Ontario Civil


Contracts of insurance


Automobile insurer in Ontario cannot rescind automobile insurance contract at common law

Plaintiff pedestrian was catastrophically injured when she was struck by car driven by K. K and his wife A were joint owners of car. They had applied for automobile insurance coverage over three months before accident and defendant insurer had issued one-year policy. Because of misrepresentations in application regarding A's driving record, defendant purported to rescind policy shortly after issuing it, couple of months before accident. Plaintiffs sued K and A, and obtained judgment for $2,000,000.00. Plaintiffs commenced action against defendant under s. 258(1) of Insurance Act on basis that insurance contract had not been properly terminated by defendant, and K and A were in fact insured by defendant on date of accident. Motion judge dismissed plaintiffs' action on summary judgment. Plaintiffs appealed. Appeal allowed. Automobile insurer in Ontario cannot rescind automobile insurance contract at common law ab initio, and defendant's letter purporting to do that was not effective. Contract remained in effect on date of accident. As defendant did not prove defence of knowing misrepresentation, plaintiffs' entitlement was not limited to $200,000.00 minimum liability limit. There was no waiver or abuse of process. Plaintiffs had undertaken to court that they would account for any double recovery.

Merino v. ING Insurance Company of Canada (2019), 2019 CarswellOnt 6149, 2019 ONCA 326, K. Feldman J.A., S.E. Pepall J.A., and G. Pardu J.A. (Ont. C.A.); reversed (2017), 2017 CarswellOnt 20256, 2017 ONSC 6281, Gregory J. Verbeem J. (Ont. S.C.J.).

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