A judgment creditor can sometimes proceed directly against a liability insurer after obtaining judgment against the insured. In Ontario, section 132 of the Insurance Act creates that route. Natario v. RBC Insurance Company of Canada, 2026 ONCA 482, concerns how late an insurer can change the legal label attached to its defence in that kind of proceeding.
The underlying claim arose from a catastrophic injury. The insurers had already pleaded that their insureds gave a false account of how the accident occurred. Shortly before trial, they sought to amend the defence to characterize the same alleged conduct as civil fraud.
The motion judge refused the amendment and the Court of Appeal upheld that decision.
The point was not that an insurer can never rely on fraud in a section 132 proceeding. The Court expressly did not decide that broader legal question. Instead, it focused on the actual pleading record and the timing of the proposed change. The factual dishonesty the insurers wanted to rely on was already part of the case. Adding a new civil fraud theory on the eve of trial did not materially improve their ability to defend the statutory indemnity claim, while it risked prejudice that could not fairly be repaired with costs or an adjournment.
That distinction matters in coverage litigation. A defence can be factually preserved without every possible legal characterization being added late in the process. Courts still expect parties to identify the legal case they intend to run early enough for the other side to prepare.
The appeal was dismissed and the respondent received $15,000 in costs. The decision leaves the substantive scope of fraud as a section 132 defence for another case. What it settles here is the procedural consequence of trying to add that theory too late.