Every week, Bell Temple LLP selects and reports on interesting and relevant decisions from the Ontario Superior Court of Justice, Ontario Court of Appeal, and Supreme Court of Canada.
This week’s case reports are written by Devon McIntyre
Borkowski v. Karalash et al., 2023 ONSC 6274
The plaintiff was involved in a motor vehicle accident on May 15, 2014, and brought claim for damages on May 11, 2016. The action was set down for trial in September 2019, and a pre-trial was held in June 2020. At the pre-trial the agreed to the action proceeding by way of 8-10 day jury trial.
The plaintiff subsequently advised that she had consulted with her counsel and for various reasons, including defense medicals and opinions offered at pre-trial brought, her claim would be more appropriate to proceed under the Simplified Procedure under Rule 76 of the Rules of Civil Procedure. She a motion to amend her claim to reduce the damages sought to the $200,000 limit under Rule 76, and to strike the Jury Notice.
The Defendants opposed the plaintiff’s motion, claiming that they had been prepared to proceed to trial since the June 2020 pre-trial, but that the plaintiff had repeatedly requested that the trial date be pushed back, most recently at a trial scheduling attendance in February 2023 when she asked that the trial be moved to the next jury trial sittings in 2025.
Because the plaintiff’s motion was brought after her action had been set down for trial, she had to seek leave to bring the motion pursuant to Rule 48.08. The Court identified for leave to be granted in this situation, party had to demonstrate that there had been a substantial or unexpected change in circumstances giving rise to the motion. The Plaintiff pointed to the fact that at the time her claim was issued and at the time that it was set down for trial, the monetary limit for Simplified Procedure claims under Rule 76 was $100,000. Amendments to Rule 76 which came into effect on January 1, 2020 included an increase in the monetary threshold for Simplified Procedure to $200,000 which the Plaintiff argued constituted a substantial change in circumstances. The Court ultimately agreed, and the Plaintiff’s motion was allowed.
With respect to the Plaintiff’s motion to amend her claim and strike the jury notice, the Court noted that per the recent decision in Thomas v. Aviva, 2022 ONSC 1728, for matters in which a Jury Notice was delivered prior to January 1, 2020, they can only be transferred to Simplified Procedure if the Jury Notice is struck. The overriding consideration in determining whether a Jury Notice should be struck is whether to do so would be in the interests of justice.
The Plaintiff argued that the most expedient and just way for the action to proceed would be by judge alone under Rule 76 on the date for which it had already been set. The plaintiff further argued that preparation for civil jury trials is more extensive and costly than a judge alone trial, and that civil jury trials inevitably take longer than a judge alone trial.
The Court ultimately agreed with the Plaintiff, noting that there was “no specific functional litigation disadvantage to the defendant in having the case adjudicated by an impartial and independent judge instead of an impartial and independent jury.”
While the Defendants argued that they had a right to have the action heard by a jury, the Court disagreed, and opined that a jury trial is not a constitutional right, but is a procedural entitlement that, as discussed in past cases, is subject to contextual factors and reasonable limits in the interest of obtaining the most just, expeditious and least expensive determination of each proceeding.
Trillium Mutual Insurance Company v. Emond, 2023 ONCA 729
This recent decision from the Court of Appeal concerned the interpretation of certain provisions in a home insurance policy, particularly as they pertained to the cost of rebuilding a residential home belonging to the respondents after it was destroyed by a flood.
The respondents owned a home on the Ottawa river which was located in an area that was regulated by the Mississippi Valley Conservation Authority (the “MVCA”), which put in place Regulation Policies (the “MVCA Regulations”) for any construction and development in or adjacent to rivers, lakes, shorelines, hazardous lands, and wetlands.
The Respondents held a standard form homeowners’ insurance policy issued by the Appellant, and on April 29, 2019 their home was severely damaged by a flood, and was deemed a total loss. The Appellant acknowledged coverage, however there was a disagreement as to which terms of the policy applied in determining which costs of replacing the Respondents’ home were excluded under the policy. In particular, the policy included the following terms:
- A Guaranteed Rebuilding Cost Coverage endorsement to pay the insured to replace a dwelling with materials of similar quality using current building techniques (the “GRC”);
- An exclusion for “increased costs of repair or replacement due to the operation of any law regulating the zoning, demolition, repair, or construction of buildings” (the “para. 8 Exclusion”); and,
- A Building By-Law and Code Compliance Coverage endorsement (the “BBCC”) that provided for payment of up to $10,000 for increased costs of demolition, construction, or repair to comply with any law regulating the zoning, demolition, repair, or construction.
The Appellant took the position that the MVCA Regulations fell within the meaning of the phrase “any law regulating the zoning, demolition, repair, or construction of buildings” included in the para. 8 exclusion. They acknowledged that there was coverage available under the BBCC for additional costs incurred for the purpose of compliance with the MVCA Regulations, however that such costs were capped at $10,000, as they were otherwise excluded per the para. 8 Exclusion.
The Respondents disagreed, and took the position that the cost of rebuilding their home in accordance with the MVCA could increase construction costs by as much as $700,000. They noted that the MVCA Regulations had come into place after the original construction of the house. The Respondents brought an Application for a declaration that the GRC entitled them to recover the total cost of rebuilding their home without any limitation of coverage for costs to comply with the MVCA Regulations.
The Applications judge at first instance cited the principle from the Court of Appeal decision in Wigle v. Allstate Insurance Co. of Canada,[1] 1984 CarswellOnt 26, that limitations on endorsements such as the GRC that are not “clearly apparent” should be set out in the endorsement itself. Because the GRC did not itself contain any limitations on compliance cost, the Applications judge determined that they were covered.
They further determined that the term “law” in the para. 8 Exclusion was restricted to statutes and did not include what was called “subordinate authority” such as rules, regulations, by-laws, or ordinances, pointing to the fact that the BBCC coverage used the term law but also “by-law”, “regulation”, and “ordinance.” The Application judge opined that the insurer bore the onus of proving that the para. 8 Exclusion clearly applied, and failed to meet that onus. Accordingly, the Respondents were found entitled to recover their rebuilding costs without any limitation on coverage for additional costs of complying with the MVCA Regulation.
Court of Appeal however disagreed with the Application Judge, and the decision was overturned. Although the Court of Appeal acknowledge the general principle that any irresolvable ambiguity in an insurance contract should be construed against the insurer, they disagreed that the words “any law” found in the para. 8 Exclusion did not include MVCA Regulations. In arriving at this conclusion the Court of Appeal discussed a number of earlier decisions concerning the meaning of the word “law” and noted:
“in general terms, “the term ‘law’ includes rules of conduct laid down by a legislative authority by way of statute, regulation, ordinance, by-law or some other form of prescribed method.” The plain meaning of the word “law” therefore includes both legislation and rules of subordinate authority such as by-laws and regulations.”
The Appeal was successful and the Application Judge’s decision was set aside.
[1] 1984 CanLII 45 (ON CA)
