



COURT OF APPEAL FOR ONTARIO

CITATION: Reeb v. The Guarantee Company of
    North America, 2019 ONCA 862

DATE: 20191101

DOCKET: C66784 & C66777

MacPherson, Pepall and Lauwers
    JJ.A.

DOCKET
: C66784

BETWEEN

Ryan Reeb

Applicant (Respondent)

and

The Guarantee
    Company of North America and

The Co-operators
    General Insurance Company

Respondents (Appellants)

DOCKET: C66777

AND BETWEEN

Royal
    & Sun Alliance Insurance Company of Canada

Applicant (Respondent)

and

The Guarantee
    Company of North America and

The Co-operators
    General Insurance Company

Respondents (Appellants)

David J. Strangio, for the appellants The
    Guarantee Company of North America and The Co-operators General Insurance
    Company

Mark M. ODonnell, for the respondent
    Royal & Sun Alliance Insurance Company of Canada

Myron W. Shulgan, Q.C., for the respondent
    Ryan Reeb

Heard: October 23, 2019

On appeal from the judgment of Regional Senior Judge Bruce G. Thomas
    of the Superior Court of Justice, dated March 14, 2019, with reasons reported
    at 2019 ONSC 1584.

REASONS FOR DECISION

[1]

The judgment under appeal comprises two matters that have a common set
    of reasons.

[2]

The parties in court file C66784 are Ryan Reeb and
The
    Guarantee Company of North America and The Co-operators General Insurance Company
.
    The application judges order declares that the respondent insurance companies
    have a duty to defend the applicant, Ryan Reeb, in an action commenced by
    James Riley, as plaintiff, against Ryan Reeb and others as Court File 8882/12
    in London, Ontario.

[3]

The parties in court file C66777 are Royal & Sun Alliance Insurance
    Company of Canada (RSA) as applicant, and Guarantee and Co-operators as
    respondents. The application judges order repeats the duty to defend language
    from the companion application and adds that the respondents will each pay to
    the applicant, Royal & Sun Alliance Insurance Company of Canada, an equal
    one-third of the defence costs and disbursements for the defence of Ryan Reeb
    in the action, Court File 8882/12 from the date of this judgment forward. Guarantee
    and Co-operators appeal both orders.

[4]

We dismiss the appeals, because we agree substantially with the reasons
    of the application judge.

[5]

First, the application judge declined to consider extrinsic evidence about
    whether Mr. Reebs conduct was intentional so as to bring it within the
    intentional act exclusion in the relevant insurance policies. His conduct is presented
    in the pleadings as negligence only. The application judge, at para. 31,
    properly applied
Monenco Ltd. v. Commonwealth Insurance Co.
,
2001 SCC 49, [2001] 2 S.C.R. 699, on
    the basis that [t]he extrinsic evidence sought by the respondents to be
    considered here is evidence created after delivery of the claim and extrinsic
    to its content. The application judge, at para. 34, properly distinguished
Non-Marine
    Underwriters, Lloyds of London v. Scalera
,
2000 SCC 24, [2000] 1 S.C.R. 551, on the basis that on
    the bare facts the negligence allegation in the
Scalera
pleading was completely
    untenable. That is not true of this pleading in which the negligence claim is
    tenable.

[6]

Second, we agree with the application judge that the assessment of the
    nature and quality of Mr. Reebs conduct, which he described at para. 25 as
    occurring in the context of a game played by two 14-year old boys, is best
    left for trial. The application judge, at para. 28, was right to rely on
Halifax
    Insurance Company of Canada v. Innopex Ltd
. (2004), 72 O.R. (3d) 522, leave
    to appeal refused, [2004] S.C.C.A. No. 586, for the principle that an
    application should not be permitted to become a trial within a trial.

[7]

We turn to RSAs application, which was for declarations that Guarantee
    and Co-operators respectively have a duty to defend Mr. Reeb, and for a declaration
    that they are obligated to pay to RSA an equal one-third share of ongoing
    defence costs and disbursements incurred in Mr. Reebs defence, going forward. The
    application judge found that Guarantee and Co-operators respectively have a
    duty to defend Mr. Reeb and ordered that the three insurance companies having a
    duty to defend were obliged to share the costs equally going forward.

[8]

Guarantee and Co-operators make three arguments in the factum and in
    oral submissions. First, they argue that RSAs application for contribution to
    the defence costs is statute-barred under the
Limitations Act, 2002
, S.O.
    2002, c. 24, Sched. B because RSAs application was brought over two years
    after the insurers refused to defend Mr. Reeb.

[9]

Among other things, RSA argues  that the duty to defend is an ongoing
    obligation to be applied on a rolling basis:
Pickering Square Inc. v.
    Trillium College Inc.
, 2016 ONCA 179, 395 D.L.R. (4th) 679, at para. 38.
    Since RSA only seeks contribution on a going forward basis, no limitation
    period attaches. We agree.

[10]

Guarantee
    and Co-operators second argument is that RSAs application also exceeds the specific
    contractual limitation periods found in their respective insurance policies. We
    reject this argument; the insurance policies at issue are not business
    agreements under s. 22(5) of the
Limitations Act
, because the policy
    holders are consumers:
Daverne v. John Switzer Fuels Ltd.
, 2015 ONCA 919,
    128 O.R. (3d) 188, at para. 21.

[11]

Guarantee
    and Co-operators third argument questions the need for an order identifying
    the share of costs to be paid by each insurer. We agree with RSA that the equal
    respective shares were properly set according to the principles in
General
    Accident Assurance Co. of Canada v. Commissioner of Ontario Provincial Police
    Force et al.
(1988), 64 O.R. (2d) 321, [1988] O.J. No. 291 (H.C.), at para.
    16, and in
Broadhurst & Ball v. American Home Assurance Co
. (1990), 1
    O.R. (3d) 225, [1990] O.J. No. 2317 (C.A.), at paras. 28, 40. How the insurers
    decide to carry out their duties to defend is something for them to work out
    going forward.

[12]

The appeals are dismissed. Guarantee and Co-operators will pay
    costs to counsel for Mr. Reeb at the substantial indemnity scale in the amount
    of $14,800 all-inclusive, based on the principle in
M.(E.) v. Reed
(2003),

49 C.C.L.I. (3d) 57, at para. 22 (Ont. C.A.). See also:
Hanis
    v. University of Western Ontario
(2006), 42 C.C.L.I. (4th) 65. Guarantee
    and Co-operators will pay costs to RSA in the partial indemnity amount of
    $7,700, all-inclusive.

J.C.
    MacPherson J.A.

S.E.
    Pepall J.A.

P.
    Lauwers J.A.


