Ontario court blocks Intact's bid to force contractor's indemnity answer

Intact pushed a contractor to commit to indemnity - the court wasn't persuaded

An Ontario judge has dismissed a motion by Intact Insurance Company that sought to compel a contractor's witness to answer a single question during a witness examination tied to a separate, pending motion. The dispute grew out of a City of Hamilton construction project. On February 22, 2022, Intact issued a performance bond of $2,609,969.25 for a contract between the City and contractor Seawaves Development Services Inc.

The bond named Intact as surety, the City as owner and Seawaves as contractor. Behind the bond sat an indemnity agreement. On November 18, 2020, Seawaves had agreed to indemnify a predecessor of Intact for any expenses or losses arising from bonds issued to the contractor.

The claim surfaced in late 2023. On October 11, 2023, the City notified Intact that it was claiming under the bond. Intact replied on November 8, 2023 that it did not have sufficient information to accept liability.

By October 2025, the parties were in court. The City filed a notice of action seeking damages from Intact but missed the 30-day deadline to file its statement of claim, and had to move for permission to file it late. Intact would not consent, arguing that doing so would prejudice its rights under the indemnity agreement.

Separately, Intact had started its own action against Seawaves seeking indemnity. In that context, Intact examined a Seawaves representative as a witness under rule 39.03. It asked whether, if the City won permission to file late, Seawaves would indemnify Intact for the City's action against it.

Seawaves refused to answer, and Intact asked the court to compel a response. Associate Justice J. Kriwetz sided with the contractor. He found the question was hypothetical and fell outside rule 39.03, which allows a narrower range of questions than an examination for discovery.

None of the materials on the City's motion, he noted, were even before him. The consequences of an answer weighed heavily. An affirmative response, the judge found, would "in effect, be an admission to Intact's claim for indemnity."

That would cause significant and disproportionate prejudice to Seawaves, and the question would likely decide the ultimate issue in Intact's separate indemnity action. Relevance was also thin. While a favourable answer might give Intact comfort about its indemnity claim, the judge saw no evidence it would shape Intact's position on the City's motion.

The motion was dismissed on June 29, 2026. Intact, which had sought $5,000 in costs had it won, was ordered instead to pay Seawaves $6,000 within 30 days. For sureties and claims professionals, the decision marks the limits of rule 39.03 examinations - and the difficulty of extracting a principal's indemnity commitment before the underlying claim is decided.