Arvanitopoulos v. Wawanesa Mutual Insurance Co., 2024 ONSC 3718
Reading Time: 4 minutes (approx.)
By: Alexandre Doucet
This claim stems from an appraisal of damages relating to a house fire of a home owned by the Arvanitopoulos family, the Applicants. The fire occurred in February 2015 and the house has remained in need of repair since that time.
In the fall of 2022, the parties participated in an appraisal proceeding under s. 128 of the Insurance Act, R.S.O. 1980, c I.8. The Applicants allege that they were (1) denied procedural fairness in the appraisal process, (2) that the appraisal umpire was biased against them, and (3) that the umpire’s decision was not reasonable and should be set aside on grounds of judicial review.
In this context, appraisals are intended to evaluate the values of the damage to a building and its content, and to establish expenses incurred by the insureds due to the loss (for example, living costs in an alternate location). Justice Myers began his decision by referring to Intact Insurance Co. v. Laporte (c.o.b. Warrior Gear), 2024 ONCA 454, describing the appraisal process as “[…] meant to be […] easy, expeditious, collaborative, and cost-effective” and a “way of settling disputes about appraisals” [para 4]. If the appraisers are not able to agree on their own, an umpire appointed by both parties will determine the matter.
The first question addressed by Justice Myers was whether appraisal umpires fall under the jurisdiction of judicial review, and he found that while appraisal umpire decisions are not judicial in nature, they are subject to judicial review.
He then examined whether the Applicants received the procedural fairness they were entitled to. Procedural fairness is intended to ensure each party to a proceeding has the right to know the case before them, and to show evidence and make arguments. Justice Myers found no breach of procedural fairness, stating that since the Applicants had ample time to present their evidence on the issues before them during the process; however, he did note that the insurer’s appraiser had “acted as an unrestrained bully throughout the hearing” [para 7], although this did not constitute a breach of procedural fairness. He also found no bias on the part of the appraisal umpire, who performed his duties within the scope of his broad discretion.
Ultimately, Justice Myers found that there was no issue with the appraisal panel’s decision, which was “justifiable, transparent, and intelligible” [para 64]. The appraisal process also functioned within its duties described in s. 128 of the Insurance Act: to resolve disagreements between parties regarding the cash and replacement values of insured losses as claimed in a comprehensive and procedurally fair manner.
