

AND BETWEEN:

CV-17-25007

EZIO FENOS Plaintiff

– and –

THE MANUFACTURERS LIFE INSURANCE COMPANY Defendant

COUNSEL: Donald W. Leschied, for the Plaintiff Gordon Jermane, for the Defendant

HEARD: October 2, 2019

REASONS ON SUMMARY JUDGMENT

POMERANCE J.

OVERVIEW

1This matter involves several competing summary judgment motions being heard together.

2Ezio Fenos (“Fenos”) was terminated from employment by Facca Incorporated (“Facca”). The parties entered into an agreement whereby Fenos would receive certain payments if he “sought reasonable alternate employment” during the designated time period. Some time after his termination, Fenos became disabled as a result of serious illness. He was, therefore, unable to seek alternate employment. Facca argues that Fenos’ failure to seek alternate employment relieves the company of its obligation to pay. The company seeks summary judgment on that basis. Fenos argues that his inability to seek alternate employment excused him of that obligation. He seeks summary judgment against the company on the basis that they are required to make the payments.

3After his illness developed, Fenos applied for long-term disability benefits from The Manufacturers Life Insurance Company (“Manulife”), the insurance company with whom Facca held a group policy. Manulife denied the claim arguing that Fenos’ illness occurred after the coverage period. Manulife says that the coverage period was the eight weeks provided for in the Employment Standards Act 2000, S.O. 2000, c. 41. Fenos says that the coverage period was the 24 months promised by Facca upon termination. In its third party claim against Manulife, Facca supports Fenos’ claim against the insurance company. Fenos and Facca seek summary judgment against Manulife. Manulife resists the motion, arguing that there are genuine issues for trial.

BACKGROUND AND EVIDENCE

The Termination Agreement

4The plaintiff Fenos was employed with the defendant Facca for 32 years in various roles. Facca is a construction company headquartered in Ruscom Station, Ontario. They have been involved in heavy civil construction for over 50 years and specialize in bridge construction, though they have branched into other sectors of the construction industry.

5Fenos characterizes his involvement as starting at Facca as an apprentice engineer who eventually became a co-owner and partner of Facca; Facca portrays Fenos’ involvement as an employee who started as a labourer and finished in the role of a foreman. It is undisputed that at the end of his employment he was making approximately $75,000 per year as his base salary.

6Fenos’ employment was dismissed without cause on January 5, 2015, and a settlement agreement was negotiated. There remains unresolved litigation regarding Fenos’ purported involvement as director or minority shareholder of the holding company that owns Facca, 2090193 Ontario Inc.

7The settlement agreement provided for an initial payment of $56,250, subject to Fenos returning Facca’s property, and two other payments of $75,000, to be payable on or about September 30, 2015 and September 30, 2016 respectively. The two payments of $75,000 were subject to Fenos seeking reasonable alternate employment, with a corresponding reduction of the payment for that period should he fail to do so, or if he received income from such reasonable alternate employment or any other source. There was an additional $5,000 available for reimbursement of fees incurred towards securing alternate employment.

8The settlement agreement also provided for the continuation of insurance coverage for Fenos and his family through to December 31, 2016, “subject to benefit amendments instituted by the Corporation or Carrier which impact the group during this period”.

9Manulife is the carrier who provided Facca employees with insurance coverage pursuant to a Group Insurance Plan (the “Group Policy”) which included long-term disability (“LTD”) coverage. Fenos was covered under the policy because he was an employee of Facca. Fenos’ insurance policy was designated as a Class “A” “Executives” policy as opposed to Class “B” for “Office Employees” or Class “C” for “Shop Employees”. While all policies were billed by Manulife to Facca, Class “A” members reimbursed Facca while Facca paid for billings for Class “B” and “C” insured.

10Shortly following Fenos’ termination, he registered with Canada Manpower to seek alternate employment and made one phone call in pursuit of it. He states he experienced depression about his termination and that longstanding pre-existing illnesses of diabetes, hypertension and hypercholesterolemia became symptomatic. Fenos states by late February 2015 he was effectively unable to leave his house in search of any employment.

Fenos’ Illness

11Fenos’ spouse booked an appointment with his family doctor for a non-urgent visit scheduled for March 19, 2015. Fenos’ condition substantially worsened in March and he did not attend the appointment. He was taken to a hospital by ambulance because of difficulty breathing on March 19, 2015, where he developed sepsis of unknown origin leading to acute renal failure and septic shock. He underwent emergency surgery and rehabilitation but will be on dialysis twice weekly for the remainder of his life. He was initially confined to a wheelchair for several months. He has since applied for and been in receipt of Canada Pension Plan (“CPP”) Disability Benefits.

Suspension of Payment by Facca

12Counsel for Facca contacted Fenos in advance of the September 30, 2015 payment, at which time he communicated that he was extremely ill and unable to seek reasonable alternate employment. Facca suspended payment of the additional $75,000 for 2015 and later similarly refused to make the 2016 payment on the grounds he had failed to mitigate, or that the obligation to pay became frustrated or void once Fenos was disabled.

Application for Long Term Disability Benefits

13Facca advised Fenos to apply for disability benefits to Manulife and the insurance broker AON Hewitt (“AON”) provided Fenos’ counsel with the forms required. Facca had continued to remit monthly premiums on Fenos’ behalf which were accepted by Manulife.

14Facca had not requested a benefits extension and Manulife was unaware Fenos’ employment had been terminated until AON contacted them. Facca submitted a Continuation Request Form on October 7, 2015. Although Facca attempted to add an extension for LTD coverage, the form did not have a section for it, and the form stated “Disability benefits will not be continued”.

15The Group Policy provides that where someone no longer satisfies the definition of “Employee” their insurance is terminated. Manulife states they were not aware of Mr. Fenos’ dismissal until approximately nine months after the fact. Manulife will extend each insurance benefit for “the minimum period required by law”, provided that the policyholder continues to pay premiums and the policy remains in force.

16Through AON, Facca and Manulife attempted to resolve the extension of LTD coverage for Fenos throughout October and November of 2015. Manulife advised AON on November 2, 2015 that health and dental benefits would be extended on an exceptional basis to December 31, 2016 but that LTD coverage would remain extended only for the eight-week legislated notice period in the Employment Standards Act, 2000. Manulife prepared a Memorandum of Agreement that would limit Fenos’ benefits on November 6, 2015 which was sent to AON. This Memorandum was later cancelled on November 16, 2015 at the request of AON.

17Manulife recommended Facca obtain individual LTD insurance for Mr. Fenos. They continued to accept the premiums paid on Fenos’ behalf.

18Fenos completed an application for LTD benefits. Manulife advised Fenos that his claim was denied on February 16, 2016 (and on February 23 with a corrected date). At the end of February 2016, Fenos’ counsel informed Facca that Manulife had denied his application for LTD benefits on the grounds his coverage had terminated on March 5, 2015 as a result of his dismissal.

19Facca had continued to pay premiums for Fenos until March 4, 2016, at which time Manulife, through AON, again issued a Memorandum of Agreement which stated Fenos’ LTD coverage had ended on March 5, 2015, the end of the minimum eight-week period indicated in ss. 57(h) and 60 of the Employment Standards Act, 2000. Manulife also refunded the premiums paid on Fenos’ behalf to Facca.

20Manulife characterizes this as an extension of coverage from the termination date of January 5, 2015; Facca characterizes it as retroactively terminating Fenos’ coverage to March 5, 2015 (though the eight-week period technically expired on March 2, 2015). Facca’s understanding of that Memorandum and the consequence of their accepting the refund of premiums is disputed.

21Separate actions were begun by Fenos against Facca and Manulife by statements of claim in August 2016 and May 2017. Facca subsequently issued a third party claim against Manulife in the action against them.

SUMMARY JUDGMENT PRINCIPLES

22There will be no genuine issue requiring a trial when the motions judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will occur when the process (1) allows the judge to make the necessary findings of fact; (2) allows the judge to apply the law to the facts; and (3) is a proportionate, more expeditious and less expensive means to achieve a just result [than a trial]: see Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 49.

23On a motion for summary judgment, the judge should first determine if there is “a genuine issue requiring a trial” based only on the evidence before them, without using the new fact‑finding powers. If there appears to be a genuine issue requiring a trial, they should then determine if the need for a trial can be avoided by using the fact‑finding powers under r. 20.04(2.1) and (2.2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194: see Hryniak, at para. 66. Each side must “put its best foot forward” with respect to the existence or non-existence of material issues to be tried: see Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 SCR 372, at para. 11.

24The plaintiff states this is a straightforward claim to enforce a termination undertaking and cites several cases to the effect that straightforward wrongful dismissal claims are amenable to summary judgment: see Arnone v. Theratronics Ltd., 2015 ONCA 563, 329 O.A.C. 284, at para. 12; O’Reilly v. Imax Corporation, 2019 ONSC 342, at paras. 14-15. Those cases did not involve the interpretation and an enforcement of a settlement agreement following termination nor concomitant disability insurance issues. However, in this case, the factual issues are largely not in dispute, including the following: biographical facts about the plaintiff, his dismissal without notice, and the medical evidence establishing that the plaintiff is disabled within the meaning of the Group Policy if entitled to coverage.

25Manulife submits this is not a case for granting the plaintiff’s summary judgment motion and that there are genuine issues for trial, including whether the plaintiff became totally disabled during the eight-week period that Manulife says exhausted his coverage.

THE TERMINATION AGREEMENT

26The first issue concerns the termination agreement entered into by Fenos and Facca. Some time later, Fenos suffered a severe illness, resulting in total disability. As a result of his illness, he became unable to search for reasonable alternate employment. Fenos seeks to enforce the employer’s promise to pay. Facca says that, because the employee failed to satisfy the condition in the agreement, it is relieved of its obligation to pay the outstanding amounts.

27The interpretation of a contract requires consideration of the objective intentions and expectations of the parties. In this case, those expectations crystallized on the date of termination. One can presume that the condition was placed in the contract to ensure that Fenos was diligent in mitigating his loss, with a view to reducing the amount of the second and third payments. If Fenos was capable of searching for work, and did not do so, this would be a wilful failure to mitigate and that was the mischief sought to be addressed.

28That is not what happened. Fenos did not willfully fail to comply. He became unable to do so. I find that his disability and resulting incapacity was not within the reasonable contemplation of the parties at the time of the agreement. Fenos would not logically agree to a condition that required him to do that which was physically impossible. Similarly, the company could not, in good faith, have imposed such a condition without clearly stipulating that that was their intent. The only rational inference is that both the employee and the employer contemplated that Fenos would be required to seek reasonable alternate employment so long as he was capable of doing so. This qualification is an implied term of the agreement, reasonably expected by the parties, and not overridden by the language of the agreement.

29Facca argues that the failure of Fenos to discharge his obligations renders the entire contract frustrated, with the effect that Facca’s argument to pay is unenforceable. However, I do not agree. The effect of the incapacity is not to rescind the contract in its entirety. The effect is to modify the nature of the obligation on the employee. He was to do it if he could, as a condition of payment. If he could not do it, that condition could not be satisfied, and he would not be held to an impossible requirement. This relieved Fenos of his duties under the contract, but did not extinguish the employer’s obligation to pay.

30Facca relies on the case of Rickards (Estate of) v. Diebold Election Systems Inc., 2007 BCCA 246, 241 B.C.A.C. 263, in which the court held that a similar termination agreement was frustrated by the death of the employee. The court in Rickards noted “[t]hat the death of a party brings to an end a contract requiring personal performance is a venerable principle of the common law” (para. 40). I see Rickards as being distinguishable. First, death is distinguishable from disability. One might reasonably presume that a termination agreement would only continue so long as the employee recipient was alive to receive the benefits. In Rickards, the employee died. The employee’s death prevented him from seeking alternate work but it also extinguished his personal need for compensation.

31How different this case is, where the employee is still alive, in need of compensation, and unable to seek alternate employment. The decision in Rickards must be considered against the Court of Appeal’s decision in Brito v. Canac Kitchens, 2012 ONCA 61, 287 O.A.C. 293, in which, at para. 16, Cronk J.A. observed that “[t]here can be no obligation to mitigate damages by finding alternate employment where the employee is totally incapable of working.” While Brito did not involve interpretation of a termination agreement, the reasoning is equally persuasive in this context.

32Facca says that Brito is different because the rights of the employee crystallized at the time of termination. He says that, in this case, the agreement stipulated that the right to payment arose on specific dates in 2015 and 2016. It was on those dates that the employee’s efforts to secure alternate employment was to be assessed. That may well be. However, even if the right to full payment did not attach on the date of termination, the parties’ objective expectations were set on that date.

33Facca’s argument is based on a very literal reading of the term in the agreement. The employee did not seek employment and therefore, regardless of the circumstances, is disentitled to payment. However, the literal approach can also lead to absurdity. Suppose that Fenos had phoned several employers to see if positions were available. That could theoretically constitute compliance with the literal terms of the agreement, though Fenos would have to decline any offers of employment due to his disability.

34In short, the reference to “reasonable alternate employment” must logically refer to employment reasonably available in all of the circumstances. Mr. Fenos’ circumstances make it impossible for him to work anywhere. There is no reasonable alternate employment to be sought. A failure to seek out that which does not exist cannot be seen as a breach of the terms of the contract.

35There is no genuine issue for trial as it relates to the termination agreement. The facts are the subject of agreement, including the terms of the contract, and the nature of Fenos’ disability. I am satisfied that summary judgment should be issued against Facca in relation to Fenos’ claim to enforce the termination agreement and to receive the two outstanding payments of $75,000 each.

CLAIMS AGAINST MANULIFE

36The second issue concerns Fenos’ application for LTD benefits following his termination. The policy provided that the insurance coverage would continue for the “minimum period required by law”. Manulife argues that this must refer to the statutory period of eight weeks provided for by the Employment Standards Act, 2000. The eight-week period in this case would have expired on March 2, 2015, though Manulife has rounded it up to March 5 of that year.

37Fenos was hospitalized on March 19, 2015. It is unclear whether Fenos became totally disabled before his hospitalization and, if so, whether that fell within the eight-week period. If the eight-week period is the operative guideline, the question of when Fenos became totally disabled is a genuine issue requiring a trial.

38Fenos and the employer, Facca, argue that there is no issue for trial because Manulife’s interpretation of the policy is incorrect. They say that the reference to the minimum period required by law is not restricted to the Employment Standards Act, 2000. It more properly refers to all types of law, including the common law, and contract law. Both argue that the period of 24-months coverage, offered by Facca to Fenos, is the relevant period of coverage. Fenos became clearly and totally disabled on March 19, 2015, well within that period. Therefore, they argue that summary judgment should be issued against Manulife.

39Here, again, the facts are largely uncontested. The central question is the interpretation of the reference to a “minimum period required by law” in clause 28 of the policy. Is that a reference to the minimum statutory period set by the Ontario Employment Standards Act, 2000? Or is it the minimum period of notice that would be calculated at common law, or set by a termination agreement?

40Manulife advances various arguments in support of its interpretation. It says that the “minimum period” must refer to statute because there is no minimum period of notice prescribed by common law. Common law will set the entitlement of an employee to a certain notice period, but does not per se deal with minimum periods. Manulife notes that the opening words of the clause speak to the existence of legislation. This reference would be entirely unnecessary if the period of coverage was governed by common law or contractual terms. Manulife also notes that there are undesirable commercial implications if it is held responsible for the notice period assumed by the employer. Manulife does not have input into the amount of notice given to an employee, or for which payment is required in lieu thereof. It would be wrong to allow a decision by an employer, decided independently of Manulife, to bind Manulife. Manulife argues that if an employer wishes an employee to have coverage beyond the eight-week period, the employer should purchase different or additional insurance. Manulife says, for example that the employer can negotiate for coverage during the minimum “common law” period of notice. Finally, Manulife argues that it would not realistically contract to cover a moving target – a notice period that is different in every case and cannot be precisely determined in advance.

41Fenos and Facca disagree with Manulife. They argue that the minimum period required by law must go beyond the eight-week period in the Employment Standards Act, 2000. It is clear, they say, that an employer is required to offer salary and benefits for the period of reasonable notice which will often be far more than eight weeks. If the common law requires the employer to offer benefits for a period longer than eight weeks, the insurer must be bound to honour the coverage period. Otherwise it is a hollow entitlement. Fenos and Facca say that it is commercially impracticable to require an employer to purchase additional or different insurance, in order to cover the common law period of notice. It is said that this is not done within the industry. Nor, it is said, is it practical to require the employer to provide the benefits to the employee. The employer has a duty to maintain coverage by paying premiums, as it did in this case (though the employer was reimbursed by the employee). However, to require the employer to pay the employee benefits, such as long-term disability benefits, is going too far. This is not a commercially viable position, particularly when it comes to small companies. Fenos and Facca argue that the obligation on Manulife must be temporally co-extensive with the obligation of the employer, whatever that period might be in a given case. They invoke the contra preferendum rule, which provides that, if the insurance contract is ambiguous, it must be interpreted in accordance with the interests of the insured.

42Manulife responds by saying that the term is not ambiguous and must instead be interpreted in accordance with the language of the clause.

43These competing analyses stand in stark contrast to one another. Both have support in policy, principle and logic. How then do I decide which interpretation should be adopted? The decision of this court stands to have implications beyond the interests of the parties before me. This is not a standard form contract such as one finds in the automobile insurance context. However, there is every reason to believe that this is a standard clause found in many group insurance policies purchased by employers. There is no reason to believe that this is a unique formulation, or that it was specifically negotiated by the parties in this case. There is no evidence disclosing the nature of any negotiations that did or did not take place between Facca and Manulife when the policy was obtained.

44Counsel advise that there are no authorities that deal directly with the issue of what this clause – specifically, “minimum required by law” - means in an insurance contract. Manulife explains the dearth of case law by saying that their interpretation is so universally accepted that it is not challenged in court. Facca offers the same explanation, suggesting that its interpretation is one that is accepted. Clearly, they cannot both be right. I assume that, within the insurance industry, there is a general understanding of or expectation about what this clause means. However, I have not a scintilla of evidence about what those commercial practices or realities actually are.

45I am not equipped to decide which interpretation is correct on the current record. Context is an important feature of contractual interpretation. The court must assess the objective intentions and expectations of the parties. These, in turn, are informed by the surrounding circumstances, including market forces or commercial practices that inform those expectations. Is it the case that employers routinely purchase additional or other insurance to cover common law notice periods? Or is it the case that this does not occur, because insurers routinely offer coverage for the common law period?

46During the hearing, I asked counsel whether this is a genuine issue requiring a trial: whether the interpretation of the contract in this case requires additional evidence. Counsel for Manulife agreed that the issue may require such evidence, but counsel for Fenos and Facca offered strenuous objection. It was said that I must decide this case based on the evidence before me. On a summary judgment motion, each party is to put its best foot forward, and should not be given an opportunity to supplement the record after the fact. Facca points out that Manulife has tendered no evidence to indicate that industry practice supports its interpretation. Neither, however, has Facca led such evidence in support of its view.

47I am neither able, nor willing, to decide the interpretive issue without a better understanding of the broader picture.

48This case is similar to that of Dunn v. Chubb Insurance Company of Canada, 2009 ONCA 538, 97 O.R. (3d) 701. There the court was asked to interpret provisions in a directors and officers liability insurance policy regarding the allocation of defence costs – a defined term in the policy – in proceedings brought against persons insured under the policy. The Court of Appeal found that the clause was ambiguous, and that the record before it did not resolve the ambiguity. It further held:

1. A contractual provision is ambiguous if it is reasonably susceptible of more than one meaning.
2. Extrinsic or parole evidence may be admitted to assist in resolving the ambiguity.
3. Where the insurance policy is ambiguous, the court should adopt the interpretation that gives effect to the reasonable expectations or intentions of the parties.
4. Finally, if all other rules of construction are inadequate, the doctrine of contra preferendem may be applicable to resolve an ambiguity against the party who drafted the contract. However, “contra preferendem” is a rule of last resort and will only apply “when all other rules of construction fail”.

49Most significantly for present purposes, the court ruled that a new hearing was required to allow for evidence of “commercial realities” to be introduced. The court explained at para. 37:

Without being critical, there is little evidence in the record to assist the court in resolving the interpretation dilemma identified on this appeal. There is virtually no evidence about the context or the factual matrix within which the 2001 Policy or the endorsements were agreed to. While both sides have urged that “commercial realities” support their interpretation, there is little in the record, by way of either facts or argument, to assist the court in assessing the relative commercial practicality of the approaches advocated by each party. [See Note 5 below] Indeed, we can think of benefits and problems with both interpretations depending from whose vantage point the situation is considered.

50The court extrapolated further in paras. 43 – 44:

In our view, it is undesirable to resolve the ambiguity in this case without providing the parties an opportunity to call evidence regarding the factual matrix of the agreement, as well as extrinsic evidence and evidence that would inform the contra proferentem issue. It is for that reason that we have decided that there must be a new hearing on this issue only.

We wish to stress that the remedy in this case is unusual. As noted, it arises from a submission that was advanced for the first time in oral argument on this appeal and from the parties’ different interpretation of facts that were not in evidence. In our view, it would be inappropriate to decide this issue in the absence of a complete factual record that would enable the parties to develop the relevant facts and arguments.

51I acknowledge that Dunn v. Chubb was not a summary judgment case. However, the Court of Appeal took the same approach in Kahlon v. ACE INA Insurance, 2018 ONCA 906, 144 O.R. (3d) 141, in an appeal against a decision awarding summary judgment. The remedy in Kahlon was even more unusual. The court did not remit the matter back to the lower court. Rather, it adjourned the appeal and directed that the new evidence be filed directly with the appellate court. I will quote extensively from the decision because the reasons have direct application to this case. The court stated in paras. 8 – 11:

In a nutshell, this appeal involves the availability in Ontario of underinsured coverage to truck drivers like Mr. Kahlon. Allstate’s position is that a combination of the provincially prescribed language of its OPCF 44R endorsement and the provincially prescribed insurance policy for automobiles (OAP1), in particular, section 2.2.3, leads to the inescapable conclusion that truck drivers like Mr. Kahlon do not have underinsured coverage under their personal automobile policies for injuries they sustain as drivers of their trucks.

The argument advanced by Allstate could extend more broadly to drivers of other commercial vehicles and persons related to such drivers. There are likely thousands of people who would be affected by a ruling in favour of Allstate’s argument. The implications could be serious for such drivers and their families.

The parties are entitled to have their appeal decided; at the same time, however, courts are obliged to understand and take into account the context within which contractual interpretation will operate. The court has limited evidence before it about how Ontario-based truck drivers and other drivers of commercial vehicles obtain underinsured coverage, if in fact they do, and whether the interpretation urged by Allstate would have a surprising impact on Ontario insureds.

Disposition

Accordingly, the panel decided to give the parties the opportunity to enlarge the record, perhaps with expert evidence, in order to provide the court with the information and context necessary to reach a just outcome in this case. The appeal was adjourned sine die. If the parties prefer the court appoint amicus, they should advise the court. Otherwise the court requests the parties to develop a plan for responding to the court’s concerns including timelines.

52When the matter returned to the Court of Appeal in 2019, Kahlon v. ACE INA Insurance, 2019 ONCA 774, the court considered the new evidence and allowed the appeal. It harkened back to the 2018 order in para. 13:

Because the broad practical reach of AllState’s argument could exclude many from underinsured coverage, the panel advised the parties that it needed more evidence “about how Ontario-based truck drivers and other drivers of commercial vehicles obtain underinsured coverage, if in fact they do, and whether the interpretation urged by AllState would have a surprising impact on Ontario’s insureds”: Reasons released November 9, 2018, and reported at 2018 ONCA 906, 144 O.R. (3d) 141. The panel reconvened to consider the evidence tendered by the parties and to hear further argument.

53Ultimately the Court found, at paras. 74-75, that the interpretation accepted by the applications judge would be unrealistic from a commercial perspective:

Mr. Kahlon also asserts that he reasonably expected that his AllState policy would provide him with underinsured coverage for the Florida accident which he had when he was driving a heavy commercial vehicle. Mr. Kahlon clearly wants and needs underinsured coverage but that is not a sufficient basis on which to sustain his claim. In contractual interpretation, the assessment of reasonable expectations is objective, not subjective. It is to be based on the language of the contract under consideration and the context: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 49, 55; Dumbrell v. The Regional Group of Companies Inc., 2007 ONCA 59, 85 O.R. (3d) 616, at para. 50.

Apart from Mr. Kahlon’s reasonable expectations, in the context the court must also take account of AllState’s reasonable expectations. AllState does not provide insurance coverage for commercial vehicles. It would be an incongruous result to find AllState liable as the default insurer for underinsurance coverage for all of its customers engaged in the various commercial activities referred to earlier in this decision while they are on the job, simply because they have an AllState policy on their domestic vehicles. This is an “unrealistic result” that the court should not be quick to reach: Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co.

54I have cited extensively from these authorities because they speak directly to the issue that troubles me in this case. If the evidence described above was properly solicited and considered by a court hearing an appeal from summary judgment, it must logically be available to a judge considering summary judgment at first instance. There is, before me, very little evidence to illuminate the circumstances surrounding the insurance contract. I have little to no evidence about negotiations between Facca and Manulife. I do not know why or how clause 28 ended up in the policy. Perhaps more importantly, I have no evidence at all to illuminate broader considerations relating to industry practice. Facca and Manulife have considerable experience in that industry and, if there is a general practice or understanding, that must inform the expectation of the parties. Furthermore, the evidence is necessary to ensure that the court does not reach an “unrealistic result”.

55To my mind, this is a genuine issue requiring a trial and it is not in the interests of justice to exercise the power to grant summary judgment. I dismiss the applications by Fenos and Facca for summary judgment against Manulife, and I direct a trial of those issues.

56If counsel cannot agree on costs, I will receive written submissions within 30 days of release of this judgment.