In Marvelous Mario’s Inc. v. St. Paul Fire and Marine Insurance Co., 2019 ONCA 635, the plaintiffs commenced two separate actions to claim for insurance proceeds under a commercial general liability policy in relation to a moth infestation that allegedly caused business interruption losses and the bankruptcies of their related commercial bakery businesses. Justice Hourigan, writing on behalf of the panel at the Court of Appeal, upheld the trial judge’s finding that the plaintiffs’ alleged losses did not constitute “direct loss” and were therefore not covered under the policy. In relation to the defendant’s cross-appeal, the Court of Appeal reversed the trial judge’s finding that portions of the plaintiffs’ action for business interruption losses related to lost business equipment could proceed to a trial on the issue of damages and held that the plaintiffs’ claim should be dismissed in its entirety. Importantly, the Court of Appeal clarified that for “rolling limitation periods” to apply to claims for business interruption losses, there must be recurring or multiple breaches within the context of an ongoing obligation that would restart the clock for a limitation period. The Court of Appeal ordered costs of the appeals and the cross-appeal to the defendant in the amount of $20,000. Further, the issue of costs for the second action was remanded to the trial judge (with costs of the first action previously awarded in the amount of $180,000).
The defendant, St. Paul Fire and Marine Insurance Co., was represented at trial and on appeal by Bell Temple partner, David A. Tompkins, and associate, Trevor J. Buckley.