Top 5 Civil Appeals From The Court Of Appeal (July 2013)
Aviva Insurance Company of Canada v. Lombard General Insurance Company of Canada, 2013 ONCA 416 (Blair, Tulloch and Lauwers JJ.A.), June 20, 2013 2. Goodyear Canada Inc. v. American International Companies (American Home Assurance Company), 2013 ONCA 395 (Laskin, Cronk and Hoy JJ.A.), June 13, 2013 3. Ontario College of Pharmacists v. 1724665 Ontario Inc. (Global Pharmacy Canada), 2013 ONCA 381 (Gillese, Epstein and Lauwers JJ.A.), June 10, 2013 4. Peel Law Association v. Pieters, 2013 ONCA 396 (Cronk, Juriansz and Pepall JJ.A.), June 13, 2013 5. Williams-Sonoma Inc. et al. v. Oxford Properties Group Inc. et al., 2013 ONCA 441 (Weiler, Gillese and Hoy JJ.A.), June 26, 2013 1. Aviva Insurance Company of Canada v. Lombard General Insurance Company of Canada, 2013 ONCA 416 (Blair, Tulloch and Lauwers JJ.A.), June 20, 2013 In this decision, the Court of Appeal assessed the responsibility of two insurance companies to cover losses which resulted from a 1995 Toronto apartment fire. Among the defendants held liable for the fire were Axes Investments, the owner of the building, and Tandem Group Management, the property manager. Jointly represented at trial, they were found liable for a portion of the plaintiffs' damages as a single defendant. Axes and Tandem were insured under three policies: a primary policy from Lombard General Insurance Company of Canada, with limits of $1 million, insuring both Axes and Tandem; a Lombard umbrella policy, with limits of $9 million, insuring both Axes and Tandem; and a policy issued by Aviva Insurance Company of Canada, with limits of $5 million, insuring only Tandem. The insurers' peculiar responses to the tort actions, with Lombard defending Axes and Tandem as a single defendant represented by one counsel and Aviva declining to participate, set off a long and complex legal battle. The central dispute between them was which policy would respond to the losses in excess of the first million dollars covered by Lombard's primary policy, and in what amount. Ultimately Aviva paid the entire amount of the excess claim to the tort plaintiffs. It then brought a motion for recovery from Lombard for half of the payment. Aviva submitted that Lombard should be responsible for half of the payment on the theory that the Lombard umbrella policy covered Axes and Tandem, and Tandem and Axes were each liable to pay the portion of the damages assessed against them in the tort actions. Lombard premised its argument on the fact that a previous proceeding had determined that Aviva was required to respond next after the Lombard primary policy to the liability of their joint insured, Tandem. As Aviva's payment satisfied the liability claim in full, Lombard argued it had no responsibility under its excess umbrella coverage. Grace J. agreed with Aviva and ordered judgment against Lombard in the amount of $1,086,195.70, representing half of the amount paid by Aviva. Lombard appealed. Blair J.A. found a resolution of the appeal in the principles of equitable contribution. Citing the decision of the Supreme Court of Canada in Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48,  2 S.C.R. 695, Blair J.A. outlined the criteria for applying the doctrine between insurers: (i) All policies concerned must comprise the same subject-matter. (ii) All policies must be effected against the same peril. (iii) All policies must be effected by or on behalf of the same assured. (iv) All policies must be in force at the time of the loss. (v) All policies must be legal contracts of insurance. (vi) No policy must contain any stipulation by which it is excluded from contribution. As Blair J.A. explained, the doctrine of equitable contribution has traditionally been applied to prevent over-recovery by an insured with more than one insurer covering the same risk, by requiring all insurers of the risk to share pro rata in payment of the loss. Having chosen the single defendant strategy in the tort action, Lombard and Aviva were each equally obliged to respond to the plaintiffs' claims in full. The fact that Aviva "blinked" first and paid for the excess of the claim does not relieve Lombard of its obligation. Blair J.A. went on to find that Lombard's responsibility to contribute to the damages awarded against Axes and Tandem could be grounded in the principle of unjust enrichment. The trial judge awarded damages against Axes and Tandem as a single tortfeasor and the plaintiffs had the right to pursue either or both of them. Both Axes and Tandem were obliged to pay the portion of the damages awarded against them. When Aviva covered that obligation, it conferred a benefit on Lombard and suffered a corresponding deprivation. Blair J.A. concluded that there is "no reason in law or justice" for Lombard's retention of the benefit conferred by Aviva. The Court concluded that Lombard was required to reimburse Aviva for one-half of its payment to satisfy the tort claims. The appeal was dismissed. 2. Goodyear Canada Inc. v. American International Companies (American Home Assurance Company), 2013 ONCA 395 (Laskin, Cronk and Hoy JJ.A.), June 13, 2013 In this decision, the Court of Appeal considered whether the Stonewall Principle should be adopted in Ontario. This appeal arose from the multitude of claims brought in the United States against Goodyear Canada arising from damages allegedly sustained over many years due to exposure to asbestos contained in materials manufactured and exported by the company. Goodyear sued the respondents, which had issued occurrence-based insurance policies to Goodyear for the period 1969-1980, seeking a declaration that they are obliged to defend and indemnify it in respect of the U.S. claims. The central dispute...
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