Underlying case before Ontario Court of Appeal involved injury from fall through attic floor
In proceedings arising from grievous permanent injuries, the Ontario Court of Appeal declined to quash the defendant insurance companies’ appeal of the dismissal of their motion for leave to amend their statement of defence to include a civil fraud defence.
In Natario v. RBC Insurance Company of Canada, 2026 ONCA 263, the plaintiff’s friends owned a home. RBC Insurance Company of Canada issued a home insurance policy to the homeowners.
In 2012, the plaintiff fell through a hole in the attic floor of her friends’ home, resulting in injuries that rendered her paraplegic. She sued RBC Insurance and the insureds. Initially, she alleged that she tripped over construction debris and fell down the stairs.
For seven years, the insureds maintained that the plaintiff slipped on debris while going downstairs. They denied that she fell through an opening in the attic, as they feared the legal consequences of performing renovations in the attic without a building permit.
In 2015, the plaintiff amended her claim to plead that she fell through a hole or unstable floorboards in the attic.
In 2016, Aviva Insurance Company of Canada acquired RBC Insurance and assumed its responsibilities under the home insurance policy.
In 2019, the insureds admitted that they submitted fabricated evidence during the discovery examinations.
Aviva Insurance and RBC Insurance refused to indemnify the insureds based on their misrepresentation, which allegedly materially breached the policy. However, the insurers kept defending against the plaintiff’s action to minimize any judgment.
In 2021, the parties consented to the dismissal of the action without costs. Under the consent order:
In February 2022, the plaintiff claimed damages of $2 million from the insurers under s. 132(1) of the Insurance Act.
In December 2024, the Ontario Court of Appeal issued a separate decision refusing to find Aviva responsible for covering damages arising from a motor vehicle collision due to material misrepresentations during discovery examinations, which constituted civil fraud.
In September 2025, before the Ontario Superior Court of Justice, the insurers in this case moved for leave to amend their pleadings to add a civil fraud defence based on the insureds’ false statements and the material facts already pleaded.
On Dec. 10, 2025, a motion judge dismissed the insurers’ motion upon determining that issuing leave to amend the pleadings would result in noncompensable prejudice to the plaintiff.
The plaintiff moved to quash the insurers’ appeal of the judge’s order. She argued that the order was interlocutory because it did not finally resolve all or part of the dispute and did not alter the “labelling” or format for ruling on the substantive issues.
The plaintiff asserted that the insurers could only appeal the judge’s interlocutory order before the Divisional Court with leave under s. 19(1)(b) of the Courts of Justice Act, 1990.
The insurers countered that the order was final because it prevented them from asserting civil fraud as a distinct defence. They added that the Ontario Court of Appeal, not the Divisional Court, had jurisdiction to hear the appeal and decide whether to let the civil fraud defence proceed.
The Court of Appeal for Ontario dismissed the plaintiff’s motion to quash and ordered her to pay the defendant insurers’ costs of $5,000, including harmonized sales tax and disbursements.
The appeal court ruled that the motion judge’s denial of the insurers’ motion for leave to amend their pleadings to add civil fraud was a final order that foreclosed a new substantive defence.
Accordingly, s. 6(1)(b) of the Courts of Justice Act provided that an appeal against the judge’s order lay, as of right, to the Ontario Court of Appeal.
The appeal court distinguished between civil fraud and the insurers’ already pleaded defences, including those based on the policy’s provisions and a common law breach of the duty of good faith.
The appeal court pointed out that the Rules of Civil Procedure, RRO 1990, Reg 194, required defendants to specifically plead affirmative defences to avoid surprise at trial and provide particulars of how the case met the elements of fraud.
The appeal court noted that civil fraud required proof of a false representation, knowledge of the falsehood or recklessness, reliance on the representation, and a resulting loss.
