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Insurance - Execution Against Insurer. Svia Homes Limited v. Northbridge General Insurance Corporation
In Svia Homes Limited v. Northbridge General Insurance Corporation (Ont CA, 2020) the Court of Appeal considered a s.132 Insurance Act application to recover payment of a judgment directly from an insurer who it was alleged was liable to the debtor:[1] The appellant, Svia Homes Limited (“Svia”), holds an unsatisfied judgment against 1390348 Ontario Limited (“139 Limited”). Svia brought an application to recover payment of that judgment from the respondent, Northbridge General Insurance Corporation (“Northbridge”). Svia’s application was under s. 132 of the Insurance Act, R.S.O. 1990, c. l.8, which permits the holder of an unsatisfied judgment against an insured person to recover the amount of the judgment from that person’s insurer, “subject to the same equities as the insurer would have if the judgment had been satisfied”. Northbridge is the insurer of 139 Limited under a Commercial General Liability policy of insurance (the “Policy”).
[2] The application judge held that 139 Limited had breached a condition in the Policy requiring it to give Northbridge timely notice of the action that led to the judgment, resulting in forfeiture of 139 Limited’s right under the Policy to claim indemnity from Northbridge. In the application judge’s view, the grounds necessary to justify granting relief from that forfeiture were not established. As Svia, under s. 132 of the Insurance Act, stood in no higher position than 139 Limited, Svia’s claim against Northbridge for payment of the judgment failed.
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[29] As noted above, Svia maintains that Northbridge has conceded all the ingredients necessary to find that it is liable to Svia. I disagree. I read Northbridge’s concession to be limited to pointing out that although Statutory Condition 8 gave Svia a right to give notice, it imposed no obligation on it to do so, and therefore Svia did not breach any obligations under the Policy that needed to be relieved against.[3] I do not read it as a concession that 139 Limited did not breach the Policy, that 139 Limited’s breach should be relieved against or, most importantly, that without relief from 139 Limited’s breach, Svia’s application could or should succeed.
[30] The language of s. 132 (1) of the Insurance Act demonstrates that it is those non-conceded items that matter, as the central question is whether the insured (here 139 Limited) would have had a valid claim to coverage if it had satisfied the judgment. In The Sovereign General Insurance Company v. Walker, 2011 ONCA 597, 107 O.R. (3d) 225, at para. 13, this court stated:The concluding words of s. 132(1) – “subject to the same equities as the insurer would have if the judgment had been satisfied” – are important. Persons … seeking recovery under s. 132 can stand in no better position than the insured. So, if the insurer … had a defence against its insured … that defence would apply to the [s. 132 claimant’s] claim [Citation omitted.].
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