DATE:  20041004
DOCKET:  C40987

COURT OF APPEAL FOR ONTARIO

RE:                              THE CORPORATION OF THE TOWN OF THE BLUE MOUNTAINS (Applicant/Respondent in Appeal) v. ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA (Respondent/Appellant)

BEFORE:                   CATZMAN, DOHERTY and ARMSTRONG JJ.A.

COUNSEL:                Robert B. Bell and Keith Batten for the appellant

                                    Hillel David for the respondent

HEARD:                     September 30, 2004

ORALLY RELEASED:              September 30, 2004

On appeal from the judgment entered by Justice Backhouse of the Superior Court of Justice dated October 28, 2003.

ENDORSEMENT

[1]               We would allow the appeal on the “cancellation” issue and need not address the “coverage” issues.

[2]               The trial judge misapprehended the evidence.  The calculation of the premium refund (the maximum refund contemplated under the policy) could not reasonably support any inference as to the intention of the parties when they purported to “cancel” the policy.

[3]               The only evidence that sheds any light on the intention of the parties comes from the appellant’s records as produced through the affidavit of an employee of the appellant.  That affidavit was not challenged on cross-examination.  On the evidence adduced by the appellant, it was the insured, through its agent, who requested the cancellation of the policy based on dissatisfaction with the broker.  There is nothing in the record that would allow the court to read cancellation as meaning anything other than its normal and ordinary meaning, that is, the termination of the entire policy.  Had the respondent intended simply to change the termination date or to otherwise amend any provision in the policy, it would have said so as it did on an earlier occasion.  In our view, the only reasonable inference to draw from the evidence available to the application judge was that the entirety of the policy was cancelled, including the completed operations hazard provision of the policy.

[4]               The appeal is allowed, the judgment below set aside, and in its place judgment will go dismissing the application.

“M.A. Catzman J.A.”

“Doherty J.A.”

“Robert P. Armstrong J.A.”