COURT OF APPEAL FOR ONTARIO

CITATION: Kyle v. Atwill, 2020 ONCA 476

DATE: 20200723

DOCKET: C67203

Feldman, Brown and Zarnett JJ.A.

BETWEEN

Fleming Kyle

Applicant

(Appellant)

and

Elizabeth Gail Atwill

Respondent

(Respondent)

Aaron Franks and Rhea Kamin, for the
    appellant

Carolyn Shelley and Silvia Cioci, for
    the respondent

Heard: January 20, 2020

On appeal from the order of Justice Timothy
    Minnema of the Superior Court of Justice, dated June 13, 2019, with reasons reported
    at 2019 ONSC 3707, 25 R.F.L. (8th) 195.

Feldman J.A.:

A.

Overview

[1]

The issue on this appeal is whether a plea asking
    the court to set aside a marriage contract is subject to a limitation period,
    and if so, what is the period?

[2]

The parties entered into a prenuptial agreement
    (the marriage contract) immediately before their marriage. The contract waived
    any entitlement to spousal support and provided that the parties would be
    separate as to property. After seven years of marriage, the parties separated.

[3]

Eventually, the husband brought family law proceedings
    claiming equalization of net family property and spousal support. The wife
    defended by relying on the marriage contract as a complete answer. He replied
    by asking the court to set aside or rescind the marriage contract on the basis that
    he had signed it without financial disclosure, without legal advice, under
    duress, and under a clear power imbalance.

[4]

Although the husband commenced the proceeding
    within the six-year limitation period for equalization claims under the
Family
    Law Act
, R.S.O. 1990, c. F.3, s. 7(3)(b), more than two years had elapsed since
    the parties separated. The wifes position was that the request to rescind the marriage
    contract was out of time. On summary judgment, the motion judge found that rescission
    of a marriage contract constitutes a claim under the
Limitations Act
,
    2002
, S.O. 2002, c. 24, Sched. B., that claim is subject to the two-year limitation
    period in s. 4 of the Act, and the husband discovered his claim roughly two
    months after separation. The motion judge therefore found the claim to be
    time-barred.

[5]

For the reasons that follow, I would allow the
    appeal. The husbands plea for rescission of the marriage contract is a
    proceeding for a declaration where no consequential relief is sought and
    therefore, under s. 16(1)(a) of the
Limitations Act
, no limitation
    period applies to that pleading. The husbands claim for equalization is
    subject to the six-year period set out in s. 7(3)(b) of the
Family Law Act
,
    and his claim for spousal support is not subject to a limitation period,
    pursuant to s. 16(1)(c) of the
Limitations Act
. Neither is time-barred
    and the action may proceed.

B.

Facts

[6]

The parties married in July 2005 after
    cohabiting for one year.

[7]

One week before the wedding, they signed the
    marriage contract based on a template for prenuptial agreements that the wife
    had found on the internet. Although the contract states that each party has
    retained their own lawyer and has received independent legal advice, neither the
    husband nor the wife retained or consulted a lawyer. Similarly, the contract
    states that the parties exchanged financial disclosure, but no formal exchange took
    place.

[8]

The agreement contains provisions setting out
    the parties intent to keep their assets separate, to bar any property claims
    following separation, and to waive any future rights to spousal support.

[9]

When the parties separated in August 2012, the
    husband moved out of the matrimonial home, which was owned by the wife.

[10]

The parties retained counsel and began
    negotiations until the husband abandoned the negotiations in the spring of 2013
    because his existing mental illness had worsened. In the spring of 2015, the
    husbands lawyer contacted the wifes lawyer to indicate that the husband was
    preparing to initiate a court proceeding.

[11]

However, no proceeding was commenced until
    August 24, 2017, when the husband brought an application for spousal support,
    equalization of net family property, and yearly financial disclosure. The
    husband did not explicitly seek to set aside the marriage contract in his original
    pleading, but his statement of facts referred to the contract and stated that
    he had signed it with no legal advice, no financial disclosure, and under
    duress.

[12]

The wife filed an answer, relying primarily on
    the marriage contract as a defence to the husbands claims. She subsequently
    amended her answer to argue that the husbands claim to set aside the marriage
    contract was statute-barred by s. 4 of the
Limitations Act
.

[13]

Following the amendment, the husband filed a reply
    contesting the applicability of the
Limitations Act
and stating that
    the marriage contract should be deemed invalid because he signed it without
    financial disclosure, without legal advice, under duress and with a clear power
    imbalance.

C.

Decision of the Motion Judge

[14]

The issue whether the husbands request to set
    aside the marriage contract was statute-barred was heard four weeks prior to
    the scheduled trial date, as a summary judgment motion. The two issues on the
    motion were whether a trial was required to decide: first, whether the two-year
    limitation period in s. 4 of the
Limitations Act
applies to an
    application to set aside a marriage contract under s. 56(4) of the
Family
    Law Act
; and second, if so, whether the husband had brought his
    application in time.

[15]

Dealing with the first issue, the motion judge
    found that the request to set aside the marriage contract constituted a claim to
    remedy an injury, loss or damage within the meaning of s. 4 of the
Limitations
    Act
. The husbands loss was the extinguishment of his rights under the
Family
    Law Act
to equalization and spousal support by an allegedly improperly obtained
    marriage contract: at para. 27. Therefore, the two-year limitation period applied
    unless the
Limitations Act
provided otherwise.

[16]

The motion judge then considered whether a
    request to set aside a marriage contract comes within s. 16(1)(a) of the
Limitations
    Act
. That section provides that there is no limitation period for a
    proceeding for a declaration if no consequential relief is sought. The motion
    judge found that while the husband was seeking a declaration that the marriage
    contract was of no force or effect, s. 16(1)(a) was not engaged because he was
    also seeking the consequential relief of spousal support and equalization of
    net family property: at para. 31.

[17]

Having found that the two-year limitation period
    applied, the motion judge turned to the question of when the husband discovered
    his claim, using the criteria in s. 5 of the
Limitations Act
. He found
    that by October 17, 2012, when the husband told his social worker that the
    marriage contract had issues and that the wife was still relying on it, the husband
    knew that a court proceeding was appropriate: at para. 44.

[18]

The motion judge rejected the husbands further
    argument that he was not legally able to discover what limitation period
    applied to a proceeding to rescind a marriage contract under s. 56(4) of the
Family
    Law Act
because there was no previous case law on the issue: at para. 46. The
    motion judge also considered whether the husbands mental health issues had
    made him incapable of commencing the proceeding until he did so more than two
    years after October 17, 2012, but the motion judge found no evidence in the
    record to make incapacity a genuine issue for trial: at para. 50.

[19]

Accordingly, the motion judge found that he
    could decide on the record before him on summary judgment that the husbands request
    for rescission of the marriage contract was out of time, as more than two years
    had elapsed since he discovered his claim: at para. 51.

D.

Issues on Appeal

[20]

The sole issue on the appeal is whether the
    motion judge erred by dismissing the husbands claims for equalization and
    spousal support on summary judgment because his plea to rescind the marriage
    contract was statute-barred. As the
Family Law Act
provides no
    limitation period for an application to set aside a marriage contract, the
    appeal requires this court to decide which of the
Limitations Act
s
    provisions governs the request to set aside the marriage contract under s.
    56(4) of the

Family Law Act
. The question is thus whether the
    application to set aside the marriage contract is subject to no limitation
    period because it is a proceeding under s. 16(1)(a) of the
Limitations Act
for a declaration where no consequential relief is sought, or whether it is subject
    to the two-year limitation period and if so, when the loss or damage occurred and
    when the claim was discovered.
[1]

E.

Standard of Review

[21]

The parties agree that the standard of review on
    this appeal is correctness. Although the motion judge made a number of
    determinations of mixed fact and law in granting summary judgment, the issue
    under appeal is whether he erred in law by determining that the two-year
    limitation period under s. 4 of the
Limitations Act
applies to an
    application under s. 56(4) of the
Family Law Act
.

F.

Legislative Context

[22]

There are two Ontario statutes that govern
    limitations issues in family law matters: the
Limitations Act
and the
Family
    Law Act
. The
Limitations Act
sets out the general limitation
    periods for actions in Ontario as well as the applicability of limitation
    periods set out in some other acts, including the
Family Law Act
.

(1)

The Limitations Framework under the
Limitations
    Act

[23]

The
Limitations Act
provides the basic
    two-year limitation period for claims in Ontario, as well as the circumstances
    in which other limitation periods may apply.

[24]

The general limitation period is stated at s. 4:

4
Unless
    this Act provides otherwise, a proceeding shall not be commenced in respect of
    a claim after the second anniversary of the day on which the claim was
    discovered.

[25]

Claim is defined in s. 1:

1
In
    this Act, [] claim means a claim to remedy an injury, loss or damage that
    occurred as a result of an act or omission[.]

[26]

Section 5 sets out when a claim is discovered:

5(1)
A claim is discovered on the earlier of,

(a)
the day on which the person with the
    claim first knew,

(i)
that the injury, loss or damage
    had occurred,

(ii)
that the injury, loss or damage was
    caused by or contributed to by an act or omission,

(iii)
that the act or omission was that
    of the person against whom the claim is made, and

(iv)
that, having regard to the nature
    of the injury, loss or damage, a proceeding would be an appropriate means to
    seek to remedy it; and

(b)
the day on which a reasonable person
    with the abilities and in the circumstances of the person with the claim first
    ought to have known of the matters referred to in clause (a).

(2)
A
    person with a claim shall be presumed to have known of the matters referred to
    in clause (1) (a) on the day the act or omission on which the claim is based
    took place, unless the contrary is proved.

[27]

Section 16(1) gives a list of proceedings for
    which there is no limitation period. Subsection 16(1)(a) provides that [t]here
    is no limitation period in respect of [] a proceeding for a declaration if no
    consequential relief is sought.

(2)

Limitation Periods for Equalization and for
    Spousal Support

[28]

In the family law context, the operation of the
Limitations
    Act

together

with the
Family Law Act

prescribes
    limitation periods that are, in most cases, considerably more generous than the
    two-year period set out in s. 4 of the
Limitations Act
, in recognition
    of the unique situation of spouses and families on the breakup of a marriage.

[29]

Section 19(1)(a) of the
Limitations Act
provides for the application of limitation periods contained in other acts. One
    such limitation period is s. 7(3) of the
Family Law Act
, which sets
    out three limitation periods for applications for equalization of net family
    property that may be brought under s. 5 of the
Family Law Act
. Section
    7(3) states:

7(3)
An
    application based on subsection 5 (1) or (2) shall not be brought after the
    earliest of,

(a)
two years after the day the
    marriage is terminated by divorce or judgment of nullity;

(b)
six years after the day the
    spouses separate and there is no reasonable prospect that they will resume
    cohabitation;

(c)
six months after the first
    spouses death.

[30]

Unlike with limitation periods contained in the
Limitations
    Act
, the court may extend limitation periods specifically provided in the
Family
    Law Act
under s. 2(8) of that Act,

in certain enumerated
    circumstances.

[31]

With respect to spousal support, the
Family
    Law Act
does not provide a limitation period for seeking an order for
    spousal support under s. 33(1) of that Act. The limitation issue is dealt with
    in s. 16(1)(c) of the
Limitations Act
,
which provides that
    there is no limitation period for bringing a proceeding to obtain support or to
    enforce a contract providing for support under the
Family Law Act
.

[32]

These special limitation periods account for the
    need to allow spouses more time to try to resolve their property issues without
    having to go to court, and the fact that a spouse or former spouses support
    needs can change over time and may be addressed whenever they do.

(3)

Limitation Period for Setting Aside a Domestic
    Contract

[33]

Persons who are married or intend to marry may
    agree regarding their rights and obligations during and after the marriage in a
    marriage contract, which is one form of domestic contract:
Family Law Act
,
    s. 52.

[34]

A domestic contract prevails over the Act unless
    the Act provides otherwise: s. 2(10). A number of provisions of the
Family
    Law Act
permit a court to set aside all or part of a marriage contract,
    two of which are relevant to this appeal.

[35]

First, in the context of an application for
    spousal support, s. 33(4) gives the court the power to set aside a provision in
    a marriage contract that waives or reduces the right to support in three
    enumerated situations, including where the provision results in unconscionable
    circumstances.

[36]

Second, s. 56(4) allows a court to set aside an
    entire marriage contract or any provision in it, on application. That provision
    states:

56(4)
A court may, on application, set aside a domestic contract or a
    provision in it,

(a)
if a party failed to disclose to
    the other significant assets, or significant debts or other liabilities,
    existing when the domestic contract was made;

(b)
if a party did not understand the
    nature or consequences of the domestic contract; or

(c)
otherwise in accordance with the
    law of contract.

[37]

There is no limitation period provided in the
Family
    Law Act
for setting aside all or part of a domestic contract under s.
    56(4), although that section specifically contemplates a court application for
    such relief. There is also no limitation provided for setting aside a spousal
    support provision of a marriage contract under s. 33(4), but that determination
    is made as part of a spousal support application for which there is no
    limitation period, as provided in s. 16(1)(c) of the
Limitations Act
.

[38]

Because the
Family Law Act
is silent as
    to the limitation period that applies to an application to set aside a marriage
    contract or a provision in it, one must look to the
Limitations Act
to
    determine which provisions of that Act, if any, apply. In this respect, I do
    not share my colleagues view that the provision establishing the limitation
    period for seeking equalization should be read to also apply to an application to
    set aside a marriage contract under s. 56(4) of the
Family Law Act
. The
    fact that the
Family Law Act
does not provide a limitation period for an
    application to set aside a marriage contract under s. 56(4) is, in my view, a
    clear legislative signal that the
Limitations Act
is to apply.

G.

Analysis

(1)

Preliminary Issue: Does it matter whether the
    request to set aside the marriage contract was part of the husbands original claim
    or part of his response to the wifes defence?

[39]

As a preliminary matter, I wish to address the husbands
    submission that because the question of setting aside the marriage contract only
    arose procedurally in the context of the wifes defence, no limitation applies.

[40]

I would reject this argument. Procedurally, the husband
    did not initiate a request to set aside the marriage contract until it was
    raised as a defence, whereupon he asked that the contract be set aside in a
    reply pleading. However, regardless of how the issue arose, in order for the husband
    to obtain an order under the
Family Law Act
for equalization or
    spousal support in contravention of the marriage contract he signed, he
    requires an order under s. 56(4) setting all or part of that marriage contract
    aside.
[2]
Otherwise, the court will enforce the contract:
Family Law Act
, s.
    2(10).

[41]

Therefore, the motion judge did not err by
    treating the issue as a request by the husband for relief, thereby engaging the
    limitation issue.

(2)

Section 16(1)(a) of the
Limitations Act

[42]

On questions of statutory interpretation such as
    those at issue in this appeal, a court must read the words of an act in their
    entire context and in their grammatical and ordinary sense harmoniously with
    the scheme of the act, the object of the act, and the intention of the
    legislature:
Bell ExpressVu Limited Partnership v. Rex
, 2002 SCC 42,
    [2002] 2 S.C.R. 559, at para. 26. Here, there are two statutes that work
    together to provide limitations in the family law context, and the court must
    interpret them applying the same principles.

[43]

Section 4 of the
Limitations Act
mandates
    the basic two-year limitation period for all claims unless the Act provides
    otherwise. As a result, if there is another provision that governs the limitation
    for the relevant proceeding, that provision prevails. Therefore, if s. 16(1)(a)
    applies, then there is no limitation period for bringing a proceeding to set
    aside a marriage contract under s. 56(4) of the
Family Law Act
.

[44]

In addressing the potential applicability of s.
    16(1)(a) of the
Limitations Act
to a proceeding under s. 56(4) of the
Family
    Law Act
, the motion judge agreed that the application to set aside the
    marriage contract is a proceeding for a declaration: at para. 31. The
    declaration is that the contract is of no force and effect and is set aside.
    However, the motion judge found that the husband was claiming consequential
    relief in the form of equalization and spousal support and for that reason, the
    proceeding did not come within s. 16(1)(a) for limitation purposes: at para.
    31.

[45]

I agree with the motion judge that the
    application to set aside the marriage contract is an application for a
    declaration. However, I do not agree that that application seeks consequential
    relief.

[46]

The current
Limitations Act

was
    the product of a lengthy process of law reform efforts over a number of years.
    In the early 1990s, the Limitations Act Consultation Group to the Attorney
    General made a series of recommendations that ultimately formed the basis for
    the current
Limitations Act
, including the provision setting out the limitation
    period for declarations: see
Recommendations for a New Limitations Act
(Toronto: Ministry of the Attorney General of Ontario, 1991). At p. 18, the
    Consultation Group gave its recommendation that there be no limitation period
    for a proceeding seeking a declaration:

Recommendation 2: Applicability and
    Exemptions from Limitations:

c) Exemption  Declarations

Declarations do not grant any judicial remedy.
    Therefore, since they impose no legal obligation on the defendant there is no
    justification for barring them. Moreover, there will be circumstances in which
    parties will wish to submit matters to court, such as interpretation of legal instruments
    like wills and contracts, without seeking a remedy from the court.

There is some concern that if there is no
    limitation period on seeking declarations the procedure may be used to circumvent
    limitation periods. Then, the declaration could be used in aid of non-judicial
    remedies. If evidence develops that there is abuse of the declaration power
    then this provision may have to be re-examined.

[47]

The Committees commentary explains that declarations
    would be exempt from any time limit because no consequential remedy would be
    ordered against another party. Professor Lazar Sarna explains the distinction
    between a declaratory and a remedial judgment as follows in his text,
The
    Law of Declaratory Judgments
, 4th ed. (Toronto: Thomson Reuters, 2016), at
    p. 54:

A distinction is made between a remedial
    judgment and a declaration. In those provinces where declaratory orders are
    excluded from limitations statutes or the purview of juries, the distinction is
    crucial. A remedial judgment carries within its own terms a solution for the
    cure of a dispute, be that an order to do or not to do, or more specifically,
    to pay, deliver over, seize, sell, dissolve, remove, or refrain. It is
    self-executing in the sense that the parties and the executing officer need no
    further direction or authorization than that contained in the judgment. A
    declaration confirms or denies the existence of a right, as if bearing witness
    to what has always been the legal relationship between the disputing parties.
    Put that way, it is an existential judgment that considers rights to be or not
    to be. An executing officer would be at a loss for guidance if called upon to
    execute the declaration because no remedial course is stated in the declaration.
    The parties are not even called upon to take the next step in accommodating the
    declaration: rather, their challenge is to consider immediate compliance, or
    new court proceedings to remedy a situation interpreted and clarified by the
    declaration. [Footnote omitted.]

[48]

This description of declaratory and remedial
    judgments is reflected in the jurisprudence of this court. A declaratory
    judgment is a formal statement by a court pronouncing upon the existence or
    non-existence of a legal state of affairs  it is restricted to a declaration
    of the parties rights and does not order any party to do anything

:
Starz
    (Re)
, 2015 ONCA 318, 125 O.R. (3d) 663, at para. 102; see also
Fehr v.
    Sun Life Assurance Company of Canada
, 2018 ONCA 718, 84 C.C.L.I. (5th)
    124, at para. 207;
Peikut v. Romoli
, 2020 ONCA 26, 55 E.T.R. (4th)
    166, at paras. 12-13.

[49]

As enacted, s. 16(1)(a) of the
Limitations
    Act
provides that there will be no limitation period for a proceeding for
    a declaration if no consequential relief is sought. As this is a limitations
    statute, as a matter of statutory interpretation, the question is: what is the
    meaning of consequential relief in this section, and what is the intent of
    limiting the circumstances when there will be no limitation period to when the
    request for a declaration does not also claim consequential relief?

[50]

To answer the question, one must be careful not
    to confuse procedure with substance in interpreting and applying s. 16(1)(a) of
    the
Limitations Act
. The
Limitations Act
is not concerned
    with procedural issues: the purpose and effect of its provisions is to govern
    the time limits for commencing actions and proceedings. Whether the parties
    have combined different claims or causes of action into one or more proceedings
    will not alter the time periods that govern. Put differently, different
    limitation periods may govern different claims in the same action.

[51]

The key, therefore, is not whether consequential
    relief in the form of a claim for a remedy against another party is sought
    procedurally in the same proceeding or in a subsequent proceeding. The key is
    whether the request for a declaration coupled with a claim for enforceable
    relief is, in substance, a claim for a remedy against the other party and not
    merely a request for a declaratory order.

[52]

This is because, if it is a claim for a
    substantive remedy against another party, then the limitation period applicable
    to that substantive remedy will apply to that claim. Similarly, if a
    declaration is necessary as a prelude to a claim for a remedy against another
    person, no limitation period applies to the proceeding for a declaration, but the
    applicable limitation period for seeking the remedial order may still bar that
    claim.

[53]

Accordingly, if a party seeks both consequential
    and declaratory relief against another party, the consequential relief is
    subject to the limitation periods set forth in the
Limitations Act
, or
    in this case, the
Family Law Act
, while the declaratory relief alone
    benefits from the absence of a limitation period. The bar is not against
    joining a claim for consequential relief; the bar is against applying no
    limitation period to the consequential relief.

[54]

Applying the principle to this case, where the
    husband seeks a declaration that would remove a significant obstacle to his
    claims for equalization and for spousal support, that declaration is subject to
    no limitation period, pursuant to s. 16(1)(a) of the
Limitations Act
.
    The limitations governing the consequential relief he seeks, namely
    equalization and support, are the periods applicable to those forms of relief:
    six years from the date of separation for equalization, and no limitation
    period for support.

[55]

Conversely, had the husband brought his
    equalization claim seven years after the date of separation with no reasonable
    possibility of reconciliation, and therefore out of time, the fact that he
    would be able to obtain a declaration setting aside the marriage contract would
    not mean that his equalization claim could proceed. That claim would remain
    time-barred, subject to the power of the court to extend the time under s.
    2(8).

[56]

In summary, although one may always characterize
    any relief that is sought that depends on the outcome of the declaration
    proceeding as consequential relief, the intent and effect of s. 16(1)(a) is not
    to preclude the party seeking the declaration from also asking for
    consequential relief as a matter of procedure. It is to prevent a party who
    seeks a consequential remedy from circumventing the limitation period that is
    applicable to the claim for the remedy by joining that claim with an
    application for a declaration: see, for example,
Alguire v. The
    Manufacturers Life Insurance Company (Manulife Financial)
, 2018 ONCA 202,
    140 O.R. (3d) 1, at para. 29; see also Sarna, at pp. 55-56.
[3]

(3)

Conclusion on s. 16(1)(a) of the
Limitations
    Act

[57]

I conclude that a proceeding under s. 56(4) of
    the
Family Law Act
comes within s. 16(1)(a) of the
Limitations Act
.
    There is no limitation period for bringing the proceeding for a declaration
    setting aside a marriage contract, whether as a stand-alone matter or if the
    proceeding also claims other family law relief. The other relief remains
    subject to the applicable limitation periods, including the residual discretion
    of a family court to grant extensions of time under s. 2(8) of the
Family
    Law Act
. In this case, those limitation periods are six years for the
    husbands equalization claim, and there is no limitation period for his spousal
    support claim.

[58]

This result also works seamlessly within the
    limitation structure of the
Family Law Act
, because it does not add a
    new, shorter limitation period of two years, which would disrupt the longer
    time spouses have been given to resolve their affairs. It does not interfere
    with the philosophy of the Act, which is to give more generous time periods for
    separating spouses to resolve their claims for equalization and spousal
    support.

[59]

Moreover, while spouses may seek to set aside a
    marriage contract in the circumstances set out in s. 56(4) at any time, a
    spouse is unlikely to bring such an application during the marriage, even if
    the spouse learns that the other spouse failed to disclose some material assets
    when they were negotiating their agreement. If they remain happily married,
    there will be no need.

[60]

An application to set aside a marriage contract
    would likely be brought in the context of marriage break-up and its financial
    consequences for the parties. Those financial consequences are governed by the
    limitation periods specified in the Act and in the
Limitations Act
. An
    application to set aside a marriage contract will not extend or reduce those
    periods.

(4)

Is the request to set aside a marriage contract
    a claim for loss or damage caused by an act or omission?

[61]

Because of my conclusion that the request to set
    aside a marriage contract under s. 56(4) of the
Family Law Act
is a
    proceeding for a declaration where no consequential relief is sought under 16(1)(a)
    of the
Limitations Act
, it is unnecessary to consider whether that
    request falls within the definition of claim, and in that context when the loss
    or damage occurred and when the husband discovered the claim.

H.

Disposition

[62]

Accordingly, I conclude that the motion judge
    erred in law in failing to find that s. 16(1)(a) of the
Limitations Act

applies to a proceeding under s. 56(4) of the
Family Law Act
for a
    declaration setting aside the marriage contract, and in finding that the two-year
    limitation period under s. 4 applies.

[63]

I would therefore allow the appeal and set aside
    the summary judgment, with costs of the appeal to the husband in the agreed
    amount of $10,000 inclusive of disbursements and HST. If the parties are unable
    to agree on the costs of the summary judgment motion in light of the
    disposition of the appeal, they may each file costs submissions not exceeding
    two pages in length by August 10, 2020.

K. Feldman
    J.A.

B. Zarnett
    J.A.

Brown J.A. (Concurring):

I
INTRODUCTION

[64]

I agree with my colleague that the
    husbands appeal should be allowed and the summary judgment granted by the
    motion judge be set aside. However, I reach that conclusion by a different
    path.

II.
POINTS OF DISAGREEMENT

[65]

Although I agree with my colleague
    that the motion judge did not err by treating the husbands pleadings (Application
    and Reply) as containing a request to set aside the marriage contract, I
    respectfully disagree with two of my colleagues other conclusions.

A.

Do all proceedings invoking s. 56(4)
    of the
Family Law Act
fall within s. 16(1)(a) of the
Limitations Act,
    200
2
?

[66]

With respect, I am unable to agree
    with my colleagues broad statement, at para. 57, that a proceeding under s.
    56(4) of the
Family Law Act
comes within s. 16(1)(a) of the
Limitations Act
.

[67]

It may or it may not.

[68]

I agree that a proceeding that seeks
    only to set aside a domestic contract under s. 56(4) of the
Family Law Act
,
    R.S.O. 1990, c. F.3
(the
FLA
) and does not seek
    consequential relief may well fall within the language of s. 16(1)(a) of the
Limitations Act
, 2002
, S.O. 2002,
    c. 24 Sched. B (the
Limitations Act
)
,
    namely: There is no limitation period in respect of (a) a proceeding for a
    declaration if no consequential relief is sought.

[69]

However, such a proceeding would
    be a rare bird. As put by Abrams and McGuinness in
Canadian
    Civil Procedure Law
,
2nd Edition
(Markham:
    LexisNexis Canada, 2010)
, at
§
5.87:
    Proceedings for declarative relief within the description of clause [16(1)](a)
    are relatively rare, although not unknown.

[70]

The reality of family law
    litigation is that a proceeding in which an applicant seeks to set aside a
    domestic contract invariably also contains, as part of the prayer for relief,
    requests by the applicant for consequential relief relating to support or
    property equalization. Seeking such relief in the same proceeding in which the
    applicant attempts to set aside a domestic contract would take the proceeding
    outside of the language of
Limitations Act
,

s. 16(1)(a).

B.

Does the husbands proceeding seek consequential relief
?

[71]

Second, I respectfully disagree
    with my colleagues conclusion, at para. 45, that the husbands proceeding is
    one for a declaration that does not seek consequential relief within the
    meaning of
Limitations Act
, s. 16(1)(a).

[72]

A
declaratory judgment is a formal statement by a court
    pronouncing upon the existence or non-existence of a legal state of affairs
    it is restricted to a declaration of the parties rights and does not order any
    party to do anything:
Starz (Re)
, 2015 ONCA 318, 125 O.R. (3d) 663, at
    para. 102.
However, the present case is
    not one where the husbands request for an order setting aside the marriage
    contract is for an existential judgment that considers rights to be or not to
    be or where the parties are not even called upon to take the next step in
    accommodating the declaration so that the failure of the parties to abide by
    its guidance will inevitably lead to independent subsequent proceedings
    claiming consequential relief, all hallmarks of a proceeding for a declaration
    in which no consequential relief is sought: Lazar Sarna,
The Law of Declaratory Judgments
, 4th ed.
(Toronto: Thomson Reuters, 2016), at pp. 7 and 54.

[73]

On the face of his pleadings, the
    husband seeks relief consequential to setting aside the marriage contract. The
    husbands originating Application, in the section headed Claim by Applicant,
    seeks three forms of relief: (i) indexed spousal support; (ii) equalization of
    net family properties; and (iii) costs. In addition, the motion judge interpreted
    portions of the husbands Application and Reply as requesting an order to set
    aside the marriage contract pursuant to s. 56(4) of the
FLA
. Consequently, the husbands request for an order setting aside the
    marriage contract goes beyond clarifying the nature of a particular obligation:
Alguire v. The Manufacturers Life Insurance Company
    (Manulife Financial)
, 2018 ONCA 202,
    140 O.R. (3d) 1, at para. 29;
Leibel v. Leibel
, 2014 ONSC 4516, at para. 38.

[74]

Instead, the request attempts to
    open the door to the court granting him spousal support and an equalization
    payment. So framed, the essential nature of what the husband is seeking in
    his proceeding, the pith and substance of the relief he seeks, is spousal
    support and an equalization payment:
Skylark Holdings
    Limited v. Minhas
, 2018 ONSC 1568
    (Div. Ct.), at para. 8;
Van Halteren v. De Boer
    Tool Inc.
, 2018 ONSC 1554, at para.
    6.

[75]

Accordingly, if the husbands
    proceeding is characterized as one seeking a declaration under s. 56(4) of the
FLA
, it is not a proceeding
    for a declaration in which no consequential relief is sought. On the contrary,
    it very much is a proceeding in which relief is sought consequential to the
    order to set aside the marriage contract. As a result, it does not fall within
    the language of s. 16(1)(a) of the
Limitations Act
.

[76]

The question then is: what
    limitation periods apply to the husbands proceeding?

III.
THE PARTIES POSITIONS

[77]

The parties offer two different
    answers to that question.

[78]

The respondent wife supports the
    motion judges conclusions that (i) the husbands request to set aside the
    marriage contract constitutes a discrete claim within the meaning of s. 1 of
    the
Limitations Act
(ii) to which the two-year basic limitation period
    contained in s. 4 of that Act applies (iii) with the result that since the
    husband discovered that claim no later than October 17, 2012 (iv) his August
    24, 2017 application was commenced out-of-time (v) notwithstanding that his
    requests for an equalization payment and spousal support were brought within
    the applicable limitation periods. However, the respondent further submits that
    this court should add a gloss to ss. 4 and 5 of the
Limitations Act
so that a
    claim to set aside a marriage contract is presumptively discovered on the
    date the parties separate. This submission appears to recognize that requiring
    a party to apply to set aside a marriage contract within two years of the
    discovery of some injury, loss or damage while the marriage remains on-going
    would result in a harsh, if not absurd, application of the
Limitations Act
.

[79]

On his part, the husband disagrees
    that his request to set aside the provisions of the marriage contract regarding
    his claims for an equalization payment and spousal support is a stand-alone
    claim for limitation period purposes. Instead, he characterizes his request
    to set aside those provisions as a gateway to claiming his statutory rights
    to equalization and spousal support. As such, the timeliness of his set aside
    request falls to be determined by the limitation periods applicable to his
    monetary claims for an equalization payment and spousal support, a six-year
    limitation period and no limitation period, respectively.

IV.
ANALYSIS

[80]

I am persuaded by the husbands
    submission. It more closely accords with the statutory language regarding the
    interplay between Ontarios family law and limitation periods regimes.

A key interpretative principle

[81]

A key principle governing the
    interplay between those two regimes is that the basic two-year limitation
    period that applies to a proceeding  in respect of a claim does not apply to
    proceedings seeking equalization payments or spousal support. Instead, the
Limitations Act
recognizes special limitation periods for each.

[82]

In the case of spousal support, s.
    16(1)(c) of the
Limitations Act
states:

There is
no limitation period
in
    respect of  (c) a proceeding to obtain support under the
Family
    Law Act
or to enforce a provision for support or maintenance
    contained in a contract or agreement that could be filed under section 35 of
    that Act. [Emphasis added.]

[83]

In the case of an equalization
    payment,
FLA
s. 5(1) sets out the basic entitlement:

When a divorce is granted
    or a marriage is declared a nullity, or when the spouses are separated and
    there is no reasonable prospect that they will resume cohabitation, the spouse
    whose net family property is the lesser of the two net family properties is
    entitled to one-half the difference between them.

Section 7(1) of the
FLA
specifies the process by which a person can
    seek a court order for an equalization payment:

The court may, on the application
    of a spouse, former spouse or deceaseds spouse personal representative,
    determine any matter respecting the spouses entitlement under section 5.

[84]

Section
19(1)(a) of the
Limitations
    Act
recognizes that the limitation
    period applicable to a proceeding seeking an equalization payment is that set
    out in
FLA
s. 7(3), which states:

An application based on subsection 5(1)
    or (2) shall not be brought after the earliest of,

(a) two years after the day the marriage
    is terminated by divorce or judgment of nullity;

(b) six years after the day the spouses
    separate and there is no reasonable prospect that they will resume
    cohabitation;

(c) six months after the first spouses
    death.

In the present case, the husbands request for an equalization payment
    falls within the six-year limitation period in
FLA

s.
    7(3)(b).

[85]

Accordingly, the starting points
    for determining the limitation periods applicable to a proceeding in which
    spousal support or an equalization payment is sought are s. 16(1)(c) of the
Limitations Act
and s.
    7(3) of the
FLA
, respectively
.

The treatment of domestic contracts in the
FLA

[86]

Does this starting point change
    when the proceeding seeking an equalization payment or spousal support also
    requests an order setting aside a domestic contract, or a provision in a
    domestic contract, that restricts or waives a partys entitlement to an
    equalization payment or spousal support? I am not persuaded that it does.

[87]

I recognize that the
FLA
accords strong
    recognition to domestic contracts: it provides that the contract prevails in
    respect of a matter also dealt with by the
FLA
, unless the Act provides otherwise:
FLA
, s. 2(10). A marriage
    contract may deal with the ownership in or division of property, as well as
    with support obligations:
FLA
, ss. 52(1)(a) and (b).

[88]

But the
FLA
subjects aspects of
    domestic contracts to judicial supervision. Under s. 56(4), a court may set
    aside a domestic contract in the event certain circumstances occurred at the
    time the contract was entered into, such as inadequate financial disclosure,
    lack of understanding of the nature and consequences of the contract or basic
    contract formation problems.
FLA
s. 56(4) deals with unconscionable agreement:
Scheel v. Henkelman
(2001), 52 O.R. (3d) 1 (C.A.), at para. 15.

[89]

As well, a court may set aside a
    contractual waiver of the right to spousal support where it results in
    unconscionable circumstances. Specifically,
FLA
s. 33(4) provides that in considering an application
    for support under
FLA
s. 33(1):

The court may set aside a provision for support
    or a waiver of the right to support in a domestic contract and may determine
    and order support in an application under subsection (1) although the contract
    contains an express provision excluding the application of the section,

(a) if the provision for support or the
    waiver of the right to support results in unconscionable circumstances...

[90]

The case law recognizes that the
    setting aside of a waiver of support provision that results in unconscionable
    circumstances under
FLA
s. 33(4) occurs as part of the courts consideration
    of an application for spousal support:
Scheel
, at
    paras. 15-16. Consequently, no limitation period would apply to the examination
    of a waiver of support provision under
FLA
s. 33(4) that is raised as part of a s. 33
    application for spousal support by reason of s. 16(1)(c) of the
Limitations Act
.

[91]

However, the
FLA
does not expressly
    specify the limitation period applicable to an application to set aside a
    domestic contract that relies on the unconscionable agreement factors
    contained in
FLA
s. 56(4). The respondent submits that the lack of an express limitation
    period covering s. 56(4) applications is significant. It means that where an
    applicant commences a proceeding for an equalization payment and spousal
    support, coupled with a request to set aside a domestic contract for any of the
    reasons specified in
FLA
s. 56(4), a discrete limitation period applies to the
    set aside request: namely, the basic two-year limitation period found in s. 4
    of the
Limitations Act
. That is because the threshold request to set aside
    the domestic contract constitutes a discrete claim in the proceeding that
    attracts the basic limitation period. As I will explain, I do not accept this
    submission.

Applying the key interpretative principle

[92]

One must recall the key
    carve-out principle that governs the interplay between Ontarios family law
    and limitation periods regimes: the basic two-year limitation period in the
Limitations Act
does not
    apply to proceedings seeking an equalization payment or spousal support. If
    such a proceeding includes a request to set aside a domestic contract on any
    grounds specified in
FLA
s. 56(4), does a discrete limitation period apply to
    that part of the proceeding or do the equalization payment and spousal support
    limitation periods apply?

[93]

The answer really boils down to
    the perspective one takes of the proceeding. Is the set aside request a
    discrete, stand-alone claim? Or, should
the set aside
    request be treated as one subsumed within the proceeding claiming an
    equalization payment and spousal support under the
FLA
?

[94]

In answering those questions,
    courts should be reluctant to discover or add yet another limitation period to
    family law litigation given the remedial nature of family law legislation. As
    well, in seeking to answer the questions courts must recognize the reality of
    contemporary family litigation: a very large number of family law litigants are
    now self-represented. Accordingly, in this area of the law, necessity dictates
    that simplicity and understandability of the rules of the game must be a
    major consideration in the interpretative exercise.

[95]

In my view, the statutory language
    governing claims for equalization payments and spousal support indicate that
    any related set aside request in a proceeding be treated as one falling under
    the limitation periods that apply to the requests for an equalization payment
    and spousal support asserted in the proceeding.

[96]

Dealing first with a proceeding
    that seeks spousal support, s. 16(1)(c) of the
Limitations
    Act

states that:

There is no limitation period in respect
    of
a proceeding to obtain support
under the
Family Law Act
or to enforce a provision for
    support or maintenance contained in a contract or agreement that could be filed
    under section 35 of that Act.
[Emphasis added.]

[97]

The statutory language of a
    proceeding to obtain support under the
Family Law
    Act
 is broad enough to include a
    proceeding that couples a request to set aside the provisions of a domestic
    contract that limit or waive spousal support for reasons set out in
FLA
s. 56(4) with a
    request for an order to provide spousal support under
FLA
s. 33(1). The bars to
    relief contained in the domestic contract would have to be set aside in order
    for the applicant to obtain support under the
FLA
.

[98]

Such an interpretation does not
    undermine the recognition given to domestic contracts by
FLA

s. 2(10). It is consistent with the policy of allowing
    courts to set aside waivers of support in domestic contracts that result in
    unconscionable circumstances:
FLA
, s. 33(4). It also is in step with the approach under
    the
Divorce Act
, R.S.C. 1985, c. 3 (2nd Supp.)
that a domestic contract is a factor that the court
    must consider on an application for spousal support:
Miglin v. Miglin
, 2003
    SCC 24, [2003] 1 S.C.R. 303, at paras. 68-78.

[99]

So too, the language of s. 7 of
    the
FLA
is broad enough to include a proceeding that couples a request to set aside the
    provisions of a domestic contract that limit or waive an equalization payment
    for reasons set out in
FLA
s. 56(4) with a request for an order determining a
    spouses entitlement to an equalization payment under
FLA
s. 5.

[100]

As noted earlier,
FLA
s. 7(3) creates
    special limitation periods for an application based on subsection 5(1) or
    (2). The husbands request for an equalization payment is based on subsection
    5(1). The language in
FLA
s. 7(1) that authorizes a court to determine
any
    matter respecting the spouses entitlement under section 5
 (emphasis
    added) is broad enough to include a concurrent request to set aside, for the
    reasons set out in
FLA
s. 56(4), the provisions of a domestic contract that
    limit or waive the right to an equalization payment. In other words,
    determining whether the provisions of a domestic contract validly limit or
    waive a spouses entitlement to an equalization payment falls within the
    language of determining any matter respecting the spouses entitlement under section
    5.

V.
CONCLUSION

[101]

The husbands proceeding couples a
    request to set aside the provisions of the marriage contract that bar his
    entitlement to an equalization payment and spousal support with his claims for
    an equalization payment and spousal support. So framed, the husbands
    proceeding to set aside the bars to an equalization payment in the marriage
    contract and to secure an equalization payment is subject to the six-year
    limitation period in
FLA
s. 7(3)(b); his proceeding to set aside the bars to
    spousal support in the marriage contract and to obtain spousal support are not
    subject to any limitation period pursuant to s. 16(1)(c) of the
Limitations Act
. Since
    the husband commenced his proceeding approximately five years following the
    date of separation, his proceeding is not statute-barred.

[102]

Consequently, I agree with my
    colleague that the husbands appeal must be allowed and the summary judgment
    set aside. I agree with my colleagues disposition of costs.

Released: K.F. July 23, 2020

David Brown J.A.

[1]
On appeal, the husband raised other arguments regarding the
    interpretation of the
Family Law Act
for limitations purposes, one of
    which was accepted by my colleague in his concurring reasons.

[2]

The
    husband did not seek to rely on s. 33(4) of the
Family Law Act
on the
    summary judgment motion, but made arguments about the applicability of s. 33(4)
    for the first time on appeal. In any event, as I discuss at para. 37 of these
    reasons, an order to set aside a spousal support clause in a marriage contract
    will be made under that section in the context of a support application under
    s. 33(1), for which there is no limitation period: see s. 16(1)(c) of the
Limitations
    Act
.

[3]
Professor Sarna explains, at pp. 55-56, that some actions for
    declaratory relief may nevertheless seek remedial orders:

The importance of
    defining an order as declaratory or remedial lies in part in the question of
    limitations. Limitation periods for remedial claims are statutorily different
    than that for declarations, if any. For example, many provincial statutes
    define the remedial order as a judgment or an order made by a court in a
    civil proceeding requiring a defendant to comply with a duty or to pay damages
    for the violation of a right, but excludes a declaration of rights and duties,
    legal relations, or personal status without consequential relief.

If in addition to
    declaratory relief, a claim against pension trustees would require them to act
    by making payment, the thrust of the action seeks a remedial order, and engages
    the [Ontario]
Limitations Act
. Similarly, a foreclosure action
    effectively seeks a remedial order because an order nisi, although containing a
    declaration of a mortgage being in default, also orders requiring the debtor to
    pay. The borderline cases where a litigant tries to avoid the limitations bar
    by using a declaratory recourse will easily be screened out by the presumption
    that all claims are caught by limitations. Accordingly, the litigant cannot
    avoid the consequences of the passage of time by seeking a declaration that
    money is payable. [Footnotes omitted.]


COURT OF APPEAL FOR ONTARIO

CITATION:
    Le Treport Wedding & Convention Centre Ltd. v. Co-operators General
    Insurance Company, 2020 ONCA 487

DATE:
    20200729

DOCKET:
    C67088

Feldman,
    Lauwers and Huscroft JJ.A.

BETWEEN

Le
    Treport Wedding & Convention Centre Ltd.

Plaintiff
    (Appellant)

and

Co-operators
    General Insurance Company

Defendant
    (Respondent)

Emily Stock and Brandon Cook, for the
    appellant

Robert W. Dowhan and Matthew McMahon,
    for the respondent

Heard: in writing, with questions by
    teleconference on May 19, 2020

On appeal from the order of Justice Douglas
    K. Gray of the Superior Court of Justice, dated May 17, 2019, with reasons
    reported at 2019 ONSC 3041.

Lauwers
    J.A.:

I.

Overview

[1]

The trial judge accepted this description of the
    catastrophic rainstorm event in the Greater Toronto Area that underpins this
    case:

On July 8, 2013, the GTA experienced a rain
    event unparalleled in its recorded history. Environment Canada measured in
    excess of 90 mm of rain in less than two hours at Pearson International
    Airport. That is the highest amount of measured rainfall in that short a period
    of time since such data tracking began. As a result, flooding was widespread
    across the GTA. The storm of July 8, 2013 also produced the highest single day
    rainfall total in recorded history for the GTA.

[2]

The entry of water into the banquet hall facility
    operated by the appellant, Le Treport Wedding & Convention Centre Ltd.,
    caused significant damage.

[3]

The appellant was insured under an all-risks
    policy by the respondent insurer, Co-operators General Insurance Company. It is
    common ground that the trial judge did not err in finding that the Sewer Back Up
    Endorsement applied and that the policy limit of $500,000 was fully paid out to
    the appellant by the insurer.

[4]

The appellant argues that the trial judge erred
    in finding that the flood endorsement does not apply on the facts, and in
    refusing to require payment under several other coverages.

[5]

For the reasons that follow, I would allow the
    appeal in part.

II.

The Factual Context

[6]

Representatives of the parties met on July 15,
    2013, a week after the storm. The next day, the insurer sent a letter to the
    appellant advising of the necessary steps to take in order to mitigate losses,
    including shutting down to complete repairs. The appellant got a quotation for emergency
    repairs on July 19, 2013 for $46,396.32, excluding tax, which the insurer paid.
    On September 26, 2013, the insurer sent the appellant a quote, provided by the
    insurers contractor, indicating that the full replacement cost to be paid
    after the repairs were completed was $105,533.94.

[7]

The appellant was dissatisfied with the quote,
    believing it to be insufficient and so low that it would not justify shutting
    down the business to effect the repairs. Many months later, on April 21, 2014,
    the insurer told the appellant that the actual cash value of the repairs,
    quoted in the September 2013 letter, was $79,150.45, which it paid.

[8]

According to the trial judge, the appellant
    later got a quote estimating the repair cost at $681,869.99.

[9]

Because there was such a wide gap between the
    estimates of losses and costs, the appellant triggered the appraisal process
    provided under Statutory Condition 11 of the policy and s. 128 of the
Insurance
    Act
, R.S.O. 1990, c. I.8. The appraisal award, released on March 21, 2016,
    set the value of the damage to the building at a replacement cost of $591,552, with
    an actual cash value of $561,974.40. The value of the contents/equipment loss
    was set at a replacement cost of $337,777.18, with an actual cash value of
    $253,332.89.

[10]

The insurer delayed the payment of the claim
    under the Sewer Back Up Endorsement. The
April 2014 payment brought the total
    amount paid to about $124,000. The insurers next payment came five years after
    the loss, in November 2018, when it paid the remaining balance up to the $500,000
    limit of the Sewer Back Up Endorsement.

[11]

The insurer denied the appellants claim for
    indemnity for business interruption under the Profits Endorsement Form coverage
    of the insurance policy because the appellant continued to operate after the
    rainstorm.

[12]

The appellant sued the insurer for the balance of
    payments it alleged were owed exceeding the
$500,000 limit of the Sewer Back Up Endorsement
, including for claims under the Flood Endorsement, for losses
    associated with business interruption, and for extra-contractual damages.

[13]

The trial judge found that the Sewer Back Up Endorsement
    applied; the insurer had paid out the policy limit of $500,000 and owed nothing
    more. He dismissed the appellants other claims.

III.

The Issues

[14]

The appellant asserts that the trial judge erred
    in finding that it was not entitled to:

(1)

coverage under the Flood Endorsement Form;

(2)

coverage for business losses under the Profits
    Endorsement Form;

(3)

extra-contractual damages on the basis that the insurer
    delayed making payments; and

(4)

compensation for professional fees incurred to
    establish the quantum of the business interruption loss under the Commercial
    Plus Endorsement Form.

[15]

These asserted errors form the issues in this
    appeal.

IV.

The Analysis

[16]

Before considering the issues in this appeal, I
    set out the applicable standard of review and the principles of interpretation
    for insurance contracts.

[17]

The standard of appellate review on the
    interpretation of the standard form insurance contract language is correctness:
Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co.
, 2016
    SCC 37, [2016] 2 S.C.R. 23, at para. 46;

MacDonald v. Chicago Title
    Insurance Company of Canada
,

2015 ONCA 842, 127 O.R. (3d) 663,
    leave to appeal refused, [2016] S.C.C.A. No. 39. Courts should strive to construe
    similar insurance policies similarly:
Progressive Homes Ltd. v. Lombard
    General Insurance Co. of Canada
,
2010 SCC
    33
,
[2010] 2 S.C.R. 245
, at para.
    23.

[18]

Questions of mixed fact and law are subject to
    the standard of palpable and overriding error, except for any extricable errors
    of law, which are subject to the correctness standard:
Canada (Minister of
    Citizenship and Immigration) v. Vavilov
, 2019 SCC 65, 441 D.L.R. (4th) 1, at
    para. 37;
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at
    paras. 8, 10.

[19]

The principles of interpretation for insurance
    policies bear repeating. In
Sams Auto Wrecking Co. Ltd. (Wentworth Metal)
    v. Lombard General Insurance Company of Canada
, 2013 ONCA 186, 114 O.R.
    (3d) 730, Laskin J.A. gave a short statement of the general law on interpreting
    insurance contracts, at para. 37:

The principles for interpreting insurance
    policies, and in particular exclusion clauses, are well-established. The policy
    should be interpreted to promote a reasonable commercial result; provisions
    granting coverage ought to be construed broadly; provisions excluding coverage
    ought to be construed narrowly; in the case of ambiguity, the interpretation most
    favourable to the insured should be adopted; and even a clear and unambiguous
    clause should not be given effect if to do so would nullify the coverage
    provided by the policy.

In addition, the court must strive to
    interpret the contract according to the whole of the contract and any relevant
    surrounding circumstances in a way that promotes the true intent and
    reasonable expectations of the parties at the time of entry into the contract
    and avoids either a windfall to the insurer or an unanticipated recovery to
    the insured:
MacDonald v. Chicago Title Insurance
, 2015 ONCA 842, 127
    O.R. (3d) 663, at para. 66,

per
Hourigan J.A.

[20]

I turn now to the issues.

(1)

Issue One: Does the Flood Endorsement apply on
    the facts?

[21]

The appellant argues that the Flood Endorsement
    applies on the facts. If that submission is correct, then it is common ground
    that there is no policy limit on the amount the appellant can recover under the
    Flood Endorsement, and the prospect of compensation on the basis of the
    appraisal award arises.

[22]

The trial judge found that the Flood Endorsement
    did not apply for two reasons: first, because the Surface Water exclusion
    operated; and second, because the event did not meet the definition of a flood
    in the Endorsement. I have separated these reasons for analytical
    purposes, but it is not clear to me that the trial judge saw them as completely
    distinct. I address each in turn after setting out the relevant provisions of
    the policy.

a)

The Policy Language

[23]

To summarize the insurance, the Commercial Broad
    Form policy excluded coverage for flood including flood by surface water, so
    the appellant purchased coverage under the Flood Endorsement, which excluded
    coverage for sewer back ups. To address that risk, the appellant purchased the
    Sewer Back Up Endorsement.

[24]

The trial judge noted that the general part of
    the Commercial Broad Form policy, Form No. B-1, excluded certain perils, including
    loss or damage caused by flood. Form No. B-1 provides:

1. INSURED
PROPERTY

A. This Form insures the following items for
    which a
limit of insurance is specified in the
    Declarations and only while at the Premises:

BUILDING, EQUIPMENT, STOCK, CONTENTS,
    ALL PROPERTY

4. INSURED PERILS

This Form, except as otherwise provided,
    insures against
all risks for direct physical loss of or damage to the
    insured property
.

5. EXCLUSIONS

B. EXCLUDED PERILS

This Form does not insure against loss or
    damage caused directly or indirectly:

b.
in whole or in part by flood, including
    Surface Water, waves, tides, tidal waves, tsunamis, or the breaking out or
    overflow of any natural or artificial body of water
.

17. DEFINITIONS

Wherever used in this Form [Commercial Broad
    Form policy, Form No. B-1]

J.

Surface Water
means water or natural precipitation temporarily diffused over the
    surface of the ground.
[Emphasis added.]

[25]

In this case, in addition to the general
    coverage, the appellant also purchased the Flood Endorsement, Form No. AB-100,
    which provides:

FLOOD ENDORSEMENT

This Policy is extended to include, only if
    indicated in the Declarations, loss or damage caused directly by the peril of
    flood subject to the following conditions:

1. FLOOD

For the purpose of this endorsement, flood
    shall mean the rising of, the breaking out or the overflow of any body of
    water, whether natural or man-made and includes waves, tides, tidal waves and
    tsunamis.

3. EXCLUSIONS

This endorsement does not cover loss or damage
    caused directly or indirectly by:

a. water which backs up through
    sewers, sumps,  septic tanks or drains;

All other terms and conditions of this Policy
    remain unchanged. [Emphasis added.]

[26]

The appellant also
    purchased the Sewer Back Up Endorsement, Form No. B-1(J), which stipulates:

SEWER BACK UP ENDORSEMENT

The coverage provided by this Policy is
    extended to include loss or damage caused directly by the backing up of sewers,
    sumps, septic tanks or drains subject to the following [limits].

[27]

I now turn to the trial judges first reason for
    excluding coverage for the flood.

b)

Does the Surface Water Exclusion apply?

[28]

The trial judges
    decision on the application of the Flood Endorsement, in light of the Surface
    Water exclusion, is brief. He found that the Surface Water exclusion applied
    to exclude coverage for the flood, explaining at paras. 233, 234 and 237:

The definition of flood in the endorsement
    is as follows:

For the purpose of
    this endorsement, flood shall mean the rising of, the breaking out or the
    overflow of any body of water, whether natural or man-made and includes waves,
    tides, tidal waves and tsunamis.

It is to be noted that the words Surface
    Water, as defined in the policy, are not included within the term flood in
    the endorsement.

In the case before me, it is clear, from the
    evidence, that damage to the property was caused by an influx of water
    resulting from the extraordinary rain storm that accumulated on the ground, and
    in this case, on the roof of the building.
It clearly constituted Surface
    Water as defined in the policy, and which is excluded from coverage and is not
    included within the definition of flood.
[Emphasis added.]

[29]

The trial judge concluded, at para. 242:

The damage to the [appellants] property was
    not caused by a flood as defined in the policy.
The term Surface Water
    is not included in the definition of flood, while it is a specific exclusion in
    the policy itself.
In my view, the case is even stronger than was the case
    before Charney J. [
Parker Pad & Printing Ltd. v. Gore Mutual Insurance
    Company
,
2017
    ONSC 3894
,
138 O.R. (3d) 620]
that
    there is no coverage for what occurred through the Flood Endorsement. [Emphasis
    added.]

[30]

In my view, the trial judge erred in giving any
    effect to the definition of Surface Water in the Commercial Broad Form policy
    when he interpreted the Flood Endorsement, for two reasons.

[31]

First, the trial judges use of the exclusion language
    misapprehends the relationship between the Commercial Broad Form policy and the
    Flood Endorsement. An endorsement is not a standalone insurance policy. It is
    linked to the policy to which it is attached and with which it is purchased:
Pilot
    Insurance Co. v. Sutherland
,
2007 ONCA
    492
,
86 O.R. (3d) 789
.

[32]

In
Pilot
, this court affirmed that an
    endorsement does not have an independent existence from the policy: at para.
    21. In that case, the insurer disputed whether coverage was available to an
    insured injured in an accident that occurred in Jamaica. The automobile
    insurance policy was territorially limited to Canada and the United States. Attached
    to the policy was the Ontario Policy Change Form 44R Endorsement for Family
    Protection Coverage, which did not include a territorial limitation. This court
    held that the territorial limit in the policy applied to the endorsement. Lang
    J.A. observed, at para. 21:

An endorsement changes or varies or amends the
    underlying policy.
While it may be comprehensive on the subject of the
    particular coverage provided in the endorsement
, it is built on the
    foundation of the policy and does not have an independent existence. [Emphasis
    added.]

[33]

In other words, the policy and the endorsement
    must be read together. This principle also applies to property damage claims:
Cabell
    v. The Personal Insurance Company
, 2011 ONCA 105, 104 O.R. (3d) 709, at
    paras. 14-17,
per

Rosenberg J.A.

[34]

The second reason why the trial judge erred in importing
    the exclusion of Surface Water flooding into the Flood Endorsement is that
    doing so would effectively nullify flood coverage, not only in this case but in
    almost all cases, because few buildings stand right on the edge of a body of
    water. The appellants facility is on land located some distance away from
    water. How could the Flood Endorsement ever be engaged if it excluded a flood
    via surface water?

[35]

The insurer effectively concedes this point,
    explaining:

If water breaks the banks of a body of water
    and then has to flow across a surface before entering a premise and causing a
    loss, it will still be deemed a Flood under the Policy. Surface Water is
    excluded from the Policy unless there is a Flood, as defined by the Policy
.

[36]

This concession is appropriate.

[37]

In my view, the Flood Endorsement should be read
    as entirely displacing the flood exclusion in the Commercial Broad Form policy.
    It is, in the words of Lang J.A. in
Pilot
, comprehensive on the
    subject of the particular coverage provided in the endorsement: at para. 21.
The Endorsement must be read without giving the Surface Water
    exclusion
in the Commercial Broad Form policy any
    weight
.
Because the Flood
    Endorsement extends coverage, it falls within the interpretative principle that
    provisions granting coverage ought to be construed broadly:
Sams Auto
    Wrecking
, at para. 37.

[38]

This leaves for determination the more basic
    question: Did the trial judge err in finding that there was not a flood within
    the meaning of the Flood Endorsement?

c)

Did the flood trigger coverage under the Flood Endorsement?

[39]

The Flood Endorsement provides that the policy
    includes loss or damage caused directly by the peril of flood. To repeat for
    convenience, it defines flood: For the purpose of this endorsement, flood
    shall mean the rising of, the breaking out or the overflow of any body of
    water, whether natural or man-made and includes waves, tides, tidal waves and
    tsunamis.

(i)

The Trial Judges Interpretation

[40]

The trial judge relied on the decision of
    Charney J. in
Parker Pad
to bolster his interpretation that the Flood
    Endorsement did not apply. In that case, as the result of a rainstorm, water
    pooled next to the foundation of the plaintiffs building. It eventually seeped
    through the wall and into the building. The definition of flood in the
    insurance policy was the same as in this case, and Charney J. denied coverage. He
    observed: There is no question that the ordinary meaning of the word flood
    would include the pooling of water resulting from a rainstorm: at para. 46.
    But he held that the very specific and restricted definition in both the Insurance
    Policy and the Flood Endorsement governed: at para. 47.

[41]

In the view of Charney J., the ordinary meaning
    of the phrase the rising of, the breaking out or the overflow of any body of
    water whether natural or man-made is limited to pre-existing bodies of water:
    at para. 53. This language does not include pooling of rain water in a location
    where no body of water previously existed: at para. 53. He concluded that: The
    pool of water did not exist before the rain, and cannot be said to rise, break
    out or overflow because it has no pre-determined boundary or level from which
    it can rise, break out or overflow: at para. 53. The damage was caused by
    seepage through the foundation, which was excluded from the policy: at para.
    55.

[42]

In this case, the trial judge noted: In the
    case before me, it is clear, from the evidence, that damage to the property was
    caused by an influx of water resulting from the extraordinary rain storm that
    accumulated on the ground, and in this case, on the roof of the building: at
    para. 237. The factual finding made by the trial judge is set out in the
    decision, at para. 238:

On the evidence, I am not persuaded that the [appellant]
    has proven, on a balance of probabilities, that any of the water that invaded
    the [appellants] property came as the result of the breaking out or the
    overflow of a body of water. A practical view of the evidence must be taken,
    and the only evidence of any possibility of water breaking out of or from the
    overflow of any body of water was given by Mr. Coluccio, who saw water coming
    from the ditch known as Tonelli Creek. No other evidence, particularly expert
    evidence, was tendered. Tonelli Creek is 600 metres away from the [appellants]
    premises, and the evidence is that there were several inches of rain that
    covered the ground in all directions over a large area. In the scheme of
    things, I am not convinced that any of this water would have materially added to
    the volume of water that covered the ground and the roadways and that
    eventually found its way onto the [appellants] property. The [appellant] has
    not satisfied me on the balance of probabilities that that is so.

[43]

The appellant argues that the trial judge made a
    palpable and overriding error of fact in this determination because, on any
    reasonable view of the facts, this event was a flood.

(ii)

The Evidence

[44]

To set the scene, the evidence was that the
    appellants facility is large, at approximately 32,000 square feet, and is
    located at 1075 The Queensway East in Mississauga. The facility is part of a
    plaza. It has a large parking lot in front, between the building and The
    Queensway. Between the parking lot and The Queensway, there is a shallow ditch,
    which is approximately three or four feet wide. At the entrance to the building
    is a six-inch curb and then a four-inch lip. Tonelli Creek is about 600 metres
    east of the facility and runs from a point north of The Queensway. From there,
    the creek goes underground in a southerly direction.

[45]

The trial judge set out the testimony of John
    Cipressi, the appellants principal, at paras. 17-20, which I now paraphrase.
    Shortly after 5:00 p.m. the rain came pouring down in massive amounts and
    caused considerable flooding on The Queensway. After about half an hour of rain,
    water came flowing down from The Queensway across the ditch, into the parking
    lot, and ultimately into the building. Mr. Cipressi testified that water was
    entering through the doors and was falling from the ceilings. Water was also
    coming up into the building from floor drains. There was water, varying between
    two inches and at least ankle deep, in the front lobby, in the washrooms, and
    in the large event rooms. This is what the appellant characterizes as the
    flood.

[46]

The trial judge also recounted the evidence of a
    witness, Rocco Coluccio, a school principal. In particular, the trial judge
    noted that Mr. Coluccio testified that as he drove west on The Queensway and
    passed Tonelli Creek, the force of the water turned his vehicle into another
    lane because of the water gushing from the stream: at para. 75. The flow from
    the creek was towards the facility.

[47]

Mr. Cipressis evidence was that in addition to
    Tonelli Creek, there are a number of other bodies of water in the area around
    the appellants facility, including the Cooksville Creek (to the northwest) and
    the Applewood Creek, Etobicoke Creek and Little Etobicoke Creek (to the east). He
    confirmed on cross-examination that, during the rainstorm, the water covering
    The Queensway was coming from everywhere.

(iii)

Discussion

[48]

In my view, the influx of water into the
    appellants facility was a flood within the meaning of the Flood Endorsement. I
    say this for the following reasons.

[49]

First, there is no question that the ordinary
    meaning of the word flood would include the massive, forceful, and fast-moving
    flow of water into the facility on this occasion. It was quite unlike the
    situation in
Parker Pad
, where the stormwater pooled and then seeped
    into the building.

[50]

Second, there was a catastrophic failure of all
    the water channelling features in the vicinity, both natural and man-made. Had
    the creeks and the stormwater management system been able to handle the volume
    of water, there would be no case, but they were not. Tonelli Creek contributed
    its water from upstream to the flood instead of channelling it away. In my view,
    this scenario falls well within the words of the Flood Endorsement: the rising
    of, the breaking out or the overflow of any body of water, whether natural or
    man-made.

[51]

Drainage channels, stormwater management
    facilities, ditches, and even creeks can be dry on occasion. How then does the
    body of water concept in the Flood Endorsement apply? In my view, the focus
    of the Endorsement is on the flood, that is
the rising of, the breaking out
    or the overflow of
any body of water, whether natural or man-made
    (emphasis added). There is a strong sense of unexpected and significant water
    movement communicated by these words. Just before a creek or a drainage ditch
    overflows, it constitutes a body of water, even though it might have been dry
    several hours earlier. This is true for man-made channels like the drainage
    ditch between the facility and The Queensway. There is no sense in which the
    Endorsement requires the body of water to have a permanent existence.

[52]

Third, this courts decision in
Cabell
offers support for this interpretation. In that case, the issue was whether one
    of the policys common exclusions, Common Exclusion 11, applied to Endorsement
    33b, Outdoor Inground Swimming Pool, Hot Tub, Spa and Sauna Coverage, with
    regards to damage to a swimming pool. The case turned on two points. The first
    was whether the endorsement was sufficiently clear. In holding that it was not,
    Rosenberg J.A. relied on
Wigle v. Allstate Insurance Co. of Canada
,
    where Cory J.A. stated that: Limitations on the apparent coverage in the
    endorsement that are ambiguous in the sense that they are not clearly apparent,
    should be set out in the endorsement itself: (1984), 49 O.R. (2d) 101 (C.A.),
    at p. 120.

[53]

The second point on which
Cabell
turned
    related to the concept of nullification. Rosenberg J.A. explained that the
    burden is on the insurer to demonstrate that its interpretation would not
    essentially nullify the coverage for most risks or run counter to the
    reasonable expectations of the ordinary person who purchased the coverage, at
    para. 28.

[54]

Rosenberg J.A. discussed the nullification issue
    at some length, covering the many authorities and applying the law to the facts:
    at paras. 14-17, 24-28. He added that: When counsel for the respondent insurer
    was pressed for an example that would not come within Common Exclusion 11, he
    was unable to do so: at para. 29. Counsels inability to come up with a
    realistic application of the Flood Endorsement was also true in this case.

[55]

In his oral submissions, counsel for the insurer
    acknowledged that Mr. Coluccio saw the water overflowing from the creek
    and heading to the facility but asserted that there was no evidence to take it
    to the next level, that is, that the facility is downhill from the creek. But
    this is not correct. Mr. Cipressi testified in relation to exhibit number
    seven, which depicted the gradients, that: This water flows downhill towards
    that direction, in this photo, being the direction to the facility. He then
    confirmed: That water flows down from that location. He added: And the north
    [being] higher elevation, and everything comes downward towards us. Based on
    this evidence, there is no doubt that the water flowed out of Tonelli Creek
    towards the facility, which, as Mr. Cipressi testified, lies at a lower elevation.
    The flowing water was forceful enough to redirect Mr. Coluccios automobile.

[56]

As in
Cabell
, counsel for the insurer
    struggled in oral argument to find a circumstance in which the Flood
    Endorsement would ever benefit the appellant. He posited an ice jam on the
    Credit River to the west, or an overflow from Lake Ontario to the south. Both
    are several kilometers away from the site.

[57]

Finally, in construing the Flood Endorsement,
    the trial judge departed from the principle that
provisions
    granting coverage ought to be construed broadly. His interpretation effectively
    nullified coverage for the obvious risks identified in the Endorsement and belied
    the reasonable expectations of the appellant in purchasing that coverage. He
    also made a palpable and overriding error in failing to find on the evidence
    that there was a flood within the meaning of the Flood Endorsement.

[58]

To conclude, it is difficult to imagine a
    realistic scenario that would constitute a flood within the meaning of the
    Flood Endorsement if, on the facts, this event did not satisfy that definition.
In my view, the Flood Endorsement applies and the
    appellant is entitled to compensation on that basis.

(iv)

The Consequences

[59]

Because the Flood Endorsement applies to the
    loss or damage caused by the flood, the limit of covered losses in the Sewer
    Back Up Endorsement no longer serves to limit the appellants claim. The
    available evidence on that additional loss is the appraisal award, calculated
    according to the process in Statutory Condition 11 in the policy and s. 128
    of the
Insurance Act
.

[60]

The trial judge mentioned the appraisal process
    and award in several paragraphs. The appellants appraiser was David Leblanc
    and the insurers appraiser was Thomas Carroll, who was employed by and had
    represented the insurer throughout the dealings with the appellant. The umpire
    was Pete Volaric, a Hamilton lawyer. Only Mr. Volaric and Mr. Leblanc signed
    the award. At trial, the insurer collaterally attacked the appraisal award as a
    means of challenging the credibility of witnesses, but the trial judge made no
    finding on its validity nor was that an issue before him. The purpose of an
    appraisal is valuation. It does not determine liability, which is the courts
    function.

[61]

The appraisal award is binding on the parties
    and I would grant judgment to the appellant in the amount of $429,329.18, being
    the balance of the actual cash value amount awarded on the appraisal that
    exceeds the $500,000 Sewer Back Up Endorsement limit.

(2)

Issue Two: Is the appellant entitled to insurance
    coverage for Business Interruption Losses?

[62]

The trial judge dismissed the appellants claim
    for business interruption losses under Form AB-3, the Profits Endorsement Form.
    It provides:

The insurer agrees to indemnify the Insured
    against loss directly
resulting from necessary interruption of business
,
    caused by destruction or damage by the perils insured against to property at
    the Premises, up to the limit(s) of insurance stated in the Declarations
    for this Form and subject to the provisions, limitations, exclusions,
    conditions and other terms of this Policy including this Form. [Emphasis added.]

[63]

Shutting down the business in order to conduct
    the necessary repairs was a bone of contention between the appellant and the
    insurer from the outset. The trial judge noted that had the appellant shut
    down, the repairs would have been the insurers responsibility, as would the
    business interruption losses. Mr. Cipressi feared that the appellant would
    suffer a loss of reputation, did not want to disrupt already scheduled events,
    and plainly thought he could remediate sufficiently to permit the business to
    carry on. The evidence supports the trial judges finding that Mr. Cipressi did
    not want to shut the business down.

[64]

The trial judge heard from the business valuator,
    Dawson Coneybeare, on behalf of the appellant on the subject of the appellants
    business losses. The insurer led no contrary opinion evidence but relied on the
    cross-examination of Mr. Coneybeare. The absence of contrary opinion evidence
    does not oblige the trial judge to accept Mr. Coneybeares evidence, and he
    clearly did not, as he noted at para. 255:

I am not convinced that there were actually
    lost profits that have been proven. As noted earlier, in the year following the
    incident, there was no decrease in revenue. I am not convinced that any
    decrease in revenue thereafter was necessarily anything more than a reflection
    of the cyclical nature of the business, which appears to have been the case
    during the period between 2009 and 2012. Assuming, however, that the decrease
    in revenue can be said to have resulted from the incident, I am not convinced
    that it was as a result of any fault of the [insurer]. I am persuaded that the [appellant]
    made its own decision to keep operating, and the lack, or at least delay, of
    necessary remediation and repair was the more likely cause of any decrease in
    revenue.

[65]

This is a factual finding to which this court
    must defer in the absence of a palpable and overriding error. I am not
    persuaded that the trial judge made such an error. The appellant impugns as a
    legal error the trial judges statement: I am not convinced that it was as a
    result of any fault of the [insurer]. I do not take much from this statement
    because contextually it precedes and sets in contrast his finding that Mr. Cipressis
    refusal to shut the facility down to complete the repairs was the problem. He
    was, in the trial judges view, the author of his own misfortune. There is
    evidence to support this view.

[66]

Because the claim for business interruption
    losses was not made out on the evidence as found by the trial judge, this is
    not the case in which to definitively interpret the meaning of the expression necessary
    interruption of business in the Profits Endorsement Form. However, I would not
    want to be taken as necessarily agreeing with the trial judge that the
    expression requires a total cessation of business activity for a period of time
    for coverage to arise.

[67]

I make two observations. First, I do not see
    this case as substantially different from the case referred to by the trial
    judge, at para. 249:
EFP Holdings Ltd. v. Boiler Inspection and Insurance
    Co. of Canada
, 2001 BCSC 1580, 34 C.C.L.I. (3d) 212. In that case, the
    language of the policy provided coverage where a business is
interrupted or
interfered
with
solely as a result of an [a]ccident
    (emphasis added): at para. 8. Pitfield J. read the language as disjunctive,
    noting at para. 16:

Interruption contemplates a break in the
    continuity of the business. Interference contemplates a lesser event which
    may not interrupt the business but impedes or interferes with the profit-making
    capability of the business resulting in a diminution in gross profit.

[68]

In this case, the trial judge contrasted and
    relied on the absence of the words interfered with in the Profits Endorsement
    Form in order to hold that the Form did not cover the appellants business
    interruption claim.

[69]

As useful as another case might often be to the
    task of interpretation, the focus must be on the specific language of the Profits
    Endorsement Form. I point out that the absolute meaning given by the trial
    judge to interruption is inconsistent with the text of clause 7(f) of the Endorsement,
    which states that: The Insured shall with due diligence do and concur in doing
    and permit to be done all things which may be reasonably practicable to
    minimize or check any interruption of
or interference
with the business
    or to avoid or diminish the loss (emphasis added). The implication in the use
    of the word interference is that it might suffice to trigger coverage.

[70]

Second, on appeal, the insurer argued that there
    is nothing in the trial judges decision which suggests that an interruption
    cannot be partial. The insurer put forward the example of an event that shut
    down the banquet hall but not the catering business. One could also imagine
    part of the facility being shut down but not all of it. These examples lead me
    to doubt the trial judges interpretation of the Profits Endorsement Form.

(3)

Issue Three: Extra-Contractual Damages

[71]

The amount claimed on this head is $428,000 for
    economic loss for consequential damages after the indemnity period, as
    calculated by Mr. Coneybeare. The trial judge laid any such losses at the
    feet of the appellant, as noted earlier, and denied liability.

[72]

The appellant argues that the trial judge erred
    in refusing to award extra-contractual damages because the insurer delayed
    making payments under the policy. The insurer
paid $46,396.32 for emergency services on
    August 6, 2013 and $79,150.45 in April 2014 for repair costs. The insurers
    next payment came in November 2018, when it paid out the balance of the $500,000
    policy limit of the Sewer Back Up Endorsement. This was more than two years
    after the appraisal award and five years after the loss.

[73]

I see no basis on which to set aside the trial
    judges disposition of this issue, which rests on the dual finding set out
    above that the appellant had not proven a loss of profit and revenue resulting
    from the event and that it was the author of its own misfortune.

[74]

The delay in payment was not acceptable, and the
    trial judge acceded to the appellants submission that some adjustment should
    be made to account for the delay in the costs award to the insurer by reducing
    the costs award.

(4)

Issue Four: Payment of Professional Fees

[75]

The appellant argues that the trial judge erred
    in not awarding $15,077.94 for professional fees paid to Mr. Coneybeare for his
    report, which related to establishing the quantum of loss under item K of the
    Commercial Plus Endorsement Form, Form No. B-1(8). It provides:

In the event of loss or damage by an insured
    peril, the Insurer will pay reasonable fees to auditors, accountants,
    architects, engineers or other professionals, other than public adjusters and
    the Insured
'
s own employees, for producing
    and certifying particulars or details of the Insured's business required by the
    Insurer in order to arrive at the amount of loss payable under this Policy
.

This extension applies only to fees incurred
    in establishing the quantum of a loss, liability for which is otherwise
    accepted by the Insurer. This extension may also apply to any Business Interruption
    loss covered under this Policy
.

[76]

The insurer argues that this Endorsement is
    intended to
assist an insured in quantifying a loss in
    order to determine the amount payable under the policy. In order to receive
    payment for professional fees under the policy, the fees must be submitted to
    the insurer by way of a proof of loss
.
    This was not done.

[77]

This provision, says the insurer, was not
    intended to indemnify a litigant for the costs of their expert trial witnesses
. The insurer points out that much of
Mr
.
Coneybeare
'
s report is devoted to the claim for extra-contractual damages,
    which is not within the purview of the Endorsement.

[78]

I am persuaded by the insurers argument that M
r.
Coneybeare was not
    retained for the purposes of producing and certifying particulars or details of
    the appellant's business in order to arrive at the amount of loss payable under
    the policy, but for the purposes of providing evidence at trial, as the timing
    and the content of his report shows. I would not allow the appeal of this
    issue.

V.

Disposition

[79]

I would allow the appeal in part and
I would grant judgment to the appellant in the amount of
    $429,329.18, together with prejudgment interest and costs. I would dismiss
    the rest of the appeal.

[80]

The appellant is entitled to costs on the appeal
    in the agreed amount of $20,000, plus disbursements in the amount of $7,500 all-inclusive.

[81]

If the parties are unable to agree on the
    allocation of trial costs in light of this decision, then
the court will accept written submissions no more than five pages
    in length beginning with the appellant, to be served and filed with the court
    at coa.e‑file@ontario.ca within two weeks of the release of this
    decision, followed one week later by the respondents submissions, and any
    reply within another week.

Released: July 29, 2020 (K.F.)

P.
    Lauwers J.A.

I
    agree. K. Feldman J.A.

I
    agree. Grant Huscroft J.A.