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 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 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 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, 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, 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.

An insurer sought to amend its statement of defence approximately nine years after a fire destroyed the insured's restaurant to assert that the insured had deliberately set the fire, rather than relying on its original defence of non-cooperation with the fire investigation.

The motion judge dismissed the amendment motion and awarded substantial indemnity costs.

The Court of Appeal upheld the dismissal of the amendment but reduced the costs award, finding that while the insurer's delay was inordinate and triggered a presumption of prejudice that was not rebutted, the conduct did not rise to the level of egregious misconduct warranting substantial indemnity costs.

The plaintiffs sought partial summary judgment regarding their Guaranteed Rebuilding Cost Coverage (GRC) endorsement in a homeowner's policy following a fire loss.

The defendant insurer disputed the claim, arguing that the plaintiffs had not commenced rebuilding within the two-year period stipulated by the endorsement.

The court found that the plaintiffs had taken sufficient steps to "begin to repair or rebuild" within the two-year period, or alternatively, within the extended period provided by a Tolling Agreement.

The court also considered and rejected the application of relief from forfeiture under the Insurance Act or Courts of Justice Act as an alternative basis for relief.

The plaintiffs' motion for partial summary judgment was successful, entitling them to GRC coverage.

The defendant insurer brought a motion to amend its statement of defence to allege that the plaintiffs committed arson and fraud, eight years after the fire that destroyed the plaintiffs' business.

The insurer had originally only pleaded a lack of co-operation.

The court dismissed the motion, finding that the extreme and unexplained delay in seeking the amendment would cause non-compensable prejudice to the plaintiffs, who had lost the opportunity to properly investigate the allegations when the evidence was fresh.

The court also noted concerns regarding the insurer's duty of utmost good faith.

The plaintiff hospital sued the general contractor (Compass) and subcontractor (Black Creek) for water damage caused during a kitchen renovation.

Black Creek brought a motion under Rule 21 to determine whether Compass's cross-claim against it for contribution and indemnity was barred by the 'covenant to insure' in the general contract.

Black Creek argued the tort immunity principle barred the cross-claim for damage to the entire hospital.

Compass argued the immunity only applied to the 'work' (the kitchen project) and not the adjacent property (the rest of the hospital).

The court held that the covenant to insure and the builder's risk policy only covered the project site (the kitchen), not the entire hospital.

Therefore, Compass's cross-claim against Black Creek for damages outside the kitchen was not barred.

The defendants brought a motion under Rule 49.09(a) of the Rules of Civil Procedure for judgment enforcing a settlement allegedly accepted by the self‑represented plaintiff.

The underlying action concerned allegations by a former Ph.D. student that his academic supervisor and the university engaged in harassment and misconduct that prevented him from completing his studies and caused psychological harm.

The court reviewed extensive settlement negotiations conducted by email and found that the defendants made a formal settlement offer which the plaintiff unequivocally accepted.

The plaintiff argued that there was no meeting of the minds, citing mental health issues, limited English proficiency, and alleged duress arising from financial pressure and the potential termination of health benefits.

The court rejected these arguments, finding that the plaintiff had the capacity to contract, understood the terms including the requirement of a full and final release of all claims, and freely accepted the offer.

The settlement was enforced and judgment granted in accordance with its terms.

The applicant municipalities sought a declaration that their insurers had a duty to indemnify them for damages sought in two underlying actions relating to the expropriation of lands for a Toyota manufacturing plant.

The insurers argued the application was premature as the underlying actions involved substantial disputed facts and potential coverage exclusions, including whether the municipalities gained a personal profit or advantage, or if the claims were for restitution or statutory compensation.

The court dismissed the application, holding that unlike the duty to defend, the duty to indemnify must generally be determined after trial based on findings of fact, and the current record contained too many disputed facts to resolve the coverage issues prematurely.