Human rights allegation allowed in civil action for breach of contract

The insured’s application to add allegations of discrimination under human rights legislation in an existing claim for breach of contract against the insurer was allowed

Insurance law – Homeowner’s insurance – Breach of contract – Limitation of actions

Nero v. Allstate Insurance Co.,[2023] O.J. No. 3471, 2023 ONSC 4472, Ontario Superior Court of Justice, August 1, 2023, R. Brott Associate J.

The insurer denied coverage arising out of a fire at the residential home the insured rented to a tenant who grew medical marijuana. The insured sued for breach of contract. In the course of the action, the insurer produced insurance underwriting guidelines which indicated the insurer may deny home insurance to a person where the person or their tenant cultivates marijuana under a government license for a disability. The insured sought to amend his pleading to include allegations that the insurer’s policy constituted discrimination under the Human Rights Code, R.S.O. 1990, c. H.19 (the “Code”). The insurer refused to consent to the amendments. On application, the court allowed the amendments.

First, the court concluded that it had jurisdiction to hear the Code amendments and the human rights claim could be advanced in civil court under s. 46.1 of the Code because it was brought together with a reasonable cause of action, namely the claim against the insurer for breach of contract.

Second, despite the limitation to bring the claims in another forum potentially having expired, the court noted that no limitation period applied in the civil action under s. 16(1)(a) of the Limitations Act, 2002, S.O. 2002, c. 24, as the human rights amendments only sought declaratory relief. Further, and in any event, the court concluded the plaintiff had not discovered the potential discrimination claim until the underwriting guidelines were produced and therefore the amendments were sought within the 2-year limitation period under s. 4.

This case was digested by Michael J. Robinson, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Michael J. Robinson at [email protected].

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