Court File and Parties

Court File No.: CV-22-687006-00CP
Date: 2025-06-09
Court: Superior Court of Justice - Ontario

Plaintiffs:
Dr. Mazen Dagher and Dr. M Dagher Dentistry Professional Corporation

Defendants:
CDSPI Advisory Services Inc., Aviva Insurance Company of Canada, Aviva General Insurance Company, and Aviva Canada Inc.

Before: Edward M. Morgan

Counsel:

• William Pepall, Crawford Smith, Rebecca Shoom, Tim Gleason, Michael Currie, and Nicole Kelly, for the Plaintiffs
• Solomon McKenzie and Allison Spiegel, for the Plaintiffs in Templeman v. Aviva Insurance Co. of Canada, CV-22-0068964
• Elizabeth Bowker, for the Defendant, CDSPI Advisory Services Inc.
• Sam Dukesz and Amy Yun, for the Defendants, Aviva Insurance Company of Canada, Aviva General Insurance Company, and Aviva Canada Inc.
• Sean Dewart, agent for McCarthy Tétrault

Heard: 2025-06-06

Endorsement

[1] This is a class action brought by dentists who purchased certain insurance policies brokered by the Defendant, CDSPI Advisory Services Inc. (“CDSPI”), and issued by the Defendants, Aviva Insurance Company of Canada, Aviva General Insurance Company, and Aviva Canada Inc. (“Aviva”).

[2] On October 29, 2024, counsel appeared before me to argue a motion to approve a settlement of this matter as between the Plaintiff and CDSPI. That motion was also attended by counsel for the plaintiffs in what is effectively a companion action (although not case managed by me), Templeman v. Aviva Insurance Co. of Canada, CV-22-0068964. The Templeman action is brought by roughly 800 individual dentists making similar claims as in the present class action.

[3] Counsel for Aviva submitted at the October 2024 hearing that the proposed settlement between the Plaintiffs and CDSPI is a partial settlement that converts the adversarial relationship between those two parties into a co-operative one, and that therefore the requirements set out by the Court of Appeal in Handley Estate v. DTE Industries Limited, 2018 ONCA 324 apply. Counsel advised that Aviva intends to bring a motion to stay the proceedings in accordance with the principles set out in Handley Estate.

[4] I adjourned the settlement approval motion so that motion materials could be filed and cross-examinations take place. I also indicated that the issues in the Plaintiffs’ settlement approval motion and in Aviva’s stay motion were so close to each other that two motions should be argued together. Those motions are scheduled to be heard by me over three days, June 25-27, 2025.

[5] Several weeks ago I received a request, consented to by all counsel, for a case conference on the basis that there were some new developments to be discussed in advance of the upcoming motions. That case conference took place on Friday, June 6, 2025.

[6] At the case conference, counsel advised me (and followed up with a copy) of a Direction issued by Sossin J.A. indicating that on October 23-24, 2025 the Court of Appeal will be hearing a case that asks for a reconsideration of the Handley Estate rule. That hearing combines three cases raising similar issues and will be heard by a panel of five members of the Court of Appeal: Thrive Capital Management Ltd. et al v. Noble 1324 Queen Inc. et al. (COA-24 CV-1159), Direction of April 25, 2025.

[7] Counsel in the Thrive Capital appeal joined counsel in the present class action to explain the importance of that appeal to the issues pending before me. Counsel also took the opportunity to point out that the Rules Committee has a proposed amendment in the works that may impact on the treatment of partial settlements in significant ways. The new Rule 49.14 will apply to situations where plaintiffs have reached a settlement with one defendant but continue to litigate against other defendants. In particular, Rules 49.14(4) through (7) will set specific procedures for these situations and remedies for breach of those procedures.

[8] Counsel for the Plaintiffs in the class action are of the view that the upcoming motions before me should be adjourned pending the decision of the Court of Appeal in Thrive Capital. It is their view that the law governing partial settlements may undergo a significant change once the Court of Appeal has a chance to reconsider it, and that the parties should have the benefit of that appellate reasoning before arguing a case based on what may soon be the outdated Handley Estate approach. They submit that it will cause more delay than necessary if the matter is argued prior to the ruling in Thrive Capital and then ultimately appealed under whatever principles prevail after the ruling in Thrive Capital.

[9] Counsel for Aviva, in a submission with which, interestingly enough, is concurred in by counsel for the plaintiffs in the Templeman, is of the opposite view. They submit that a motion court need not wait for an appellate hearing four months down the road – indeed, potentially many more months than that, given that a panel of five Court of Appeal judges will be hearing the case and writing reasons for decision. It is Aviva’s and the Templeman plaintiffs’ view that waiting for the Thrive Capital decision would cause excessive delay.

[10] They also submit that the result of the Thrive Capital decision is as yet unknown – it might change the law on partial settlements but also might not change it at all. Furthermore, if there is a change in the Handley Estate principles, the change might only apply prospectively. Additionally, given the prominence of a five-judge ruling, there may be a further attempt to appeal the matter to the Supreme Court of Canada, which would cause even more delay.

[11] I am inclined to agree with Aviva’s view of the timing of the upcoming hearing. The settlement approval/stay of proceedings motions have been scheduled for a long time. The date was set last October, which was itself an adjournment of a motion date set months before that. Given a very crowded civil motions docket in Toronto, motions are heard when they can be scheduled and are decided on the basis of the law in force at the time. While as case management judge I have discretion to adjust the schedule for the hearing, motion dates are a precious commodity and a fixed, three-day motion should not be tampered with unless there is a very cogent reason for doing so.

[12] If the law later changes or is the subject of appellate reasoning that sheds new light on the issue, that may or may not be the subject of a further appeal. If it is, the impact of any new developments in the law will be considered by the Court of Appeal at that time. But the Court of Appeal always has something of significance on its agenda; if the parties to every motion had to wait not just for an ex post appellate ruling but for a prior appellate ruling on a similar case before their motion could be determined, the motions pipeline would be so clogged, and rulings would be so delayed, that the system would be dysfunctional.

[13] In addition, I note that Ontario Regulation 50/25, which contains Rule 49.14, has been approved by the Attorney General and filed as of May 5, 2025. Section 11 of the Regulation provides: “This Regulation comes into force on the day that is six weeks after the day this Regulation is filed.”

[14] That means that new Rules 49.14(4) to (7) pertaining to partial settlements will be in force on June 25, 2025 when the motions before me are set to begin. All counsel will therefore be in a position to argue the impact, if any, of those Rules on the present situation.

[15] Under the circumstances, I am not prepared to adjourn the upcoming court dates. The motion by the Plaintiffs for approval of the proposed settlement with CDSPI, together with the motion by Aviva for a stay of proceedings, shall be heard as scheduled on June 25 to June 27, 2025.

Edward M. Morgan
Date: June 9, 2025