Ontario v St. Paul Fire and Marine Insurance Company, 2023 ONCA 173
Reading Time: 5 minutes (approx.)
By: Chloe Jardine (Articled Clerk)
The appellant, His Majesty the King in the Right of Ontario (herein “Ontario”), appealed a decision which found that its general liability insurer, St. Paul Fire and Marine Insurance Company (herein “the Insurer”), did not have a duty to defend Ontario in a class action as the claims being alleged did not fall within the coverage clauses of either insurance policy held by Ontario with the Insurer.
The proposed class action proceeding was commenced by Robin Cirrillo and stems from delays in the operation of the Ontario bail release system. The class action sought damages relating to persons who were arrested between January 1, 2000, and “the present” and were arrested for more than 24 hours prior to receiving a bail hearing. Allegations included negligence, breach of fiduciary duty, and breaches of the Canadian Charter of Rights and Freedoms.
Ontario notified the Insurer, with whom Ontario held two general liability commercial policies. Ontario retained a branch of the Ministry of the Attorney General, the Crown Law Office – Civil, to defend the claim. The Insurer remained notified of the progress of the litigation throughout.
In May 2019, a motion judge denied certification of the proposed class action proceeding. At the time of the motion, Ontario had already undertaken $300,000.00 in legal services to defend the claim. Following the motion, the Insurer notified Ontario that there was no available coverage and therefore the Insurer would not indemnify Ontario for these legal fees. Ontario pursed an application seeking a declaration that the Insurer has a duty to defend as relates to the proposed class action. This application was dismissed in November 2021, a decision which Ontario appealed here.
On appeal it was found that the Insurer did have a duty to defend under one of the two policies, however, this duty only began when the policy was applicable. The relevant policy was only engaged when a covered claim exceeded the “ultimate net loss” defined in the policy, which was $5,000,000.00 per occurrence in this instance. Until such a time, Ontario would be independently responsible for defending the action and for the costs associated with doing so. Given that Ontario had only incurred $300,000.00 in legal fees at the time, the Insurer had no duty to defend against the proposed class action proceeding.