COURT OF APPEAL FOR ONTARIO
FINLAYSON, WEILER and GOUDGE JJ.A.
BETWEEN:
ROBERT MURPHY ) Paul J. Bates, for the appellant
Plaintiff )
(Appellant) )
–and– )
LLOYD’S OF LONDON and ) Mark B. Harrington, for the
M.J. OPPENHEIM in his quality as ) respondents
Attorney in Canada for the Non-Marine )
Underwriters, Members of Lloyd’s, )
London, England )
Defendants )
(Respondent) )
) Heard: October 10, 2000
On appeal from the judgment of Justice Robert A.F. Sutherland dated December 2, 1996.
FINLAYSON J.A.:
1The plaintiff Robert Murphy appeals from the judgment of Sutherland J. dismissing his action against Lloyd’s of London on an insurance policy.
2Murphy was the owner of a horse named “Big Brat”. It was insured for $57,000.00 by certain underwriters at Lloyd’s, London England, under a policy of insurance covering Livestock Mortality and Specified Perils. Big Brat had been purchased for Murphy by Joseph Hudon (“Hudon”), a highly successful harness racing trainer and driver, at an auction in Pennsylvania for $44,000.00 (U.S.). Hudon stabled, trained and raced Big Brat for Murphy from Hudon’s farm near Rockwood, Ontario.
3In his first nine races after being purchased by Murphy, Big Brat was “in the money” eight times, earning over $20,000. Murphy hoped that, with Hudon training and racing Big Brat, the horse could be put out for stud with an excellent record.
4On February 13, 1993, Hudon and his entire staff were at a race meet at Greenwood Raceway in Toronto. Murphy was out of the country. Big Brat, along with a number of other horses, remained at the Rockwood farm. No one remained behind with the horses. Hudon and his staff returned to the farm in Rockwood between 6:30 p.m. and 7 p.m. on February 13, 1993. Upon checking the horses, Hudon noticed that Big Brat was showing signs of colic and severe discomfort. Big Brat was examined by a veterinarian at the farm, then taken immediately to the Large Animal Clinic of the Ontario Veterinary College at the University of Guelph. The veterinary staff at the Large Animal Clinic cared for Big Brat for some three hours after his arrival. He died at approximately 11:45 p.m. on February 13, 1993.
5The post-mortem examination performed by Dr. Peter G. Little, Professor of Pathology at the University of Guelph, revealed lesions in Big Brat’s digestive tract, suggesting the presence of a toxic agent introduced into the stomach. Bruising of the epiglottis indicated that something, possibly a tube, had been forced down the horse’s throat. The lungs contained a significant amount of fluid and the windpipe was full of froth. There was extensive damage to the capillaries of the lungs. There were no gross lesions in the mouth or brain. This suggested to Dr. Little that the horse died of a severe pulmonary edema resulting from its struggle with the effects of a toxic agent that had been forced down its throat by way of a rubber tube.
6Samples collected from Big Brat were sent to the National Poisons Unit at New Cross Hospital, a unit of Guy’s Hospital in London, England. The results of the test showed that the horse’s tissue contained astounding levels of bismuth. Ivan House, an analyst of substances for traces of poisons, expressed the opinion that a lethal dosage of bismuth (a few grams) had been introduced into the horse’s stomach.
7Relevant provisions of policy
8A. MORTALITY
Q
WE will insure the livestock against death which results, directly/and or directly from:
accident
illness; or
death.
V. EXCLUSIONS
WE will not cover any loss resulting directly or indirectly from:
- administration of drugs, medication or inoculation, unless:
a. required because of accident, illness or disease; and
b. administering by or at the direction of a licensed veterinarian.
- malicious, wilful or intentional acts or omissions by:
a. YOU [the insured]; or
b. YOUR employees or bailees.
Reasons of trial judge
9The trial judge excluded the application of s.7 by his findings that:
Exclusion 7 applies where there are malicious, wilful or intentional acts or omissions by the insured or his employees or bailees. It was submitted on behalf of the defendants that, given the evidence suggesting that Joe Hudon had raced horses that were tired or unfit although he elsewhere protested that he had never done so, it was open to me to dismiss the case on the basis of Exclusion 7 by finding that Hudon, a bailee, had caused the death of Big Brat by a malicious, wilful or intentional act.
I observe that there is no evidence whatsoever against the insured, Robert Murphy, in this regard.
As to Hudon, a finding of malicious, wilful or intentional destruction of a theretofore successful horse owned by an important customer with whom Hudon had a good and important relationship, would require cogent evidence.
10In dismissing the action, the trial judge relied on the exclusion in s.3. He stated:
The defendants having brought themselves within Exclusion 3 from the coverages of the Insurance Policy, and the plaintiff not having brought himself within any of the exceptions to Exclusion 3, the Insurance Policy does not cover the loss and so judgment will go for the defendants dismissing the action, with costs to the defendants.
11The trial judge made the following findings of fact with respect to the nature and medical uses of bismuth:
I find, based on the uncontradicted evidence of Dr. Kadar, that bismuth is a heavy metal found in nature, usually in association with lead and zinc. Bismuth salts usually occur or are made by the dissolving of bismuth in an acid. Medical applications include treatment of syphilis, skin bacteria and gastrointestinal disorders, including indigestion and diarrhoea. In North America its best known application is in the patent medicine known as Pepto-Bismol, used to treat indigestion and diarrhea.
12However, the trial judge expressly found that there was no evidence that any Pepto-Bismal or similar type product was administered to Big Brat. In commenting on an opinion letter written by Dr. Daniel W. Duncan, a veterinary surgeon retained as an expert by the respondent insurer, the trial judge said:
I accept that, as stated in Dr. Duncan’s letter, bismuth in the form of, or a form akin to, the commercial product Pepto Bismal can be used for treating diarrhea and gastroenteritis in horses but to focus on that in this case as if only routine dosages had been administered is to ignore the evidence of the extremely high concentrations of bismuth found in the stomach of Big Brat. Moreover, there is no evidence of the administration of a Pepto Bismal-like substance in this case. Hudon said he did not do it. There is no report of it having been administered at the University of Guelph. I do not believe a Pepto Bismal type of substance would have been administered at Guelph University without Dr. Kenney knowing about it, or that Dr. Kenney would have failed to disclose it to the court if he had known about it.
13In making his finding with respect to the application of s.3, the trial judge relied upon a few lines from the expert testimony of Dr. Deszo Kadar, a pharmacologist. Dr. Kadar stated that “the probability is that the compound administered was bismuth”. [Emphasis by the trial judge.] Based on the use of this term by the witness, the trial judge found that the insurer had brought itself within the exclusion to the policy. Implicitly, he found that it did not matter who had given the bismuth to the horse or for what purpose in order for the exclusion to apply.
Analysis
14In my opinion, once the trial judge found as a fact that s.7 of the exclusion did not apply, he should have given judgment in favour of the appellant for the face value of the policy. This horse was clearly poisoned by some person and on the finding of the trial judge that person was not the insured or any person acting on his authority. Accordingly, as between the parties to the policy, the death of Big Brat was an accident and was an event insured against. It was an event that took place without the foresight or expectation of the parties and was not reasonably foreseeable. It was “an unlooked-for mishap or an untoward event which [was] not expected or designed”: see Fenton v. J. Thorley & Co., [1903] A.C. 443 (H.L.) at p.448, approved by the Supreme Court of Canada in Stats v. Mutual of Omaha Insurance Co., 1978 CanLII 38 (SCC), [1978] 2 S.C.R. 1153.
15Resort to s.3 of the exclusions was misconceived. I cannot accept that the poison forced down this horse’s mouth could be classified as a drug or a medication nor could it be said that it was administered in the normal context of the expression “administration of drugs, medication or inoculation”.
16The definition of “administer” in the Shorter Oxford English Dictionary, 3rd ed. (Oxford: Clarendon Press, 1991) includes:
- To apply, as medicine, etc. 1541. 5. Hence fig. To dispense, give (anything beneficial; also (joc.) a rebuke, a blow, etc.) to 1489; intr. to minister to 1712.
17In Dorland’s Illustrated Medical Dictionary (Toronto: W.B. Saunders Company, 1994), the definition of “drug” is set out as follows:
- any chemical compound that may be used on or administered to humans or animals as an aid in the diagnosis, treatment, or prevention of disease or other abnormal condition, for the relief of pain or suffering, or to control or improve any physiologic or pathologic condition. 2. a narcotic.
18In my opinion, the intention of the exclusionary clause, that is to say s.3, is to exclude liability where drugs, medication or inoculation are given for a beneficial purpose but not by or at the direction of a veterinarian. It is not intended to exclude the giving of a substance that is designed to injure or destroy the animal. That is excluded by s.7.1 Accordingly, the trial judge’s reliance on s.3 is in error on two levels. The word “administration” within the meaning of the clause must refer to the prescribing for or the giving of a dosage of some substance that the administrator believes to be beneficial to the animal and the word “drugs” must refer to substances in the nature of medicines, not some lethal substance that can be a component of a medicine.
19The onus is on the insurer in the case in appeal to demonstrate that this poison – bismuth – was given to the horse for medicinal purpose. It has failed to do so.
20Accordingly, the appeal is allowed, the judgment is set aside and judgment should be entered below awarding damages to the appellant in the agreed amount of $57,000 plus prejudgment interest. The appellant is entitled to his costs both here and below.
Released: OCT 24 2000 Signed: “G.D. Finlayson J.A.”
GDF “I agree K.M. Weiler J.A.”
“I agree S.T. Goudge J.A.”
