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


Domaines de pratique :
Name:
More results...

 
 

The New Brunswick Labour and Employment Board affirms longstanding practice against piecemeal certification of bargaining units

July 8, 2019

Bryan Mills and John Morse On May 21, 2019, the New Brunswick Labour and Employment Board (”Board”) dismissed an application by the New Brunswick Union of Public and Private Employees (“Union”) seeking certification as bargaining…

Read More

Carbon pricing: Ontario Court of Appeal delivers constitutional endorsement

July 5, 2019

Jonathan Coady and Justin Milne The Ontario Court of Appeal has found that the Greenhouse Gas Pollution Pricing Act¹ is valid federal legislation.² The Act implements national minimum pricing standards to reduce greenhouse gas (“GHG”) emissions.…

Read More

A Charter right to testamentary freedom? The NSSC decision in Lawen Estate

July 2, 2019

Richard Niedermayer, TEP, Jennifer Taylor and Bhreagh Ross, summer student There is a right to testamentary freedom under section 7 of the Charter, according to a recent decision of the Nova Scotia Supreme Court. In…

Read More

Hydro-Quebec now subject to annual energy cap, but not a monthly cap, under much-disputed 1969 power contract: Churchill Falls (Labrador) Corp. v Hydro-Quebec, 2019 QCCA 1072

June 24, 2019

John Samms Introduction Much ink has been spilled on the controversial 1969 power contract between Hydro-Quebec and CFLCo (the contract) and last week the Quebec Court of Appeal added to the pile with its decision…

Read More

Final cannabis edibles, topicals and extracts regulations released

June 17, 2019

Kevin Landry On June 14, 2019, Health Canada announced the release of the final version of amendments to the Cannabis Regulations, which will permit for the production and sale of edibles, extracts and topicals. The…

Read More

Trademark changes

June 17, 2019

Daniela Bassan and Divya Subramanian The Canadian Trade-marks Act will be amended effective June 17, 2019. As a result, the Act will undergo a complete overhaul on various aspects of trademark prosecution, registration, and enforcement.…

Read More

Discovery: Atlantic Education & the Law – issue 04

June 12, 2019

We are pleased to present the fourth issue of Discovery, our very own legal publication targeted to educational institutions in Atlantic Canada. While springtime for universities and colleges signal the culmination of classes, new graduates…

Read More

How employers can protect themselves with respect to social media

May 29, 2019

Grant Machum and Richard Jordan   In an earlier article, we considered an employer’s options when an employee departs and takes with them the social media contacts they have obtained during the course of their…

Read More

Canada’s Digital Charter – a principled foundation for a digital future?

May 28, 2019

Matthew Jacobs and Daniel Roth (summer student)   “… we cannot be a Blockbuster government serving a Netflix society.” – The Hon. Minister Navdeep Bains paraphrasing the Hon. Scott Brison (May 2019, at the Empire…

Read More

New reporting requirements for beneficial ownership of federal corporations coming this June

May 24, 2019

Tauna Staniland, Andrea Shakespeare, Kimberly Bungay and Alycia Novacefski The federal government has introduced new record keeping requirements for private, federally formed corporations governed by the Canada Business Corporations Act (“CBCA”). The amendments to the…

Read More

Search Archive


Domaines de pratique :
Name:
More results...