Kinnear v. Canadian Recreation Excellence (Vernon) Corp. et al.

• Jurisdiction: British Columbia
• Court: Court of Appeal (British Columbia)
• Judge: Finch, C.J.B.C., Saunders and Frankel, JJ.A.
• Citation: (2012), 325 B.C.A.C. 50 (CA),2012 BCCA 291
• Date: 26 April 2012

Kinnear v. Recreation Excellence (2012), 325 B.C.A.C. 50 (CA);

    553 W.A.C. 50

MLB headnote and full text

Temp. Cite: [2012] B.C.A.C. TBEd. JL.006

Vernon Vipers Hockey Club, Dr. J. Duncan Wray Inc. and American Home Assurance Company (respondents/third parties) v. Canadian Recreation Excellence (Vernon) Corporation and Regional District of North Okanagan (appellants/defendants)

(CA038693; 2012 BCCA 291)

Indexed As: Kinnear v. Canadian Recreation Excellence (Vernon) Corp. et al.

British Columbia Court of Appeal

Finch, C.J.B.C., Saunders and Frankel, JJ.A.

June 29, 2012.

Summary:

The Vernon Multiplex served as the home of the Vernon Vipers Hockey Club (the Hockey Club). The Multiplex was owned by the appellant Regional District of North Okanagan and managed by the appellant Canadian Recreational Excellence (Vernon) Corporation. The two appellants were named as "additional insureds" on an endorsement to the Hockey Club's comprehensive liability policy. Kinnear went to the Multiplex to attend one of the Hockey Club's games. While leaving the property to buy some refreshment at a retail outlet across the street, Kinnear fell and injured himself. Kinnear sued the appellants for damages for loss and injury suffered as a result of the fall. The appellants issued third party proceedings against the Hockey Club and its insurer, asserting that as additional insureds, they were entitled to be defended by the third parties, and were also entitled to contribution and indemnity for any amounts found owing to Kinnear. The Hockey Club and the insurer applied for declarations that they were under no obligation to defend or indemnify the appellants. At issue was the meaning to be given to the policy endorsement adding the appellants as additional insureds "... but only in respect of liability arising out of the Named Insured's operations".

The British Columbia Supreme Court, in a decision reported at [2010] B.C.T.C. Uned. 1899, allowed the application and dismissed the third party claims against the Hockey Club and the insurer. The court could not conclude that the liability or alleged negligence in this case arose out of the operations of the Vipers Hockey Club. The appellants appealed from the dismissal of the third party claims.

The British Columbia Court of Appeal dismissed the appeal.

Insurance - Topic 1851

The insurance contract - Interpretation of contract - General - [See Insurance - Topic 6878 ].

Insurance - Topic 6878

Liability insurance - Business - Comprehensive policy - Duty to defend - The Vernon Multiplex served as the home of the Vernon Vipers Hockey Club (the Hockey Club) - The Multiplex was owned and managed by the two appellants - The two appellants were named as "additional insureds" on an endorsement to the Hockey Club's comprehensive liability policy - Kinnear went to the Multiplex to attend one of the Hockey Club's games - While leaving the property to buy some refreshment at a retail outlet across the street, he fell and injured himself - Kinnear sued the appellants for damages for loss and injury suffered as a result of the fall - The appellants issued third party proceedings against the Hockey Club and its insurer, asserting that as additional insureds, they were entitled to be defended by the third parties, and were also entitled to contribution and indemnity for any amounts found owing to Kinnear - The appellants' claim to a defence and indemnity turned on the meaning to be given to the policy endorsement adding them as additional insureds "... but only in respect of liability arising out of the Named Insured's operations" - The British Columbia Court of Appeal affirmed the dismissal of the appellants' third party claims against the Hockey Club and the insurer on the basis that the liability alleged against the additional insureds did not arise out of the operations of the Vernon Vipers Hockey Club - The contractual term "arising out of the Named Insured's operations", imposed a causal requirement greater than a simple "but for" test - The phrase "arising out of" should be construed as requiring "an unbroken chain of causation" and a connection that was more than "merely incidental or fortuitous" - "Operations" was a word of sufficiently broad meaning as to include the creation of a situation, or circumstance, that was connected in some way to the alleged liability - It did not necessarily imply an active role by the named insured in creation of the liability event - The operations of the Hockey Club extended beyond the simple presentation of games to spectators, and included conduct and the provision of facilities necessary to accomplish their objective - However, no aspect of the Hockey Club's operations were alleged to have caused Kinnear to fall and injure himself - The most that the pleadings alleged was that those operations caused him to be in a place where, for unrelated reasons, he became injured - That might have been enough to meet a simple "but for" test, but it could not satisfy "the more rigorous causal requirement established in such cases as Citadel, Herbison, and Saanich".

Words and Phrases

Arising out of - The British Columbia Court of Appeal discussed the meaning of these words in the context of an insurance policy endorsement which added the appellants as additional insureds "... but only in respect of liability arising out of the Named Insured's operations" - See paragraphs 28 to 52.

Words and Phrases

Operations - The British Columbia Court of Appeal discussed the meaning of the word "operations" in the context of an insurance policy endorsement which added the appellants as additional insureds "... but only in respect of liability arising out of the Named Insured's operations" - See paragraphs 53 to 68.

Cases Noticed:

Monenco Ltd. et al. v. Commonwealth Insurance Co. et al., [2001] 2 S.C.R. 699; 274 N.R. 84; 155 B.C.A.C. 161; 254 W.A.C. 161; 2001 SCC 49, consd. [para. 15].

Saanich (District) v. Aviva Insurance Co. of Canada (2011), 311 B.C.A.C. 117; 529 W.A.C. 117; 2011 BCCA 391, consd. [para. 15].

Williams v. B.C. Conference of the Mennonite Brethren Churches et al., [2010] B.C.T.C. Uned. 791; 8 B.C.L.R.(5th) 261; 2010 BCSC 791, consd. [para. 15].

Board of Education of School District No. 79 (Cowichan Valley) v. Lloyd's London, [2003] B.C.T.C. Uned. 552; 2 C.C.L.I.(4th) 170; 2003 BCSC 1303, refd to. [para. 15].

Penticton (City) v. AXA Pacific Insurance Co. et al., [2009] B.C.T.C. Uned. 1404; 78 C.C.L.I.(4th) 273; 2009 BCSC 1404, refd to. [para. 15].

Liu v. Chu et al., [2009] B.C.T.C. Uned. 753; 74 C.C.L.I.(4th) 242; 2009 BCSC 753, refd to. [para. 15].

McGeough v. Stay 'N Save Motor Inns Inc. (1993), 40 A.C.W.S.(3d) 966 (B.C.S.C.), consd. [para. 15].

Amos v. Insurance Corp. of British Columbia, [1995] 3 S.C.R. 405; 186 N.R. 150; 63 B.C.A.C. 1; 104 W.A.C. 1, consd. [para. 21].

Citadel General Insurance Co. v. Vytlingam - see Vytlingam v. Farmer et al.

Vytlingam v. Farmer et al., [2007] 3 S.C.R. 373; 368 N.R. 251; 230 O.A.C. 364; 2007 SCC 46, consd. [para. 21].

Herbison v. Lumbermens Mutual Casualty Co., [2007] 3 S.C.R. 393; 368 N.R. 292; 230 O.A.C. 395; 2007 SCC 47, consd. [para. 21].

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. 26].

Hannah v. John Doe #1 et al. (2010), 285 B.C.A.C. 115; 482 W.A.C. 115; 3 B.C.L.R.(5th) 54; 2010 BCCA 141, refd to. [para. 36].

Twin City Fire Insurance Company v. Ohio Casualty Insurance Company (2007), 480 F.3d 1254 (11th Cir.), refd to. [para. 47].

SFH, Inc. v. Millard Refrigerated Services, Inc. (2003), 339 F.3d 738 (8th Cir.), refd to. [para. 47].

UPS Freight v. National Union Fire Insurance Company of Pittsburgh (2011), 428 Fed. Appx. 168 (3rd Cir.), refd to. [para. 47].

Ohio Casualty Insurance Company v. Union Pacific Railroad Company (2006), 469 F.3d 1158 (11th Cir.), refd to. [para. 48].

New Hampshire v. United States Fidelity & Guaranty Co. (1998), 143 F.3d 5 (1st Cir.), refd to. [para. 48].

McIntosh v. Scottsdale Insurance Company (1993), 992 F.2d 251 (10th Cir.), refd to. [para. 48].

Anderson (Arthur) Inc. v. Toronto-Dominion Bank et al. (1994), 71 O.A.C. 1, additional reasons (1994), 14 B.L.R.(2d) 1 (C.A.), refd to. [para. 50].

Potvin v. Canadian Museum of Nature et al., [2003] O.T.C. 449; 23 T.L.W.D. 2313-002 (Sup. Ct.), consd. [para. 66].

Waterloo (City) v. Economical Mutual Insurance Co. [2006] O.T.C. 1523; 154 A.C.W.S.(3d) 193 (Sup. Ct.), refd to. [para. 68].

Counsel:

J.H. MacMaster, for the appellants;

J.P Kennedy, for the respondents.

This appeal was heard on April 26, 2012, at Vancouver, B.C., before Finch, C.J.B.C., Saunders and Frankel, JJ.A., of the British Columbia Court of Appeal. The following judgment of the Court of Appeal was delivered by Finch, C.J.B.C., on June 29, 2012.