December 2, 2025 | David S J Yun
Last month, the Court of Appeal for Ontario (“ONCA”) dismissed an appeal of the judgment of Dow J granting our client’s motion for summary judgment in 2689686 Ontario Inc. v Lloyd’s Underwriters et al. Our defence team, Chet Wydrzynski and Raya Sidhu, acted for the insurer, Lloyd’s Underwriters (“Lloyd’s”) and Gerry Gill, a partner at DWF, acted for Lloyd’s on appeal. We are pleased to have achieved this result for our client.
In dismissing the appeal, ONCA deferred to Dow J’s assessment of the evidence in finding that the “frost or freezing” exclusion applied and reiterated that the doctrine of nullification was only applicable for policies with “illusory coverage” where enforcement of an exclusion would result in negation of coverage for all anticipated risks.
Background
This matter centred on a denial of coverage following an April 2020 roof collapse at an under-renovation hotel property. In denying the claim, Lloyd’s relied on an exclusion within the underlying builder’s risk policy which carved out losses caused by “frost or freezing”. The insured, 2689686 Ontario Inc. (“286”) sued Lloyd’s, along with two other co-defendants, for damages arising from the collapse and denial of coverage.
Motion for Summary Judgment
After discoveries, Lloyd’s brought a motion for summary judgment and dismissal of the action. After determining that the matter was suitable for summary judgment, Dow J granted Lloyd’s motion, finding that the undisputed expert evidence established that the collapse was caused by “frost or freezing”, the exclusion applied, and the doctrine of nullification was inapplicable.
Appeal
286 appealed on three grounds: (1) the matter was inappropriate for summary judgment as the parties’ expert reports reached differing conclusions, (2) the exclusion was inapplicable, and (3) Dow J failed to apply the doctrine of nullification. With respect to the two grounds, ONCA found no error in the motions court judge’s consideration and assessment of the expert evidence and held that this judgment warranted deference.
On nullification, ONCA reiterated that in policy interpretation matters, the doctrine of nullification applied to cases of “illusory coverage” where enforcement of an exclusion negates coverage under the policy. ONCA held that enforcement of the “frost or freezing” exclusion does not negate the coverage under the policy as the policy clearly set out covered and excluded perils. Based on the motion court judge’s review of the available evidence, the cause of the collapse fell squarely within an excluded peril. Accordingly, the doctrine of nullification was inapplicable.
Conclusion
Discordant expert report conclusions do not disqualify coverage determination matters from being adjudicated in summary judgment motions. Here, the crux of the discord between the insurer and insured’s expert reports centred around whether the roof collapsed due to snow accumulation or “frost or freezing”. This decision reinforces that where appellate courts cannot find error in analysis, they will defer to lower court judges’ review, assessment, and determination of available evidence.
The analysis of coverage issues will often engage with the parties’ reasonable expectations prior to policy formation as well as their disclosure obligations. Here, the former was engaged solely in the context of the doctrine of nullification in that insureds seek coverage through insurance policies for anticipated risk. Nullification applies where no coverage would result from enforcement of a given exclusion. ONCA upheld Dow J’s finding that enforcement of the subject exclusion would not yield such a result.
Our experienced coverage team can assist stakeholders with navigating questions concerning policy interpretation and coverage issues.