Walker v. Sovereign General Insurance Co., (2011) 283 O.A.C. 192 (CA)

• Judge: O'Connor, A.C.J.O., Laskin and MacPherson, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: March 30, 2011
• Jurisdiction: Ontario
• Citations: (2011), 283 O.A.C. 192 (CA);2011 ONCA 597

Walker v. Sovereign General (2011), 283 O.A.C. 192 (CA)

MLB headnote and full text

Temp. Cite: [2011] O.A.C. TBEd. SE.018

The Sovereign General Insurance Company (defendant/appellant) v. Marie Walker and Albert Walker (plaintiffs/respondents)

(C52325; 2011 ONCA 597)

Indexed As: Walker v. Sovereign General Insurance Co.

Ontario Court of Appeal

O'Connor, A.C.J.O., Laskin and MacPherson, JJ.A.

September 19, 2011.

Summary:

Walker slipped and fell on ice in a parking lot. She and her husband sued the property owner and the maintenance company retained to keep the property clear of ice and snow. The owner cross-claimed against the maintenance company. The maintenance company had gone bankrupt and did not defend the action. Five years after the accident, the owner notified the maintenance company's insurer of the action, forwarded all the pleadings to it and arranged for a lengthy adjournment of the trial to permit the insurer to participate in the action. The insurer declined to participate. The Walkers settled with the owner and obtained judgment against the maintenance company for $100,000 in general damages and related relief. The Walkers sued the insurer under s. 132 of the Insurance Act, claiming damages of $145,793.95 (the amount of the total judgment against the maintenance company less the owner's contribution). Alternatively, they claimed relief from forfeiture under s. 129 of the Act. The Walkers moved for summary judgment. The insurer brought a cross-motion for summary judgement to dismiss the action.

The Ontario Superior Court, in a decision reported at [2010] O.T.C. Uned. 3283, allowed the Walkers' motion, holding that they were entitled to judgment under s. 132. Alternatively, they were entitled to relief from forfeiture under s. 129. The insurer appealed.

The Ontario Court of Appeal dismissed the appeal.

Insurance - Topic 1861

The insurance contract - Interpretation of contract - Contra proferentem rule - Ambiguity construed against insurer - Walker slipped and fell on ice in a parking lot - She and her husband sued the property owner and the maintenance company retained by the owner - The maintenance company was bankrupt and did not defend - Five years after the accident, the owner notified the maintenance company's insurer of the action, forwarded all the pleadings to it and arranged for an adjournment to permit the insurer to participate - The insurer declined to participate - The Walkers settled with the owner and obtained judgment against the maintenance company - The Walkers sued the insurer under s. 132 of the Insurance Act - Alternatively, they claimed relief from forfeiture under s. 129 of the Act - A motions judge held that because the owner had cross-claimed against the maintenance company, it might have been entitled to part of the insurance proceeds and therefore it had standing to give the insurer notice of the claim (statutory condition 8) - He held that under either of the policy's two notice provisions (statutory condition 8 or policy condition 3(a)), the owner's notice was effective notice to the insurer - Accordingly, the Walkers were entitled to judgment under s. 132 - Alternatively, they were entitled to relief from forfeiture - The Ontario Court of Appeal dismissed an appeal - The policy contained two stand alone coverages: property coverages and liability coverage - The statutory condition applied to property coverages and the policy conditions applied to liability coverage - Therefore, statutory condition 8 did not apply - However, policy condition 3(a) permitted notice to be given "by or for the insured" - The person giving notice should have sufficient proximity to the claim to have knowledge of the information required by condition 3(a) - The owner was such a person - Minimally, the class of persons capable of giving notice was ambiguous and the ambiguity had to be construed against the insurer - Alternatively, the court would have granted relief from forfeiture - The failure to give timely notice constituted imperfect compliance, not non-compliance - Forfeiture would be inequitable given the judge's findings that there was no bad faith and the insurer suffered no prejudice from the late notice.

Insurance - Topic 3110

Payment of insurance proceeds - Actions - Conditions precedent - Notice of claim - [See Insurance - Topic 1861 ].

Insurance - Topic 3137

Payment of insurance proceeds - Actions - Relief against forfeiture - When available - [See Insurance - Topic 1861 ].

Insurance - Topic 3139

Payment of insurance proceeds - Actions - Relief against forfeiture - Imperfect compliance with statutory conditions - Claims - Notice and proof of loss - [See Insurance - Topic 1861 ].

Insurance - Topic 3162

Payment of insurance proceeds - Actions - By judgment creditor against debtor's insurer - When available - [See Insurance - Topic 1861 ].

Insurance - Topic 6945

Liability insurance - Defences - Notice of possible claim - Lack of - [See Insurance - Topic 1861 ].

Cases Noticed:

Lewis v. Prince Edward Island (1998), 172 Nfld. & P.E.I.R. 93; 528 A.P.R. 93; 157 D.L.R.(4th) 227 (P.E.I.C.A.), refd to. [para. 13].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 37].

Elance Steel Fabricating Co. v. Falk Bros. Industries Ltd. and Canadian Surety Co., [1989] 2 S.C.R. 778; 99 N.R. 228; 80 Sask.R. 22, refd to. [para. 41].

Counsel:

William S. Chalmers, for the appellant;

Stephen B. Abraham and Michael G. Emery, for the respondents.

This appeal was heard on March 30, 2011, by O'Connor, A.C.J.O., Laskin and MacPherson, JJ.A., of the Ontario Court of Appeal. Laskin, J.A., released the following judgment for the court on September 19, 2011.