Skip to content

Client Update: Summary of Pender vs. Squires, 2013 NLCA 37

Facts
This appeal arose from a decision which held that the Dominion of Canada General Insurance Company (“Dominion”) has a duty to defend Larry and Lona Hannam and their teenage son Jordan in an action relating to an all-terrain vehicle (“ATV”) accident.

The pleadings allege that Jordan Hannam was operating Larry Hannam’s ATV with his consent. Jordan is alleged to have loaned the ATV to his friend, Kayla Squires. Kayla is alleged to have allowed her friend, Tanya Pender, to ride as a passenger. Kayla lost control of the ATV and crashed, resulting in serious personal injuries to Tanya.

The ATV was not insured under the Hannam’s motor vehicle insurance coverage but Larry Hannam had a broad-form homeowner’s insurance policy (the “Policy”) from Dominion that covered the Hannam household.

The Policy states that it:

…does not apply to… the ownership, use or operation, by you or on your behalf, of motorized vehicles except as provided for in special conditions 3 and 4.

Dominion argued that it does not have a duty to defend based on this exclusion in the Policy.

Analysis
The Supreme Court of Canada recently summarized the law pertaining to an insurer’s duty to defend in Progressive Homes Ltd. v. Lombard General Insurance Company of Canada, [2010] SCJ No 33, which states:

An insurer is required to defend a claim where the facts alleged in   the pleadings, if proven to be true, would require the insurer to indemnify the insured for the claim.

The applications judge found that the use or operation of the ATV was not alleged in the pleadings to have been by Larry Hannam or on his behalf. The Statement of Claim alleged “negligent supervision” on the part of the Hannam’s.

The appeal judge held that the allegation of negligent supervision or entrustment of the ATV, and their son’s negligent entrustment or permission to operate to another inexperienced operator, is inextricably linked to the use or operation of the ATV.

Having found that the exclusion applies, the court turned its attention to special condition 4 of the Policy which states:

You are insured against claims arising out of your use or operation of any motorized land vehicle… which you do not own provided that it is designed for use principally off public roads…

Dominion argued that the words “you” and “your” are to be interpreted collectively to include all Hannams in the household. The Policy defined “you” as including an insured’s spouse and/or children.

The court held that there is no uncertainty with respect to the coverage issue as it pertains to Larry Hannam. As owner of the ATV, there is no possibility of coverage under the exclusion and special condition 4. However, the language of special condition 4 gives rise to the possibility of coverage for Jordan and Lona Hannam, therefore Dominion has a duty to defend both Jordan and Lona Hannam.

Costs
At the Court of Appeal, the court ordered that Dominion pay the costs of the application for all defendants at the lower court level and the Court of Appeal. Lona and Larry Hannam were represented by one counsel who, for the most part, made submissions that treat the Hannams as a unit. Accordingly, costs were awarded against Dominion regardless of the determination that it does not have a duty to defend Larry Hannam.

Implications of this Decision
This case exemplifies how low the threshold is to invoke the duty to defend. All that is required is the “mere possibility that a claim falls within the insurance policy”. Where there is any ambiguity or doubt, the duty to defend is to be resolved in favour of the insured party.

In this case, the court determined that there is a possibility that the word “you” could be defined differently in separate parts of the Policy. Therefore, this mere possibility gave rise to Dominion’s duty to defend the two Hannams who are not unequivocally excluded as owners of the ATV.

SHARE

Archive

Search Archive


 
 

Cap or no cap? Court of Appeal confirms damages are substantive law in interprovincial tort claims

November 12, 2024

Joe Thorne & Jennifer Taylor In 2005, a bus accident occurred in Nova Scotia. The people injured in the accident were residents of Newfoundland and Labrador, which is where they sued the bus owner and driver…

Read More

2024 Nova Scotia election: Employer obligations

October 31, 2024

By Killian McParland and Sophie Poulos As recently announced, the next Nova Scotia provincial election will be held on Tuesday, November 26, 2024. Under Nova Scotia’s Elections Act, every employee who is an eligible voter (i.e.…

Read More

Greener light for growth – Province provides further clarity on renewable energy future in Nova Scotia

October 24, 2024

By Sadira Jan, Dave Randell, Nancy Rubin, Kimberly MacLachlan, and Onye Njoku Bill 471, the Advancing Nova Scotia Opportunities Act, received Royal Assent and introduces changes to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation…

Read More

Bill C-49 is blowin’ a gale: A significant step in offshore renewable energy legislation

October 22, 2024

By Sadira Jan, Dave Randell, Nancy Rubin, G. John Samms, Kimberly MacLachlan, and  Jamie Gamblin Bill C-49 received Royal Assent and will amend the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act and the Canada-Nova Scotia…

Read More

2024 New Brunswick election: employer obligations

October 17, 2024

By John Morse The New Brunswick provincial election is set to take place on Monday, October 21, 2024, with polling hours between 10:00 a.m. to 8:00 p.m. Under the New Brunswick Elections Act, all employees…

Read More

CAPSA releases guidelines on Capital Accumulation Plans and Pension Plan Risk Management

September 11, 2024

Level Chan and Dante Manna On September 9, 2024, the Canadian Association of Pension Supervisory Authorities (CAPSA) released the long-awaited final revisions to Guideline No. 3 – Guideline for Capital Accumulation Plans (CAPs) and the…

Read More

Nova Scotia legislative update: “Stronger Workplaces for Nova Scotia Act” – Bill No. 464

September 6, 2024

Sean Kelly and Tiegan A. Scott On September 5, 2024, the “Stronger Workplaces for Nova Scotia Act” (Bill No. 464) was introduced in the Nova Scotia House of Assembly for first reading by the Honourable Jill Balser…

Read More

Historic human rights ruling: Alberta tribunal sets record with landmark damages award, redefining the rules on compensation and deterrence

September 3, 2024

John A.C. Morse and Lauren Sorel The Human Rights Tribunal of Alberta (the “Tribunal”) recently awarded three complainants a total of $273,274.91 in compensation, with $155,000.00 of this amount designated as general damages – a…

Read More

Zoning changes and constructive taking: Newfoundland and Labrador Court of Appeal affirms the finding in Index v Paradise

August 28, 2024

Stephen Penney and Megan Kieley1 The Newfoundland and Labrador Court of Appeal’s recent decision in Index Investments Inc v Paradise (Town)2 is a significant decision for municipalities. The Court of Appeal endorsed the Newfoundland and…

Read More

Immigration red flags: five organizational issues that open employers to risk

August 15, 2024

By Kathleen Leighton & Brittany Trafford The Temporary Foreign Worker Program (“TFWP”) and International Mobility Program (“IMP”) provide Canadian employers the opportunity to hire foreign workers to address their labour needs, particularly when qualified Canadians…

Read More

Search Archive


Scroll To Top