Gibbens v. Co-operators Life Insurance Co., (2009) 396 N.R. 165 (SCC)

• Judge: McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ.
• Court: Supreme Court (Canada)
• Case Date: April 16, 2009
• Jurisdiction: Canada (Federal)
• Citations: (2009), 396 N.R. 165 (SCC);2009 SCC 59

Gibbens v. Co-op Life (2009), 396 N.R. 165 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2009] N.R. TBEd. DE.014

Co-operators Life Insurance Company (appellant) v. Randolph Charles Gibbens (respondent) and Canadian Life and Health Insurance Association Inc. (intervenor)

(32677; 2009 SCC 59; 2009 CSC 59)

Indexed As: Gibbens v. Co-operators Life Insurance Co.

Supreme Court of Canada

McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ.

December 18, 2009.

Summary:

The plaintiff had unprotected sex with three women. He became infected with type 2 herpes simplex virus which, in turn, caused transverse myelitis (inflammation of the spinal cord) resulting in his total paralysis from the mid-abdomen down. The plaintiff sought indemnification from his group insurer for paraplegia caused "directly and independently of all other causes from bodily injuries occasioned solely through external, violent and accidental means". A special case was brought.

The British Columbia Supreme Court, in a decision reported [2007] B.C.T.C. Uned. E08, ruled in favour of the plaintiff. The insurer appealed.

The British Columbia Court of Appeal, in a decision reported 254 B.C.A.C. 120; 426 W.A.C. 120, dismissed the appeal. The insurer appealed.

The Supreme Court of Canada allowed the appeal.

Insurance - Topic 3565

Accident and sickness insurance - The contract - Interpretation of terms - Accident defined - The Supreme Court of Canada stated that "A century and a half of insurance litigation has failed to produce a bright line definition of the word 'accident'" - The court examined the caselaw and then discussed general principles of interpretation - The court held as follows: (1) words like "accident" should be given their ordinary meaning; (2) a generous interpretation should be given to the term "accident" unless a policy clearly restricted it; (3) the words of an insurance contract, when ambiguous, should be construed against the drafter (i.e. the insurer) (contra proferentem); (4) when a policy was ambiguous, effect should be given to the reasonable expectations of the parties; and (5) courts were "normally ... reluctant to depart from [authoritative] judicial precedent interpreting the policy in a particular way" - The court also discussed how the concepts of accident, disease and natural causes related to one another, the expectation test, the happening of disease in the ordinary course of events, disease-based claims and the natural transmission of disease - See paragraphs 16 to 34, 40 to 47, 58 to 66.

Insurance - Topic 3565

Accident and sickness insurance - The contract - Interpretation of terms - Accident defined - [See Insurance - Topic 3580 ].

Insurance - Topic 3580

Accident and sickness insurance - The contract - Interpretation of terms - Loss resulting directly or independently of other causes from accidental bodily injuries - The plaintiff had unprotected sex with three women - He became infected with type 2 herpes simplex virus (HSV-2) which, in turn, caused transverse myelitis (inflammation of the spinal cord) resulting in his total paralysis from the mid-abdomen down - The plaintiff sought indemnification from his group insurer for paraplegia caused "as a direct result of a Critical Disease or resulting directly and independently of all other causes from bodily injuries occasioned solely through external, violent and accidental means" - The list of Critical Disease under the policy did not include sexually transmitted diseases - The Supreme Court of Canada dismissed the claim - The causal chain that led to the plaintiff's bodily injury was sex that transmitted the herpes that led to transverse myelitis - Transverse myelitis was an unexpected consequence of the disease, but it occurred (though rarely) as a normal incident or consequence of that disease - The court did not place emphasis on the fact the sex was unprotected - To conclude that the plaintiff's acquisition of herpes was an "accident" despite the absence of any mishap or trauma other than the acquisition of a sexually transmitted disease in the ordinary way would simply serve to add sexually transmitted diseases to the list of Critical Diseases in the group policy contrary to the intent of the policy - See paragraphs 1 to 67.

Words and Phrases

External, violent and accidental means - The Supreme Court of Canada discussed the definition of the expression "external, violent and accidental means" found in a group policy - See paragraphs 35 to 39, 53 to 57.

Cases Noticed:

Martin v. American International Assurance Life Co. et al., [2003] 1 S.C.R. 158; 301 N.R. 127; 178 B.C.A.C. 161; 292 W.A.C. 161; 2003 SCC 16, refd to. [para. 11].

Fegan v. State Mutual Life Assurance Co. of America (1996), 945 F. Supp. 396 (D. N.H.), consd. [para. 16].

Smith v. British Pacific Life Insurance Co., [1965] S.C.R. 434, refd to. [para. 17].

Milashenko v. Co-operative Fire & Casualty Co. (1970), 11 D.L.R.(3d) 128 (S.C.C.), refd to. [para. 17].

Columbia Cellulose Co. v. Continental Casualty Co., [1964] I.L.R. 1-119 (S.C.C.), refd to. [para. 17].

De Souza v. Home and Overseas Insurance Co., [1995] L.R.L.R. 453 (C.A.), consd. [para. 17].

Landress v. Phoenix Mutual Life Insurance Co. (1934), 291 U.S. 491 (Sup. Ct.), consd. [para. 18].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, consd. [para. 20].

Stats v. Mutual of Omaha Insurance Co., [1978] 2 S.C.R. 1153; 22 N.R. 91, consd. [para. 21].

National Bank of Greece (Canada) v. Katsikonouris - see National Bank of Greece (Canada) et autres v. Simcoe & Erie General Assurance Co. et autres.

National Bank of Greece (Canada) et autres v. Simcoe & Erie General Assurance Co. et autres, [1990] 2 S.C.R. 1029; 115 N.R. 42; 32 Q.A.C. 250, consd. [para. 21].

Straits Towing Ltd. et al. v. Walkem Machinery & Equipment Ltd. and Canadian Indemnity Co., [1976] 1 S.C.R. 309; 3 N.R. 523, consd. [para. 22].

Fenton v. Thorley (J.) & Co., [1903] A.C. 443 (H.L.), consd. [para. 22].

Wang v. Metropolitan Life Insurance Co. (2004), 189 O.A.C. 355; 242 D.L.R.(4th) 598 (Ont. C.A.), leave to appeal refused [2005] 1 S.C.R. xvii; 341 N.R. 399; 207 O.A.C. 397, consd. [para. 24].

Brissette v. Westbury Life Insurance Co., [1992] 3 S.C.R. 87; 142 N.R. 104; 58 O.A.C. 10, consd. [para. 25].

Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252; 147 N.R. 44; 83 Man.R.(2d) 81; 36 W.A.C. 81, consd. [para. 26].

Algoma Steel Corp. v. Allendale Mutual Insurance Co. (1990), 38 O.A.C. 204; 72 O.R.(2d) 782 (C.A.), leave to appeal refused [1991] 1 S.C.R. v; 135 N.R. 158; 49 O.A.C. 318, refd to. [para. 27].

Sinclair v. Maritime Passengers' Assurance Co. (1861), 3 E. & E. 478; 121 E.R. 521 (Q.B.), consd. [para. 29].

Wyman v. Dominion of Canada General Insurance Co., [1936] 2 D.L.R. 268 (Ont. H.C.), consd. [para. 29].

Brintons Ltd. v. Turvey, [1905] A.C. 230 (H.L.), consd. [para. 32].

Toronto Professional Firefighters' Association v. Toronto (City) (2007), 223 O.A.C. 146 (Div. Ct.), refd to. [para. 34].

Glenlight Shipping Ltd. v. Excess Insurance Co., [1983] S.L.T. 241 (Sess. 2nd Div.), refd to. [para. 42].

Cornish v. Accident Insurance Co. (1889), 23 Q.B.D. 453 (C.A.), refd to. [para. 42].

Brown v. Continental Casualty Co. (1926), 108 So. 464 (La.), refd to. [para. 42].

Bertalan Estate v. American Home Assurance Co. et al. (1999), 13 B.C.T.C. 349; 68 B.C.L.R.(3d) 118 (S.C.), refd to. [para. 42].

N.W. Commercial Travellers' Association v. London Guarantee and Accident Co. (1895), 10 Man. R. 537 (Q.B.), consd. [para. 53].

Bacon v. U.S. Mutual Accident Association (1887), 44 Hun. 599 (N.Y. Sup. Ct.), consd. [para. 53].

Derksen et al. v. 539938 Ontario Ltd. et al., [2001] 3 S.C.R. 398; 277 N.R. 82; 153 O.A.C. 310; 2001 SCC 72, refd to. [para. 56].

C.C.R. Fishing Ltd. and Bank of Montreal v. British Reserve Insurance Co., [1990] 1 S.C.R. 814; 109 N.R. 1, refd to. [para. 56].

Etherington v. Lancashire and Yorkshire Accident Insurance Co., [1909] 1 K.B. 591 (C.A.), consd. [para. 57].

Carroll v. CUNA Mutual Insurance Society (1995), 894 P.2d 746 (Colo.), consd. [para. 58].

Peoples Life Insurance Co. v. Menard (1954), 117 N.E.2d 376 (Ind. App.), consd. [para. 60].

American Accident Co. of Louisville v. Reigart (1893), 23 S.W. 191 (Ky.), refd to. [para. 60].

Koch v. Empire Life Insurance Co. (1981), 29 A.R. 49 (Q.B.), consd. [para. 60].

Jones v. Aetna Life Insurance Co. (1969), 439 S.W.2d 721 (Tex. Civ. App.), refd to. [para. 60].

Claxton v. Travellers Insurance Co. of Hartford (1917), 36 D.L.R. 481 (Que. Ct. Rev.), refd to. [para. 61].

Voisin v. Royal Insurance Co. of Canada (1988), 29 O.A.C. 227; 66 O.R.(2d) 45 (C.A.), refd to. [para. 61].

Guillet v. American Home Assurance Co. (2004), 191 O.A.C. 168; 72 O.R.(3d) 641 (C.A.), refd to. [para. 61].

Kolbuc v. ACE INA Insurance (2007), 224 O.A.C. 198; 85 O.R.(3d) 652; 2007 ONCA 364, consd. [para. 64].

Authors and Works Noticed:

Couch on Insurance (3rd Ed.) (1995 Looseleaf), § 139:18 [para. 54].

Hall, Geoff R., Canadian Contractual Interpretation Law (1st Ed. 2007), pp. 93, 94 [para. 27].

Ivamy, Edward Richard Hardy, General Principles of Insurance Law (6th Ed. 1993), p. 355 [para. 27].

MacGillivray, Insurance Law (10th Ed. 2003), para. 11-3 [para. 27].

Milton, John, Paradise Lost (1767), Book II, p. 44 [para. 18, footnote 1].

Norwood, David, and Weir, John P., Life Insurance Law in Canada (3rd Ed. 2002), p. 212 [para. 28].

Scales, Adam F., Man, God and the Serbonian Bog: The Evolution of Accidental Death Insurance (2000-2001), 86 Iowa L. Rev. 173, p. 288 [para. 38].

Welford, Alfred William Baker, The Law Relating to Accident Insurance (2nd Ed. 1932), pp. 268 [paras. 17, 36, 58, 62]; 269 [para. 18].

Counsel:

Bruce Laughton, Q.C., and Leah Terai, for the appellant;

Guy J. Collette, Michael Sobkin and A.C. Richard Parsons, for the respondent;

Patricia D.S. Jackson and David Outerbridge, for the intervenor.

Solicitors of Record :

Laughton & Company, Vancouver, B.C., for the appellant;

Guy J. Collette Law Corporation, Vancouver, B.C., for the respondent;

Torys, Toronto, Ontario, for the intervenor.

This appeal was heard on April 16, 2009, by McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ., of the Supreme Court of Canada. The following decision of the Supreme Court was delivered in both official languages by Binnie, J., on December 18, 2009.