Fridays With Rogers Partners

At this morning’s muffin meeting, Micah Pirk O’Connell discussed the Court of Appeal’s recent decision in 1472292 Ontario Inc. (Rosen Express) v. Northbridge General Insurance Company, 2019 ONCA 753.

This was an appeal of a judgment following an application by Rosen Express as against its insurer, Northbridge, for various declaratory relief, including that Northbridge was obliged to defend and indemnify Rosen in relation to the theft of two containers of electronic goods that Rosen had consigned to deliver for a customer. The application was following Northbridge’s denial of coverage for the stolen goods on the basis of alleged material misrepresentation voiding coverage, and on the basis that the cargo was not in the custody of Rosen at the time of the theft (and thus not covered).

Notably, the application was brought prior to any claim being made by the customer as against Rosen, in relation to the stolen goods.

While the application judge declined to make a declaration for indemnity as requested in the application (because no claim had been made by the customer as against Rosen), His Honour did make two declarations of fact in favour of Rosen, in respect of Northbridge’s two objections to coverage. His Honour found that there was no material misrepresentation and that the theft occurred while the cargo was in Rosen’s custody.

On Northbridge’s appeal, the Court of Appeal held that the application judge erred in making declarations in the absence of an underlying claim as against Rosen, as neither of the two criteria for granting declaratory relief were met. First, there was no “real dispute”. Second, the declaration had no “practical effect” in the absence of a viable claim against Rosen. The Court held that the case “was not one where the court could make a declaration to govern the rights of the parties contingent on a possible future event.”

The Court further held that the application judge erred in making findings of fact and in framing them as declaratory relief where no claim existed. The Court held that declaratory relief is sought to determine the rights of the parties and “[w]hile determining the rights of the parties may entail findings of fact, courts do not have jurisdiction to simply declare facts, detached from the rights of the parties.”

Matthew Umbrio addressed the Superior Court decision of Taylor v Mayes, 2019 ONSC 5651, a motion seeking pre-trial discovery of the third party in the action, Her Majesty the Queen in Right of the Province of Ontario.

The Crown objected to pre-trial discovery for several reasons, including on the basis that the third party claim as against it was barred by application of the Workplace Safety and Insurance Act, 1997, and for failure to comply with notice requirements contained in the Public Transportation and Highway Improvement Act. The Crown also contended there was no right of pre-trial discovery against the Crown unless provided for by statute, the Crown’s argument being that the Public Transportation and Highway Improvement Act did not confer any such right and could not be supplemented by the Proceedings Against the Crown Act.

The motion judge ultimately concluded that the Crown’s reading of the Transportation and Highway Improvement Act was too narrow and that its wording allowed for an action to be carried on “in the same manner as in an action brought by a subject of Her Majesty against another subject”, which included discovery obligations to which all parties are subject. The motion judge also concluded that the Crown had voluntarily agreed to discovery on the facts of the case.