Smitten Baby Products Inc v. FirstOnSite Restoration Limited, 2025 ONSC 4281

This case addresses whether a restoration contractor retained by an insurer’s adjuster owes a duty of care to the insured for pure economic loss. Following a 2018 water loss at the plaintiff’s warehouse, the insurers’ adjuster engaged FirstOnSite to investigate and report. The plaintiff later sued the underwriters, the adjusters, and FirstOnSite for business losses said to flow from delay in the adjustment. On a rule 21 motion, Justice Centa held it is plain and obvious that FirstOnSite owed no duty of care to the plaintiff and dismissed the claim against it.

The court found the pleading did not fall within the established negligent misrepresentation or negligent performance of a service category because there were no material facts of an undertaking by FirstOnSite to the plaintiff or reasonable reliance by the plaintiff. While foreseeability and proximity could be alleged under a novel duty analysis, residual policy considerations negate any prima facie duty. The insured has meaningful contractual remedies against its insurers, and imposing a concurrent duty on the insurer’s investigator would distort contractual relationships and create conflicts between the investigator’s obligations to the insurer and a proposed duty to the insured. The pleading also failed to set out material facts of factual causation for the alleged delay losses. Leave to amend was refused, and the action against FirstOnSite was dismissed.

Thomson v. Watson, 2020 ONSC 4409

The plaintiff was injured in a single-vehicle accident in British Columbia. At the time, he was employed by IC Asphalt, which was based in Alberta and had operations in BC and Alberta. Following the accident, the plaintiff applied for worker’s compensation in Alberta. He was approved for benefits and received them on an ongoing basis. Notwithstanding the approval of workers’ compensation, the plaintiff commenced an action for damages in Ontario on the basis that he was ordinarily resident in Ontario, as was the defendant. The defendant brought a Rule 21 motion to strike, arguing that the plaintiff’s right to pursue a civil action was extinguished by his election to receive worker’s compensation. Before the defendant’s motion was brought, two decisions had been rendered by the Ontario Workplace Safety and Insurance Appeals Tribunal (WSIAT): (1) that WSIAT had jurisdiction to hear the defendant’s “right to sue” application; and (2) that the Ontario Workplace Safety and Insurance Act did not bar the plaintiff’s right to sue because he was not a “worker” under Ontario law.  Justice Whitten granted the defendant’s Rule 21 motion holding that the plaintiff could not proceed with his action. He reasoned that the principles of comity and the existence of the Interjurisdictional Agreement on Workers’ Compensation between provinces favoured a decision respecting the “fabric of workers’ comp benefits” regimes across the country, and barring a tort claim when a valid workers’ comp claim has been made. Further, it would be an abuse of process to allow the Ontario tort action to continue once the plaintiff had made an unequivocal election to receive workers’ compensation in Alberta.