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CANADIAN CASES on the LAW of INSURANCE Fifth Series/Cinqui`Eme S´Erie Recueil De Jurisprudence En Droit Des Assurances

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CANADIAN CASES on the LAW of INSURANCE Fifth Series/Cinqui`Eme S´Erie Recueil De Jurisprudence En Droit Des Assurances CANADIAN CASES ON THE LAW OF INSURANCE Fifth Series/Cinqui`eme s´erie Recueil de jurisprudence en droit des assurances VOLUME 18 (Cited 18 C.C.L.I. (5th)) EDITOR-IN-CHIEF/REDACTEUR´ EN CHEF Won J. Kim, B.A., LL.B. Kim Orr Barristers P.C. Toronto, Ontario QUEBEC EDITOR/REDACTEUR´ POUR LE QUEBEC´ Jean-Fran¸cois Lamoureux, LL.L. Robinson Sheppard Shapiro Montr´eal, Qu´ebec CARSWELL EDITORIAL STAFF/REDACTION´ DE CARSWELL Cheryl L. McPherson, B.A.(HONS.) Director, Primary Content Operations Ken Murphy, B.A.(HONS.), LL.B. Product Development Manager Nicole Ross, B.A., LL.B. Mike MacInnes, B.A.(HONS.), LL.B. (Acting) Supervisor, Legal Writing Lead Legal Writer Jocelyn Cleary, B.A.(HONS.), LL.B. Stephanie Hanna, B.A., M.A., LL.B. Senior Legal Writer Senior Legal Writer Lisa Rao, B.SC., LL.B. Amanda Stewart, B.A.(HONS.), LL.B. Senior Legal Writer Senior Legal Writer Andrea Toews, B.A., LL.B., LL.M. Martin-Fran¸cois Parent, LL.B., Legal Writer LL.M., DEA (PARIS II) Bilingual Legal Writer Heather Niziol, B.A. Content Editor CANADIAN CASES ON THE LAW OF INSURANCE, a national series of Recueil de jurisprudence canadienne en droit des assurances, une s´erie topical law reports, is published 12 times per year. Subscription rate $382.00 nationale de recueils de jurisprudence sp´ecialis´ee, est publi´e 12 fois par an- per bound volume including parts. Indexed: Carswell’s Index to Canadian n´ee. L’abonnement est de 382 $ par volume reli´e incluant les fascicules. In- Legal Literature. dexation: Index a` la documentation juridique au Canada de Carswell. Editorial Offices are also located at the following address: 430 rue St. Pierre, Le bureau de la r´edaction est situ´e a` Montr´eal — 430, rue St. Pierre, Mon- Montr´eal, Qu´ebec, H2Y 2M5. tr´eal, Qu´ebec, H2Y 2M5. ________ ________ © 2013 Thomson Reuters Canada Limited © 2013 Thomson Reuters Canada Limit´ee NOTICE AND DISCLAIMER: All rights reserved. No part of this publica- MISE EN GARDE ET AVIS D’EXONERATION´ DE RESPON- tion may be reproduced, stored in a retrieval system, or transmitted, in any SABILITE´ : Tous droits r´eserv´es. 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La participation d’une personne a` la pr´esente publication ne peut en aucun cas etreˆ consid´er´ee comme constituant la formulation, par celle-ci, d’un avis No one involved in this publication is attempting herein to render legal, ac- juridique ou comptable ou de tout autre avis professionnel. Si vous avez counting, or other professional advice. If legal advice or other expert assis- besoin d’un avis juridique ou d’un autre avis professionnel, vous devez tance is required, the services of a competent professional should be sought. retenir les services d’un avocat ou d’un autre professionnel. Les analyses The analysis contained herein should in no way be construed as being either comprises dans les pr´esentes ne doivent etreˆ interpr´et´ees d’aucune fa¸con official or unofficial policy of any governmental body. comme etant´ des politiques officielles ou non officielles de quelque organ- isme gouvernemental que ce soit. 8 The paper used in this publication meets the minimum requirements of 8 Le papier utilis´e dans cette publication satisfait aux exigences minimales American National Standard for Information Sciences — Permanence of Pa- de l’American National Standard for Information Sciences — Permanence of per for Printed Library Materials, ANSI Z39.48-1984. Paper for Printed Library Materials, ANSI Z39.48-1984. ISSN 0824-2585 ISBN 978-0-7798-4214-8 Printed in Canada by Thomson Reuters CARSWELL, A DIVISION OF THOMSON REUTERS CANADA LIMITED One Corporate Plaza Customer Relations 2075 Kennedy Road Toronto 1-416-609-3800 Toronto, Ontario Elsewhere in Canada/U.S. 1-800-387-5164 M1T 3V4 Fax 1-416-298-5082 www.carswell.com Contact www.carswell.com/contact Onex v. American Home Assurance 171 [Indexed as: Onex Corp. v. American Home Assurance Co.] Onex Corporation, Gerald W. Schwartz, Christopher A. Govan, Mark Hilson and Nigel Wright, Plaintiffs/Defendants by Counterclaim (Respondents/Cross-Appellants) and American Home Assurance Company, Brit Syndicates Ltd. (Lloyd’s Syndicate 2987), Heritage Managing Agency Limited (Lloyd’s Syndicate 3245), XL Insurance Company Limited, Liberty Mutual Insurance Company, Lloyd’s Underwriters Syndicates No. 2623, 0623, 0033 and AIG Europe (UK) Limited, and Houston Casualty Company, Defendants/Plaintiff by Counterclaim American Home (Respondents/Appellant/Respondent on Cross-Appeal) Ontario Court of Appeal Docket: CA C54076, C54123, C55034 2013 ONCA 117 D. O’Connor A.C.J.O., Janet Simmons, M. Rosenberg JJ.A. Heard: June 2, 2012 Judgment: February 25, 2013 Civil practice and procedure –––– Summary judgment — Availability of summary judgment — Miscellaneous –––– Respondent company was sued in state of Georgia, resulting from bankruptcy proceedings — Action settled for $9.25 million, with company incurring approximately $35 million in defence costs — Company brought action against appellant insurer, when insurer refused to reimburse company for their costs — Company claimed that they were to be reimbursed both under standard and excess policies — Both parties moved for summary judgment — On motion, it was found that company was not entitled to coverage under excess policy, as they had given notice under standard policy — Standard policy did not exclude type of defence that company needed, and in- surer was required to pay $15 million under this policy — Insurer appealed from findings of liability by motion judge — Company cross-appealed — Appeal al- lowed — Cross-appeal dismissed — Letter from insurance broker set out proper particulars to exclude coverage to company under standard policy — Insurer was allowed to amend pleadings, to take into account circumstances of changed policy limits — Claim was not excluded due to it being brought by litigation trust in Georgia — This litigation trust was not considered to be Georgia com- pany that was excluded under policy — Motion judge correctly interpreted ex- clusion policy, but insurer’s interpretation was also reasonable — Factual issues could not be resolved at this stage — Reasonable expectations of parties had to be determined at trial level — Trial court would have to determine whether in- 172 CANADIAN CASES ON THE LAW OF INSURANCE 18 C.C.L.I. (5th) surer was entitled to set-off — Matter was to be returned to Superior Court, with possibility of parties renewing motions for summary judgment. Insurance –––– Principles of interpretation
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