Ruling finds equitable relief inappropriate at current stage of proceedings
The Ontario Court of Appeal has refused a motion for the production from non-party insurers under a Norwich order upon finding it unclear how the production of insurance policies and documents regarding insurance claims would be relevant to the action.
In Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2025 ONCA 543, the respondent executed an agreement to administer Servantage Dixie Sales Canada Inc.’s product repair and service program in 2008.
Dixie entered into an agreement with the appellants to do repair work under the repair program in or about 2009. Dixie noticed irregularities in the appellants’ billings and repair services in 2018.
According to the respondent’s investigation findings, between 2015–18, 99.51 percent of repair program billings had been inauthentic, and the respondent had paid Dixie $3,207,977.05 on account of fraudulent repair claims.
The respondent brought an action seeking damages for fraud, fraudulent misrepresentation, misappropriation, conversion, knowing receipt, knowing assistance, and unjust enrichment. In 2019, a judge granted Mareva and Norwich orders against the appellants, Mr. Milburn, and Eaton Equipment Ltd.
In 2024, the respondent moved for summary judgment motion against the appellants. It sought recovery of the money paid to Eaton and Dixie and punitive damages based on the appellants’ fraudulent conduct.
Early this year, a motion judge granted the respondent summary judgment against the appellants, jointly and severally. The judge held that the appellants perpetrated a fraudulent scheme against the respondent, involving false invoices for repairs of items bought at the respondent’s stores.
The judge ordered the appellants to pay $3,325,238.09 in damages and $1,200,000 in costs and ordered Mr. Milburn to pay $50,000 in punitive damages.
On appeal, the appellants sought to set aside the judge’s order. They alleged multiple errors in the judge’s findings regarding reliance, causation, costs, and Ontario’s Limitations Act, 2002.
The appellants argued that the respondent:
- received indemnification from its insurers for any losses it suffered
- did not provide any documents concerning any insurance claims
- objected to every insurance-related question throughout the litigation
- interfered with the appellants’ efforts to obtain disclosure about insurance claims
- did not deserve summary judgment in its favour if it received indemnification
The respondent acknowledged that it had filed an insurance claim. However, it alleged that it received no payment.
Under r. 61.16(1) of Ontario’s Rules of Civil Procedure, 1990, the appellants moved for production from named and unnamed non-party insurers, who had not received any motion materials, under a “Norwich-type” order.
The appellants accepted that granting a Norwich order at this stage of proceedings would be exceptional. However, the appellants alleged that the court could grant the relief under its general supervisory authority, given that the disclosure sought would ensure a complete evidentiary record.
The respondent countered that the appellants were out of time for appealing the order. The respondent said that the motion lacked factual basis, given counsel’s confirmation that it received no insurance proceeds. The respondent added that insurance claim proceeds were not deductible from a damages award, even if the respondent had made a recovery via its insurance policies.
Norwich order not issued
The Court of Appeal for Ontario dismissed the appellants’ motion.
The appeal court noted that a Norwich order was an equitable remedy granted on a discretionary basis to advance pre-trial discovery in certain circumstances. The appeal court deemed this relief improper at this point in the proceedings and explained that the appellants should have requested it during the trial process, not on appeal.
The appeal court noted that its role was to decide whether the motion judge erred in applying the law or determining the summary judgment motion.
Next, the appeal court ruled that a Norwich order would be inappropriate, even if a Norwich order had been available on a motion pending appeal.
The appeal court stressed that a party seeking an equitable remedy should come to the court with clean hands. The appeal court noted that, in this case, the motion judge determined that the appellants had created a fraudulent scheme.
