Ontario Society for the Prevention of Cruelty to Animals v. Sovereign General Insurance Co., 2015 ONCA 702

• Judge: Epstein, Pepall and Benotto, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 22, 2015
• Jurisdiction: Ontario
• Citations: 2015 ONCA 702;(2015), 340 O.A.C. 330 (CA)

SPCA v. Sovereign Ins. (2015), 340 O.A.C. 330 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. OC.025

Ontario Society for the Prevention of Cruelty to Animals (applicant/respondent) v. The Sovereign General Insurance Company (respondent/appellant)

(C59166; 2015 ONCA 702)

Indexed As: Ontario Society for the Prevention of Cruelty to Animals v. Sovereign General Insurance Co.

Ontario Court of Appeal

Epstein, Pepall and Benotto, JJ.A.

October 22, 2015.

Summary:

The Ontario SPCA held commercial general liability insurance policies with the insurer. Three persons separately sued the SPCA. The insurer refused to defend the actions, relying on exclusionary clauses in the policy and the fortuity principle, which presumptively excluded coverage for intentional harm. The SPCA sought a declaration that the insurer had a duty to defend. An application judge ordered that the insurer defend the actions. The insurer appealed.

The Ontario Court of Appeal dismissed the appeal.

Insurance - Topic 725

Insurers - Duties - Duty to defend - The Ontario SPCA investigated a horse breeder and a Toronto animal shelter - The breeder and two employees of the shelter (chief veterinarian and lead animal cruelty investigator) were all charged under the Criminal Code with offences respecting cruelty to animals or other criminal charges - The latter two persons were paraded in handcuffs before the media, who had been summoned for the event - All charges were either stayed for abuse of process or withdrawn by the Crown where there was no reasonable prospect of conviction - The three persons commenced separate actions against the SPCA, alleging, malicious prosecution, negligent investigation, negligence, false arrest and imprisonment, slander and defamation - The SPCA's commercial general liability insurer refused to defend the actions, relying on exclusionary clauses in the policy and the fortuity principle, which presumptively excluded coverage for intentional harm - The Ontario Court of Appeal affirmed an application judge's declaration that the insurer had a duty to defend - The duty to defend required a possibility of the claim succeeding, not certainty - Coverage provisions were to be construed broadly and exclusion provisions narrowly - Where there was a genuine ambiguity or doubt, the duty to defend was resolved in the insured's favour - The fortuity principle precluded coverage for intentional acts with intended consequences, not intentional acts with unintended consequences - The policy expressly provided coverage for intentional acts such as malicious prosecution, false arrest and imprisonment, etc. - Neither the fortuity principle nor the exclusion of coverage for violating a penal provision applied to negate the duty to defend - Further, the statements of claim pleaded intentional acts, but no specific intent to cause a particular harm suffered - See paragraphs 31 to 88.

Insurance - Topic 1856

The insurance contract - Interpretation of contract - Exclusions - [See Insurance - Topic 725 ].

Insurance - Topic 1870

The insurance contract - Interpretation of contract - Broad construction in favour of coverage - [See Insurance - Topic 725 ].

Insurance - Topic 6878

Liability insurance - Business - Comprehensive policy - Duty to defend - [See Insurance - Topic 725 ].

Insurance - Topic 6904

Liability insurance - Business - Comprehensive policy - Exclusions - Intentional injury - [See Insurance - Topic 725 ].

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge (incl. contractual interpretation) - An application judge interpreted a commercial general liability policy respecting the insurer's duty to defend where the insurer denied a duty to defend based on exclusion clauses and the fortuity principle - The Ontario Court of Appeal, in determining the appropriate standard of review, stated that "Where, as here, the exercise involves the application of a legal principle of contractual interpretation in the context of insurance to the pleadings in issue, a mixed question of fact and law is engaged" - See paragraphs 32 to 36.

Cases Noticed:

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633; 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 32].

Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. et al. (2015), 599 A.R. 363; 643 W.A.C. 363; 2015 ABCA 121, refd to. [para. 34].

Precision Plating Ltd. et al. v. AXA Pacific Insurance Co. et al. (2015), 374 B.C.A.C. 37; 642 W.A.C. 37; 2015 BCCA 277, refd to. [para. 34].

1298417 Ontario Ltd. v. Lakeshore (Town) (2014), 326 O.A.C. 322; 2014 ONCA 802, refd to. [para. 35].

Somersall v. Friedman et al., [2002] 3 S.C.R. 109; 292 N.R. 1; 163 O.A.C. 201; 2002 SCC 59, refd to. [para. 39].

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. 39].

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. 41].

Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, [2010] 2 S.C.R. 245; 406 N.R. 182; 293 B.C.A.C. 1; 496 W.A.C. 1; 2010 SCC 33, refd to. [para. 41].

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, refd to. [para. 42].

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. 43].

ING Insurance Co. of Canada v. Miracle et al. (2011), 283 O.A.C. 79; 105 O.R.(3d) 241; 2011 ONCA 321, refd to. [para. 44].

Beresford v. Royal Insurance Co., [1938] A.C. 586 (H.L.), refd to. [para. 46].

E.M. v. Reed et al. (2003), 171 O.A.C. 145; 49 C.C.L.I.(3d) 57 (C.A.), refd to. [para. 47].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 54].

Canada Post Corp. v. Key Mail Canada Inc. et al. (2005), 202 O.A.C. 158; 77 O.R.(3d) 294 (C.A.), refd to. [para. 55].

Fenton v. J. Thorley & Co., [1903] A.C. 443 (H.L.), refd to. [para. 58].

Nelles v. Ontario et al., [1989] 2 S.C.R. 170; 98 N.R. 321; 35 O.A.C. 161, refd to. [para. 61].

Henry v. British Columbia (Attorney General) et al. (2015), 470 N.R. 200; 369 B.C.A.C. 47; 634 W.A.C. 47; 383 D.L.R.(4th) 383; 2015 SCC 24, refd to. [para. 61].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 65].

Weston Ornamental Ironworks Ltd. v. Continental Insurance Co., [1981] I.L.R. 477 (Ont. C.A.), refd to. [para. 80].

Counsel:

Ramon V. Andal, for the appellant;

Brian Shiller and Angela Chaisson, for the respondent.

This appeal was heard on March 11, 2015, before Epstein, Pepall and Benotto, JJ.A., of the Ontario Court of Appeal.

On October 22, 2015, Pepall, J.A., released the following judgment for the Court of Appeal.