



COURT OF APPEAL FOR ONTARIO

CITATION: 56 King Inc. v. Aviva Canada Inc., 2017 ONCA 408

DATE: 20150523

DOCKET: C62968

Lauwers, Hourigan and Benotto JJ.A.

BETWEEN

56 King Inc.

Plaintiff/ Respondent

(Appellant)

and

Aviva Canada Inc.

Defendant/ Moving Party

(Respondent)

Sebastian J. Winny, for the appellant

Elizabeth Bowker, for the respondent

Heard: May 15, 2017

On appeal from the order of Justice Thomas R. Lofchik of
    the Superior Court of Justice, dated November 21, 2016, with reasons reported
    at 2016 ONSC 7139, 62 C.C.L.I. (5th) 163.

REASONS FOR DECISION

[1]

The appellant commenced a claim under an insurance policy for damage to
    a commercial property caused by windstorms in July 2013. The action is for
    damages under the policy and damages for breach of the insurers duty of utmost
    good faith in handling the claim for coverage.

[2]

The statement of claim was issued on February 14, 2014. On January 25,
    2016, the insurer elected an appraisal under s. 128 of the
Insurance Act
,
    R.S.O. 1990, c. I.8. The appellant rejected the appraisal on the basis that it
    was too late and that, in any event, the bad faith claim could not proceed by
    appraisal. The insurer then brought a motion requesting a declaration that the
    appellants losses could be determined by appraisal. The motions judge granted
    the insurers motion. His decision is the subject of this appeal.

[3]

The appellant submits: (i) the motion judge did not have jurisdiction to
    make the order because the matter must be brought by application and not by
    motion; (ii) the two-year delay prior to the demand for appraisal is a bar to
    an appraisal; and (iii) the effect of the motion judges decision is to
    bifurcate the jury trial, which the court does not have jurisdiction to do.

[4]

We do not accept these submissions. First, the motion judge had
    jurisdiction to make the order. The appellants action was based on claims
    under a policy of insurance. Likewise, in its motion, the respondent sought
    relief that flowed from the insurance policy. The case of
Lukezic v. Royal
    Bank of Canada,
2012 ONCA 350, 360 D.L.R. (4th) 111, relied on by the
    appellant is distinguishable. In that case, the motion was for a declaration
    that a party was a vexatious litigant. The relief sought was pursuant to the
Courts
    of Justice Act
, R.S.O. 1990, c. C.43, which sets out a definition for
    application (s. 1(1)). Here, the relief sought is pursuant to the
Insurance
    Act
, which does not define application. Also, a full hearing on the
    merits of a vexatious litigant claim would involve issues outside the claims in
    the action, unlike the respondents motion in this case. Lastly, it would make
    no sense to require the respondent to commence a second proceeding by way of
    application for relief arising from the same contract of insurance.

[5]

Second, we agree with the motion judges conclusion that the appraisal
    process in the
Insurance Act
was available while the appellants
    action was proceeding:
Greer v Co-Operators General Insurance Co.
[1999] O.J. No.3118.  The respondent argues that the statutory condition
    imposes no time limit on the insurers right to invoke appraisal, while the
    appellant argues that the court has discretion to refuse to allow an appraisal
    to proceed under s. 128 of the
Insurance Act
, which provides that the
    judge may appoint an appraiser or an umpire. The legislation signals a
    decided preference for appraisal, as the authorities note, but the language of
    s. 128 gives the court discretion to curb abuse. However, there was no abuse on
    the part of the respondent in this case. On the facts, the appraisal was
    requested within three weeks of the respondents admission of coverage. Therefore,
    in any event, there was no delay.

[6]

Third, we do not agree that the effect of the order is to impermissibly
    bifurcate the trial. The independent operation of the
Insurance Act
appraisal
    process will simply limit and narrow the issues left for the trial, which will
    continue.

[7]

The appeal is dismissed with costs payable to the respondent in the
    agreed upon amount of $7,000 inclusive of disbursements and HST.

P. Lauwers J.A.

C.W. Hourigan J.A.

M.L. Benotto J.A.


