Court File and Parties
Court File No.: CV-21-00002686-00A1
Date: 2025-11-05
Ontario Superior Court of Justice
Between:
PAUL, LAIT Unrepresented Plaintiff
- and -
SABHA, HINDU Mark Klaiman, for the Defendant Defendant
- and -
ECCLESIASTICAL INSURANCE OFFICE PLC, PRESZLER INJURY LAWYER Anthony Gatensby, for the Third-Party Ecclesiastical Insurance Office PLC Third-Party
Heard: October 22, 2025, in person
Motion for Summary Judgment
THE MOTION
[1] The Third Party, Ecclesiastical Insurance Company (the insurer of the Defendant, Hindu Sabha Temple) moves for Summary Judgment by way of a declaration that it owes no duty to defend Hindu Sabha in a claim brought by the Plaintiff against Hindu Sabha for damages arising from sexual abuse or assault of the Plaintiff by an employee of the Temple, on two bases:
a. The loss arises from sexual abuse and such losses are excluded from coverage under the Ecclesiastical policy; and
b. Hindu Sabha's claim is not covered because Hindu Sabha breached its obligation to report the claim as required by the policy such that Ecclesiastical is irreparably prejudiced in defending the claim, and no relief from forfeiture should be granted.
RESULT
[2] For reasons set out below, the Application is allowed in part. The insurer has no obligation to defend the Temple in this action. Common Exclusion 7, excluding claims arising from sexual abuse, applies to exclude the loss in its entirety. This finding is sufficient to dismiss the Motion. Had I not found Common Exclusion 7 to have applied, I would have dismissed the motion on the basis that whether the claim was reported as required and whether relief from forfeiture should be granted require findings of fact and credibility to be made and must await the findings made at trial. Further, there is no bespoke procedure short of a trial that will do justice between the parties in a more efficient, proportional or economical way than a trial.
THE ACTION
[3] The Plaintiff, Lalit Paul, was a boy of 14 who spent much time at temple Hindu Sabha. He alleges that for a period in 2009, he was sexually touched by Singh, a part time employee of Hindu Sabha who worked at the Temple. The Statement of Claim alleges that Singh was a guru, spiritual leader, and/or teacher at Hindu Sabha. At the hearing, Hindu Sabha referred to him as a part time cook.
[4] The Statement of Claim was issued on 23 July 2021, and served shortly thereafter, although the date is not clear. Hindu Sabha says that this was its first notice of the claim or the circumstances of the claim.
[5] The Plaintiff sued Hindu Sabha pleading that it is vicariously liable for the actions of Singh. Hindu Sabha submitted the claim to Ecclesiastical asking it to undertake the defence of the claim. Hindu Sabha says it wrote to Ecclesiastical on 9 August and 5 September 2023 to report the claim. Ecclesiastical says that it was notified of the claim on 27 November 2023 when Hindu Sabha sent Ecclesiastical Hindu Sabha's Third Party Claim against it. The Third Party Claim was issued 1 November 2023.
ISSUES
[6] There are three issues in this motion:
a. Is the loss excluded by Exclusion 7 of the Common Exclusions?
b. Did Hindu Sabha breach its obligation to report the claim as required by the policy? and
c. Should Relief from Forfeiture be granted?
[7] I deal with the second and third issues together.
ANALYSIS
Motion for Summary Judgement
[8] There is no dispute about the law regarding Summary Judgment. I summarize it here for completeness' sake. Further, both parties submit that an insurance coverage dispute lends itself to resolution by Summary Judgment.
[9] Rule 20.04(2)(a) states that the Court shall grant Summary Judgement if "the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence." If there is a genuine issue requiring trial, pursuant to Rule 20.04(2.1) the judge may exercise certain powers "unless it is in the interest of justice for such powers to be exercised only at a trial." These powers include the following:
a. Weighing the evidence.
b. Evaluating the credibility of a deponent.
c. Drawing any reasonable inference from the evidence.
[10] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, para. 66, the Supreme Court says that the Court's analysis on a Summary Judgement Motion must take place in two stages:
a. The Motion judge must determine if there is a genuine issue requiring a Trial based only on the evidence filed on the Motion. No genuine issue requiring a Trial will exist if the evidence permits the Motion judge to fairly and justly adjudicate the dispute in a timely, affordable, and proportional matter. If no genuine issue requiring a Trial exists, the Motion judge must render Summary Judgement.
b. If the Motion judge concludes at the first stage that a genuine issue for Trial exists, the Motion judge must consider whether a Trial may be avoided by using the enhanced fact-finding powers set out in Rule 20.04(2.1). The Motion judge may exercise those powers, unless doing so would be contrary to the interests of justice.
[11] The overarching concern is whether the Summary Judgement will provide a fair and just adjudication of the issues.
[12] At para. 50, the Supreme Court explained that when a Summary Judgement Motion allows the judge to find the necessary facts and resolve the dispute, proceeding to Trial would generally not be proportionate, timely or cost effective. On the other hand, where the judge cannot have confidence in their conclusion, Summary Judgement is not a proportionate way to resolve a dispute. The Trial judge must be sure that s/he can find the necessary facts and apply the relevant legal principles to resolve the dispute.
[13] Each party must put its best foot forward by setting out in the Affidavit specific facts showing that there is a genuine issue requiring a Trial. For example, if there is a fact that must be proven to succeed at Trial and the party having the onus to prove that fact cannot demonstrate there is sufficient evidence, then a Trial is unnecessary (see: Pammett v. Ashcroft, 2014 ONSC 2447, at paras. 27 and 29).
[14] Issues of credibility may be decided on a motion for Summary Judgment, but the Court must approach issues of credibility carefully, determining those issues only if it finds that the record is sufficient to make that determination (see: Zhu v. Kendellhurst Academy Inc., 2018 ONSC 7685, at para. 12).
[15] In Cook v. Joyce, 2017 ONCA 49, at para. 91 to 92, the Court of Appeal said that the more important credibility is to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record:
[91] Summary judgment can operate as a timely, fair, and cost-effective means of adjudicating a civil dispute, but it has its limits. Not all civil disputes are amenable to a final adjudication on the merits by summary judgment. The present summary judgment motion proceeded on an entirely written record, with the motion judge declining to hear oral evidence under r. 20.04(2.2). As this court has observed, in certain cases adjudication exclusively on a written record poses a risk of substantive unfairness: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438, at para 44.
[92] The more important credibility disputes are to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record. As Benotto J.A. wrote in Trotter Estate, 2014 ONCA 841, 122 O.R. (3d) 625, at para. 55, "[i]t is not always a simple task to assess credibility on a written record. If it cannot be done, that should be a sign that oral evidence or a trial is required."
[16] Further, the Affidavits on a motion for Summary Judgement are prepared by lawyers and usually include voluminous exhibits. These facts can obscure the affiant's "authentic voice". Consequently, the Court must ensure that lawyer-crafted evidence and transcript evidence from cross examinations do not create substantive unfairness that would not likely occur in a trial where the trial judge sees and hears the witnesses' evidence in full context (see: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438, at para. 44; Metropolitan Toronto Condominium Corporation No. 1067 v. 1388020 Ontario Corp., 2025 ONSC 667, at para. 37 (ix); Truscott v. Co-operators General Insurance Company, 2023 ONCA 267, 482 D.L.R. (4th) 113, at paras. 58-59; Thompson v. Herschel Rescue and Training Systems, 2023 ONCA 845, at para. 10).
ISSUE #1: DOES COMMON EXCLUSION 7 APPLY TO EXCLUDE THE LOSS
The Law
[17] The parties also agree on the law that applies to the duty to defend, except in one respect which I will return to later in these reasons.
[18] The uncontroverted law is as follows:
a. The primary interpretive principle is that the court should give effect to clear language to the insurance policy, reading the contract as a whole. Where the language of the insurance policy is ambiguous, the courts rely on general rules of contract construction. For example, courts should prefer interpretations that are consistent with the reasonable expectations of the parties 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 one that would not have been in the contemplation of the parties at the time the policy was concluded. Courts should also strive to ensure that similar insurance policies are construed consistently. These rules of construction are applied to resolve ambiguity. They do not operate to create ambiguity where there is none in the first place. When these rules of construction fail to resolve the ambiguity, courts will construe the policy against the insurer. One corollary of the contra proferentem rule is that coverage provisions are interpreted broadly, and exclusion clauses narrowly (see: Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, at par. 22 to 24).
b. In determining the duty to defend, the Court must consider the provisions of the policy and the pleadings in the underlying action to determine whether the insurer has a duty to defend the insured. The "pleadings" are those that advance a claim against the insured (see: IT Haven Inc. v. Certain Underwriters at Lloyd's, London, 2022 ONCA 71, 18 C.C.L.I. (6th) 219, at para. 35). The factual statements in the pleading must be accepted as true. The Court cannot consider "extrinsic evidence", namely evidence not contained in a pleading. Documents referred to in a pleading may be referred to in determining the duty to defend as they are incorporated by reference (see: Monenco, at para. 36; IT Haven Inc., at para. 37; Ontario v. St. Paul Fire and Marine Insurance Company, 2023 ONCA 173, para 27). (I will return to the issue of whether, and if so, what other "extrinsic evidence" a court may consider).
c. The pleadings must be interpreted broadly, with any doubt being resolved in favour of the insured (see: Panasonic, at para. 22; Monenco, at paras. 31-33; IT Haven Inc., para 34).
If the pleadings allege facts which may trigger the insurer's duty to indemnify the insured, the insurer must defend the insured (see: Monenco, at para. 28). The mere possibility of coverage, based on a reasonable reading of the policy and the claim, is sufficient to trigger the duty to defend the insured against that claim (see: Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551 at para. 52; Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, 122 O.R. (3d) 144, at para. 14; Nichols v. American Home Assurance Co., [1990] 1 S.C.R. 801, at p. 810). The insurer's duty to defend is broader than the duty to indemnify (see: Monenco, at para. 29; Nichols at p. 810; Panasonic Eco Solutions Canada Inc. v. XL Speciality Insurance Company, 2021 ONCA 612, 466 D.L.R. (4th) 276, at para. 22).
d. In determining whether coverage is possible, a court must look beyond the labels used to describe the claims and ascertain the substance and true nature of the claim (see: Scalera, at para. 50).
e. Any doubt as to whether the pleadings bring the incident within coverage must be resolved in favour of the insured. Coverage clauses should be construed broadly in favour of coverage, and exclusion clauses should be construed narrowly (see: Monenco, at para. 31; Tedford, at para. 14). Where the policy is ambiguous, effect should be given to the reasonable expectations of the parties (see: Tedford, at para. 14; Scalera, at para. 71).
f. If coverage is excluded for defined claims, coverage is also excluded for derivative claims. Derivative claims are claims that are not distinct from the excluded claims (see: Scalera, at para. 51).
THE PLEADING
[19] The Statement of Claim names Hindu Sabha, only. Although Mr. Singh, the alleged assailant, is named in the pleadings he is not a party and does not seek coverage under Ecclesiastical's policy. The material allegations in the Statement of Claim are:
The Plaintiff, Paul, alleges that commencing in or about 2009, when the Plaintiff, Paul, was approximately 14 years of age, Singh sexually abused, assaulted, and molested the Plaintiff [then listed particulars of the assaults]
The Plaintiff, Paul, alleges that that [sic] all of the aforementioned wrongful acts were related to activities pertaining to his [the assailant's] involvement with the Defendant, HS [i.e. Hindu Sabha].
The Plaintiff, Paul, alleges that Singh's behaviour constituted sexual abuse, battery and assault. […]
[20] Hindu Sabha is alleged to have owed a duty of care to the plaintiff which was breached. The particulars of negligence as against Hindu Sabha, which are set out the following paragraphs of the Statement of Claim:
The Plaintiff, Paul, alleges that the Defendant, HS, owed the Plaintiff, Paul, a duty of care, and in particular, a duty to protect him from harm by its employees, volunteers and/or priests, and specifically wrongdoing of a sexual nature.
The Plaintiff, Paul, alleges that the Defendant, HS, employed Singh to carry out the purposes and teachings of the Defendant, HS, in dealing with the Plaintiff, Paul. It provided the Singh with the opportunity and means to come into contact with the Plaintiff, Paul. It fostered a relationship between Singh and the Plaintiff, Paul. It provided Singh with a position of respect, authority and trust. It provided Singh with control of the temple, which further added to his position of respect and power.
The Plaintiff, Paul, alleges that the rules, principles, and policies of the Defendant, HS, created an opportunity for Singh to exert power and authority over the Plaintiff, Paul, which allowed Singh to engage in and continue to engage in the aforementioned behavior.
The Plaintiff, Paul, alleges that the Defendant, HS, provided Singh with the responsibilities and powers of a priest and provided him with the opportunity to abuse such responsibilities and powers. The abuse by Singh was related to the relationship of trust and intimacy between him and the Plaintiff, Paul, which arose as a result of Singh's position as an employee and/or priest, a position granted to him by the Defendant, HS.
The Plaintiff, Paul, alleges that at all material times, Singh was acting in the course of his duties as an employee and/or priest for the Defendant, HS, and was using the rules, principles, and policies of the temple to further his attempts to manipulate the Plaintiff, Paul, and engage in deviant activities.
The Plaintiff, Paul, alleges that Singh was, as a result of his position with the Defendant, HS, able to take advantage of the Plaintiff, Paul, under the guise of carrying out the activities of a priest. Singh was able to gain access to the Plaintiff, Paul, and was afforded an opportunity to foster a trusting relationship with the Plaintiff, Paul, and engage in the aforementioned behaviours for a considerable period of time and thereby the Defendant, HS, put the Plaintiff, Paul, at risk of being abused by Singh.
The Plaintiff, Paul, alleges that he trusted Singh as a result of his status as a priest. The Plaintiff, Paul, was dependent upon Singh for leadership, mentorship, counseling, religious and/or spiritual guidance and was vulnerable to any abuse or wrongful exercises of Singh's power.
The Plaintiff, Paul, alleges that the Defendant, HS, created the risk of sexual assault that led to, and allowed Singh to sexually assault the Plaintiff, Paul.
The Plaintiff, Paul, alleges that the Defendant, HS, was negligent and failed in its duty to the Plaintiff, Paul, the particulars of which are set out below:
(a) it failed to properly supervise its employees, volunteers and/or priests, including Singh;
(b) it failed to instruct its employees, volunteers and/or priests about the possibilities of becoming sexually deviant and/or making advances to members and/or other young people;
(c) it failed to educate members and/or staff of the church, about the possibility of such deviant behaviours;
(d) it failed to properly investigate Singh's background, character and psychological state prior to offering him a position with the church;
(e) it failed to document Singh for his shortcomings as a priest and employee;
(f) it failed to warn Singh's immediate supervisors, colleagues, members and others who may come into contact with Singh of his difficulties as a priest;
(g) it failed to have any, or a proper system of self-reporting, other-reporting or counselling in place for employees, volunteers and/or priests who engage in such behaviour;
(h) it fostered a system, based on the rules, principles, and policies of the Defendant, HS, in particular, the belief that members attend temple, programs and/or meetings to experience and to see values held, modelled, expressed and taught by priests, whereby the reporting of such deviant sexual behaviour of a priest by its members would be considered to be "wrong";
(i) it denied the existence, or alternatively, was wilfully blind to the existence of the behaviour described herein;
(j) it implemented and maintained a system which was designed to cover-up the existence of such behaviour if such behaviour was ever reported;
(k) it failed to protect the Plaintiff, Paul, from Singh when it knew, or ought to have known, that he was vulnerable to the attentions, influence and authority of Singh;
(l) it failed to properly supervise, control, and give guidance to its employees, volunteers and/or priests, particularly Singh;
(m) it failed to screen and/or monitor the character and sexual activity of employees, volunteers and/or priests, particularly Singh;
(n) it failed to warn the Plaintiff, Paul, and others of the propensities of Singh;
(o) it failed to protect the Plaintiff, Paul;
(p) it failed to take steps to investigate the activities of Singh once it was fully aware of his shortcomings in an effort to locate and assist any victims including the Plaintiff, Paul; and,
(q) it failed to adequately counsel and assist the Plaintiff, Paul, once it knew of Singh's behaviours.
The Plaintiff, Paul, alleges that in addition to, and in the alternative to the above, the Plaintiff, Paul, alleges that the Defendant, HS, knew or ought to have known that Singh had the propensity to engage in such deviant behaviours.
The Plaintiff, Paul, alleges that the Defendant, HS, owed a special duty to the Plaintiff, Paul, by virtue of its relationship with him to counsel and render assistance to the Plaintiff, Paul, once it became aware of the behaviour of Singh.
The Plaintiff, Paul, alleges that the relationship between him and Singh commenced when the Plaintiff, Paul, was a very young person, and as such, Singh and the Defendant, HS, owed the Plaintiff, Paul, a high duty/standard of care, and in particular, a duty to protect him from harm by its priests and specifically sexual abuse.
The Plaintiff, Paul, alleges that the Defendant, HS, is vicariously liable for the actions of Singh.
THE POLICY
[21] While the alleged assaults covered two of Ecclesiastical's policy periods, the relevant wordings are the same.
[22] Hindu Sabha is "the insured" under the coverage grant.
[23] Common Exclusion 7 is the material exclusion on this motion. It provides:
This insurance does not apply to:
7. Abuse
"Bodily injury," "property damage" or "personal and advertising injury" arising directly or indirectly, in whole or in part out of:
a. Claims or "actions" arising directly or indirectly from "abuse" committed or alleged to have been committed by an Insured, including the transmission of disease arising out of any act of "abuse".
b. Claims or "actions" based on the insured's practices of "employee" hiring, acceptance of "volunteer workers" or supervision or retention of any person alleged to have committed "abuse".
c. Claims or "actions" alleging knowledge by an Insured of, or failure to report the alleged "abuse" to the appropriate authority(ies).
[24] The policy defines "Abuse" for the purposes of the exclusion as "any act or threat involving molestation, harassment, corporal punishment, assault or battery or any other form of sexual, physical, mental, psychological or emotional abuse".
THE POSITION OF THE PARTIES
[25] Ecclesiastical argues that the abuse exception clearly excludes all aspects of the claim against Hindu Sabha. Lalit Paul alleges that Singh sexually assaulted him, that Singh was in the course of his employment at the time, and that Hindu Sabha was vicariously responsible for Singh.
[26] Hindu Sabha argues that the exclusion does not apply, arguing that the Court should consider on the coverage question the evidence of the Plaintiff on his Examination for Discovery, the material portions of which are:
a. Paul first interacted with Singh in the kitchen of Hindu Sabha. Singh was a cook (question 144).
b. The alleged sexual assaults occurred on three occasions (question 146).
c. On the first occasion, Singh did not "assault" Paul. Singh laid down beside Paul on a mat in the Temple and softly touched Paul's shoulder (question 148-153).
d. The second incident occurred when Paul accompanied Singh back to Singh's room and took a nap with him (Question 155).
e. The third occasion occurred while they were working in the kitchen preparing food. Singh asked Paul to help set up Singh's Facebook account. Paul said that he and Singh went to the exterior rear of the Temple where there was a silver trailer. While he was setting up Singh's Facebook account, Singh tried to force himself on the top of Paul while they were in this silver trailer (question 160-182).
[27] Hindu Sabha argues that since the Plaintiff did not consider the first two instances as sexual assaults, the exclusion is not triggered.
[28] Hindu Sabha concedes that the third incident was a sexual assault. Relying on the evidence of the Affiant on behalf of Hindu Sabha, however, it argues that at the time of the assault, Singh was not acting within the scope of his employment or in furtherance of the Temple's business, and Common Exclusion 7a does not apply. The trailer in which the third incident occurred was nothing but a storage trailer, with no electricity or other utilities. Common Exclusion #7a applies to claims arising whole or in part, directly or indirectly, from abuse committed or alleged to have been committed "by an insured". "An insured" is defined in Section II - Who Is An Insured of the General Liability section of the policy. Clause 2(a) of that definition provides that employees are insured persons under the policy, but only for "acts within the scope of their employment by the insured or while performing duties related to the conduct of the insured's business".
[29] Since the exclusion does not apply to Mr. Singh, since he was an employee of the Temple, and since all allegation against the Temple relate to its responsibility for Mr. Singh, Common Exclusion 7 does not apply to bar the defence to the Temple.
[30] Hindu Sabha's submissions invite consideration of the extrinsic evidence rule and of the definition of "conduct of the insured's business".
ANALYSIS
[31] I find that the Sexual Abuse Exclusion Applies to exclude this loss, based on the facts as pleaded.
[32] The exclusion clearly excludes all loss arising wholly or partially, directly or indirectly, out of claims or actions:
a. Arising directly or indirectly from abuse committed or alleged to have been committed by an insured,
b. Based on the insured's practices of employee hiring, acceptance of volunteer workers, or supervision or retention of any person alleged to have committee the alleged abuse;
c. Alleging knowledge by an insured of, or failure to report, the alleged abuse to authorities.
[33] All allegations in the Statement of Claim fall within one of these three categories.
[34] There is no question of ambiguity or doubt.
The "Extrinsic Evidence" of Pleadings Rule
[35] What about Hindu Sabha's argument that two of the three events were not "abuse" and in the third, Singh was acting outside his employment?
[36] Hindu Sabha does not argue that the exclusion is ambiguous or capable of more than one meaning. It argues that the exclusion does not apply because Singh's first two alleged contacts were not sexual assaults and in the third, Singh was not acting in discharge of his duties as an employee.
[37] This argument raises the extrinsic evidence rule or pleadings rule.
[38] Neither counsel could refer me to any cases in which the Court used the evidence from the Examination for Discovery of the plaintiff/victim of sexual assault to determine the Defendant's insurer's duty to defend the Defendant. Accordingly, I approach the issue from first principles.
The Law
[39] The basic rule is that on a duty to defend motion, the court may look only at the pleadings advancing claims against the insured, and the policy. The allegations in the pleadings are to be accepted as true, and if any contain allegations which might be covered, the duty to defend is triggered. The duty to defend is therefore broader than the duty to indemnify, because it is triggered by the mere possibility of coverage (see: Panasonic, at para. 22, citing Monenco, at paras. 28-29).
[40] There are exceptions to extrinsic evidence rule. A court may consider documents, such as contracts or other documents expressly referred to in the pleadings in the underlying action (see: Gordon G. Hilliker, Liability Insurance Law in Canada, 7th ed. (Toronto: LexisNexis Canada, 2020), at p. 114, Monenco, at para. 36; IT Haven Inc., at para. 37; Ontario v. St. Paul Fire and Marine Insurance Company, 2023 ONCA 173, para 27) or extrinsic evidence of "underlying facts" where those facts are unrelated to, and not disputed in, the underlying action (see: Hilliker, at p. 121; Mark G. Lichty & Marcus B. Snowden, Annotated Commercial General Liability Policy, loose-leaf (2021-Rel. 2) (Toronto: Thomson Reuters Canada Ltd., 2021), at §12:22; Craig Brown et al., Insurance Law in Canada, loose-leaf (2021-Rel. 8) (Toronto: Thomson Reuters Canada Ltd., 2021), at §18:15; 1540039 Ontario Limited v. Farmers' Mutual Insurance Company (Lindsay), 2012 ONCA 210, 110 O.R. (3d) 116, at paras. 26, 30; IT Haven, para. 37). This appears to be based on the proposition that there can be no prejudice to the insured (the Respondent on that Motion) in so doing.
[41] In IT Haven, the Court of Appeal, beginning at page 38, addressed the philosophy behind judicial reticence to considering extrinsic evidence in duty to defend applications. The Court of Appeal gave two reasons:
a. Using extrinsic evidence to determine whether the insurer owes the insured a duty to defend could require findings of fact or the resolution of live issues in the underlying litigation which could operate to prejudice the insured in the underlying litigation and could potentially result in inconsistent findings between underlying litigation and the duty to defend dispute. Further, findings of fact made on the application could ultimately be "contrary to the evidence tendered on the full record at trial.
b. The issue of the duty to defend must be determined quickly, at the beginning of the litigation. It is only fair to the insured to prevent it from being left to defend itself while the insurer contests its liability under the policy. Therefore, a duty to defend application should not become a "trial within a trial.
[42] Based on these general rules, the Court upheld the Application Judge's refusal to consider the insured's alleged misrepresentations that the insurer said voided the policy, as they were highly contested, and required a hearing.
[43] In Ontario v. St. Paul Fire and Marine Insurance Company, 2023 ONCA 173, the Plaintiff referred in its pleading to various reports that were critical of Ontario's bail release system. The Application Judge held that since the documents were referred to in the pleading, she could refer to them. Applying IT Haven's principled approach, the Court of Appeal held that since the Application Judge did not make findings of fact about or based on those reports, she had not run afoul of the extrinsic evidence rule. She only used the reports as an aid to determine the 'true nature' of the claims advanced against the insured. Although the claim was based in negligence, the allegations (in light of the reports) went beyond negligence and included, at the very least, that Ontario was "knowingly indifferent" to the harms it was causing (see: C.A. at para 14).
[44] In AIG Insurance Company of Canada v. Lloyd's Underwriters, 2022 ONCA 699, Lloyds declined to defend its insured in part based on an engineering report it commissioned with respect to the loss, offering a causal analysis, but also recommendations regarding remedial action. That report had been referred to in the claim against the insured. Therefore, the insurer urged that it could be used on the duty to defend application.
[45] The Application Judge noted that he had reservations about using the engineer's report as urged by the insurer. After noting the caselaw which permits very limited use of extrinsic evidence, he determined that the report was only preliminary and part of an ongoing investigation. He said it was also controversial.
[46] The insurer appealed, alleging that the Application Judge had misapplied the law on the use of extrinsic evidence. Court of Appeal held that the Application Judge used the engineer's report appropriately when he held that the report could not be used to determine the duty to defend because doing so would require findings of fact to be made before trial that would affect the underlying litigation.
Application
[47] I am not persuaded that the extrinsic evidence rule's exceptions apply to include evidence given by the victim, given under oath or affirmation at his Examination for Discovery. I say this for the following reasons:
a. Although the Discovery evidence was taken under oath or affirmation, it has not yet been tested under cross examination;
b. It is not referred to in a pleading and therefore incorporated by reference;
c. Hindu Sabha does not urge the Court to use the Discovery evidence to determine the true nature of the claim. It urges the Court to accept these facts, which are not pleaded, to determine the duty to defend. As the Court of Appeal has instructed, this is beyond the permissible uses of the exceptions to the extrinsic evidence rule. To accept the evidence of the victim as to the nature of the events would be unfair to the Respondent on this Motion.
d. The facts Hindu Sabha urges the Court to accept are not uncontroversial. Ecclesiastical does not accept them. As a Third-Party defendant to the action, has not had the opportunity to test this evidence. The Discovery was held in May 2023, before Ecclesiastical was served, which, at the earliest, in August 2023.
e. The victim's characterization of the three incidents is not relevant. It is the legal characterization of them that is relevant on the duty to defend.
f. This is exactly the type of mischief that the extrinsic evidence rule was intended to prevent.
Scope of Employment
[48] If I am not correct with respect to the extrinsic evidence rule, I find that Common Exclusion 7 b) and c) still operates to exclude the action from coverage insofar as Hindu Sabha is concerned.
[49] In this case, Hindu Sabha, not Singh, who seeks a defence. The allegations against Hindu Sabha (as contained in para.s 22 to 34 of the Statement of Claim) are all excluded by Common Exclusion 7 b) and c).
[50] Hindu Sabha's interpretation of Common Exclusion 7 requires the exclusion to be read cumulatively; that is for the exclusion to apply to claims against Hindu Sabha there must first be an abuse committed by an employee or volunteer acting in relation to his employment with the temple (Common Exclusion 7 a)), and either of 7b) or 7c) apply. The exclusion does not read this way. For example, 7b) excludes: "Claims or "actions" based on the insured's practices of … supervision or retention of any person alleged to have committed "abuse". "Any person" is much broader than "an insured." Clause 7c excludes: "Claims or "actions" alleging knowledge by an insured of, or failure to report the alleged "abuse" to the appropriate authorities. In other words, the "abuse" that is known but not reported or acted upon can be by "an insured" or "any person".
ISSUES 2 AND 3: FAILURE TO REPORT AND RELIEF FROM FORFEITURE
[51] Had I found that Common Exclusion 7 did not exclude the loss, I would have dismissed the motion for Summary Judgment with respect to Hindu Sabha's delay in reporting the loss to the insurer and Hindu Sabha's request for relief from forfeiture. There are many factual disputes that must be decided, which require a hearing including:
a. Did Hindu Sabha notify the insurer of the claim in August or September 2023, or on November 23, 2023, when it sent the Statement of Claim and Third Party Claim to the insurer?
b. When was Hindu Sabha served with the Statement of Claim?
c. When did it first discover that it was insured by the insurer for the relevant times?
d. Did Hindu Sabha act reasonably in searching for its policy of insurance, including not calling its Broker(s) to determine if it had insurance for the relevant times?
e. Was its explanation for not sending the Statement of Claim to the insurer reasonable, i.e., in all the circumstances, did it send the Claim to the insurer 'as soon as practicable, after receiving it?
f. Was the insurer prejudiced by the delay in reporting?
[52] Neither party was of any assistance with respect to whether there is a bespoke process that could be crafted short of a full trial on the issue of notice to the insurer and relief from forfeiture. In any event, deciding the question now or short of the underlying action would create the possibility of inconsistent findings between the bespoke process and the trial of the underlying action.
CONCLUSION
[53] In the result, the court grants summary judgment and the proceedings are dismissed against Ecclesiastical Insurance. By agreement, Hindu Sabha shall pay costs of $12,500.00 to the insurer.
Trimble, J.
Released: November 5, 2025