Ont. Superior Court dismisses individual's insurance claim but allows corporate claim to proceed

The contract was issued to the corporate plaintiff, not the individual claimant: court

Ont. Superior Court dismisses individual's insurance claim but allows corporate claim to proceed

The Ontario Superior Court of Justice dismissed an individual plaintiff’s insurance claim due to a lack of standing and insufficient cause of action while allowing the corporate plaintiff's claim to proceed.

The defendant, Co-operators General Insurance Company, brought a motion in a case involving an insurance claim related to a fire at a banquet hall. The defendant's motion sought multiple orders, including striking out parts of the statement of claim and the dismissal of plaintiff Joe Alessandro’s claim for lack of standing.

The case centred around an insurance claim made by the plaintiffs following a fire at a banquet hall operated by the corporate plaintiff. The defendant argued that the insurance policy was void ab initio due to material misrepresentations or non-disclosure by Alessandro. The policy was issued in the corporate plaintiff's name.

The Superior Court addressed the defendant's request to strike the statement of claim under Rule 21.01(1)(b), which allows a pleading to be struck out if it discloses no reasonable cause of action. The court must accept the facts alleged in the pleading as true unless they are patently ridiculous or incapable of proof. The test applied is whether it is "plain and obvious" that the claim cannot succeed.

The court found that certain paragraphs of the statement of claim that alleged violations of the Charter of Rights and Freedoms did not disclose a reasonable cause of action. The court noted that the Charter applies to government actions, not private disputes, and therefore, the allegations against the private defendant could not invoke Charter rights. These paragraphs were struck out.

The court also struck out another paragraph of the statement of claim, which sought $500,000 in damages for conspiracy to commit deception. The court struck out this paragraph due to a lack of material facts and the requirement for more than one defendant in a conspiracy claim.

Furthermore, the court struck out the claim of the personal plaintiff, Joe Alessandro, as he was not a party to the insurance contract, which was issued to the corporate plaintiff. Under corporate law principles, a shareholder cannot sue for losses the corporation suffers.

The court acknowledged that Rule 15.01(2) requires a corporation to be represented by a lawyer. The defendant's motion to compel the corporate plaintiff to retain counsel was adjourned pending a motion by Alessandro to represent the corporation himself.

Ultimately, the ruling resulted in the striking of certain paragraphs of the statement of claim, the dismissal of Alessandro's personal claim, and the adjournment of motions regarding corporate representation and security for costs.

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