Court Of Appeal Summaries (November 2, 2015 – November 6, 2015)

There was one substantial civil law decision from the Court of Appeal this week, along with a number of shorter endorsements. The more substantive decision was an insurance case where a home insurer tried to bring a subrogated claim against its own insured in order to access the insured's auto policy. The court confirmed that an insurer cannot sue its insured for the very loss covered. Other topics covered this week included default judgments, summary judgment, equitable set-off, fraudulent conveyances, vexatious litigants, family law, and the Repair and Storage Liens Act.

Table of Contents

Civil Cases

Rochon v. Rochon, 2015 ONCA 746 (click on the case to read the summary)

Keywords: Insurance Law, Fire Loss, Interpretation, Unnamed Insured, Insurable Interest, Factual Expectancy Test, Kosmopoulos v. Constitution Insurance Co. of Canada, Scott v. Wawanesa Mutual Insurance Co., Subrogation, Whether Home Insurer Could Bring Subrogated Claim Against Negligent Unnamed Insured

Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733 (click on the case name to read the summary)

Keywords: Vexatious Litigants, Motion to Dismiss, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, Rule 2.1

Frankie Tomatto's Woodbine Inc. v. De Groot, 2015 ONCA 739 (click on the case name to read the summary)

Keywords: Civil Procedure, Noting in Default, Default Judgment, Setting Aside

Todd Brothers Contracting Limited v. Algonquin Highlands (Township),2015 ONCA 737 (click on the case name to read the summary)

Keywords: Contract Law, Summary Judgment

Correia v. Smith, 2015 ONCA 743 (click on the case name to read the summary)

Keywords: Personal Property, Liens, Repair and Storage Liens Act, s. 15, Vehicle Lease, Notice of Sale, Improper Notice, Damages

Tribecca Finance Corporation v. Tabrizi, 2015 ONCA 748 (click on the case name to read the summary)

Keywords: Contract Law, Mortgages, Default, Equitable Set-Off, Duress, Bad Faith, Breach of Fiduciary Duty, Consolidation of Proceedings, Civil Procedure, Summary Judgment

Indcondo Building Corporation v. Sloan, 2015 ONCA 752 (click on the case name to read the summary)

Keywords: Debtor-Creditor, Civil Procedure, Judgments, Enforcement, Fraudulent Conveyances, Fraudulent Conveyances Act, Assignments and Preferences Act, Setting Aside Transfers, Piercing the Corporate Veil, Laches, Delay

Cortina v. Cortina, 2015 ONCA 750 (click on the case name to read the summary)

Keywords: Family Law, Equalization of Property, Exclusion of Gifts, Inter Vivos Gifts, Child Support, Custody, Costs Consequences, Family Law Act, s. 4(2), Family Law Rules, R. 18(14)

For a list of Civil Law Endorsements, click here

For a list of Criminal Law decisions, click here

Civil Cases

Rochon v. Rochon, 2015 ONCA 746

[Simmons, Epstein, and Pardue JJ.A.]

Counsel:

Steve Baldwin and Daniel Baldwin, for the appellants

Alan L. Rachlin, for the respondent

Keywords: Insurance Law, Fire Loss, Interpretation, Unnamed Insured, Insurable Interest, Factual Expectancy Test, Kosmopoulos v. Constitution Insurance Co. of Canada, Scott v. Wawanesa Mutual Insurance Co., Subrogation, Whether Home Insurer Could Bring Subrogated Claim Against Negligent Unnamed Insured,

Facts:

There was a fire in the garage of Paulette and Marcel Rochon's home when their son, Francois Rochon was working on his car in the garage. Francois Rochon entered the home for a brief period of time, and upon his return to the garage he noticed the garage and his car were engulfed in flames. The fire spread causing extensive damage. The house was insured under a residential homeowner's insurance policy (the "Policy") issued by Grenville Mutual Insurance ("Grenville"). Paulette and Marcel Rochon were the named insureds and Francois Rochon was an unnamed insured. The definition of who is insured under the Policy read as follows:

"You" or "your" means the person(s) named as Insured on the Declaration Page and, while living in the same household, his or her spouse, the relatives of either or any person under the age of 21 in their care. "Spouse" includes either of two persons who are not married to each other and have lived together continuously for a period of not less than three years or, in a relationship of some permanence where there is a child born of whom they are the natural or adoptive parents, and have cohabited within the preceding year. Only the person named on the Declaration Page may take legal action against us. [Emphasis added by the Court of Appeal]

Grenville paid Paulette and Marcel $148,581.65 for property damage caused by the fire. Francois Rochon had third party liability coverage for loss caused by his negligence in the use and operation of a motor vehicle under an insurance policy with Economical Insurance ("Economical"). Grenville sought to recover from Economical in a subrogated claim alleging that the fire resulted from Francois Rochon's negligent use and operation of the vehicle.

The trial judge concluded that Francois Rochon was negligent in using equipment to fix his vehicle. However, despite Francois Rochon's negligence, Grenville was not entitled to subrogate its claim against Economical because an insurer cannot subrogate against its own insured. The language used in the Grenville Policy clearly and unambiguously established Francois Rochon as an insured. Furthermore, Conditions 5, 6 and 11 also supported Francois Rochon was an insured. The trial judge also ruled that Francois Rochon had an insurable interest in the loss. Grenville appealed the decision.

Issues:

(1) Did the trial judge err in concluding that Francois Rochon was an insured under the Policy for the purposes of the claim?

(2) Did the trial judge err in finding that Francois Rochon had an insurable interest in the loss?

(3) Did the trial judge err in not giving effect to the policy argument for allowing subrogation in the circumstances of this case?

Holding: Appeal Dismissed.

Reasoning:

(1) No, the language in the Policy was clear and the trial judge gave effect to it. The Policy unambiguously defined Francois Rochon as an insured under Section 1. He fell under the definition of "you" and "your", which applied to all sections of the Policy. Furthermore, there was no inconsistent use of "you" and "your" throughout the Policy. The definition of "you" and "your" and its applicability to Section 1 was unambiguous. The Court of Appeal also recognized that even if it were to hold otherwise, the Supreme Court in Non-Marine Underwriters, Lloyds of London v. Scalera held that in interpreting insurance contracts, standard practice is to construe ambiguities against the insurer. Thus, the definition of "you" and "your" must be interpreted broadly and any ambiguity must be construed against Grenville. If Grenville wished to preclude coverage of Francois Rochon, it was incumbent on Grenville to clearly provide this in the wording of its contract of insurance. The Court of Appeal also rejected Grenville's privity argument. Thus, the Court of Appeal saw no reason to interfere with the trial judge's finding that Francois Rochon was an unnamed insured under Section 1 of the Policy.

(2) No. The Court of Appeal relied on the Supreme Court's decision in Kosmopoulos v. Constitution Insurance Co. of Canada which defined insurable interest in terms of the factual expectancy test. This means "To 'have a moral certainty of advantage or benefit, but for those risks or dangers' or 'to be so circumstanced with respect to [the subject matter of insurance] as to have benefit from its existence, prejudice from its destruction' is to have an insurable interest in it." Thus, an insurable interest exists if, apart from the insurance contract itself, the insured would benefit or suffer from the continued existence or destruction of the subject-matter of insurance or from the occurrence of the insured-against risk. In Scott v. Wawanesa Mutual Insurance Co., the Supreme Court applied the factual expectancy test from Kosmopoulos and concluded that an insurable interest in a residence can exist absent legal ownership.

The Court of Appeal held that there were two areas that Francois Rochon had an insurable interest in the loss. First, Section 1 of the Policy stated that the contents of the dwelling and any other personal property owned, worn, or used while on the premises was insured. The trial judge found as fact that Francois Rochon had contents and tools on the premises and therefore he had an insurable interest in the...