Ontario Court of Appeal affirms dismissal of insured’s claim due to applicable exclusion in policy

Ontario Court of Appeal affirms Superior Court decision granting insurer’s application for summary judgment and dismissal on the basis that insured’s damage was caused by an excluded peril under the policy.

Insurance law – Property law – Builder’s risk – Exclusions; Practice – Appeals – Summary judgments, availability.

2689686 Ontario Inc. v. Lloyd’s Underwriters, [2025] O.J. No. 5067, Ontario Court of Appeal, November 24, 2025, J.M. Copeland, D.A. Wilson and R.M. Pomerance JJ.A.

The insured appealed an Ontario Superior Court decision granting the insurer’s application for summary judgment and dismissal where the court had concluded that the loss was excluded from coverage.  The lower court had concluded that the damage was due to frost followed by heating that caused the insured’s roof to fail. The insured argued that the Superior Court erred in its decision in three ways: in finding this was an appropriate case for summary judgment; in finding the “frost or freezing” exclusion was applicable; and in failing to apply the doctrine of nullification. The Court of Appeal rejected all three arguments and dismissed the appeal.

On the issue of suitability, the Court of Appeal agreed with the Superior Court that a case involving the application of an exclusion clause contained in an insurance policy is amenable to determination by way of a summary judgment motion, and that there was no error in the motion judge’s analysis. With respect to the applicability of the “frost or freezing” exclusion, the Court of Appeal found that it was appropriate for the Superior Court to find that the roof’s failure was caused by frost or freezing based on the evidence, including the opinion of the insurer’s expert, which was favoured over the insured’s expert. Finally, with respect to the doctrine of nullification, the Court of Appeal disagreed with the insured’s argument that the exclusion clause ought not to be enforced because to do so would be inconsistent with the reason the policy was purchased. The Court of Appeal held that enforcing the exclusion for frost and freezing did not negate the coverage under the policy. 

This case was digested by Alicia Catalano and edited by Steven W. Abramson of Harper Grey LLP.  If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected].