The City of Oshawa sought a declaration that MEARIE had a duty to defend it in a slip-and-fall action arising from an uneven sidewalk where Oshawa PUC had previously performed work.
The City was an additional insured on Oshawa PUC's policy.
The court found that MEARIE had a duty to defend because there was a mere possibility that the claim fell within coverage, as the liability could arise from Oshawa PUC's operations.
However, the court held that the City must bear its share of defence costs for uncovered claims and denied the City's request to appoint its own counsel, finding that MEARIE's proposed safeguards adequately addressed any conflict of interest.
