The Court of Appeal for Ontario has published its decision in an appeal brought by the Aviva Insurance Company of Canada, Aviva General Insurance Company and Aviva Canada Inc., which sought to overturn the denial for its motion for a stay in a case where the insurer received nearly immediate notice of a settlement, but argued that disclosure did not happen in a timely enough fashion.

In individual actions and a class action, it is alleged that Aviva cancelled the right to increase pandemic coverage, and that all requests by policyholders to exercise that right were refused. (The dentists in question had been insured under “Triple Guard” insurance policies that allowed policyholders to increase their pandemic outbreak coverage up to $5,000 per day or $100,000 per year. This right was allegedly cancelled on March 13, 2020.)

Aviva objected to being added to the individual actions against the broker, CDSPI Advisory Services Inc., and new actions were commenced against it.

In the appeal, Aviva argued that it was entitled to notice when both the individual cases and the class action case were settled – which it received. The motion judge and appeal judge both noted that Aviva did not have a right to the disclosure because it was not a party to those proceedings.

“It will be recalled that Aviva objected to being joined as a defendant in the individual actions brought against CDSPI,” the decision states.

“Aviva argues that it was entitled to a stay of the proceedings against it because it did not receive timely disclosure,” the decision adds, saying that the law being cited is no longer “good law,” having been overturned in more recent cases. “Aviva was never deprived of any information,” it adds noting that although the argued rule is not applicable in the current context, it had nonetheless been honoured. “The motion judge’s reasons continue to carry persuasive force.”

Aviva was given full opportunity to contest the proposed settlement 

They add that in this case, Aviva was given full opportunity to contest the proposed settlement in a hearing before the motion judge: “Aviva not only received disclosure of the proposed class settlement but was given a full opportunity to oppose the settlement through its participation in the settlement approval hearing. The disclosure to Aviva went well beyond the protections of the CPA (Class Proceedings Act, 1992),” they write, adding that Aviva’s own counsel’s affidavit notes that updates were provided on a periodic basis about the state of negotiations. 

“In any event, while Aviva was not entitled to disclosure of settlements in the individual actions, it received such disclosure. By the time of the approval motion, Aviva was aware, not only of the class action settlement, but also of the individual action settlements between CDSPI and the individual actions plaintiffs and was able to make submissions about both agreements.”

Deceit and concealment allegations were without foundation 

The judge also found Aviva’s allegations of deceit and concealment were without foundation. It was also noted that the allegations were not previously advanced before the motion judge. “It would be unfair to the respondents and contrary to the interest of justice to entertain Aviva’s argument for the first time on appeal,” they write. 

The decision concludes by maintaining the costs awarded by the motion judge.

“Finding Aviva unsuccessful on both its challenge to the settlement approval and its motions for stay, the motion judge ordered Aviva to pay costs of the class action plaintiffs, the individual action plaintiffs and CDSPI on a partial indemnity basis,” they write. “I am not persuaded that there is any basis to disturb the motion judge’s discretionary costs order.”

The decision notes that discretionary costs decisions should only be set aside on appeal if there is an error in principle or if the award is “plainly wrong.” It also notes that Aviva’s position put all the other parties involved in a position of needing to invest substantial resources.

“Aviva was certainly entitled to oppose the settlement approval motion; however, it cannot now complain that it must bear the costs consequences of doing so,” they write. “Having mounted a challenge focused on undermining the class action plaintiffs’ settlement with CDSPI, Aviva has put itself in the relatively uncommon position of being liable for the cost of the approval motion.”

Costs awarded included $50,000 to class counsel, $25,000 to the individual plaintiffs and $10,000 to CDSPI.