Background
John Jordan and William Nielson, joint owners of a hunting camp destroyed by fire on November 3, 2018, claimed $51,000 under a $55,000 cash-value fire insurance policy with Commonwell Mutual Insurance Group. After an Ontario Provincial Police investigation ended favourably for them, Commonwell initiated the appraisal process under s. 148, Statutory Condition 11, of the Insurance Act. The umpire appraised the cash value at $32,918.26, less the deductible and indemnity payments.
On October 6, 2022, Justice Mary A. Fraser of the Superior Court of Justice recorded the parties’ agreement that the February 23, 2021 Appraisal Agreement was binding, except for specifically excluded items and without prejudice to the plaintiffs’ other damages claims. After the limitation period for appealing that order expired, Commonwell paid the appraisal amount. The plaintiffs sold the property for $23,000 and continued their action, alleging breach of contract and bad faith against Commonwell and negligence against their broker, Finnegan Insurance Brokers Ltd. Commonwell and Finnegan were the defendants and moving parties below; the plaintiffs were the appellants on the main appeal and respondents on the cross-appeal, while the defendants were respondents on the main appeal and appellants by way of cross-appeal.
Justice Thomas J. Carey refused a proposed amendment asserting a newly alleged $50,000 settlement agreement because it raised a new cause of action after the limitation period. Following a three-day trial, the defendants moved for non-suit at the close of the plaintiffs’ case. Carey J. reserved judgment and, roughly 15 months later, released a 1½-page decision dismissing the action. Six months afterward, he awarded each defendant $10,000 in inclusive costs.
The Court’s Holding
Writing for Miller, Trotter and Osborne JJ.A., Trotter J.A. would dismiss the plaintiffs’ appeal. He agreed that Carey J.’s reference to granting “summary judgment motions” was erroneous, but accepted that it was a slip: the motion, submissions and decision were framed in non-suit terms, and nothing in the reasons showed use of the genuine-issue-for-trial test from Hryniak v. Mauldin. Although it would have been preferable to articulate the limited inquiry described in FL Receivables Trust 2022-A v. Cobrand Foods, the Court found no basis to conclude that Carey J. failed to apply that test. His reference to “credible evidence” was surplusage.
The reasons, though imperfect and brief, permitted meaningful appellate review under the functional approach in Levac v. James. The Court independently agreed that no evidence supported the remaining claims. The contract claim was not pursued on appeal. The bad-faith allegations failed on the evidence; the alleged settlement was not properly before the Court. Against Finnegan, Jordan admitted knowing he had a cash-value-only policy, acknowledged not discussing the issue with his broker, and had renewed the same policy repeatedly. The absence of expert evidence establishing the applicable standard of care and its breach was fatal under Krawchuk v. Sherbak. A replacement-cost appraisal had been struck from Jordan’s trial affidavit by consent and was not properly before the Court.
The Court granted the defendants leave to appeal costs and allowed their cross-appeal. It deferred to Carey J.’s findings concerning multiple counsel and litigation conduct, and held that his brief costs reasons remained reviewable. Nevertheless, the award was clearly wrong: proportionality had overshadowed other Rule 57 considerations, including four days of discoveries, the numerous settlement offers and the principle of indemnity. Rule 49.10(2) did not apply because the plaintiffs recovered no judgment, but Rules 49.13 and 57.01(1) permitted consideration of the offers. The Court substituted partial-indemnity trial awards of $40,000 inclusive of HST for each defendant, plus Commonwell’s $11,607.37 and Finnegan’s $2,556.24 in disbursements. It also awarded each defendant $10,000 all-inclusive for each appeal.
Key Takeaways
- The appellate court treated the summary-judgment wording as an error in description, not proof that the wrong test had been used, after examining the motion, submissions and record.
- Brevity and delay did not themselves establish insufficient reasons; the decisive question was whether meaningful appellate review remained possible.
- The costs intervention rested on this record: neglected indemnity, disbursements, pre-trial expense and settlement offers, alongside deference to the trial judge’s findings on counsel and conduct.
Why It Matters
The decision illustrates the contextual review of sparse reasons following a non-suit and the distinction between identifying imperfections and finding reversible error. Its costs analysis also shows how an award may remain reviewable in reasoning yet require intervention where the overall result deprives successful parties of reasonable indemnification.