Monteith & Sutherland v Novex Insurance, 2025 ONSC 4697
Reading time: 4 minutes (approx.)
By: Sarah Richard
A land surveying company, the applicant, was hired to provide surveying services for a wastewater utilities project in Halton Hills (the “Halton Project”). During the project, a claim was filed (the “Halton Claim”) against the applicant, alleging substandard work. The applicant reported the claim to its professional liability insurer, the respondent, under a policy covering land surveying services. The applicant eventually settled the claim for $3.2 million and sought reimbursement from the insurer under the policy.
The applicant maintained that the Halton Claim was covered under the respondent’s professional liability policy, as it arose from land surveying services. They argued it fell within the policy period in which the applicant was first informed of the claim (PP1) and denied any failure to cooperate. The respondent contended that the claim was excluded due to the existence of other insurance coverage (Lloyd’s) and that it should fall under a later policy period (PP2), being when the respondent received notification of the claim. The respondent also claimed the applicant breached its duty to cooperate, which voided coverage.
There were three legal issues in this case:
- Does the subject matter of the Halton Claim fall within the respondent’s insurance coverage?
- In which policy period, PP1 or PP2, does the Halton Claim fall?
- Did the applicant breach its duty to cooperate under the policy?
Regarding the first issue, the court found that the Halton Claim did fall within the respondent’s coverage policy as it covered claims arising from the applicant’s professional land surveying services. The other insurance coverage excluded land surveying activities; therefore, it was deemed irrelevant by the court. Furthermore, the prior admission of partial liability by the respondent supported the claim.
With respect to the second issue, the court ruled that the Halton Claim fell under policy period PP1, when the applicant received notice of the claim. It held that late notice was permitted under the policy’s curative provision, as long as the insurer wasn’t prejudiced. The court rejected the insurer’s interpretation of that provision as inconsistent with the policy’s wording.
Lastly, the court concluded that the applicant had not breached its duty to cooperate. It found that the respondent failed to show any meaningful non-cooperation or resulting prejudice. The applicant shared key documents, communications, and updates throughout the litigation.
In the end, the respondent was required to indemnify the applicant the full settlement of the Halton Claim for a total of $3,200,000.00. Also, the applicant was awarded costs on a partial indemnity basis of $75,000.00.
