Law Times

Law Times • January 15, 2018 Page 15 www.lawtimesnews.com CASELAW elsewhere in s. 267.5. Unifor- mity of language that legislature intended "amount of damages for non-pecuniary loss" to be same amount that was subject to reduction upon application of rules under s. 267.5(7). Place person with vicarious liability in no worse position than pro- tected defendant as to amount of damages, court must subtract applicable amount for statu- tory deductible from amount of damages awarded by jury. Hinds v. Metrolinx (2017), 2017 CarswellOnt 17771, 2017 ONSC 6619, Emery J. (Ont. S.C.J.). Plaintiffs granted leave to claim negligent representation, bad faith and punitive damages Plaintiffs suffered fire which destroyed their business prem- ises, contents, and equipment. Plaintiffs owned that premises and operated lodge/restaurant as resort. At time of fire loss, lodge, equipment and business were insured under subscrip- tion resort policy of insurance issued by defendant insurance broker (S Ltd.). Defendant P was insurance broker with J Ltd, and was local agent who arranged coverage with plaintiffs. Resort policy was specifically designed for resorts by S Ltd. on behalf of subscribing insurers. Prospec- tive insured's application was sent to S Ltd. who developed insurance package geared to- ward resort's needs, and S Ltd. enlisted subscribing insurance companies to provide coverage for described losses. S Ltd. re- ceived compensation through distribution and brokerage agreement. Value chart provid- ed by S Ltd. to brokers included minimum levels of replacement costs for lodges but no criteria for classification of lodges un- der standard, deluxe or luxury categories. Plaintiffs' uncontra- dicted evidence was that they were unaware of existence of value chart before fire, but relied on P in agreeing to insure lodge for minimum replacement cost of $427,000, and P's evidence was that she urged plaintiffs to obtain quotation from local contractors to determine cost of rebuilding lodge. After fire, it became apparent that cover- age to replace lodge itself was significantly inadequate. Plain- tiffs commenced claim against P, J Ltd., and S Ltd. for breach of contract, negligence, and/or breach of fiduciary duty. Plain- tiffs brought motion for leave to amend statement of claim to include claim of negligent rep- resentation against S Ltd. and bad faith with resultant punitive damages. Motion granted. Cri- teria for negligent misrepresen- tation may be reasonably found to exist, plaintiffs were within limitation period based on dis- coverability principle and there was reasonable cause of action against S Ltd. for negligent mis- representation. It was not plain and obvious beyond reasonable doubt from amended statement of claim that plaintiffs could not succeed at trial on claim for bad faith with resultant punitive damages. Regarding claim of bad faith in statement of claim, given evidence available, plain- tiffs could have cause of action for bad faith with resultant pu- nitive damages. No basis ex- isted for establishing link from amendments sought and any prejudice to S Ltd. that could not be addressed by appropri- ate ruling on timing of filing of amended statement of defence or ruling on costs in ultimate resolutions of matters if plain- tiffs were not successful with any new claims. 2015004 Ontario Inc. v. J.G. Rivet Insurance Brokers Ltd. (2017), 2017 CarswellOnt 4105, 2017 ONSC 1793, K.E. Pedlar J. (Ont. S.C.J.). AUTOMOBILE INSURANCE Extent of risk Breach of probation order not operating to restrict availability of insurance coverage Defendant P owned snowmobile covered by his automobile insur- ance provided by defendant in- surance company (Aviva). P had valid G driver's licence which was not subject to any restric- tions, but P was subject to pro- bation order arising from guilty plea to careless driving in 2008 which prohibited him from driving at night or with alcohol in his system. P was involved in serious snowmobile collision one night after drinking while ice fishing with his friends, with plaintiff M being seriously in- jured. M and his mother com- menced action against P for damages for negligence and settlement was reached respect- ing liability and damages, how- ever, issue of insurance coverage was unresolved. At trial, Aviva was held liable for M's damages entirely as P had been autho- rized by law to drive in accor- dance with Statutory Condition 4(1) under Insurance Act (Act). Aviva's position was also found to be inconsistent with s. 118 of Act. Aviva appealed. Appeal dis- missed. Compliance with Statu- tory Condition 4(1) depended only on P's possession of valid driver's licence and compli- ance with its terms, not terms imposed on driving pursuant to any other law. Enactment of s. 118 of Act was meant to ensure that there was coverage avail- able for claims of innocent tort victims and interpretation that would result in tortfeasor who had broken law having no cover- age would negate policy under- lying s. 118 of Act. Breach of his probation order did not operate to restrict availability of insur- ance coverage to P. Middleton v. Pankhurst (2017), 2017 CarswellOnt 16762, 2017 ONCA 835, C.W. Hourigan J.A., L.B. Roberts J.A., and I.V.B. Nordheimer J.A. (Ont. C.A.); affirmed (2016), 2016 Carswel- lOnt 7803, 2016 ONSC 3157, W. Matheson J. (Ont. S.C.J.). Active use of vehicle not requirement for "use and operation" Insured was injured when hood of vehicle collapsed while refill- ing windshield washer f luid. Vehicle was parked in drive- way, engine was off and in- sured was not going anywhere. Insured claimed for and was refused statutory accident ben- efits (SABS) by insurer. Insured commenced action against in- surer. Insured brought motion for summary judgment and declaration that injuries were sustained as result of use and operation of motor vehicle; in- surer brought cross-motion for summary judgment to dismiss action. Motion granted; cross- motion dismissed. Opening hood to check level of wind- shield washer f luid was one of ordinary and well-known ac- tivities to which motor vehicles were put. Active use of vehicle was not requirement. Insured granted declaration of entitle- ment to claimed SABs. Davis v. Aviva Canada Inc. (2017), 2017 CarswellOnt 15969, 2017 ONSC 6173, C.T. Hackland J. (Ont. S.C.J.). CONTRACT OF INDEMNITY Contribution among insurers "Failing to obey stop sign" including failing to stop and failing to yield to traffic Insured was injured in colli- sion at intersection between his motorcycle and motor vehicle. Insurer J sought to recover pur- suant to s. 275 of Insurance Act, statutory accident benefits paid to its insured from insurer E. Indemnification in loss trans- fer under Insurance Act was made according to respective degree of fault of insured driv- ers involved in accident. Loss transfer arbitration was held. Arbitrator found that rule 14(2) under Fault Determination Rules applied to case, that mo- tor vehicle driver was 100% at fault for incident and that in- surer was entitled to loss trans- fer indemnity on 100% basis. Insurer E appealed. Appeal dis- missed. Arbitrator reasonably interpreted rule 14(2) having re- gard to s. 136 of Highway Traf- fic Act. Plain language "fails to obey a stop sign" supported use of Act as interpretive aid be- cause it was rules of road, upon which Fault Determination Rules were based, that provided context to understand what it meant to fail to obey stop sign. Arbitrator reasonably conclud- ed that "fails to obey a stop sign" included failing to stop at stop sign and failing to yield to traf- fic approaching intersection so closely that to proceed would have constituted immediate hazard. Arbitrator's decision was also consistent with pur- pose behind legislative scheme, to provide summary and expe- dient way of allocating fault that in most cases would probably, but not necessarily, correspond with actual fault. Arbitrator did not ignore drivers involved in accident but rather declined to take into account insured's speed, reasonably concluding it was impermissible tort consid- eration. Economical Mutual Insur- ance Company v. Jevco Insur- ance Company (2017), 2017 CarswellOnt 18713, 2017 ONSC 6534, Akbarali J. (Ont. S.C.J.); af- firmed (2017), 2017 CarswellOnt 4415, Scott W. Densem Member (Ont. Arb.). Judges and Courts JURISDICTION Superior courts Court should not exercise discretion to hear moot appeal due to concern for judicial economy Taxpayer was formed in corpo- rate reorganization involving amalgamation of three related corporations, with intent to achieve specific tax outcome by using "tax bump rules" under Income Tax Act. As amalgama- tion was effected in one step, rather than two steps, advanta- geous tax outcome did not re- sult. Application judge granted taxpayer's application for or- der rectifying amalgamation. Five weeks after application was granted, and one week af- ter Crown served notice of ap- peal, plan of arrangement was implemented. Later, Supreme Court of Canada released judg- ment clarifying test for recti- fication in tax context. Crown appealed. Appeal quashed. Ap- peal was moot and discretion should not be exercised to hear it. There was authority to order Director under Ontario Busi- ness Corporations Act to cancel certificate of arrangement and reinstate certificate of amalga- mation if it was determined on appeal that applicant was not entitled to rectification. Crown had time to seek stay of recti- fication order pending appeal but did not do so. Third parties had relied on financial conse- quences of plan of arrangement implemented pursuant to recti- fication order. Fraud was not al- leged and there were no special circumstances which justified exercising power to cancel cer- tificate of arrangement. In these circumstances, principle in ju- risprudence required court to decline to exercise its authority to order revocation of certifi- cate of arrangement. Because principle would not permit court to give effect to decision that taxpayer failed to meet new test for rectification, appeal was academic. Court should not exercise its discretion to hear appeal because of concern for judicial economy. Slate Management Corpora- tion v. Canada (Attorney Gen- eral) (2017), 2017 CarswellOnt 15279, 2017 ONCA 763, Alex- andra Hoy A.C.J.O., K.M. van Rensburg J.A., and L.B. Roberts J.A. (Ont. C.A.). Municipal Law PLANNING APPEAL BOARDS AND TRIBUNALS Judicial review Ontario Municipal Board ordering township to amend zoning bylaw permitting accessory building Respondent S brought applica- tion seeking permission for ac- cessory building on property in applicant township. Town- ship's council defeated motion made to introduce and pass by- law to amend zoning in man- ner requested by S. When mo- tion was defeated, S appealed to Ontario Municipal Board ("OMB"). Township made un- successful motion requesting that appeal be dismissed pursu- ant to s. 34(25)(a)(i) of Planning Act. OMB concluded that ac- cessory building erected solely for agricultural uses fit char- acter of surrounding area and was consistent with provincial policy as ref lected in Provincial Policy Statement ("PPS") as well as in conformance with policy direction of both county's offi- cial plan and township's official plan. OMB ordered that town- ship draft zoning bylaw amend- ing relevant zoning bylaw per- mitting accessory building be submitted to board for its con- sideration. Township brought application for judicial review. Application dismissed. Town- ship brought up numerous is- sues, including submission that OMB declined to exercise its ju- risdiction in not hearing its mo- tion. There was nothing in re- cord to substantiate township's bald claims that OMB simply "declined to hear the Township's motion" and "failed to provide reasons for [its] decision". Even if material filed by township had provided basis for arguing that OMB wrongfully declined juris- diction or failed to provide suf- ficient reasons in relation to par- ticular s. 34(25) motion brought by township in this particular case, such idiosyncratic and case-specific failing would not be of sufficient general or pub- lic importance to merit atten- tion of Divisional Court. Issues proposed by townships were framed in manner inaccurately suggesting that this particular OMB decision had more exten- sive formal ramifications than it actually did. Relief actually granted by OMB was entirely and precisely contemplated by S's application and appeal, and had very definite "nexus or con- nection" to underlying applica- tion. Standard of reasonableness applied, as PPS is policy issued pursuant to authority granted by Planning Act and its interpreta- tion and application therefore falls within specialized expertise of OMB. Appropriate deference accordingly must be shown to OMB's decisions in that regard. Snowden v. The Corporation of the Township of Ashfield-Col- borne-Wawanosh (2017), 2017 CarswellOnt 17848, 2017 ONSC 6777, I.F. Leach J. (Ont. Div. Ct.).

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