Ontario Superior Court of Justice

Court File No.: CV-23-0334-00
Date: 2025-03-19

Between

Gregory Hood
Applicant
Counsel: A. Mercer

-and-

Aviva Insurance Company of Canada
Respondent
Counsel: P. Rollo and G. Rossi

Heard: January 14, 2025
Before: Regional Senior Justice W.D. Newton

Judgment

Overview

[1] On August 29, 2021, Mr. Hood’s seasonal cabin property was discovered to have been moved off its foundation.

[2] At issue is whether Mr. Hood has established that the damage was caused by an insured peril—a windstorm—or whether Aviva has established that the damage was caused by settling, which is excluded under the policy.

The Insurance Policy

[3] For an annual premium of $2,848, Aviva insured the main building for $258,600, and, for an additional premium, the outbuildings and personal property, against specified perils.

[4] A specified peril was “windstorm or hail.” Windstorm is not defined.

[5] Loss or damage “resulting directly from settling, expansion, contraction, moving, bulging, buckling or cracking except resulting damage to building glass” was excluded.

The Facts

[6] The evidence on this application consisted of affidavits from Mr. Hood, Steve Brennen, Janet Omeniuk, Leslie Chalke, Alain Normand, Joseph Hince, and Brent Hobday for the plaintiff, and Tanya Leclair for Aviva.

[7] Also filed were reports from Bart Flisak, an engineer retained by Aviva, and Terry Smith, an engineer retained by Mr. Hood. Mr. Flisak delivered an initial report dated November 5, 2021, and a supplementary report dated August 16, 2024. Mr. Smith also delivered two reports: April 8, 2024, and October 8, 2024.

The Witnesses

[8] Mr. Hood deposed that he attended the cabin for several weeks each summer, and that he retained a local resident, Steve Brennan, to assist with maintenance, preparing the cabin for use, and closing the cabin up for the winter.

[9] He had Mr. Brennan attend the cabin on August 26, 2021, to prepare the cabin for his visit the following week. On August 29, Mr. Brennan contacted Mr. Hood and informed him that the cabin had been “severely damaged from the windstorm.”

[10] Other neighbours had informed Mr. Hood of suspected wind and storm damage. The Hince’s gazebo was “blown down” and destroyed, and shingles were torn off from their roof. Another neighbour, Lou Chalke, reported that heavy winds had blown a sailboat across their dock. A local marina reported a “micro tornado” the same day. Another neighbour, Brent Hobday, informed Mr. Hood that he witnessed storm damage that day with, “things blown all over the place.”

[11] Steve Brennen is a general superintendent of a construction company and had owned the property adjacent to Mr. Hood’s. He deposed that he is familiar with the “pier and pad” foundations used in the area because of the rocky conditions. He was at the Hood cabin on a regular basis, including on August 26, 2021, and did not view any issues with the foundation prior to August 29, 2021. His visit on August 26 included a look under the cabin for any issues.

[12] On August 29, he arrived at the cabin “to find that the cabin had been blown off its foundation and landed flat on the ground.” He also witnessed a “great deal of property damage in the area, as well as downed trees…”

[13] Janet Omeniuk is with the Minaki Marina, which is located about 15 miles south of the Hood cabin. She deposed that she received a weather warning and experienced a micro tornado on August 27, 2021.

[14] Leslie Chalke spends her summers on a lake a “few miles” south of the Hood cabin. She deposed that there were “major windstorms” in late August 2021, and that she observed damage, “including downed trees as a result of the windstorm.”

[15] Alan Hince owns a cabin adjacent to the Hood cabin, about 100 feet away. He is at his cabin every weekend throughout the summer and did not observe any obvious issues with the Hood cabin until August 27. He deposed that then, his gazebo was “blown down and destroyed” and noted that shingles were torn off his roof.

[16] Brent Hobday owns a cabin directly across the bay from the Hood cabin. While not present on August 27, 2021, he observed that furniture had been blown across his property. He noted that his property is better protected from the wind.

[17] Tayna Leclair, a claims specialist with Aviva, delivered an affidavit setting out the claim’s history for this insurance claim. On cross-examination on her affidavit, Ms. Leclair stated that Aviva did not do any in-depth investigation of weather data, but instead left that to their engineer.

The Experts

[18] Bart Flisak, P.Eng., was retained by Aviva. He inspected the Hood cabin on September 26, 2021, a month after the damage was discovered. He swore an affidavit adopting his reports. In his report of November 5, 2021, he noted that the beams supporting the floor joists were supported on short wooden posts bearing on 18” x 18” precast concrete footings spaced at 8’ centres along the beams. He noted that there were no physical connectors or fasteners between the posts and concrete footings.

[19] On inspection, Mr. Flisak noted that the camp floor and superstructure had displaced toward the south and collapsed off the wood posts and concrete footings onto the ground. He described this movement as “relatively uniform” across the entire footprint of the camp.

[20] Of the exposed footings, and he did not describe how many were exposed, the top of the footings were out of level, sloping to the south.

[21] Mr. Flisak concluded the following:

The settlement of the footings along their set of edges, and the resulting out of level alignment of the footing top services is consistent with long–term differential movements of the soils underlying the footings.

The settlements of the footings observed is not the result of a single event such as high winds, however, the out of level alignment of the footings (tilted down to the south) that occurred over the long–term would have made the structure highly susceptible to the initiation of a horizontal displacement towards the south even under relatively nominal wind loading.

[22] He also noted that an adjacent log–framed outbuilding was also exhibiting signs of long-term settlement of its similar footing foundation, but had not yet collapsed.

[23] Terry Smith, P.Eng., was retained by Mr. Hood to review and respond to the Flisak report. He swore an affidavit and a Form 53 Acknowledgement. Although he did not attend the Hood property, he reviewed the collateral information, including information provided by the witnesses. He disagreed with Mr. Flisak’s conclusion about the interpretation of the observations of the footing alignment, noting that it was not the cause of the building failure, but the result. He stated the following:

If the soil supporting the paver is non-homogeneous, with more resistance to consolidation at the north edge of the paver than the south edge, rotational settlement can occur, such as that reported in this case. While it is probable that there was some measure of differential resistance to consolidation resulting in some rotational displacement of a limited number of footings, it is very unlikely that this condition occurred uniformly at all 18 pavers.

To achieve the reported condition, with all visible pavers being uniformly displaced in rotation, requires the application of an eccentric load on the pavers. In our opinion the Crosier Kilgour report failed to consider the most probable mechanism that would result in a uniform rotational displacement, specifically the collapse of the cottage.

Based on our review of the supplied data it is likely that rotational displacement of the precast pavers occurred as a result of the collapse, rather than being the cause of the collapse.

Based on our analysis of the available data, and considering the multiple reports of localized high wind events in the area on the date of loss, it is our opinion that the most likely cause of the loss was exposure to a significant localized wind event resulting in a combination of horizontal and uplift forces exceeding the capacity of the wood posts to resist rotational displacement.

[24] Mr. Flisak responded to the Smith report by report dated August 16, 2024. He produced computer modelling to support his conclusions.

[25] Mr. Smith responded to this supplementary Flisak report by report dated October 8, 2024, with his own modelling to support his conclusions. Mr. Smith concluded the following:

It is our opinion that for a uniform failure/displacement to occur, the horizontal forces distribution must be relatively uniform across all footings. Such an effect is more likely to occur if the exterior walls of the structure are subjected to wind pressure, resulting in a relatively uniform horizontal force on all footings. When horizontal wind pressure is transferred to the wood posts which are not mechanically fastened to the concrete footings, this would result in a uniform horizontal movement of all posts. The horizontal movement of the posts would ultimately shift the load off the center of the footing resulting in an eccentric load on the footings.

While the first Crosier report concluded that the damages did not occur as a result of an acute wind event, Crosier has provided no engineering analysis or even reasonable discussion for wind effects in either report. In our opinion Crosier has failed to properly include wind effects in their analysis, and by doing so demonstrate a strong bias toward their initial theory.

[26] On cross-examination, Mr. Flisak admitted that he did not consider any information from Mr. Hood’s neighbours about wind or damage but did look at some weather data from distant weather stations. He stated that when he attended the site, he did not see any “obvious signs of heavy wind on the property.” He agreed that any settlement of the foundation left the camp vulnerable to displacement or collapse and that, had the building been level, “it would have been much more robust and able to accommodate any sorts of environmental loads.”

Positions of the Parties

[27] There is consensus on the principles of contract interpretation to be applied. In Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, [2010] 2 S.C.R. 245, Rothstein J. stated as follows:

[22] The primary interpretive principle is that when the language of the policy is unambiguous, the court should give effect to clear language, reading the contract as a whole (Scalera, at para. 71).

[23] Where the language of the insurance policy is ambiguous, the courts rely on general rules of contract construction (Consolidated‑Bathurst, at pp. 900-902). For example, courts should prefer interpretations that are consistent with the reasonable expectations of the parties (Gibbens, at para. 26; Scalera, at para. 71; Consolidated-Bathurst, at p. 901), so long as such an interpretation can be supported by the text of the policy. Courts should avoid interpretations that would give rise to an unrealistic result or that would not have been in the contemplation of the parties at the time the policy was concluded (Scalera, at para. 71; Consolidated-Bathurst, at p. 901). Courts should also strive to ensure that similar insurance policies are construed consistently (Gibbens, at para. 27). These rules of construction are applied to resolve ambiguity. They do not operate to create ambiguity where there is none in the first place.

[24] When these rules of construction fail to resolve the ambiguity, courts will construe the policy contra proferentem—against the insurer (Gibbens, at para. 25; Scalera, at para. 70; Consolidated-Bathurst, at pp. 899-901). One corollary of the contra proferentem rule is that coverage provisions are interpreted broadly, and exclusion clauses narrowly (Jesuit Fathers, at para. 28).

[28] Further, the parties agree that Mr. Hood has the onus of proving that a windstorm was the cause of the loss and, thereafter, Aviva has the onus of proving that the exclusion, directly from settling, applies.

[29] Mr. Hood submits that the evidence establishes that a windstorm was, more likely than not, the direct cause of the damage to the cabin that occurred on August 29, 2021. He relies on the observations of Mr. Brennan, who had been to the property three days prior and then again on the day the loss was discovered on August 29, 2021, and the evidence from four neighbours, all of whom gave some evidence of observing either high winds or the effect of high winds.

[30] Mr. Hood submits that, as Aviva has failed to define “windstorm,” the ordinary dictionary definition—a storm with very strong wind but little or no rain or snow—should apply, and notes that other cases have considered this issue and concluded that, as the insurer has not defined windstorm, any ambiguity should be resolved in favour of the insured. See, e.g., Belwood Poultry Limited v. Kent & Essex Mutual Insurance Company, paras. 58, 61.

[31] As described by engineer Smith, the most likely cause of the loss was “exposure to a significant localized wind event resulting in a combination of horizontal and uplift forces exceeding the capacity of the wood post to resist rotational displacement.” Mr. Hood submits, therefore, that “significant localized wind event” equates to “very strong wind,” which equates to “windstorm.”

[32] Mr. Hood argues that the conclusions of engineer Flisak fail to adequately consider the possibility of a windstorm causing the loss and notes the absence of any weighing of the evidence of Mr. Brennan’s observations both before and after the damage was discovered, or the evidence of the four neighbours with respect to high winds.

[33] With respect to the exclusion, Mr. Hood notes that the onus is on Aviva to establish that the loss was loss or damage “resulting directly from settling” and relies upon the opinion of engineer Smith.

[34] Aviva submits that Mr. Hood has not established, on a balance of probabilities, that a windstorm occurred and that a windstorm was the direct cause of the loss.

[35] Aviva submits that the Court should accept the opinion of Mr. Flisak rather than the opinion of Mr. Smith, noting that Mr. Flisak inspected the premises “shortly following the loss” and that Mr. Smith did not inspect the premises at any time.

[36] Aviva submits that the evidence of Mr. Hood and Mr. Brennan—that re-levelling of the foundation was required periodically—supports Mr. Flisak’s conclusion that the direct cause was settling.

[37] Aviva also submits that there is an absence of meteorological data to assist, given the remote location of the cabin, and that the neighbours’ observations do not establish that there was a windstorm at the Hood cabin. Aviva points to the lack of apparent wind damage in the few photos of the cabin that are available.

Analysis

[38] At the commencement of argument, I expressed concern over my ability to evaluate the evidence based on the written material alone, without hearing, in particular, from the experts. Counsel for both parties expressly stated that the parties wished to proceed without the costs associated with oral testimony and I acknowledge the benefit to both parties in resolving this dispute without further costs.

[39] I accept, on a balance of probabilities, that there was sufficient wind to cause damage in the area of Mr. Hood’s cabin on or about August 29, 2021. I base that finding on the following:

a. the observations of Mr. Brennan of a “great deal of property damage in the area, as well as downed trees”;

b. the observations of Ms. Chalke of major windstorm, damage, including downed trees;

c. the observations of Mr. Hobday that furniture was blown across his property; and

d. the observations of next-door neighbour Mr. Hince whose gazebo was “blown down and destroyed” and who noted that shingles were torn off his roof.

[40] I also accept that the direct cause of the loss or damage was from “exposure to a significant localized wind event resulting in a combination of horizontal and uplift forces exceeding the capacity of the wood post to resist rotational displacement,” which I find to be equivalent to a windstorm. I base this finding on the observations of Mr. Brennan on August 26, 2021, that there were no foundation issues then. As he was responsible for maintenance, he was aware of the need to re-level at times and had looked under the cabin that day.

[41] I prefer the expert opinion of Mr. Smith to the opinion of Mr. Flisak for the following reasons:

a. Mr. Flisak did not consider the “collateral” evidence of wind damage as observed by Mr. Brennan and the neighbours;

b. Mr. Flisak’s inspection was not “shortly after the loss” but was 30 days later and his observations of lack of wind damage was made then and not on August 29 when Mr. Brennan and Mr. Hince made their observations;

c. I accept Mr. Smith’s conclusion that the uniform displacement of footing pads is more consistent with occurring as a result of the collapse, and was not the cause of the collapse; and

d. While I accept that the outbuilding showed some sign of settling, there was no information about the profile, location, or exposure to wind, to allow me to assess this factor.

[42] For these reasons, I am satisfied that Mr. Hood has established, on a balance of probabilities, that a windstorm occurred and was the direct cause of the loss.

[43] I do not find that the exclusion applies. For the foregoing reasons, I find that the loss was not loss or damage “resulting directly from settling.”

[44] An Order shall issue declaring that this loss is covered under the policy.

[45] As Aviva has provided notice that it is seeking an appraisal pursuant to the Insurance Act, RSO 1990, c I.8, the parties do not require me to deal with damages. If counsel are unable to agree as to the form of the Order, they may seek a further appointment before me.

[46] If the parties are unable to agree on costs, then Mr. Hood will deliver his costs submissions within 45 days of the release of this decision and Aviva may deliver their submissions within 10 days thereafter. Submissions for both parties will be limited to four pages plus costs outlines.

“Original signed by”
W.D. Newton

Released: March 19, 2025

References

[1] Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, [2010] 2 S.C.R. 245
[2] Oxford Canadian Dictionary
[3] See, e.g., Belwood Poultry Limited v. Kent & Essex Mutual Insurance Company, paras. 58, 61