An Ontario court has tossed out an appeal by an insurance brokerage of a large judgment against it in favour of Reliable Life Insurance Co.

The defendants, M.H. Ingle & Associates Insurance Broker and various individuals, appealed two judgments of Judge Nola Garton.

In the first action Garton held that the insurance brokerage was liable to Reliable in the amount of $1.6 million under an agreement between Reliable and Ingle relating to the underwriting by Reliable of insurance programs developed, promoted , and sold by Ingle.

In the second action, Garton held that the defendants M.H. Ingle & Associates, Muriel Ingle, Robin Ingle and Muriel Helena Ingle and David Bruce Black, executors of the estate of John Ingle were liable to Reliable for the same amount under the terms of a guarantee.

In the first action, Ingle raised only one issue on appeal, and that was whether an indemnity provision in the agreement between Reliable and Ingle upon which Reliable based its claim was unenforceable. Ingle argued that the provision was a contract of reinsurance and because Ingle was not licensed to carry the business of insurance, the agreement was unenforceable.

The judge ruled, “I am of the view that the contract is enforceable even if it is prohibited by the Insurance Act and I would dismiss the appeal for this reason.”

As to the second case, the judge said, “Clearly, the typical contract of guarantee, of which the one before us is an example, does not reflect the kind of transaction that would bring the guarantors within the policy concerns of the provisions of the Insurance Act, discussed earlier in these reasons. I would not give effect to this ground of appeal.”

The appeals were dismissed with costs.