Automobile insurer in Ontario cannot rescind automobile insurance contract at common law

Ontario civil | Insurance | Contracts of insurance | Rescission

Plaintiff pedestrian was catastrophically injured when she was struck by car driven by K. K and his wife A were joint owners of car. They had applied for automobile insurance coverage over three months before accident and defendant insurer had issued one-year policy. Because of misrepresentations in application regarding A's driving record, defendant purported to rescind policy shortly after issuing it, couple of months before accident. Plaintiffs sued K and A, and obtained judgment for $2,000,000.00. Plaintiffs commenced action against defendant under s. 258(1) of Insurance Act on basis that insurance contract had not been properly terminated by defendant, and K and A were in fact insured by defendant on date of accident. Motion judge dismissed plaintiffs' action on summary judgment. Plaintiffs appealed. Appeal allowed. Automobile insurer in Ontario cannot rescind automobile insurance contract at common law ab initio, and defendant's letter purporting to do that was not effective. Contract remained in effect on date of accident. As defendant did not prove defence of knowing misrepresentation, plaintiffs' entitlement was not limited to $200,000.00 minimum liability limit. There was no waiver or abuse of process. Plaintiffs had undertaken to court that they would account for any double recovery.

Merino v. ING Insurance Company of Canada (2019), 2019 CarswellOnt 6149, 2019 ONCA 326, K. Feldman J.A., S.E. Pepall J.A., and G. Pardu J.A. (Ont. C.A.); reversed (2017), 2017 CarswellOnt 20256, 2017 ONSC 6281, Gregory J. Verbeem J. (Ont. S.C.J.).

Case Law is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada and all Ontario courts. These cases may be found online in WestlawNext Canada. To subscribe, please visit

Free newsletter

Our daily newsletter is FREE and keeps you up to date on all the developments in the Ontario legal community. Please complete the form below and click on subscribe for daily newsletters from Law Times.

Recent articles & video

Open schedule at Competition Tribunal presents opportunity for commissioner, lawyer says

Students raise alarm on future of university legal clinics

CICB to cease accepting applications on Oct. 1

Stikeman Elliott, Rubin Thomlinson, McCarthy Tétrault win HR awards

Insurance lawyers reveal their referral philosophies

Court of Appeal rules auto insurer not liable for parental negligence claim stemming from accident

Most Read Articles

New equality measure approved by Law Society of Ontario as the statement of principles gets repealed

Judges call out lack of support for legal aid, pro bono amid MAG presence

Chasm in opinions remains after statement of principles repeal

Law students, paralegals can continue working on the same summary conviction matters