October 11, 2011 by Canadian Underwriter
B.C.’s Court of Appeal has upheld a lower court order that requires Aviva Insurance Company of Canada to defend the Corporation of the District of Saanich in a personal injury liability case involving two named insured lacrosse associations.
A man identified in the case only as “Mr. Wright” was hit in the head with a lacrosse ball while taking his dog to obedience school at a recreation centre “occupied” by Saanich under the meaning of the province’s Occupiers Liability Act. The ball knocked him to the floor and he claimed for injury and damages.
The Pacific Rim Field Lacrosse Association, which operates under the auspices of the B.C. Lacrosse Association, was using the recreation centre for lacrosse practices at the time. Aviva is the lacrosse associations’ insurer.
Aviva issued a certificate of insurance to the associations for the period between Mar. 1, 2007 and Mar. 1, 2008 on a policy covering bodily injury and property damage arising out of lacrosse activities. Saanich is an additional insured under the policy.
Wright’s statement of claim, which contains allegations not proven in court, suggests Saanich was negligent in not warning people attending the dog obedience school of the dangers posed by the lacrosse practice.
Saanich demanded Aviva defend it in the action but Aviva refused to do so. Saanich brought a petition seeking an order requiring Aviva to defend the action on its behalf and to indemnify it for any damages it may be found liable to pay Wright.
A B.C. lower court found Aviva had a duty to defend Saanich.
Aviva appealed, arguing, among other things, that the lower court judge had incorrectly applied a test for determining coverage for no-fault insurance claims to a claim for coverage in respect of a third party allegation.
The insurer further argued that the judge mischaracterized the substance and true nature of Wright’s claim against Saanich, thus concluding liability on the part of Saanich could arise out of the associations’ lacrosse activities.
The Court of Appeal rejected Aviva’s arguments.
First, it noted the lower court judge did in fact consider whether or not an unbroken chain of causation linked the district to the activities of the lacrosse associations (such a chain of causation is required to determine the insurer’s duty to defend: it does not speak to whether Aviva must indemnify Saanich, which remains the subject of dispute).
Second, the Appeal Court argued, the judge did not mischaracterize the true nature of the claim against Saanich.
“There is, in the pleadings, a causation link between the alleged delict of Saanich and the injury to Mr. Wright,” the Appeal Court concluded. “The unbroken chain of causation, alleged in the pleadings encompasses both the actions of the unknown lacrosse player and the actions of Saanich that placed Mr. Wright in a position to be struck by the lacrosse ball….
“Consideration of the ‘errant’ aspect of the lacrosse ball intimately implicates the actions of Saanich.”