On December 7, 2011, the Ontario Divisional Court released its decision in two appeals that both involved property damage caused by the failure of leased hot water tanks. In each case the hot water tank, located in the homeowner's basement, developed a leak which resulted in damage to the home and contents.
The appeals raised a number of issues relating to implied warranties in lease agreements, the application of the Consumer Protection Act, the time period during which the implied warranties were operative, the time period during which the product was defective, the differences between sale and lease agreements, and the duty to warn. While most of those issues were not dealt with, the decision nevertheless is one of considerable importance, not just because there are literally hundreds (perhaps thousands) of similar claims that awaited the outcome, but more importantly because of the confirmation of the principle that implied warranties applicable to a leased product apply not only at the outset of the term of the lease but throughout that term. Read the full case summary... | Read The Toronto Star article coverage... | Read Canadian Underwriters coverage... | Read the court decision...
The Ontario Court of Appeal recently released this important decision on the position of an insurer whose subrogated claim is combined, as it must be, with the insured's uninsured loss claim in a single action.
On September 16, Justice Stinson of the Ontario Superior Court of Justice released a significant decision in our clients’ favour concerning liability insurance coverage for “long tail” latent bodily injury claims. The insured asbestos manufacturer asked that the Court impose a coverage allocation method known as the “Stonewall principle” as adopted by some U.S. courts. This method would require the manufacturer’s previous insurers to continue to provide coverage for bodily injury occurring well after their policy periods, starting from the time the insured could no longer voluntarily insure itself because of the insurance industry’s market-wide adoption of an asbestos exclusion (i.e. 1986). The Ontario Court refused to accept the Stonewall principle. It also found in favour of the insurers on a second issue – each claim is subject to the deductible under each policy cumulatively without proration.
September 09, 2011
The Court is naturally reluctant to deprive a litigant of their right to bring an action to trial, and motions to dismiss a claim for delay are infrequently brought and even more infrequently granted. Gosia Bawolska celebrated a significant win for our client, an engineering company, when she persuaded the Court that the plaintiff’s delay in bringing the claim to trial had resulted in significant prejudice to our client’s ability to defend itself should the matter proceed to trial. The Court not only agreed with Ms. Bawolska’s submissions, it also awarded the cost of the entire action to our client.
The Court’s decision in our client’s favour confirmed that a defendant is presumed to have suffered prejudice due to the plaintiff’s delay, and that the burden then shifts to the plaintiff to rebut that presumption. If the plaintiff is not successful in rebutting that presumption, the Court may exercise its inherent jurisdiction to dismiss the claim as a fair trial is no longer possible.