SREIT (Park West Centre) Ltd. et al. v. ING Insurance Co. of Canada

• Jurisdiction: Nova Scotia
• Court: Court of Appeal of Nova Scotia (Canada)
• Judge: MacDonald, C.J.N.S., Saunders and Hamilton, JJ.A.
• Citation: 2009 NSCA 38,(2009), 276 N.S.R.(2d) 308 (CA)
• Date: 06 April 2009
• Subject Matter: PRACTICE,INSURANCE

SREIT Ltd. v. ING Ins. (2009), 276 N.S.R.(2d) 308 (CA);

    880 A.P.R. 308

MLB headnote and full text

Temp. Cite: [2009] N.S.R.(2d) TBEd. AP.026

ING Insurance Company of Canada (appellant) v. SREIT (Park West Centre) Ltd., a body corporate, and Artrus Realty Corporation, carrying on business as O & Y Enterprises (respondents)

(CA 300130; 2009 NSCA 38)

Indexed As: SREIT (Park West Centre) Ltd. et al. v. ING Insurance Co. of Canada

Nova Scotia Court of Appeal

MacDonald, C.J.N.S., Saunders and Hamilton, JJ.A.

April 15, 2009.

Summary:

A pedestrian sued for injuries sustained after he slipped on ice outside a shopping complex owned by SREIT and managed by O&Y Enterprises (the defendants). ING was prepared to provide a complete defence. ING's position changed when a second amendment to the statement of claim added new allegations of negligence; namely, that the defendants were negligent in maintaining a leaky rain gutter, contributing to the ice buildup. ING refused to defend against those allegations, on the basis that indemnification did not extend to the actions or omissions of the defendant owner. The defendants applied for a declaration that ING be obliged to assume and pay for their entire defence.

The Nova Scotia Supreme Court, in a decision reported at (2008), 266 N.S.R.(2d) 303; 851 A.P.R. 303; 2008 NSSC 183, allowed the application. The rain gutter allegations could possibly give rise to liability within the insurance coverage. Even if the allegations were outside the policy coverage, they were "palpably intertwined" with a claim admittedly within the coverage. ING appealed.

The Nova Scotia Court of Appeal dismissed the appeal. The judge's analysis, reasons and disposition did not result from any palpable and overriding error. Even if the court were to apply a correctness standard, it would find no fault in either the reasoning or the result.

Insurance - Topic 725

Insurers - Duties - Duty to defend - The Nova Scotia Court of Appeal stated that "The duty to defend, unlike the duty to indemnify, is triggered not by actual acts or omissions of an insured, but rather by allegations against the insured. The mere possibility that a claim within the policy may succeed is not enough. Thus it has been said that the duty to defend is broader than the duty to indemnify" - See paragraph 10.

Insurance - Topic 725

Insurers - Duties - Duty to defend - A pedestrian (Bowser) sued for injuries after slipping on ice outside a shopping complex owned and managed by the respective defendants - The insurer (ING) was prepared to provide a complete defence in the action - ING's position changed when a second amendment to the statement of claim added new allegations; namely, that the defendants were negligent in maintaining a leaky rain gutter, contributing to the ice buildup - ING refused to defend against those allegations - The defendants applied for a declaration that ING assume the entire defence - The trial judge allowed the application, where the allegations could give rise to liability within the insurance coverage - Even if the allegations were outside the coverage, they were "palpably intertwined" with a claim within the coverage - ING appealed, arguing that a series of words in the commercial general liability policy made it clear that indemnification would not extend to the actions or omissions of the defendant owner - The Nova Scotia Court of Appeal dismissed the appeal - ING's approach put the cart before the horse by assuming, as a starting point, that a given claim was and could only be outside the coverage described in the policy - " ... this is the wrong test: the duty to defend relies on the possibility of coverage, not upon raising the possibility that a claim may not ultimately be covered. An insurer cannot resist a duty to provide a defence simply by raising other possible scenarios in which there would be no coverage" - The nature of the action had not changed - As the defendant manager might be found to have failed to salt and sand as required, it was possible that the amended pleadings could give rise to liability within coverage - This was all that the defendants were required to show - See paragraphs 13 to 16.

Insurance - Topic 6878

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

Practice - Topic 8800

Appeals - Duty of appellate court regarding findings of fact - [See Practice - Topic 8800.1 ].

Practice - Topic 8800.1

Appeals - Duty of appellate court regarding findings of mixed law and fact by a trial judge - In the context of an appeal concerning an issue involving an insurer's duty to defend a claim for damages in an underlying action following a slip and fall, the Nova Scotia Court of Appeal concluded that the chambers judge's findings should be reviewed on a standard of palpable and overriding error, not correctness - The judge's principal focus was not to interpret the terms of the insurance contract, but to assess the pleadings in order to ascertain the substance and true nature of the claim, and whether it could give rise to liability within the policy coverage - The inquiry involved a question of mixed fact and law, and was heavily weighted towards the facts - Therefore, the judge's decision was owed considerable deference - Absent palpable and overriding error, the court would not intervene - "Invoking the 'palpable and overriding error' standard recognizes the high degree of deference paid on appeal to factual findings or inferences. Not every misapprehension of the evidence or every error of fact will justify appellate intervention. The error must not only be plainly seen, but be overriding and determinative" - See paragraphs 19 to 20.

Cases Noticed:

Neary v. Wawanesa Mutual Insurance Co. (2003), 216 N.S.R.(2d) 219; 680 A.P.R. 219 (C.A.), refd to. [para. 10].

Hamel Construction Inc. v. Lombard Canada Ltd. (2005), 232 N.S.R.(2d) 138; 737 A.P.R. 138; 2005 NSCA 69, refd to. [para. 10].

Nichols v. American Home Assurance Co. et al., [1990] 1 S.C.R. 801; 107 N.R. 321; 39 O.A.C. 63, refd to. [para. 11].

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, refd to. [para. 11].

Sansalone v. Wawanesa Mutual Insurance Co. et al., [2000] 1 S.C.R. 627; 253 N.R. 95; 135 B.C.A.C. 255; 221 W.A.C. 255, refd to. [para. 11].

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, refd to. [para. 11].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1, refd to. [para. 19].

Delgamuukw et al. v. British Columbia et al., [1997] 3 S.C.R. 1010; 220 N.R. 161; 99 B.C.A.C. 161; 162 W.A.C. 161, refd to. [para. 20].

McPhee v. Gwynne-Timothy (2005), 232 N.S.R.(2d) 175; 737 A.P.R. 175; 2005 NSCA 80, refd to. [para. 20].

2703203 Manitoba Inc. v. Parks et al. (2007), 253 N.S.R.(2d) 85; 807 A.P.R. 85; 2007 NSCA 36, refd to. [para. 20].

Belmont Financial Group Inc. v. Trisura Guarantee Insurance Co. (2008), 269 N.S.R.(2d) 143; 860 A.P.R. 143; 2008 NSCA 87, dist. [para. 21].

Counsel:

Wendy Johnston, Q.C., and Alison Buchanan (articled clerk), for the appellant;

Lisa Richards and Andrew Gough, for the respondent.

This appeal was heard in Halifax, N.S., on April 6, 2009, by MacDonald, C.J.N.S., Saunders and Hamilton, JJ.A., of the Nova Scotia Court of Appeal. The following judgment of the court was delivered by Saunders, J.A., on April 15, 2009.