COURT FILE NO.: CV-18-593656

DATE: 20201123

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JIAN LIN, PLAINTIFF

AND:

QI AN WENG, XIUQIN WENG, AVIVA GENERAL INSURANCE COMPANY, and RBC GENERAL INSURANCE COMPANY, DEFENDANTS

BEFORE: Pinto J.

COUNSEL: Paul Starkman and Calvin Zhang, for the Plaintiff

Frank Csathy and Michael Connolly, for the Defendants Aviva General Insurance Company and RBC General Insurance Company

HEARD: September 15, 2020

Reasons for Decision

Overview

[1] The plaintiff and defendants each move for summary judgment in respect of a home insurance coverage dispute.

[2] In 2014, Lin, the plaintiff, bought a home in Markham, Ontario and insured the property through RBC. Aviva succeeded RBC as the property's insurer. In 2015, the Weng defendants, a married couple, rented the master bedroom of the property. In December 2015, the Wengs started defaulting on their rental payments and, in February 2016, Lin requested that the Wengs pay their arrears and move out by mid-March 2016.

[3] On March 15, 2016, when Lin was out at work, Qi An Weng attempted to extract resin from marijuana in the basement of the home, causing an explosion and fire that destroyed the property. Qi An Weng pleaded guilty to drug-related and arson charges in respect of the incident.

[4] By letter dated May 12, 2017, Aviva rejected Lin's property loss claim. Aviva relied on a "Marijuana Exclusion" clause found at paragraph 28 of the home insurance policy:

We do not insure: […]

28. Growing, cultivation, harvesting, processing, manufacturing, distribution, storage or sale of marijuana or any product derived from or containing marijuana or any other drug, narcotic or illegal substance falling within the Schedules of the Controlled Drugs and Substances Act. This includes loss or damage to buildings or structures or Personal Property contained in them, used in whole or in part, including any alteration to the premises to facilitate such activity whether or not the insured is aware of such activity or use of the property.

[5] Lin commenced this action on March 9, 2018. A few weeks later, on April 30, 2018, section 129.1, an amendment to the Insurance Act, R.S.O. 1990, c. I.8 came into force. The section states:

If a contract contains a term or condition excluding coverage for loss or damage to property caused by a criminal or intentional act or omission of an insured or any other person, the exclusion applies only to the claim of a person,

(a) whose act or omission caused the loss or damage;

(b) who abetted or colluded in the act or omission;

(c) who,

(i) consented to the act or omission, and

(ii) knew or ought to have known that the act or omission would cause the loss or damage; or

(d) who is in a class prescribed by the regulations.

[6] The amendment was enacted to limit insurance contracts' ability to prevent recovery for loss or damage to property by innocent persons if it was caused by the act or omission of another person. The bill was intended to prevent the additional harm to co-insureds who are victims of criminal acts, particularly domestic abuse, that results when they cannot recover in these scenarios: Ontario Legislative Assembly, Official Report of Debates (Hansard), 41st Parl., 2nd Sess. (26 April 2017) (Mike Colle).

[7] The plaintiff amended his statement of claim on June 10, 2019 to plead reliance on section 129.1. Aviva and RBC had filed a Statement of Defence and Crossclaim on September 26, 2018 and did not deliver an amended statement of defence in response to the amended statement of claim.

[8] In January 2018, by power of sale, CIBC sold the property at a price of $505,100 since the mortgage had gone into default. After the Power of Sale, Aviva paid CIBC a sum representing the deficiency on the sale of the property after taking into account the proceeds of sale and other expenses.

[9] The parties agree that the value of the property as of March 15, 2016 was $852,500. Lin seeks damages in his summary judgment motion of $384,331.16, a figure arrived at by subtracting the mortgage principal of $468,168.84 from the value of the property as of March 15, 2016.

[10] I agree with the parties that this action can be resolved by way of summary judgment since there are no genuine issues requiring a trial: Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended; Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87. However, what remains to be decided is whether Aviva is entitled to deny coverage to Lin, particularly in light of the 2018 amendment to the Insurance Act.

[11] Aviva argues that the Marijuana Exclusion clause operates irrespective of section 129.1 since the clause excludes a certain use of the property (i.e. marijuana-related), regardless of the insured's conduct. In the alternative, Aviva argues that since section 129.1 of the Insurance Act was not in force at the time the insurance policy was issued in 2014, or when the property loss occurred in March 2016, the section does not apply since the common law does not permit legislation to apply retrospectively.

[12] The plaintiff takes the opposite view. He claims that section 129.1 was passed to remedy an obvious injustice where an exclusion clause punishes innocent insureds. He argues that he had no involvement in the marijuana-related incident. While he agrees with the presumption against retrospectivity of legislation, he claims that it does not apply to his situation and, in the circumstances, Aviva was wrong to deny him coverage.

[13] For the reasons that follow, I find that Aviva's decision to deny coverage relying on the Marijuana Exclusion clause, and the presumption against retrospectivity of the amendment, is correct. Accordingly, I grant the defendants' motion for summary judgment, dismiss the plaintiff's comparable motion, and award costs to the defendants.

Analysis

Issue #1: Is Aviva precluded from arguing about section 129.1 of the Insurance Act since it failed to file an amended defence in response to the plaintiff's amended claim?

[14] Lin argues that since Aviva did not deliver an amended defence, Aviva is deemed to rely on its original pleading in answer to the plaintiff's amended claim which referenced the section 129.1 amendment to the Insurance Act. Lin further argues that, since Aviva's original pleading makes no reference to the amendment, Aviva is precluded from taking a position on section 129.1: Rodaro et al. v. Royal Bank of Canada et al. 2002 CanLII 41834 (ON CA), [2002], 59 O.R. (3d) 74 (C.A.), at paras. 60-61.

[15] I disagree.

[16] First, I note that paragraph 22 of Aviva's Statement of Defence states that "These defendants plead and rely upon the following statutes as amended from time to time: […] Insurance Act, R.S.O. 1990, c.I.8." (emphasis added). Second, I agree with Aviva's submission that, even if its Statement of Defence were silent about the amended Insurance Act, the question of the interrelationship between the Marijuana Exclusion clause and the 2018 amendment, or the amendment's alleged non-retrospectivity, are legal issues that the plaintiff has raised in these summary judgment motions. Surely Aviva is entitled to respond to these legal arguments. Third, I would distinguish Rodaro v. RBC from the present case. In Rodaro, the trial judgment was reversed by the Court of Appeal because the trial judge found liability against RBC on a legal theory not present in the pleadings or advanced by Rodaro. Here, the plaintiff is clearly relying on the section 129.1 amendment to argue in favour of coverage. He should not be surprised if Aviva is responding with legal arguments to the contrary. Finally, the parties' factums and reply factums fully canvass the section 129.1 issue. This is not a case where an argument was raised for the first time at the hearing of the motions.

Issue #2: Does the Marijuana Exclusion clause apply to exclude coverage irrespective of section 129.1?

[17] Aviva argues that:

(a) The Property was being used to produce cannabis resin at the time of the incident;

(b) The Marijuana Exclusion clause applies notwithstanding the plaintiff's alleged lack of knowledge of the resin-making process; and

(c) There is no principled reason as to why this Court should not apply the Marijuana Exclusion clause to these facts.

[18] The first point is undisputed. With respect to the next two points, Aviva focuses on the words in the latter part of the Marijuana Exclusion clause, which, for ease of reference, I have underlined:

We do not insure: […]

28. [Marijuana or other drug, illegal substance or narcotic related activity] This includes loss or damage to buildings or structures or Personal Property contained in them, used in whole or in part, including any alteration to the premises to facilitate such activity whether or not the insured is aware of such activity or use of the property.

[19] Aviva submits that the Policy excludes coverage for any marijuana-related use of the property regardless of whether the insured was aware of such use. I agree that this is the plain and clear meaning of the Marijuana Exclusion clause.

[20] Aviva then submits that the purpose of the Marijuana Exclusion is different than the purpose of the section 129.1 amendment. The exclusion clause denies coverage in respect of a certain type of use of the property for all purposes, whereas the amendment determines coverage based on the insured's conduct and/or awareness with respect to the loss or damage.

[21] Aviva submits that the Pietrangelo and Carteri decisions support its position that insurers are entitled to exclude coverage for certain types of losses regardless of the lack of knowledge of the insured.

[22] Pietrangelo v. Gore Mutual Life Insurance Co., 2010 ONSC 568 is an Ontario case that is factually similar to the within matter. The insured rented a property to an individual who, while attempting to produce cannabis resin (hashish), caused an explosion which destroyed the insured's property. The insurance company, Gore, ultimately prevailed in denying coverage on the basis of a Marijuana Exclusion clause which stated:

We do not insure:

Nor do we insure direct or indirect loss or damage, in whole or in part:

19. to dwellings or detached private structures or unscheduled personal property contained in them, used in whole or in part for the cultivation, harvesting, processing, manufacture, distribution or sale of marijuana or any product derived from or containing marijuana or any other substance falling within Schedule (Section 2) of the Controlled Drugs and Substances Act Narcotic Control Regulations;

regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage.

[23] The trial judge, Ducharme J., determined that the word "used" in the policy should be given a broad meaning based on a plain reading of the insurance contract, and that the insurer was entitled to exclude coverage based on a valid business concern:

[100] We are reminded here that insurance is meant to strike an appropriate balance between the insurer's need to maintain sufficient financial viability and the reasonable expectations of its customers. By introducing the Marijuana Exclusion in 2003, Gore Mutual placed its customers on notice that it wished to re-address that balance. The Marijuana Exclusion meant that the insurer now viewed such unlawful activities as the kind engaged in by Mr. Arquette as something quite other than fortuitous or random. Losses of this kind were not the losses that Gore Mutual was prepared to bear, for the sound economic reason that, were it to do so, its own profitability would be undermined, and its customers would never be able to afford the spiralling costs of the premiums.

[101] As Gore Mutual pleaded in its Statement of Defence, and as Mr. Bardon affirmed in his testimony, the company created the Marijuana Exclusion out of a valid and legitimate business concern that it not be exposed to claims for loss or damage to properties used for illicit, socially harmful acts, including but not restricted to the structural and other harm done to homes when they are turned into marijuana grow operations. In adopting this course, Gore Mutual clearly intended the Marijuana Exclusion to apply regardless of any knowledge or involvement of its insureds in these illicit or socially harmful acts. In my view, Gore Mutual acted reasonably and justly in the circumstances. The Marijuana Exclusion, informed as it was by a reasonable economic rationale, did not nullify the purpose for which the insurance was purchased and sold, and preserved intact the reasonable expectations and true intentions of the parties at the time of entry into the contract.

[108] Although the plaintiffs had no knowledge of Mr. Arquette's harmful criminal acts, did not participate in them, and could not have reasonably foreseen them, that is no reason why Gore Mutual should be expected to pay for the wreckage Mr. Arquette caused. If the effect of this ruling is that, in the future, landlords will be at greater risk for a specified class of losses of which they are innocent, if it means that landlords must become more diligent still in winnowing out those potential tenants who are a threat to abuse their tenancies, then so it shall have to be.

[24] In upholding the trial judge's decision in Pietrangelo, the Court of Appeal held:

[8] First, the trial judge applied the correct law in the interpretation of the exclusion clause, namely, Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 CanLII 10 (SCC), [1980] 1 S.C.R. 888, [1979] S.C.J. No. 133. He rejected the appellants' argument to define "used" through the technical approach; rather, he interpreted it in accordance with its ordinary, commonly understood and literal meaning. He committed no error in doing so.

[9] Second, the appellants' fundamental argument here is that the exclusion clause is unjust and that it operates to create an unfairness on them primarily because of their innocence or their inability to prevent the events that caused the loss. However, the trial judge correctly observed that the issue in this regard is not whether the clause creates unfairness to the insured, but whether there is a rational basis for its existence.

[paras. 10 and 11 omitted]

[12] We agree with the trial judge; the exclusion clause in the circumstances of this case is not "unjust or unreasonable". There are certain risks which insurers are entitled not to cover for legitimate business reasons relating to the ability to assess risk and set premiums: Pietrangelo v. Gore Mutual Life Insurance Co., 2011 ONCA 162, 104 O.R. (3d) 468.

[25] In the factually similar Saskatchewan case Carteri v. Saskatchewan Mutual Insurance Company, 2018 SKQB 150, the insurance company also denied coverage to an insured where tenants, in attempting to extract marijuana resin, caused an explosion and fire at the property. The court upheld the denial of coverage, and referenced Pietrangelo and the legitimate allocation of risk as between landlords and insurers:

[102] Finally, with respect to the hardship that the drug exclusion may present for landlords, Ducharme J. concisely and fairly responded to this criticism at para. 108 of the Pietrangelo trial decision. I agree and adopt his response. In my view, this underscores the point that landlords are not forced to remain in the business of renting out residential property. If they are not able or willing to bear the risk, they may need to reconsider their investment.

[26] The plaintiff submits that Pietrangelo and Carteri are "old caselaw" that should not be relied upon as they pre-date the April 2018 amendment to Ontario's Insurance Act. The plaintiff maintains that the amendment "was intended to create an exception to exclusion clauses in insurance policies, which exclude recovery for a loss resulting from an intentional act or omission by another person, whether or not the policyholder had knowledge of the intentional act or omission of an insured or any other person."

[27] I was urged by Aviva to consider other exclusions in the subject policy, for instance in clauses 20 to 27, which immediately precede the Marijuana Exclusion provision at clause 28:

We also do not insure any loss or damage caused by or resulting from one or more of the following excluded causes of loss or damage (20-28), even if that cause of loss or damage operates concurrently or sequentially in combination with other causes of loss or damage that are insured.

20. Flood;

21. Your criminal acts, your intentional acts, your wilful acts, your failure to act, or the criminal acts, intentional acts, wilful acts or failure to act by any other person under your direction. This exclusion applies to all persons insured under this Policy even though the criminal act, or intentional act, or wilful act, or failure to act is by only one or more of the other persons insured under this Policy;

22. Terrorism whether directly or indirectly, in whole or in part, or by any activity or decision of a government agency or other entity to prevent, respond to or terminate terrorism . Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage;

23. War, invasion, act of foreign enemy, declared or undeclared hostilities, civil war, rebellion, revolution, insurrection or military power;

24. Earthquake, unless Earthquake endorsement coverage has been purchased and is shown on your Properly Insurance Certificate;

25. Snow slide, landslide or other earth movement;

26. Any nuclear incident as defined in The Nuclear Liability Act or any other nuclear liability act, law or statute, or any amendments to these laws, or nuclear explosion or contamination by radioactive material;

27. Pollutants [details omitted for brevity]

28. [Marijuana Exclusion clause]

[28] Aviva argues, leaving aside the question of retrospectivity, that section 129.1 should apply to clause 21 (your criminal acts, etc.) to differentiate between innocent and culpable insureds, but the section should not apply to the other exclusions. Aviva warns that, were I to adopt the plaintiff's argument, it would result in the policy covering insureds even in the event of, for instance, terrorism (clause 22), assuming the insured was not a perpetrator of the terrorist act. Aviva argues that this could not have been the intention of the insurance policy or the amendment to the Insurance Act.

[29] I find, based on Pietrangelo and Carteri and the reasons that follow, that the Marijuana Exclusion clause applies irrespective of section 129.1.

[30] First, I consider Pietrangelo and Carteri to be good law. Section 56 of the Legislation Act, 2006, S.O. 2006, c. 21, Sched. F, S. 56, states that an amendment of an Act does not imply a change in the law.

[31] Second, Pietrangelo directs that certain exclusions in insurance contracts, such as the Marijuana Exclusion clause, are premised on the allocation of risk being moved from the insurer to the insured, in this case landlords. This is why the risk is not covered, regardless of whether the insured was aware of the impugned use or not.

[32] Third, I note that in Soczek v. Allstate Insurance Co., 2017 ONSC 2262, which was decided just before the section 129.1 amendment, there is nothing in the judgment of Morgan J. to suggest that the differentiation between innocent and culpable insureds should apply to exclusion clauses related to uses (such as marijuana) in insurance policies. In Soczek, the plaintiff's husband burned down their house when he poured gasoline on the plaintiff and lit her on fire in an attempt to kill her. The husband was convicted of attempted murder. Allstate, the insurer, denied coverage to the plaintiff based on an exclusion related to losses caused by any intentional or criminal act done by a person insured under the policy.

[33] Despite the horrific facts, Morgan J. concluded that, as the exclusion clause in Soczek was unambiguous, the insurer was within its rights to deny insurance coverage to the wife. Morgan J. observed that, at the time, Ontario had not amended its insurance legislation as had other provinces to differentiate between innocent and culpable co-insureds. I note that, in Soczek, the earlier Pietrangelo decision was not cited. In any event, there is nothing in Soczek that appears to cast doubt on the holding in Pietrangelo about the marijuana exclusion clause being fair because it represents a legitimate allocation of risk as between insurers and landlords.

[34] Fourth, the plaintiff's submission that section 129.1 should apply to the Marijuana Exclusion clause would effectively result in that exclusion being nullified. The problem with the plaintiff's submission becomes clear when focusing on exclusions such as "flood" or "terrorism". If the plaintiff's argument were to succeed, the application of section 129.1 to the flood or terrorism exclusions would result in insureds who did not partake in the terrorist or flood-causing activity having their losses covered since they are "innocent". In my view this would radically alter the "appropriate balance between the insurer's need to maintain sufficient financial viability and the reasonable expectations of its customers", as articulated in Pietrangelo at para. 100.

[35] In summary, I find that the Marijuana Exclusion clause applies to exclude coverage irrespective of the section 129.1 amendment. The exclusion is based on excluding certain uses from coverage regardless of the insured's conduct, whereas the amendment is based on nullifying certain exclusions where the legislature has chosen to differentiate between the innocent conduct of the insured and the culpable conduct of the person responsible for the loss.

Issue #3: Alternatively, is Aviva entitled to deny coverage, even if the 2018 amendment is considered, because the amendment cannot be applied retrospectively?

[36] The section 129.1 amendment to the Insurance Act came into force on April 30, 2018 after the issuance of the policy (November 23, 2015), the date of loss (March 15, 2016), the denial of the insurance claim (May 12, 2017), and the commencement of the action (March 9, 2018).

[37] Aviva argues that since legislation is presumed not to have retrospective application, Lin cannot benefit from the 2018 amendment. Aviva submits that the amendment, if applied to a time before it came into force, would displace a substantive and vested right, namely its contractual right to deny coverage in respect of loss or damage arising from a marijuana-related use of property: Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham, Ont: LexisNexis Canada Inc., 2014) at para. 25.136; R v. Dineley, 2012 SCC 58, [2012] 3 S.C.R. 272, at para. 10. Accordingly, even if the 2018 amendment is considered, the amendment cannot be applied retrospectively to nullify the Marijuana Exclusion clause. Therefore, the exclusion clause survives and Aviva's decision to deny coverage is correct.

[38] The plaintiff responds, relying on rules regarding retrospectivity set out by Elmer Driedger, that section 129.1 of the Insurance Act is not retrospective legislation or that, due to the nature of the amendment, the presumption against retrospectivity does not apply: E. Driedger, "Statutes: Retroactive, Retrospective Reflections" (1978) 56 Can. Bar Rev. 264. The plaintiff maintains that, on a proper reading of the amendment, he benefits despite the fact that the key events occurred before the amendment came into force.

[39] The plaintiff's arguments can be distilled into the following four points:

(a) The amendment applies to any person who has an existing "claim" which has not been resolved whether the claim occurred "before" or "after" the section came into force on April 30, 2018. Relatedly, while the "date of the loss" may be relevant to damages, it is not relevant to the amendment, which uses the words "claim of a person", and makes no reference to loss or date of loss. Therefore, the amendment applies to the current claim and the plaintiff should get the benefit of the amendment.

(b) The plaintiff's innocent status did not change. He was just as innocent before the amendment as he was after.

(c) Aviva did not have a "vested right" upon the issuance of the policy, or at the time the legislative amendment came into force. Aviva never pleaded that the Marijuana Exclusion clause applied even though the plaintiff had no knowledge of the impugned conduct. Aviva only made that argument after the amendment came into force and, then too, did not plead the point by filing an amended defence to the plaintiff's amended statement of claim.

(d) The presumption against retrospectivity only applies to prejudicial statutes, not beneficial ones. Here, the intent of section 129.1 was remedial and it was passed in the public interest to remedy an obvious injustice, therefore it is not retrospective and the plaintiff should benefit from the amendment.

[40] I address each of these points below but, overall, I do not find that they have merit. The plaintiff's arguments focus on the purpose of the amendment. Instead, the law directs that I focus on whether substantive or vested rights are affected. In R. v. Dineley, the Supreme Court set out the presumption against retrospectivity. A succinct summary of the holding in R. v. Dineley is provided in Davis (Litigation guardian of) v. Wawanesa Mutual Insurance Company, 2015 ONSC 6624, 127 O.R. (3d) 629, at para. 24:

[24] The Supreme Court in R. v. Dineley, 2012 SCC 58, [2012] 3 S.C.R. 272, identified a number of rules of interpretation that can be helpful in determining whether legislation is to have prospective or retrospective effect:

(i) Cases in which legislation has retrospective effect must be exceptional;

(ii) Where legislative provisions affect either vested or substantive rights, retrospectivity has been found to be undesirable;

(iii) New legislation that affects substantive rights will be presumed to have only prospective effect unless it is possible to discern a clear legislative intent that it is to apply retrospectively;

(iv) New procedural legislation designed to govern only the manner in which rights are asserted or enforced does not affect the substance of those rights and is presumed to apply immediately to both pending and future cases;

(v) The key task in determining the issue lies not in labelling the provisions "procedural" or "substantive", but in discerning whether they affect substantive rights; and

(vi) The fact that new legislation has an effect on the content or existence of a right is an indication that substantive rights are affected.

[41] Here, the parties agree that there was no clear intention within the 2018 amendment for it to apply retrospectively.

[42] Another reason that the amendment does not apply retrospectively is that it affects Aviva's "vested or substantive rights": R. v. Dineley. The test for establishing a "vested right" is as follows: "(1) the individual's legal situation must be 'tangible and concrete rather than general and abstract' (i.e.: the individual must point to a specific right); and (2) the legal situation must have been sufficiently constituted at the time of the new legislation's commencement. In other words, by the time of the legislation's commencement, the right must have crystallized and become 'inevitable' and 'certain'": 1392290 Ontario Ltd. v. Ajax (Town), 2010 ONCA 37, 257 O.A.C. 311 (Ont. C.A.), at paras. 37-38. Further guidance as to the meaning of a substantive or vested right is offered by Sullivan:

Some vested rights are easily recognized. Property rights, contractual rights, and rights to damages or other common law remedies are well-established categories. Rights under contracts arise on the effective date of the instrument: 25.141 Sullivan.

As Bastarache J. observes, rights created by contract normally vest when the contract is concluded: 25.144 Sullivan, citing Dikranian v. Quebec (Attorney General), 2005 SCC 73, [2005] 3 S.C.R. 530 at para. 40.

[43] Based on the above law, I find that, once the parties entered into a contract of insurance, Aviva obtained a substantive and vested right, namely a contractual right to deny coverage for any loss or damage arising from a marijuana-related use of the insured property.

[44] While it is true that the amendment uses the word "claim of a person" and not "loss" or "date of loss", the date of loss triggers the plaintiff's right to commence a claim for indemnity pursuant to the terms of the Aviva Policy. The wording of the amendment does not mean that so long as the claim is active the amendment nullifies the Marijuana Exclusion clause. The plaintiff's interpretation would result in the amendment removing Aviva's substantive contractual right retrospectively, which is not permitted.

[45] As for the plaintiff's argument that he was as innocent before the amendment as after, that might be true, but that relates to the purpose of the amendment; namely, to treat innocent insureds differently that culpable ones. However, it does not answer whether the amendment must be applied to a set of facts prior to it coming into force.

[46] I have already indicated that the plaintiff's argument that no vested right of Aviva is affected is incorrect. The law is clear that contractual rights are vested rights. The Marijuana Exclusion clause appears to be a fairly important exclusion whose removal would have economic consequences for Aviva. In addition, the purpose of the presumption against retrospectivity is to prevent a change in the law from looking to the past and attaching new prejudicial consequences to a completed transaction: R. v. Chouhan, 2020 ONCA 40, 149 O.R. (3d) 365, at para. 186. In this case, I would be looking back to the contract between Aviva and the plaintiff and attaching the prejudicial consequence of removing Aviva's ability to exclude a particular kind of loss or damage from coverage.

[47] That leaves the plaintiff's argument about the amendment not having a retrospective effect because it is intended to be remedial and beneficial rather than prejudicial, and in the public interest.

[48] The fact that legislation is remedial does not necessarily mean that it is intended to apply retrospectively: R. v. Evans, 2015 BCCA 46, at para. 33. As the Ontario Court of Appeal held at para. 60 of R. v. Bengy, 2015 ONCA 397, if the need for immediate reform of the law were so pressing, why would the legislature not have explicitly made the law retrospective? There is nothing in the record, including the explanatory notes, that demonstrates a clear legislative intent that the amendment is to apply retrospectively: Davis v. Wawanesa Mutual Insurance Company, at para. 34.

[49] The Ontario Court of Appeal made clear in R. v. Bengy that just because an amendment confers a benefit does not mean that the presumption against retrospectivity does not apply: at paras. 51-52. Although the Supreme Court in Brosseau v. Alberta Securities Commission, 1989 CanLII 121 (SCC), [1989] 1 S.C.R. 301 stated that the presumption does not apply to beneficial statutes, this comment was obiter because the statute at issue in that case was in fact not beneficial. Instead, it fell into a "third category of statutes that impose a penalty in order to protect the public, rather than to impose punishment": Brosseau, at para. 52. The Insurance Act amendment here does not fall into this category. The Court of Appeal further noted that no other Supreme Court decision has followed the Brosseau distinction between beneficial and prejudicial statutes. To the contrary, "focus[ing] on the effect of a statute to determine its retrospectivity is contrary to the analysis mandated by the Supreme Court in Dineley": R. v. Bengy, at para. 55.

Conclusion

[50] Summary judgment is granted in favour of Aviva and RBC and the action against these defendants is dismissed. Lin's motion for summary judgment is dismissed.

[51] Aviva and RBC are awarded their costs for the motion and the action. If the parties are unable to agree on costs, they shall make written submissions as to costs within 10 days of the release of these Reasons. Such written submissions shall not exceed three double-spaced pages, exclusive of Costs Outlines, Bills of Costs, Offers to Settle and authorities and are to be forwarded to me via my judicial assistant. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs.

Pinto J.

Date: November 23, 2020