Nero v. Allstate Insurance Company, 2023 ONSC 4472
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By: Alexandre Doucet (Articled Clerk)
This action arises out of a residential fire and an alleged breach of contract. Nero (Plaintiff) was the owner of the property and had obtained an all-risks policy from Allstate Insurance Company of Canada (Defendant) when he began renting the property. In September 2013, Nero rented his property to Jay Durie who, shortly after moving in, advised Nero that he had a license for medical marijuana.
On January 14, 2019, a fire occurred on the property causing substantial damage. A March 15, 2019, report issued to Allstate stated that the fire was caused by the ignition of butane used within the home as part of a honey oil extraction process. Allstate denied coverage to Nero pursuant to their exclusion policy #23 which states, among other things, that Allstate will not insure a loss or damage resulting from non-prescription controlled substances in the federal Controlled Drugs and Substances Act, C.R.C., c. 1041 (Substances Act). Nero claimed a breach of contract alleging entitlement to full indemnity for the damage to the property.
During the process of the parties submitting their respective pleadings, Nero wished to amend his Statement of Claim to add allegations that Allstate’s underwriting policy constitutes discrimination under the Ontario Human Rights Code, RSO 1990, c H.19 and to clarify facts and plead certain provisions of the Ontario Insurance Act, RSO 1990, c I.8. Allstate refused to consent, claiming the court lacked jurisdiction over human rights issues, and that pursuing any human rights issues would raise new causes of action which would prejudice the defendant as the limitation period had expired.
Justice Brott began his decision by stating that the court can assess human rights violations in the case at bar because the alleged code violation can “piggy-back” on a plaintiff’s claim for breach of contract. As for the issue of a limitation period, subsection 16(1)(a) of the Ontario Limitations Act, states that there is no limitation period in respect of a proceeding for a declaration if no consequential relief is sought. Here, the proposed amendments sought declaratory relief only, with no consequential relief sought. As for the Defendant’s argument that the limitation period had expired, the underwriting guidelines and Allstate’s Practice were only discovered by Nero in March 2021, after examination for discovery. Since a limitation period’s 2-year deadline only begins when a claim is “discovered”, this meant that the limitation period had not yet passed. The amendments were granted.