Thomas J. Donnelly

Great American Insurance Company appealed a judgment finding it had a duty to defend the City of Thunder Bay against claims related to property damage from sodium hydroxide in the water supply.

Great American argued a lead exclusion in its policy precluded coverage.

The Court of Appeal upheld the application judge's finding that a section of the lead exclusion was ambiguous, thus triggering the duty to defend based on the "mere possibility" of coverage, as per *Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada*.

The appeal was dismissed, and costs were awarded to the respondents.

This appeal addressed whether relief from forfeiture is available to an insured under a professional liability insurance policy when the claim was not reported to the insurer during the policy period.

The Court of Appeal affirmed the application judge's finding that the policy was a "claims made and reported" policy, meaning that reporting the claim within the policy period was a condition precedent to coverage.

As coverage was not triggered due to the late reporting, relief from forfeiture was not available.

The court clarified that the principle from *Stuart v. Hutchins* remains undisturbed by *Kozel v. Personal Insurance Co.*, maintaining the distinction between non-compliance with a condition precedent and imperfect compliance.

The appellants, small and mid-size businesses, appealed a class action decision regarding business interruption insurance claims stemming from the COVID-19 pandemic.

They sought coverage for revenue losses, arguing that the presence of SARS-CoV-2 or civil authority orders constituted "physical loss or damage" to their property under their insurance policies.

The Court of Appeal upheld the trial judge's finding that neither the virus's presence nor the civil authority orders met the "physical loss or damage" criteria for business interruption coverage.

The appeal was dismissed, and costs were awarded to the respondents.

The plaintiffs, representing a class of small to medium-sized businesses, sought coverage under their business interruption insurance policies for losses sustained due to the COVID-19 pandemic and related civil authority orders.

The court held a common issues trial to determine whether the presence of the SARS-CoV-2 virus or government lockdown orders could cause 'physical loss or damage to property' within the meaning of the policies.

The court concluded that the virus does not physically alter or damage inanimate surfaces, and that the loss of use of the premises due to government orders does not constitute physical loss or damage.

Consequently, the court answered the certified common issues in the negative, finding no coverage under the business interruption provisions.

The Applicants sought a declaration that the Respondents were responsible for coverage of a professional liability claim under an excess liability policy.

The policy was a "claims made and reported" policy, requiring claims to be made and reported during the policy period.

The Applicants' insurance broker failed to report the claim to the Respondents until three years after the policy period expired.

The court found that the "claims made and reported" requirement was a condition precedent to coverage and was not met.

The court rejected arguments that the Respondents suffered no prejudice or that other policy conditions were inconsistent.

The court also declined to grant relief from forfeiture, noting that the Applicants would not suffer prejudice as their broker had admitted negligence and agreed to indemnify them.

The application was dismissed, and costs were awarded to the Respondents.

The applicants sought indemnity under a professional liability 'claims made' policy.

The insurers denied coverage based on an exclusion clause for claims arising from wrongful acts committed prior to the policy period if the insured's Chief Legal Counsel knew or could have reasonably foreseen that such acts would result in a claim.

The court found that prior to the policy commencing, the applicants' Chief Legal Counsel had sufficient knowledge of alleged wrongful acts by an employee to reasonably foresee that a claim would be brought.

The application was dismissed and costs were awarded to the respondents.

The moving parties sought leave to appeal the order of Belobaba J. dated May 18, 2022.

The Divisional Court dismissed the motion for leave to appeal and awarded costs to the respondent in the agreed-upon amount of $6,000.

The defendants in a certified class action regarding COVID-19 business interruption insurance claims brought a motion seeking joint adjudication and common case management of common questions across approximately 79 overlapping proceedings.

The motion was opposed by several plaintiffs in individual actions who wished to proceed independently.

The court dismissed the motion, affording deference to a prior case management decision that declined to stay the individual actions, and finding that forcing joint adjudication would inappropriately undermine the plaintiffs' right to opt out of the class proceeding and cause undue delay.

The plaintiff municipality sought a declaration that its insurers had a duty to defend it in relation to a Director's Order issued by the Ministry of the Environment and Climate Change regarding environmental contamination.

The defendant insurers brought a Rule 21 motion to determine whether the Director's Order constituted a 'civil action' under their respective liability policies.

The court held that a regulatory proceeding, including an appeal of a Director's Order to the Environmental Review Tribunal, is not a 'civil action' as defined by the Rules of Civil Procedure or the Courts of Justice Act.

Consequently, the insurers had no duty to defend the municipality.

The applicants, former directors of PACE Savings & Credit Union, sought a declaration that CUMIS General Insurance Company had a duty to defend them in an action brought by the Financial Services Regulatory Authority (FSRA) as administrator of PACE.

CUMIS denied coverage based on the 'Insured vs. Insured' exclusion in the Directors' and Officers' Liability Policy.

The court held that while the exclusion applied, the 'derivative action' exception restored coverage because the FSRA, acting as a 'person', brought the claim on behalf of the corporation.

The court also ruled that applicants facing fraud claims were entitled to independent counsel due to a conflict of interest, while those facing only negligence claims were not.

The applicant sought a declaration that its insurer had a duty to defend it in an underlying lawsuit.

The insurer argued that coverage was excluded under Exclusion 20 of the claims-made policy, which excluded claims of which the insured was aware as of the 'inception date of this Policy'.

The court found the phrase 'inception date' to be hopelessly ambiguous, as it could refer to either the initial policy issuance date or the most recent renewal date.

Applying the principles of contract interpretation, the court construed the ambiguous exclusion clause against the insurer and granted the application, ordering the insurer to provide a defence.

The appellant held an unsatisfied default judgment against a contractor for defective sewer installation and sought to recover the judgment from the contractor's insurer under s. 132 of the Insurance Act.

The insurer denied coverage because it did not receive notice of the action until nine years after it was commenced.

The application judge dismissed the claim, finding the insured breached the policy's timely notice condition and refusing relief from forfeiture due to prejudice to the insurer.

The Court of Appeal dismissed the appeal, holding that notice provided by the appellant under Statutory Condition 8 did not cure the lack of timeliness, and that the appellant stood in no better position than the insured.

The insured renewed a travel insurance policy by telephone, providing answers about medical conditions.

After hospitalization, the insurer denied the claim due to alleged misrepresentation.

The insured's estate argued that the insurer could not rely on oral statements, asserting that Statutory Condition 2 of the Insurance Act required written statements.

The court dismissed the application, holding that the insurer's practice of providing a written application for review and correction after the telephone interview satisfied the statutory requirement and the consumer protection objectives of the Insurance Act.

The Dominion of Canada General Insurance Company appealed a motion judge's decision that Pembridge Insurance Company of Canada had no duty to defend Dennis Chu and John Chu from claims arising from a motor vehicle accident.

The underlying claim involved allegations that Dennis Chu drove negligently and subsequently engaged in threatening and assaultive conduct toward another driver.

The motion judge found that Pembridge's homeowner policy exclusions for vehicle-related claims and intentional acts precluded coverage.

The Court of Appeal reversed, holding that the motion judge erred by making factual findings inappropriate at the duty to defend stage, by failing to apply the proper legal test comparing pleadings to policy language, and by conflating the duty to defend with the duty to indemnify.

The court declared that the Chus were entitled to a defence under Pembridge's homeowner policy.

The applicant insurer sought a declaration that three other insurers had a duty to defend a construction company in an action for damages resulting from an allegedly defective mechanical system.

One insurer, AIG, denied a duty to defend based on faulty workmanship and loss of use exclusions.

The court found that the allegations in the statement of claim regarding consequential damage and loss of use were sufficiently broad to raise the possibility of coverage, triggering AIG's duty to defend.

The court further held that the defence costs should be allocated among the insurers on a 'time on risk' basis, rather than equally, and that a self-insured retention clause did not alter one insurer's obligation to contribute to defence costs at this stage.

The applicant, a university professor, sought a declaration that the respondent insurer had a duty to defend her in a defamation action brought by a former colleague in Trinidad and Tobago.

The insurer denied coverage, arguing the applicant was not acting on behalf of the university when she made the impugned statements and thus was not an 'Additional Insured'.

The court found that the pleadings raised the mere possibility that the applicant was acting in her capacity as a professor on behalf of the university when she provided an off-list reference.

The court declared the insurer had a duty to defend but held the insurer retained the right to appoint defence counsel.

The appellant appealed a jury verdict in a premises liability case arising from a slip and fall.

The jury found that the respondents exercised reasonable care to ensure the appellant was reasonably safe on the premises.

The appellant argued there was no evidence to support the verdict.

The Court of Appeal upheld the jury verdict, applying the stringent test for setting aside jury verdicts, which requires the verdict to be so plainly unreasonable and unjust that no jury acting judicially could have reached it.

The court found the appellant had merely asked the jury to reject defence evidence in favour of plaintiff's evidence, which was entirely within the jury's purview.

The applicant insurer sought a declaration that it owed no duty to defend or indemnify the insured under a homeowner's policy for a third-party claim arising from a motor vehicle accident.

The underlying claim alleged the insured negligently operated his vehicle and also exited his vehicle to threaten the other driver.

The respondent automobile insurer argued the homeowner's policy might cover the threatening behaviour.

The court held that the insured's actions after exiting the vehicle were incident to the use or operation of a motor vehicle, and therefore fell within the homeowner's policy exclusion for claims arising from the ownership, use, or operation of a motorized vehicle.

The declaration was granted.

The applicant insurer, Liberty Mutual, brought an application for a declaration that coverage for its insured, Cronnox Inc., was excluded under a 'prior notice' exclusion in a professional liability policy.

Cronnox, an engineering company, was sued following an electrical explosion at a hotel where it provided design services.

Prior to the inception of the Liberty policy, Cronnox received correspondence from lawyers representing the hotel's property insurer and construction manager, advising of a potential claim and inviting Cronnox to notify its liability insurer.

The court found that the application was not premature and could be decided on the record.

Applying an objective test, the court concluded that a reasonable person in the insured's position could have reasonably expected that the acts alleged in the correspondence might give rise to a claim.

Therefore, the prior notice exclusion applied, and Liberty had no duty to defend or indemnify Cronnox.

The applicants sought a Norwich Order against the respondent university to obtain documents and information regarding DNA testing of the applicants' chicken products.

The testing was featured in a media broadcast that the applicants alleged was defamatory.

The court dismissed the application, finding that the applicants had already identified the prospective defendants and could obtain the necessary information through the normal discovery process in their existing or planned litigation against the broadcaster and the university.

However, the court ordered the university to preserve the relevant evidence.