Pender v. Squires et al., (2013) 337 Nfld. & P.E.I.R. 255 (NLCA)

• Judge: Green, C.J.N.L., Welsh and Harrington, JJ.A.
• Court: Court of Appeal (Newfoundland)
• Case Date: May 24, 2013
• Jurisdiction: Newfoundland and Labrador
• Citations: (2013), 337 Nfld. & P.E.I.R. 255 (NLCA);2013 NLCA 37

Pender v. Squires (2013), 337 Nfld. & P.E.I.R. 255 (NLCA);

    1047 A.P.R. 255

MLB headnote and full text

Temp. Cite: [2013] Nfld. & P.E.I.R. TBEd. JN.003

The Dominion of Canada General Insurance Company (appellant in 11/24, 11/25, 11/26) v. Larry Hannam (respondent in 11/24, 11/25, 11.26) and Lona Hannam (respondent in 11/24) and Jordan Hannam, an infant, by his Guardian ad litem, the Registrar of the Supreme Court of Newfoundland and Labrador (respondent in 11/25, 11/26) and Richard Flynn and Joyce Squires (respondents in 11/24, 11/25) and Kayla Squires (respondent in 11/25, 11/26) and Tanya Pender, an infant, by her Guardian ad litem, Suzanne Pender (respondent in 11/24, 11/25, 11/26) and Suzanne Pender (respondent in 11/25) and Unifund Assurance, Company (intervenor in 11/24, 11/25, 11/26) and City Sand and Gravel Limited (respondent in 11/25)

(11/24; 11;25; 11/26; 2013 NLCA 37)

Indexed As: Pender v. Squires et al.

Newfoundland and Labrador Supreme Court

Court of Appeal

Green, C.J.N.L., Welsh and Harrington, JJ.A.

May 24, 2013.

Summary:

The infant plaintiff was a passenger on an all-terrain vehicle (ATV) being driven in a gravel pit by the infant Squires. The plaintiff alleged that she was seriously injured when Squires lost control of the ATV and struck a rock-crushing machine. The plaintiff alleged that Squires was driving with the express or implied consent of the owner (Hannam). The plaintiff commenced three actions for damages. The defendants were Squires and her parents, the owner Hannam, his wife and son, and the gravel pit operator. There were also various third party claims. Now at issue was whether the insurer (Dominion), which provided coverage to the Hannams under a homeowner's insurance policy, had a duty to defend them from the plaintiff's claims or any third party claims.

The Newfoundland and Labrador Supreme Court, Trial Division (General), in a judgment reported (2011), 304 Nfld. & P.E.I.R. 282; 944 A.P.R. 282, held that Dominion had a duty to defend the Hannams in all three actions, as there existed a "mere possibility" of claims falling within the policy's coverage in each of the three actions. Dominion appealed.

The Newfoundland and Labrador Court of Appeal allowed the appeal in part. Coverage against Hannam, his wife and his son were excluded as the claims were based on the "ownership, use or operation, by you or on your behalf, of motorized vehicles". However, under Special Condition 4 of the policy, which provided coverage for claims respecting non-owned off-road vehicles, the insurer had a duty to defend the wife and son, as the claims against them were possibly covered under Special Condition 4 (as they were not "owners" of the ATV). Since Hannam "owned" the ATV, coverage was not available to him under Special Condition 4 and the insurer had no duty to defend any of the claims against him.

Insurance - Topic 725

Insurers - Duties - Duty to defend - [See Insurance - Topic 6640 ].

Insurance - Topic 6640

Multi-peril property insurance - Household or homeowner's policies - Exclusions - Use or operation of a motor vehicle - Hannam owned an ATV - A homeowner's insurance policy, under which his wife and son were also insureds, excluded coverage for claims based on "the ownership, use or operation, by you or on your behalf, of motorized vehicles" - Hannam permitted his son to drive the ATV - The son loaned the ATV to Squires, an inexperienced driver - Squires, while driving the ATV with the infant plaintiff as a passenger allegedly negligently struck a rock crushing machine in a gravel pit - The injured plaintiff sued the Hannams and others - The pleadings alleged that: the son was negligent in permitting an inexperienced driver to operate the ATV; Hannam was vicariously liable for his son's negligence; and Hannam and his wife were liable for negligently supervising or entrusting the ATV to their son, who permitted an inexperienced driver to operate it - At issue was whether the insurer had a duty to defend all claims against Hannam, his wife and son - The trial judge, in finding a duty to defend all claims, held that the exclusion clause did not apply, because the actions of the son and Squires were sufficiently remote from the ownership, use or occupation of the ATV - The Newfoundland and Labrador Court of Appeal disagreed - Hannam (owner) gave his son (an insured) permission to drive the ATV, who in turn gave an inexperienced driver permission to drive - The insurer established that "the true nature of the claims against the Hannams arise out of the ownership, use or operation of the ATV" - All of the conduct relied on by the plaintiff was "inextricably linked to the use or operation of the ATV" - Special Condition 4 of the policy, not dealt with by the trial judge, provided liability coverage for "Motorized Vehicles You Do Not Own" (off-road vehicles) - Unless Special Condition 4 applied, there would be no duty to defend Hannam, his wife or son - Since Hannam was the "owner" of the ATV, he had no coverage under Special Condition 4 and the insurer had no duty to defend any claims against him - However, since the wife and son were not "owners", both had possible liability coverage under Special Condition 4 respecting the negligent supervision and entrustment claims against them relating to the use and operation of an off-road motor vehicle which they did not own - The court rejected the insurer's submission that since the wife and son were named insureds, they were also "owners" of the ATV - Accordingly, the insurer had a duty to defend the claims against them - See paragraphs 1 to 79.

Insurance - Topic 6812

Liability insurance - Homeowners' comprehensive policy - Extent of coverage - Non-owned vehicles - [See Insurance - Topic 6640 ].

Insurance - Topic 6818

Liability insurance - Homeowner's comprehensive policy - Duty of insurer to defend - [See Insurance - Topic 6640 ].

Insurance - Topic 6821

Liability insurance - Homeowner's comprehensive policy - Exclusions - Use of vehicle - [See Insurance - Topic 6640 ]

Cases Noticed:

Cella et al. v. McLean et al. (1997), 101 O.A.C. 76; 148 D.L.R.(4th) 514 (C.A.), refd to. [para. 13].

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; 2009 SCC 49, refd to. [para. 19].

Scalera v. Lloyd's of London, [2000] 1 S.C.R. 551; 253 N.R. 1; 135 B.C.A.C. 161; 221 W.A.C. 161; 2000 SCC 24, refd to. [para. 24].

Fraser v. Co-operators Insurance Association (1986), 54 O.R.(2d) 579 (C.A.), refd to. [para. 30].

Silverthorne v. Gore Mutual Insurance Co. (2001), 144 O.A.C. 303; 52 O.R.(3d) 560 (C.A.), refd to. [para. 34].

Pictou County Farmers' Mutual Fire Insurance Co. v. Williams (2001), 191 N.S.R.(2d) 390; 596 A.P.R. 390; 2001 NSCA 33, dist. [para. 40].

Stevenson v. Reliance Petroleum Ltd., [1956] S.C.R. 936, refd to. [para. 47].

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, refd to. [para. 49].

Cleworth v. Zackariuk (1987), 34 D.L.R.(4th) 722 (B.C.C.A.), refd to. [para. 62].

Fitzgerald v. Co-operators Insurance Co. (2003), 214 N.S.R.(2d) 358; 671 A.P.R. 358; 2003 NSSC 129, refd to. [para. 71].

Wawanesa Mutual Insurance Co. v. Hewson, [2005] 1 W.W.R. 205; 254 Sask.R. 203; 336 W.A.C. 203; 2004 SKCA 112, refd to. [para. 77].

Sheppard v. Co-operators General Insurance Co. (1997), 99 O.A.C. 390; 33 O.R.(3d) 362 (C.A.), refd to. [para. 77].

Ultramar Ltd. v. Rancur Petroleum Services Ltd. et al. (2006), 260 Nfld. & P.E.I.R. 96; 786 A.P.R. 96; 23 B.L.R.(4th) 1; 2006 NLCA 55, refd to. [para. 81].

Counsel:

Stephen J. May, for the appellant;

Glenda C. Best, Q.C., for Tanya Pender;

Sarah Learmonth, for Jordan Hannam;

F. Geoffrey Aylward, Q.C., for Larry Hannam and Lona Hannam;

No one appearing for Kayla Squires, Richard Flynn and Joyce Squires;

Gerry Fleming, for City Sand and Gravel Ltd.;

Terry G. Rowe, Q.C., for the intervenor.

This appeal was heard on October 16-17, 2012, before Green, C.J.N.L, Welsh and Harrington, JJ.A., of the Newfoundland and Labrador Court of Appeal.

On May 24, 2013, Harrington, J.A., delivered the following judgment for the Court of Appeal.