Bill 198 a “Codification” of Meyer v. Bright, says Ferguson J.

Posted on September 21, 2009 by Stephen Cavanagh

In Hayden v. Stevenson, Madam Justice Jane E. Ferguson of the Ontario Superior Court held that the Bill 198 amendments to the Insurance Act are a “codification of existing law” and in doing so, sided with Madam Justice Morissette in Nissan v. McNamee.

There has not been unanimity among the judiciary on this issue, as we have discussed in previous posts about Sherman v. Guckelsberger and Sabourin v. Dominion of Canada General Insurance Company. Those two cases marked a departure from Nissan v. McNamee, in that Justices Milanetti and Valin felt that the Bill 198 reforms had been meant to “tighten up” the Insurance Act threshold, applicable to motor vehicle claims. At least one other decision though, agreed with Justice Morissette’s view in Nissan: Rosypskye v. Stewart. 

Hayden is the most recent case to have addressed the issue, but Justice Ferguson referred only to the Nissan case, not to Sherman or Sabourin. Thus, the question of the effect of the Bill 198 reforms remains unsettled.

Posted in Auto, Insurance News, Threshold | Comments Off on Bill 198 a “Codification” of Meyer v. Bright, says Ferguson J.

C.A. Says Plaintiffs Claiming Under Uninsured Motorist Coverage Need Not Pursue Insured Potential Joint Tortfeasors

Posted on August 27, 2009 by Stephen Cavanagh

Ontario auto insurers received some bad news last week from the Court of Appeal . In Loftus v. Security National Insurance Company, the Court upheld the ruling of Mr. Justice Barry MacDougall, which we reported on a little over a year ago.

The plaintiff was injured in a 2001 MVA when her car was struck by a vehicle driven by an uninsured motorist who was being chased by the police. She sued her own insurer, Security National, pursuant to the uninsured motorist coverage. She also sued the uninsured driver, but he did not defend.

Security National, which did defend, also brought third party proceedings against local police authorities, alleging that negligence on their part contributed to the accident. The question before the Court was whether, assuming negligence on the part of the police (who were insured),  Security National was liable to the plaintiff, given her failure to sue the police. The Court of Appeal agreed with Justice MacDougall, that the answer was “Yes”.

Security National relied on s. 2(1)(c) of the Uninsured Automobile Coverage Schedule, a regulation under the Insurance Act. It provides as follows:

2. (1) The insurer shall not be liable to make any payment,

(b) where a person insured under the contract is entitled to recover money under any valid policy of insurance other than money payable on death, except for the difference between such entitlement and the relevant minimum limits determined under clause (a); 

(c) where the person insured under the contract is entitled to recover money under the third party liability section of a motor vehicle liability policy.

(Subsection (b), quoted above, was revoked in 2003 but was in force at the time of the 2001 accident giving rise to this claim.)

The Court had some concerns about whether it could adjudicate this issue based on agreed facts, since some facts seemed actually to be disputed. However, the Court concluded that it could decide the case without relying on any disputed facts.

In a nutshell, it held that the words, “entitled to recover”, which appear in s. 2(1)(b) and (c), quoted above, mean, entitled to recover in fact. It held that in most cases, an injured plaintiff need not sue all potential joint tortfeasors in order to have recourse to her uninsured automobile coverage. Exceptions would be “where the joint tortfeasor’s insurer admits liability to pay or where the injured insured obtains a judgment against the joint tortfeasor”. The basis on which the Court of Appeal reached its decision involved principles of statutory interpretation which we have not summarized here.

The end result though, is that where the negligence of an uninsured driver causes injury, the victim can pursue recovery against his or her insurer, under the uninsured automobile coverage,  without having to sue other potential tortfeasors who are insured. The uninsured insurer is not entitled to commence third party proceedings against those other tortfeasors because the insurer is not, itself, a tortfeasor and so, cannot make a contribution claim under the Neglignec Act. And the Insurance Act only confers a right of subrogation against the uninsured motorist himself or herself.

(Security National, in this case, had brought third party proceedings against the police, but conceded on the argument of the appeal, that those claims could not succeed.)

So, potentially, as long as a negligent uninsured driver bears some share of liability for an accident, the injured plaintiff is entitled to ignore other potential insured tortfeasors (unless they have admitted liability) and pursue a claim only agaisnt his or her own insurer. The insurer might very well be left with no way of distributing the loss among others who were responsible.

Posted in Auto, Insurance News, Uninsured or Underinsured | Comments Off on C.A. Says Plaintiffs Claiming Under Uninsured Motorist Coverage Need Not Pursue Insured Potential Joint Tortfeasors

Summary of Privileged Statement Must Be Given Even Though Witness Examined for Discovery

Posted on August 21, 2009 by Stephen Cavanagh

Tiller v. St. Andrew’s College dealt with a somewhat obscure practice point, but one that arises regularly in tort litigation: where a witness being examined for discovery has previously given a statement about the incident, is the examining party entitled to a summary of that statement?

In this case, the plaintiff was injured when a metal rod fell from the ceiling of a St. Andrew’s College, a high school, where she was attending a dance. She sued St. Andrew’s for damages. The Chief Engineer and Director of Property and Facilities of St. Andrew’s had given a statement about the accident (presumably, to the school’s insurer) soon after the incident. Litigation privilege was claimed on the statement in the defendant’s affidavit of documents and it was acknowledged by all, that privilege had appropriately been claimed.

At the examinations for discovery, the same individual who had provided the statement gave evidence on behalf of St. Andrew’s. Counsel for the plaintiff asked about the witness’ statement and requested a summary of the “facts relevant to the issues” that were disclosed in the statement. Counsel for the defendant refused to provide one. The plaintiff moved for an order, requiring that a summary of the Chief Engineer’s statement be given. The motion was heard by Mr. Justice Peter H. Howden and His Honour granted the motion.

Undoubtedly, if the person being examined for discovery on behalf St. Andrew’s had been anyone other than the person who gave the statement, there would have been no legitimate basis for refusing to provide a summary of the information contained in the statement. However, when the discovery witness is the same person who gave the statement, the argument that is typically made (and was here), is that the examining party has an opportunity, through the discovery process, to question the witness about the subject matter of the statement. Counsel for St. Andrew’s relied upon a decision of Mr. Justice Ducharme in Kennedy v. McKenzie. There, the moving party was seeking production of the statement itself. Justice Ducharme refused, saying, “[t]hus, the respondent will be able to obtain the appellant’s own account of the events which can be elicited at his examination for discovery. While this is not contemporaneous with the collision, neither is the statement the respondent wants produced.”

Justice Howden distinguished Kennedy on a couple of bases. One was that the person who had given the statement in that case was the plaintiff in the action, whereas in the present case, the person who had given the statement was not “a participant or party who was present at the originating incident”. His Honour ordered the defendant “to produce a summary of the facts relevant to the issues in this action as revealed in the statement of Klaus Griese”. His reasons for making this order were as follows:

The defendant in this case has put in issue safety of the premises, assumption of risk, causation, contributory negligence by the plaintiff, and damages. The plaintiff is entitled to know all of the facts known to the defendant relating to the condition of the premises at the material time, the role of the plaintiff, causation, and whether or not, and to what extent, she suffered damage. The plaintiffs are also entitled to know the names of any persons with relevant knowledge and their addresses. To the extent that there are relevant facts or witness particulars in the statement of the defendant’s Chief Engineer and Director of Property and Facilities at the relevant time relating to these issues, they are discoverable.

We don’t really understand why it should make any difference to the disposition of the motion, whether the maker of the statement was personally a party to the litigation, as opposed to being  a representative of a party. Justice Howden found that the summary of the statement “is not sought solely to impugn [the Engineer’s] credibility”. However, it is difficult to see any other reason for asking about the contents of the statement. For example, counsel for the plaintiff would be free to ask the Engineer questions about all of the issues mentioned in the quotation above (“the condition of the premises at the material time, the role of the plaintiff, causation, and whether or not, and to what extent, she suffered damage”) and none of the answers to those questions would be likely to require that reference be made to the earlier statement. The only reason that we can see, for requiring that a summary be given, would be in order to compare the Engineer’s account on discovery with what he said at the time of making the statement. Thus, it seems to us that the objective of the summary would, in fact, be solely for the purpose of impeaching the credibility of the defendant’s discovery witness.

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Court Finds Duty to Defend but Refuses Insured’s Request to Appoint Own Counsel

Posted on August 19, 2009 by Stephen Cavanagh

In PCL Constructors Canada v. Lumbermens Casualty Company Kemper Canada, Madam Justice Julie A. Thorburn dealt with the recurring problem of whether an insurer owes a duty to defend and if so, whether the insured is entitled to have its own counsel conduct the defence, at the insurer’s expense. Justice Thorburn did find that a duty to defend had been triggered here but despite the insurer’s denial of coverage, was not satisfied that the insured was entitled to select counsel to defend.

In the underlying action, a hospital was suing the insured, PCL Constructors Canada for damages resulting from water leaks through a PVC roof. After analyzing the insuring agreement, exclusions and exceptions, Justice Thorburn concluded that there might be coverage for the claim, depending on whether the damage to the roof had arisen before or after PCL’s work had been completed. Because there was a possibility that the claim would turn out to be covered, the duty to defend was triggered.

Her Honour then considered PCL’s request, that it be permitted to appoint counsel to defend the claim, at the expene of the insurer (Lumbermens). PCL argued that given the position of the insurer, there was a risk that defence counsel appointed by Lumbermens would have an incentive to demonstrate that the allegations against PCL fall within the policy exclusions as this would be consistent with their stated “no indemnity” position.

Justice Thorburn began by acknowledging that, under the terms of the policy, the insurer has the right and duty to defend the claim and may investigate and settle the claim at its discretion. The mere fact that there is a “potentital tension” in the relationship between insurer and insured is not a basis for forcing the insurer to relinquish control of the defence. For that to occur, said Her Honour, “there must be a reasonable apprehension that if counsel were to act for both the insurer and the insured in defending the action, counsel would be in a conflict of interest”. Several pages later in her reasons though, she went further and said that there must not only be a conflict of interest but also, “a reasonable apprehension that the insurer may abuse its right to defend and settle to the prejudice of the insured”.

Her Honour went on to observe that, in this case, both insurer and insured had an interest in defending the claim because some portions might be covered and others not, and that “both will seek to prove that the insured is not liable for the damage or that the damages claimed are excessive. As such there is no conflict of interest in this regard”.

In what we think is probably the key to Justice Thorburn’s decision not to allow the insured to appoint defence counsel, she said that “[t]his is not the sort of  situation where a party acting improperly could mischaracterize the insured’s conduct so as to take a claim into or out of coverage.”

However, she did provide some direction to Lumbermens as to who it could retain as defence counsel. She said:

Unless the parties agree otherwise, legal counsel selected:

a) must be different from counsel who argued coverage;

b) must be counsel who has not acted for either party in the past five years, such that there is no appearance of conflict of interest;

c) must have no discussions about the case with coverage counsel; and

d) will provide identical concurrent reporting to both the insurer and the insured.

Moreover, the claim is to be assigned to claims staff within the insurer who have had nothing to do with this claim up until this point, and who will have no communication with any person who has had dealings with this claim. New claims staff is to have access to the claims file only once it has been purged of any consideration of coverage.

The conditions imposed by Her Honour are practical and will be a useful template for future coverage disputes.

It seems to us though, that the first part of her decision on the issue of controlling the defence, is a bit harder to understand. It is difficult to tell what led her to conclude that this was not a case in which the insured should be permitted to select and instruct defence counsel. As noted above, in one part of her reasons (para. 75), Her Honour said that before the insurer can be forced to surrender the defence of the underlying claim, there must be a reasonable apprehension that counsel acting for both insurer and insured would be in a conflict of interest. Later (para. 80), she said that there must be both a conflict of interest and “a reasonable apprehension that the insurer may abuse its right to defend and settle to the prejudice of the insured”.

Realistically, a conflict of interest is always present in these sorts of cases, where the insurer is taking an off-coverage position that is disputed by the insured. So long as the coverage issue continues, so will the conflict. But despite her comments at para. 75 of her reasons, Justice Thorburn seems to have recognized that the existence of such a conflict, without more, is not a basis for taking the defence away from the insured. Justice Thorburn seems to have concluded that for that to occur, the insured would have to show that “a party acting improperly could mischaracterize the insured’s conduct so as to take a claim into or out of coverage”.

We think that statement probably goes further than the authorities warrant. In Brockton (Municipality) v. Frank Cowan Co. Ltd., the Court of Appeal endorsed the approach taken by the California Court of Appeal in Foremost Insurance Co. v. Wilks, 253 Cal. Rptr. 596, (1988), where that court said: “If the reservation of rights arises because of coverage questions which depend upon an aspect of the insured’s own conduct that is in issue in the underlying litigation, a conflict exists. On the other hand, where the reservation of rights is based on coverage disputes which have nothing to do with the issues being litigated in the underlying action, there is no conflict of interest requiring independent counsel paid for by the insurer.”

Thus, requiring that the case be one in which one party, acting improperly, is in a position to “mischaracterize” the insured’s conduct so as to affect the outcome of the coverage issue, sets the bar too high for permitting the insured to control the defence. Rather, as the Court of Appeal said in Brockton, the focus should be on whether the coverage dispute will be decided by the disposition of the factual issues in the underlying action. That places counsel in a conflict of interest, without the need of speculating about whether “improper” conduct and “mischaracterization” would actually occur.

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Court Analyzes Lawyer-Client Privilege in Electronic Era

Posted on August 18, 2009 by Stephen Cavanagh

We are grateful to Master Robert Beaudoin for passing along an interesting decision by Madam Justice Ramona A. Wildman, dealing with lawyer-client privilege. The case is Eizenshtein v. Eizenshtein. It flew under our radar because of being a family law decision but, as Master Beaudoin pointed out, it is equally applicable in a civil context.

The main issue in the case was whether emails exchanged between the husband (Mr. Eizenshtein) and his lawyer lost their privileged quality when the husband’s former girlfriend got her hands on them and forwarded them to the wife (Ms. Eizenshtein). From there, the emails became exhibits to an affidavit of the wife. Counsel for the husband argued that the email exchange was privileged and therefore, inadmissible.

Justice Wildman heard the motion and ruled in favour of Mr. Eizenshtein, finding that the emails had not lost their privileged quality. Her reasons contain an interesting and useful discussion of how to fit the square peg of lawyer-client privilege into the round hole of 21st century electronic communication. We’re not entirely in agreement with Justice Wildman’s suggested approach to these sorts of cases however.

In arguing for the admissibility of the emails, counsel for the wife relied upon two exceptions to lawyer-client privilege. First, he argued that privilege is lost if the communication in question discloses that the client intends to commit a crime or is seeking advice about committing a crime. The other ground was that the communications ceased to be privileged once they were disclosed to a third party (in this case, the husband’s former girlfriend).

On the first argument, the “crime” that was alleged was knowingly filing a false affidavit. Justice Wildman, who had read the emails in question, found that they did not indicate any intention to commit a fraud or mislead the court. Accordingly, she rejected this argument for the admissibility of the emails.

The second ground, disclosure to a third party, was given more serious consideration. Her Honour referred extensively to the Supreme Court of Canada’s decision in Descoteaux v. Mierwinski and to Sopinka, Lederman and Bryant’s text, The Law of Evidence in Canada, from which authorities she extracted the principle that disclosure of confidential communications to a third party does not automatically make them admissible in court. Rather, she said, “[t]he court is required to conduct an inquiry to determine, in all the circumstances, whether the information is so important to the outcome of the case that it should be admitted despite the existence of the privilege.”

Justice Wildman was of the view that, in undertaking this “inquiry”, it would be relevant to know the extent to which the circumstances under which the privileged documents were disclosed. Here, even accepting that the wife was not guilty of any misconduct herself in the disclosure of the husband’s emails, there had been no intentional or even reckless disclosure to a third party by the husband that would warrant admitting the information.

Interestingly, on this point, the court drew some finer distinctions within the category of “advertent disclosure”. Her Honour found that even if it were true, that Mr. Eizenshtein had disclosed the emails to his former girlfriend, he had done so in the belief that they would “go no further”. Likewise, she held that asking a family member for help in printing or typing an electronic document does not result in a loss of privilege. Justice Wildman said that this was “the technological equivalent of an illiterate person asking for help to read a legal document”. Of greater importance than the distinction between advertent and inadvertent disclosure, said Her Honour, was Mr. Eizenshtein’s intention in allowing the girlfriend to see the messages.

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Decision Elucidates Requirements for Production of Expert’s “Foundational Material”

Posted on August 18, 2009 by Stephen Cavanagh

Bookman v. Loeb was a family law case but the reasons of Madam Justice Ruth E. Mesbur shed light on a somewhat unsettled area of civil litigation: to what extent must a litigant produce “foundational material” for an expert opinion? Such material might include an instructing letter, the expert’s notes, correspondence exchanged by the expert and counsel retaining him or her or other documents, most of which would typically be privileged to begin with.

In this case, counsel for the plaintiff served several experts’ report. The lawyers for the two sets of defendants asked Justice Mesbur to order production of:

  1. prior drafts of the reports;
  2. notes of counsel and the experts;
  3. all correspondence passing between counsel and the experts;
  4. copies of accounts rendered by the experts, as well as particulars of the retainer arrangement;
  5. copies of the experts’ files.

Although this case was apparently governed by the Family Law Rules, Justice Mesbur found that there was a lacuna in those Rules on this issue and that recourse could be had to the provisions of the Rules of Civil Procedure.

Her Honour referred to R. 31.06(3) of the Rules. It provides that a party is entitled, during examinations for discovery,  to ask for the “findings, opinions and conclusions” of an expert, unless the party being examined undertakes not to call the expert as a witness at trial. Here, the examinations for discovery had already taken place by the time the reports of the experts had been served. No undertaking had been given, not to call the experts as witnesses at trial. So the question was, what information were the defendants entitled to obtain prior to trial in relation to the experts’ reports?

Counsel for the plaintiff agreed to produce some of the documents in issue. These included particulars of the instructions given to the experts, copies of draft reports and accounts rendered by one of the experts.

Justice Mesbur reviewed the jurisprudence and concluded that mere service of an expert’s report does not constitute waiver of privilege on the expert’s file. Rather, she felt that the weight of authority pointed to privilege continuing until the time of trial.

With respect to the notes of counsel and the experts, Her Honour held that counsel’s notes remained privileged but that notes made by the expert that reflect any information that formed part of the foundation of the expert’s opinion, whether factual, or by way of assumption, must be produced but that other notes remained privileged.

Justice Mesbur ruled that the defendants were “clearly entitled to” letters of instruction sent to the experts and, if no such letters existed, particulars of the instruction given. Other correspondence between counsel and expert remained subject to litigation privilege.

The accounts submitted by the experts were ordered to be produced, but Her Honour accepted the submission of counsel for the plaintiff, that to go further and require the plaintiff to disclose the retainer agreement and particulars of amounts outstanding was information that went to impeachment of the experts’ expertise and therefore, need not be produced at the pre-trial stage.

Finally, Her Honour refused to order the production of the experts’ files prior to trial, holding that they remained privileged.

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C.A. Says No Contribution Claims When Plaintiff Limits Claim to Defendant’s Several Share of Liability

Posted on July 9, 2009 by Stephen Cavanagh

In Taylor v. Canada (Health), the Court of Appeal has dealt with an important issue in the law of apportionment of fault.  The court held that a defendant cannot assert a subsidiary claim (a third party claim in this case) for contribution or indemnity where the plaintiff has limited the claim against the defendant to the latter’s proportionate share of fault. The court did acknowledge that issues of discovery and production might arise in relation to the party insulated from suit. It left these to be dealt with on a case by case basis.

Writing for the Court, Justice Laskin made it clear that the portion of the Court’s 2000 ruling in Martin v. Listowel Hospital, in which it was said that courts cannot apportion fault to non-parties, was obiter and had been “overtaken” by subsequent decisions. It is now beyond doubt, that courts in Ontario can (and must, in cases like this one) apportion fault among both parties and non-parties. (David Cheifetz has been critical of Martin for a while on this point and must now feel somewhat vindicated.)

As luck would have it, we now have one of these cases in the office, but with a twist. The plaintiff has sued two sets of defendants, alleging negligence that resulted in personal injuries. The claim has been expressly confined to the defendants’ several share of liability. There is another obvious tortfeasor from which, in the ordinary course, the existing defendants would have claimed contribution or indemnity. But because the plaintiff’s claim is confined to the defendants’ several share of liability, Taylor makes it clear that a claim for contribution cannot be made.

The twist is that the plaintiff has also sued the other tortfeasor in a separate action and so far, appears to be trying to keep the two proceedings separate. We have little doubt but that, Taylor notwithstanding, the court will order common discoveries and at least trial together, if not consolidation.

However, more diffcult problems of discovery arise where the missing tortfeasor has not been sued (and, on the authority of Taylor, cannot be joined). Certainly, Laskin J.A. was alive to these. It is to be hoped that the courts will quickly develop procedures for obtaining production and discovery from non-parties, as more Taylor types of suits are brought.

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C.A. Establishes Guidelines for Damages for “Housekeeping Losses”

Posted on July 9, 2009 by Stephen Cavanagh

In McIntyre v. Docherty, the Ontario Court of Appeal considered what principles should govern claims for damages for loss of housekeeping capacity in personal injury actions. The detailed analysis undertaken by the panel is certain to become the standard used to evaluate such claims from now on.

The context in which this issue arose for consideration by the Court of Appeal was a commonplace one. The plaintiff had been injured in a car accident and had suffered soft tissue injuries. At trial, the jury awarded non-pecuniary general damages of $92,500, damages for “past housekeeping inefficiency” in the amount of $5,000, damages for past loss of housekeeping capacity of $10,400 (the plaintiff had sought $41,000) and damages for future loss of housekeeping capacity of $44,535 (the plaintiff had sought $179,500).

The defendant appealed, arguing that the $5,000 award for housekeeping inefficiently should have been included as part of the non-pecuniary damages for pain and suffering and not treated as a separate head. With respect to the award of $10,400 for past loss of housekeeping capacity, the defence contended that no damages should be recoverable because the evidence was that the plaintiff had been assisted with housekeeping work by her family members, who had not asked for compensation. Counsel argued that any claim of this sort should be made under s. 61 of the Family Law Act, and no such claim had been made here.

At first blush, what jumps out of the ruling is the C.A.’s affirmation that it is not appropriate to evaluate a plaintiff’s claim for loss of past housekeeping by reference to replacement value. This proposition was advanced in Fobel v. Dean – a 1991 decision of the Saskatchewan Court of Appeal. However, the C.A. also seemed to accept that the replacement cost values were relevant in assessing the non-pecuniary damages – another proposition put forth in Fobel.

McIntyre suggests that  the damages for past loss of housekeeping, in circumstances where expenses haven’t actually been incurred by the party claiming them, should be valued at something less than the replacement cost. Unfortunately, the Court did not explain how the replacement cost values should be used or considered in assessing non-pecuniary damages for past loss of housekeeping. The Court did make it clear though, that since Fobel, many courts have placed too much emphasis on replacement cost values to assess past housekeeping losses.

It seems that while the C.A. said that past housekeeping losses are not to be compensated by reference to replacement value, this is not the case for future housekeeping losses. The panel said that it is unnecessary for the plaintiff to satisfy the court of an intention to employ third-party help in order to receive a pecuniary award for future loss. The C.A. said it is for the plaintiff to decide whether he or she will employ a homemaker or whether he or she will struggle with her housekeeping and spend the damage award on luxuries that would otherwise be unavailable.

The focus of the decision was on assessing the value of the pre-trial loss of housekeeping claim for an injured party – not an FLA claimant who is entitled to damages pursuant to section 61 of the FLA. (In fact, the appellants argued that the injured party couldn’t receive an award for loss of housekeeping when a family member performed the work without pay since that family member would be entitled to pursue the claim pursuant to section 61 of the FLA.)

The case doesn’t appear to change anything in terms of claims for future loss of housekeeping claims, which are pecuniary in nature and can be measured with reference to replacement cost, provided the statistics underlying the replacement cost numbers make sense in the context of the claim.

With respect to past losses, this is what the Court had to say:

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Additional Insured Entitled to Defence, But Only A Limited One

Posted on May 27, 2009 by Stephen Cavanagh

Atlific Hotels and Resorts Ltd. v. Aviva Insurance Company of Canada is the latest chapter in the ongoing (and evolving) story of “additional insureds”. The latest installment was written by Mr. Justice Edward P. Belobaba.

In the underlying lawsuit, the plaintiff had slipped and fallen at the Deerhurst Resort one winter evening. She sued the resort and the contractor whom Deerhurst had hired to remove snow and ice from its premises.

The snow removal contractor was insured by Aviva. One of the terms of the agreement between the contractor and Deerhurst required that the contractor have the resort added to his policy with Aviva as an additional insured. This was done. Justice Belobaba’s reasons don’t provide much detail about the policy wording however they do say that Deerhurst was an additional insured “but only with respect to liability arising out of the contractor’s operations”. Presumably, this wording appeared in an additional insured endorsement to the CGL policy issued by Aviva but if so, it would have been preferable to have this spelled out in the reasons. The Canadian cases often don’t focus on where the grant of coverage languge comes from. (In the Riocan v. Lombard, for instance, the policy language was taken from certificates of insurance rather than from the policy itself. While discrepancies in wording between the two can give rise to its own set of issues, the wording of the actual policy should always be the starting point.)

We’ll return to the wording of the coverage grant later in this post.

Aviva was defending the underlying lawsuit for the named insured snow removal contractor but not on behalf of Deerhurst. In the application before Justice Belobaba, Deerhurst was seeking an declaration that Aviva was required to undertake its defence. Justice Belobaba ruled that Aviva was required to defend some, but not all of the allegations against Deerhurst.

His Honour said that the underlying claim really broke down into three types of allegations:

(i) negligence on the part of all of the defendants relating in various ways to the removal of snow and ice;

(ii) negligence on the part of the Deerhurst defendants in the operation and management of the hotel, including inadequate lighting and the lack of non-slip matting on the walkways, the failure by management to cancel the evening program at the conference centre so that the guests could have stayed in their rooms, the failure to cut the program short so that the participants could have returned to their lodgings sooner and more safely, and the failure to offer the plaintiff temporary overnight accommodations in the main lodge until the walkways were cleared of snow and ice and made safe for use;and

(iii) occupier’s liability.

 (This is very typical of these types of cases, so Justice Belobaba’s grouping is useful.)

Aviva ackonwledged that it was required to defend the “snow and ice” claims but argued that because it was already defending the named insured against all of these allegations, it had discharged that obligation. In making this argument, it relied on the decision of Mossip J. in D’Cruz v. B.P. Landscaping. We expressed our disagreement with Justice Mossip’s reasoning in an earlier post. Justice Belobaba also rejected her reasoning, saying:

[The Deerhurst defendants] cannot ignore the claims that are being made against them by the plaintiff merely because the insurer is providing a defence for an unrelated co-defendant. The fact that Aviva will have to pay two defence counsel or perhaps agree to a single independent defence counsel is, in my view, a necessary consequence of its contractual obligation. On this point, I respectfully disagree with the reasoning in D’Cruz v. B.P. Landscaping Ltd., [2007] O.J. No. 2704 at para. 16.

That took care of the “snow and ice” category of the underlying claim. More problematic were the other two types of claim: Deerhurst’s alleged negligence in the operation and management of the hotel and occupier’s liability. Justice Belobaba held that Aviva did not owe Deerhust a defence to the allegations in the latter two groups.

There are two important issues that arise on this part of the ruling. Unfortunately, only one of them is discussed in Justice Belobaba’s reasons.

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U.S. Study Says Party Who Gets the Most Questions from the Judges Will Lose

Posted on May 27, 2009 by Stephen Cavanagh

In an interesting article in the New York Times this week, we learn that, in cases before the U.S. Supreme Court, the party to whom the majority of the judges’ questions are directed will lose 86 percent of the time. The observation was first made and tested by a second year law student. It was then picked up by now-Chief Justice Roberts, who confirmed the results for himself. According to the article, the finding has also been substantiated by “elaborate studies from teams of professors”.

We were curious to know whether the questions of Supreme Court justices in this country are as reliable a predictor. Who better to ask than Eugene Meehan, Q.C. (who has spent some time in the S.C.C., fielding questions from the bench)?

Mr. Meehan was interested in the results of the U.S. studies, but said that he did not see that correlation before the Canadian court. Any enterprising second-year law students out there who can conduct an empirical study?

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