McKenzie v. Dominion of Canada General Insurance Co. et al., 2007 ONCA 480

• Judge: Cronk, Armstrong and MacFarland, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: Tuesday April 17, 2007
• Jurisdiction: Ontario
• Citations: 2007 ONCA 480;(2007), 225 O.A.C. 277 (CA)

McKenzie v. Dominion of Can. (2007), 225 O.A.C. 277 (CA)

MLB headnote and full text

Temp. Cite: [2007] O.A.C. TBEd. JN.079

Michael McKenzie (appellant) v. Dominion of Canada General Insurance Company and Warren Tischler (respondents)

(C45956; 2007 ONCA 480)

Indexed As: McKenzie v. Dominion of Canada General Insurance Co. et al.

Ontario Court of Appeal

Cronk, Armstrong and MacFarland, JJ.A.

June 27, 2007.

Summary:

McKenzie was operating a boat with its owner's consent. The boat collided with another boat. Several actions ensued. Insurance coverage was available to McKenzie pursuant to a boat owner liability policy issued by State Farm and Casualty Company (State Farm) to the owner, a personal liability umbrella policy issued by State Farm to the owner and a home owner's policy issued by Dominion to McKenzie's father. State Farm, on McKenzie's behalf, applied for a determination respecting, inter alia, which, and to what extent, the policies indemnified McKenzie. With the parties' consent, State Farm was added as a responding party to the application.

The Ontario Superior Court, in a decision reported at [2006] O.T.C. 775, ordered that the State Farm boat owner liability policy provided primary coverage for certain claims made by McKenzie and, after that coverage was exhausted, the other policies were required to contribute equally. McKenzie appealed. At issue was the order in which the umbrella policy and the home owner's policy had to contribute to the claims against McKenzie.

The Ontario Court of Appeal allowed the appeal and held that the umbrella policy was not required to respond to the claims until the limit of the home owner's policy was exhausted.

Insurance - Topic 785

Insurers - Liability - Where two or more policies cover risk - Primary v. excess insurance - A boat operated by McKenzie collided with another boat - Several actions ensued - Insurance coverage was available to McKenzie pursuant to a boat owner liability policy and a personal liability umbrella policy that were issued to the boat's owner and a home owner's policy issued to McKenzie's father - An applications judge held that the boat owner liability policy provided primary coverage - The judge further held that the "other insurance" clauses in the other polices were irreconcilable and therefore, after the boat owner liability policy's coverage was exhausted, the other policies were required to contribute equally - McKenzie appealed - At issue was the order in which the umbrella and the home owner's policies had to contribute to the claims against McKenzie - The Ontario Court of Appeal held that a conclusion that the "other insurance" clauses were irreconcilable was only possible where the policies covered the same level of risk - Here, the umbrella policy was a true umbrella policy while the homeowner's policy was a primary policy - The reference to "other insurance" in a primary policy could only reasonably refer to other primary insurance - Further, the applications judge erred in holding that the distinction among primary, excess and umbrella policies no longer existed - The umbrella policy was not required to respond to the claims against McKenzie until the limit of the home owner's policy was exhausted.

Insurance - Topic 788

Insurers - Liability - Where two or more policies cover risk - Contribution among insurers - [See Insurance - Topic 785].

Insurance - Topic 2944

Contribution among insurers - Excess coverage clauses - [See Insurance - Topic 785].

Insurance - Topic 2945.1

Contribution among insurers - Two or more policies covering same loss - [See Insurance - Topic 785].

Cases Noticed:

Family Insurance Corp. v. Lombard Canada Ltd., [2002] 2 S.C.R. 695; 288 N.R. 373; 167 B.C.A.C. 161; 274 W.A.C. 161; 2002 SCC 48, dist. [para. 2].

Canadian Universities' Reciprocal Insurance v. Halwell Mutual Insurance Co. et al. (2002), 164 O.A.C. 105; 61 O.R.(3d) 113 (C.A.), refd to. [para. 22, footnote 2].

Trenton Cold Storage Ltd. et al. v. St. Paul Fire & Marine Insurance Co. (2001), 146 O.A.C. 348 (C.A.), appld. [para. 31].

Authors and Works Noticed:

Couch, G.J., Cyclopedia of Insurance Law (3rd Ed.) (1995 Looseleaf), paras. 220:32, 220:41 [para. 30].

Counsel:

Robin B. Cumine, Q.C., for the appellant, Michael McKenzie;

Christopher I.R. Morrison, for the respondent, Dominion of Canada General Insurance Co.;

Brian M. Bangay, for the respondent, Warren Tischler.

This appeal was heard on April 17, 2007, by Cronk, Armstrong and MacFarland, JJ.A., of the Ontario Court of Appeal. MacFarland, J.A., released the following judgment for the court on June 27, 2007.