Eight months ago, a Superior Court judge held that the equitable
doctrine of laches does not apply to loss transfer claims. Three
days ago, another Superior Court judge held that it does apply. And
he applied it to bar a loss transfer claim.
The doctrine of laches issue arises when a party asserts that
the opposing party has "slept on its rights". The
doctrine is an equitable defence that can bar an opponent's
In Intact v. Lombard (ONSC, September 30, 2013), Intact
became responsible for paying accident benefits to its insured as a
result of a motor vehicle accident that occurred on February 13,
2007. The accident involved a heavy commercial vehicle that Lombard
insured, triggering Intact's statutory right to claim loss
transfer against Lombard pursuant to section 275 of the Insurance
Act. However, Intact did not send Lombard a loss transfer notice or
request for indemnification until September 7, 2011 (some 4.5 years
after the date of loss). Lombard raised a laches defence against
The arbitrator applied the doctrine against Intact and dismissed
the loss transfer claim. On appeal, the judge held that the
doctrine of laches does not apply in loss transfer matters. She
held that the insurer's loss transfer right was purely
statutory (under section 275 of the Insurance Act). She
noted that unlike other types of claims where laches might apply,
loss transfer claims did not have a "distinctively equitable
flavour". She found that loss transfer claims were
"devoid of equitable relief" and that it would
inappropriate to grant the equitable laches defence to this type of
The Court of Appeal is scheduled to hear Lombard's appeal at
the end of June.
In Zurich v. TD (ONSC, May 27, 2014), TD sent Zurich a
Notice of Loss Transfer alleging that Zurich's insured was 100
per cent at fault. However, the notice was sent approximately 11
years after the accident. Shortly thereafter, TD made two loss
transfer requests for indemnification from Zurich, which asserted
the doctrine of laches and denied the claims.
On the issue of laches, the arbitrator acknowledged that he was
bound by the judge's decision in Intact, but stated
that he disagreed with her finding that laches cannot be applied to
a statutory claim for loss transfer. The arbitrator held that in
any event, Zurich had failed to establish "the necessary
components of laches...one of them being presumed prejudice or
On appeal, the judge found in the unique circumstances of the
case that the doctrine of laches applies to a situation where a
first party insurer delays for approximately 11 years in requesting
loss transfer from a second party insurer. The judge noted that,
traditionally, the doctrine of laches has only been applied to
equitable, and not legal, claims. Following the fusion of law and
equity, however, courts have been more flexible in applying the
doctrine to legal claims under certain circumstances:
Ontario's loss transfer regime possesses an
equitable flavour because it is designed to address unfairness
between participants in the province's insurance industry, and
that is a sufficient basis to permit the application of the
doctrine of laches. Alternatively, I find that the fusion of law
and equity, which has evolved in order to achieve fairness and
justice, requires a finding that laches can apply in this case.
Accordingly, I find that the doctrine of laches applies, under
certain circumstances, to delayed loss transfer claims made by
first party insurers.
On the facts of the case, the judge disagreed with the
arbitrator and found that Zurich had proved the necessary
components of laches.
So now we have two diametrically opposing Superior Court
decisions on whether the doctrine of laches applies to loss
transfer claims. We are eagerly waiting for the Court of Appeal to
give us some much needed guidance on this issue.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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