



COURT OF APPEAL FOR ONTARIO

CITATION: Routh Chovaz Insurance Brokers Inc. v. Aviva
    Insurance Company of Canada, 2017 ONCA 55

DATE: 20170124

DOCKET: C62283

Simmons, Brown and Roberts JJ.A.

BETWEEN

Routh Chovaz Insurance Brokers Inc.

Plaintiff (Appellant)

and

Aviva Insurance Company of Canada

Defendant (Respondent)

Marina Stoeva, for the appellant

Christopher Reain and Michelle Fan, for the respondents

Heard: January 17, 2017

On appeal from the judgment of Justice Grant R. Dow of
    the Superior Court of Justice, dated May 25, 2016, with reasons reported at 2016
    ONSC 2567.

ENDORSEMENT

Overview

[1]

The appellant,
Routh Chovaz
    Insurance Brokers Inc., sues the respondent, Aviva Insurance Company of Canada,
    to recover $23,658.31 it paid to a client, Mr. Waqar Zaidi, as compensation for
    damages a rear-end collision caused to his 2010 Mercedes-Benz. The lawsuit
    resulted from the following series of events.

[2]

Mr.
    Zaidi owned a 2008 Mercedes Benz, which he had insured through Routh Chovaz with
    the Jevco insurance company. In 2013, he replaced the 2008 model with a 2010
    Mercedes. He asked Routh Chovaz to arrange insurance for his new vehicle with Jevco.
    Routh Chovaz issued a new motor vehicle liability insurance card, a pink
    slip, to Mr. Zaidi, but it failed to process the vehicle model change with
    Jevco.

[3]

When
    the policy came up for renewal a year later in March 2014, Routh Chovaz
    arranged for insurance with Aviva. Through its further error, Routh Chovaz
    arranged the insurance for Mr. Zaidis former car  the 2008 Mercedes  not the
    2010 Mercedes.  Aviva issued a policy of insurance for the vehicle specified by
    Routh Chovaz  the 2008 Mercedes. However, Routh Chovaz orally informed Mr.
    Zaidi that insurance had been arranged with Aviva for his 2010 Mercedes.

[4]

On
    October 2, 2014, Mr. Zaidis car was involved in a rear-end collision (the
    Accident). He claimed under the Aviva policy for the damage to the car. Aviva
    denied coverage on the basis the policy it issued only covered the 2008 car.
    Aviva refunded Mr. Zaidi the premiums he had paid.

[5]

It
    was not disputed that had Routh Chovaz informed Aviva of the proper year and
    model sought to be insured, Aviva would have insured the 2010 Mercedes and the
    additional premium would have been $71.

[6]

Mr.
    Zaidi looked to Routh Chovaz for compensation. Its errors and omissions insurer
    paid Mr. Zaidis claim of $23,658.31. It then commenced this subrogated claim
    against Aviva seeking recovery of the $23,658.31 and a declaration that Aviva
    was responsible to defend and indemnify for any personal injury claims
    resulting from the Accident. As of the time of the appeal hearing, no such
    action had been served.

[7]

The
    motion judge granted summary judgment to Aviva, dismissing Routh Chovazs
    action. Routh Chovaz appeals.

Positions of the parties

[8]

Routh
    Chovazs main ground of appeal can be summarized as follows. Aviva had
    authorized Routh Chovaz to bind it to insure motor vehicle risks. When Routh
    Chovaz orally informed Mr. Zaidi it had insured his 2010 Mercedes with Aviva,
    Aviva was bound to insure that vehicle notwithstanding Routh Chovaz
    misdescribed it as a 2008 Mercedes in the materials sent to Aviva. Given that
    obligation to insure, Routh Chovaz submits Aviva was required to indemnify it for
    the $23,658.31 it paid Mr. Zaidi, less the $71 increased premium.

[9]

Routh
    Chovaz supports this position by submitting the motion judge erred by departing
    from established legal principles in concluding Aviva was not required to
    indemnify it. It points to cases affirming the insurers right to recover for
    losses resulting from its agents negligence, but limiting damages to the
    amount of the extra premium the agent should have collected where there is no
    doubt the insurer would have accepted the risk and there was no
    misrepresentation about it.

[10]

On
    its part, Aviva submits the motion judges conclusion it was not required to
    indemnify Routh Chovaz was based on his interpretation of the Brokerage
    Agreement governing the relationship between the two parties. As a question of
    mixed fact and law, his interpretation of that contract is entitled to
    deference.

Analysis

[11]

The
    motion judge found the relationship between Routh Chovaz and Aviva was governed
    by a Brokerage Agreement dated June 15, 2011 between Aviva and Prolink Broker
    Network Inc. (Prolink). On appeal, Routh Chovaz does not take issue with that
    finding.

[12]

That finding
necessitated a
    determination by the motion judge of whether Routh Chovaz had established
    entitlement to payment of the $23,658.31 under the terms of the Brokerage
    Agreement, in particular s. 10.1 which states:

10.1 [Aviva] shall indemnify and hold the Brokerage harmless
    from and against all costs, expenses, claims, suits, demands or actions (the
    Actions) including reasonable legal fees and expenses of investigation and
    defence incidental thereto, arising as a direct result of its negligent acts or
    omissions
,
to the extent that the
    Brokerage has not caused, contributed or compounded to such liability by its
    own acts or omissions.



[13]

Although the motion judge held the terms of
    the Brokerage Agreement provided Aviva with a complete defence to Routh
    Chovazs claim, apart from quoting several sections of the Brokerage Agreement,
    including s. 10.1 and s. 10.3 (which specify the insurers and brokers
    obligations to indemnify), he did not explain how he reached that conclusion.

[14]

To
    determine whether Routh Chovaz was entitled to indemnification under the
    Brokerage Agreement would require the motion judge to consider two issues under
    s. 10.1. First, is the amount claimed by Routh Chovaz one 
arising as a direct result of [Avivas] negligent acts or
    omissions? Second, if it is, then did Routh Chovaz cause, contribute to or
    compound such liability by its own acts or omissions and, if so, to what extent?
    The motion judge did not deal with either issue in his reasons.

[15]

In fairness to the motion judge, in
    its statement of claim Routh Chovaz did not frame its claim as one under s.
    10.1 of the Brokerage Agreement. As well, on the motion below the parties did not
    squarely address those issues under s. 10.1.

[16]

Nevertheless, the motion judges
    reasons do not determine the key issue  whether Routh Chovaz established
    entitlement to be indemnified or held harmless by Aviva under s. 10.1 of the
    Brokerage Agreement. As a result, the reasons are not sufficient to permit
    appellate review. Consequently, the summary judgment dismissing Routh Chovazs
    action must be set aside.

[17]

This court is not in a position
    to resolve the dispute. Although the motion judge made certain findings of
    fact, he did not make all of the findings required to determine Routh Chovazs
    entitlement under s. 10.1. As well, the record before us does not contain all
    the evidence needed to determine that issue. For example, neither party placed
    in evidence the Underwriting Requirements referenced in s. 2.1 of the Brokerage
    Agreement. In those circumstances, it would not be appropriate for this court
    to exercise its fact-finding powers under s. 134(4) of the
Courts of Justice Act
, R.S.O. 1990, c. C. 43. Accordingly, we direct the action to
    proceed to trial.

Disposition

[18]

For the reasons set out above, we allow the
    appeal, set aside the judgment dismissing the action, and direct the action
    proceed to trial.

[19]

We fix the costs of this appeal at $12,000,
    inclusive of HST and disbursements, as agreed by the parties. However, we order
    the costs to be paid in the cause of the action.

"Janet
    Simmons J.A."

"David
    Brown J.A."

"L.B.
    Roberts J.A."


