Singer Kwinter’s Nga Dang highlights important facts and outcomes in the Ontario Courts.
Case summary originally distributed in OTLA’s July 7, 2019 newsletter.
2343697 Ontario Inc. v. Aviva Insurance Company of Canada, 2019 ONSC 3016 (CanLII)
The Defendants succeeded on a motion for an order requiring that the Plaintiffs appoint an appraiser pursuant to s. 128(5) of the Insurance Act.
On November 24, 2014, the Plaintiffs suffered property damage at their cottage due to inclement weather conditions. The Plaintiffs submitted a proof of loss dated May 19, 2015. An action was commenced on December 2, 2015. Examinations for discovery were completed. A mediation occurred in December 2018. Undertakings were answered in January 2019.
On March 7, 2019, the Defendants gave notice to the Plaintiffs under s. 128 of the Insurance Act that they had appointed an appraiser. The Plaintiffs refused to appoint their own appraiser, arguing that appraisal was not an appropriate process for this claim. The Plaintiffs argued that the request for appraisal at this stage of the proceeding was an abuse of process, as it was designed to delay them from setting the action down for trial.
The policy of insurance included statutory condition 11 from the Insurance Act which provides as follows:
In the event of disagreement as to the value of the property insured, the property saved or the amount of the loss, those questions shall be determined by appraisal as provided under the Insurance Act before there can be any recovery under this contract whether the right to recover on the contract is disputed or not, and independently of all other questions. There shall be no right to an appraisal until a specific demand therefore is made in writing and until after proof of loss has been delivered.
Myers J. noted that the Court of Appeal has held that the appraisal process may be brought while litigation is outstanding, and that appraisal is the preferred process for quantifying damages in property insurance cases. Although the main issues discussed among the parties to date in this action may have been interpretive ones under the policy, the quantum of the claim in issue remained unresolved. Myers J. stated that appraisers can therefore value the quantum of the Plaintiffs’ losses so that at trial, whatever the judge holds to be the applicable interpretation can then be applied to the values as appraised. Myers J. held that the appraisal process can be used even where coverage is not admitted and even when there are other questions between the parties.
Myers J. noted that the only real issue was whether the Defendants were committing an abuse of process or causing undue prejudice to the Plaintiffs by invoking the appraisal now. Myers J. did not believe that the appraisal would prevent the Plaintiffs from setting the action down for trial under Rule 48.01, but even if it did, statutory condition 11 stated that appraisal is required “before there can be any recovery under the contract”. Myers J. further noted that it is the intention of the statute that the issue of proof of the quantum of damages in a property case will not be before the court. Myers J. held that there was no abuse of process in the circumstances of this case. The Defendants’ motion was granted.