ING Insurance Co. of Canada v. Miracle et al., (2011) 283 O.A.C. 79 (CA)

• Judge: Sharpe, Gillese and Karakatsanis, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: March 24, 2011
• Jurisdiction: Ontario
• Citations: (2011), 283 O.A.C. 79 (CA);2011 ONCA 321

ING Ins. v. Miracle (2011), 283 O.A.C. 79 (CA)

MLB headnote and full text

Temp. Cite: [2011] O.A.C. TBEd. MY.006

ING Insurance Company of Canada (applicant/appellant/respondent by way of cross-appeal) v. Andrew Miracle o/a Mohawk Imperial Sales and Mohawk Liquidate, Attorney General of Canada, John Maracle c.o.b. Jumping Johnnies, Deborah Maracle c.o.b. Jumping Johnnies, Kevin Trudeau, Stan Fergusson Fuels Ltd., United Independent Energy Group Inc. c.o.b. Earl Rosebush Fuels (respondents/appellants by way of cross-appeal)

(C52780; 2011 ONCA 321)

Indexed As: ING Insurance Co. of Canada v. Miracle et al.

Ontario Court of Appeal

Sharpe, Gillese and Karakatsanis, JJ.A.

April 26, 2011.

Summary:

Andrew Miracle o/a Mohawk Imperial Sales and Mohawk Liquidate (Miracle) operated a convenience store and gas bar. The plaintiff's statement of claim alleged that gasoline escaped from an underground storage tank on Miracle's property and migrated on to the plaintiff's adjacent lands. A Commercial General Liability insurance policy issued to Miracle by ING Insurance Co. of Canada contained a "Pollution Liability" exclusion clause which excluded coverage for losses "arising out of the actual, alleged, potential or threatened spill, discharge, emission, dispersal, seepage, leakage, migration, release or escape of pollutants" from the lands or premises of Miracle. ING sought a declaration that it had no duty to defend or indemnify Miracle on the ground that the plaintiff's claim was excluded from coverage.

The Ontario Superior Court, in a decision reported at [2010] O.T.C. Uned. 4056, dismissed the application. The court relied on the decision in Zurich Insurance Co. v. 686234 Ontario Ltd. (Ont. C.A.) and held that, as Miracle was not an "active industrial polluter" and as the claim was based on Miracle's alleged negligence, the pollution exclusion clause did not apply. ING appealed.

The Ontario Court of Appeal allowed the appeal and granted ING a declaration that the claims asserted in the action were excluded by the pollution liability clause. ING was under no obligation to defend or indemnify Miracle for the claim.

Insurance - Topic 6914

Liability insurance - Business - Comprehensive policy - Exclusions - Discharge of pollutants - Andrew Miracle o/a Mohawk Imperial Sales and Mohawk Liquidate (Miracle) operated a convenience store and gas bar - The plaintiff's statement of claim alleged that gasoline escaped from an underground storage tank on Miracle's property and migrated on to the plaintiff's adjacent lands - A Commercial General Liability insurance policy issued to Miracle by ING Insurance Co. of Canada contained a "Pollution Liability" exclusion clause which excluded coverage for losses "arising out of the actual, alleged, potential or threatened spill, discharge, emission, dispersal, seepage, leakage, migration, release or escape of pollutants" from the lands or premises of Miracle - An application judge relied on the decision in Zurich Insurance Co. v. 686234 Ontario Ltd. (Ont. C.A.) and held that as Miracle was not an "active industrial polluter" and as the claim was based on Miracle's alleged negligence, the pollution exclusion clause did not apply - ING appealed - The Ontario Court of Appeal allowed the appeal, holding that the claims asserted in the action were excluded by the pollution liability clause - The court did not accept that the phrase "active industrial polluter of the natural environment" used in Zurich should be read as restricting the reach of the pollution exclusion clause to situations where the insured was engaged in an activity that necessarily resulted in pollution - The claim as pleaded fell squarely and unambiguously within the language of the exclusion clause - There was no merit to the submission that giving effect to the pollution exclusion clause would virtually nullify the coverage sought by Miracle in the first place - By denying coverage for pollution liability, the court did not deprive the policy of a very significant measure of protection for the myriad of other risks that the policy did cover.

Cases Noticed:

Zurich Insurance Co. v. 686234 Ontario Ltd. (2002), 166 O.A.C. 233; 62 O.R.(3d) 447 (C.A.), consd. [para. 10].

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, refd to. [para. 13].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 14].

Hay Bay Genetics Inc. v. MacGregor Concrete Products (Beachburg) Ltd. (2003), 29 C.L.R.(3d) 60 (Ont. Sup. Ct.), refd to. [para. 20].

Rylands v. Fletcher (1866), L.R. 1 Exch. 265, affd. (1868), L.R. 3 H.L. 330, refd to. [para. 22].

Liberty Mutual Insurance Co. v. Hollinger Inc. et al. (2004), 183 O.A.C. 146; 236 D.L.R.(4th) 635 (C.A.), refd to. [para. 23].

Ontario v. Kansa General Insurance Co. (1994), 69 O.A.C. 208; 17 O.R.(3d) 38 (C.A.), consd. [para. 25].

Uniroyal Chemical Ltd. v. Kansa General Insurance Co. (1996), 89 O.A.C. 311 (C.A.), refd to. [para. 25].

Pier Mac Petroleum Installation Ltd. v. Axa Pacific Insurance Co., [1997] B.C.T.C. Uned. 980; 41 B.C.L.R.(3d) 326 (S.C. Master), consd. [para. 26].

Corbould v. BCAA Insurance Corp., [2010] B.C.T.C. Uned. 1536; 13 B.C.L.R.(5th) 168 (S.C.), consd. [para. 27].

Federated Mutual Insurance Co. v. Abston Petroleum Inc. (2007), 967 So.2d 705 (Ala. Sup. Ct.), refd to. [para. 28].

Whittier Properties Inc. v. Alaska National Insurance Co. (2008), 185 P.3d 84 (Alaska Sup. Ct.), refd to. [para. 28].

Truitt Oil & Gas Co. v. Ranger Insurance Co. (1998), 498 S.E.2d 572 (Ga. App. Ct.), refd to. [para. 28].

Millers Mutual Insurance Association of Illinois v. Graham Oil Co. (1996), 668 N.E.2d 223 (Ill. App. Ct.), refd to. [para. 28].

West Bend Mutual Insurance Co. v. U.S. Fidelity and Guaranty Co. (2010), 598 F.3d 918 (7th Cir.), refd to. [para. 28].

Crescent Oil Co. v. Federated Mutual Insurance Co. (1995), 888 P.2d 869 (Kan. App. Ct.), refd to. [para. 28].

Kimber Petroleum Corp. v. Travelers Indemnity Co. (1996), 689 A.2d 747 (N.J. Super. Ct. App. Div.), refd to. [para. 28].

Harrison v. Morrison (R.R.) & Son Inc. (2003), 862 So.2d 1065 (La. App. Ct.), refd to. [para. 28].

Montana Petroleum Tank Release Compensation Board v. Crumleys Inc. (2008), 174 P.3d 948 (Mont. Sup. Ct.), refd to. [para. 28].

Union Mutual Fire Insurance Co. v. Hatch (1993), 835 F. Supp. 59 (N.D. N.H.), refd to. [para. 28].

Wagner v. Erie Insurance Co. (2002), 801 A.2d 1226 (Pa. Sup. Ct.), refd to. [para. 28].

Weston Ornamental Iron Works Ltd. v. Continental Insurance Co., [1981] O.J. No. 78 (C.A.), dist. [para. 31].

Counsel:

Michael Burgar, for the appellant, ING;

Victoria Yankou, for the respondent, Attorney General of Canada;

Richard L. Wright, for the respondent, Stan Fergusson Fuels Ltd.

This appeal was heard on March 24, 2011, before Sharpe, Gillese and Karakatsanis, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Sharpe, J.A., and was released on April 26, 2011.