Canadian Universities' Reciprocal Insurance v. Halwell Mutual Insurance Company et al.

[Indexed as: Canadian Universities' Reciprocal Insurance v. Halwell Mutual Insurance Co.]

61 O.R. (3d) 113

[2002] O.J. No. 3306

Docket No. C31352

Court of Appeal for Ontario

McMurtry C.J.O., Borins and Feldman JJ.A.

August 30, 2002

Insurance -- Equitable contribution -- Student injured during university residence-sponsored freshman orientation activity -- Student sued university and student president of residence -- Appellant insuring university under general liability policy -- Respondent providing homeowners' policy to parents of residence president -- Appellant settling lawsuit and seeking contribution from respondent on behalf of residence president -- Respondent has no duty to contribute -- Respondent's policy excluding claims arising from business -- Business exclusion applying to residence president's activities.

W was president of a university residence. He received an honorarium of $3,251.47 for the performance of his duties as president. One of his responsibilities was to oversee the residence's freshman orientation activities. In the course of one of those activities, a student was seriously injured. The student sued the university and W, among other defendants. The appellant provided a general liability policy covering the university and all of its agents. The respondent provided a homeowners' policy to W's parents. W lived with his parents during the summer and went home at Christmas, but lived in the residence during the school year. The respondent's policy covered the named insured, his or her spouse and relatives of either who lived in the household. It excluded claims arising from business, which was defined to mean "any continuous or regular pursuit undertaken for financial gain including a trade, profession or occupation". The policy provided"If you have other insurance which applies to a loss or claim, or would have applied if this policy did not exist, our policy will be considered excess insurance [page114] and we will not pay any loss or claim until the amount of such other insurance is used up." The appellant's policy provided that "This policy shall not apply to that portion of any claim made or suit brought against the Insured which is insured by another valid and collectible policy or policies of insurance, whether primary or excess, nor shall [the appellant] be liable to make any payment in connection with any such portion of a claim or suit." The appellant settled the lawsuit on behalf of all the defendants and sought contribution from the respondent on behalf of W. The trial judge found that the respondent had no obligation to contribute and dismissed the appellant's claim. The appellant appealed.

Held, the appeal should be dismissed.

The six principles which govern when the right of contribution arises are: 1) All the policies concerned must comprise the same subject-matter. 2) All the policies must be effected against the same peril. 3) All the policies must be effected by or on behalf of the same assured. 4) All the policies must be in force at the time of the loss. 5) All the policies must be legal contracts of insurance. 6) No policy must contain any stipulation by which it is excluded from contribution. In this case, three of those requirements were in issue, numbers (1), (3) and (6). W clearly had two residences at the time of the accident. He had established a pattern of living in the university residence during the school year and at his parents' home on holidays and in the summers. He treated his parents' home as his home base and had not moved anywhere permanent on his own. Accordingly, W was an assured under the respondent's policy at the time of the accident. Therefore, the requirement that both policies must be effected by or on behalf of the same assured was satisfied.

As residence president, W was engaged in "any continuous or regular pursuit undertaken for financial gain including a trade, profession or occupation". He was paid an honorarium for carrying out his responsibilities, and he testified that he would not have sought the position if it had not been for the pay. He was engaged in carrying out his duties at the time of the accident, and it was his alleged failure in that regard which caused him to be named in the action. The respondent's policy did not apply to W for this particular claim because of the business exemption. Accordingly, there was no concurrence of coverage between the two policies. On that basis, the appellant was not entitled to equitable contribution from the respondent.

The following three propositions form the basis of interpreting and applying "other insurance" clauses contained in two applicable insurance policies: (1) if the two clauses are irreconcilable and effectively cancel each other out, then both insurers are liable and must share the obligation rateably as between themselves; (2) however, if the two clauses can be read as working together so that they do not effectively cancel each other out, then the policies apply as they are stated with one primary and the other excess or excluded as the case may be; (3) and in interpreting the policies, one determines the intent of each insurer by an examination of the policy language and not by otherwise attempting to determine the subjective intentions of the insurers. The only issue for a court when considering the effect of "other insurance" clauses is to interpret the language of the clauses. The court is not to look at other evidence to determine the intentions of the respective insurers to provide or not provide primary insurance coverage in any particular situation. The trial judge in this case concluded that the two "other insurance" clauses could be reconciled, and that he did not have to hold that they cancelled each other out. In light of the conclusion that the appellant was not entitled to equitable contribution from the respondent because of the applicability of the business exclusion in the respondent's policy, the issue of how the particular [page115] language of the two "other insurance" clauses in this case might or might not fight together did not have to be decided.

APPEAL from a judgment dismissing a claim for equitable contribution.

Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, 212 D.L.R. (4th) 193, 288 N.R. 373, [2002] I.L.R. 1-7579, apld Harris (Litigation Guardian of) v. Pilot Insurance Co. (1997), 1997 4436 (ON CA), 34 O.R. (3d) 633, [1997] I.L.R. 1-3473, 30 M.V.R. (3d) 112 (C.A.), 8 O.R. (3d) 645, [1992] I.L.R. 1-2844 (Gen. Div.); Wawanesa Mutual Insurance Co. v. Bell, 1957 16 (SCC), [1957] S.C.R. 581, 8 D.L.R. (2d) 577, [1957] I.L.R. 1-273, consd Other cases referred to Arsenault v. Fitzgerald (1985), 1985 4186 (NB QB), 66 N.B.R. (2d) 232, 169 A.P.R. 232, 17 C.C.L.I. 58 (Q.B.); Godin v. London Assce. Co. (1758), 1 Burr. 489, 97 E.R. 419, 2 Keny 254, 1 Wm. Bl. 103; McGeough v. Stay 'N Save Motor Inns Inc. (1994), 1994 3263 (BC CA), 92 B.C.L.R. (2d) 288, 116 D.L.R. (4th) 137, [1994] 8 W.W.R. 295, [1995] I.L.R. 1-3122 (C.A.) (sub nom. McGeough v. O'Donals Restaurant of Canada Ltd.); Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., 1993 150 (SCC), [1993] 1 S.C.R. 252, 83 Man. R. (2d) 81, 99 D.L.R. (4th) 741, 147 N.R. 44, 36 W.A.C. 81, [1993] 2 W.W.R. 433, [1993] I.L.R. 1-2914; Seagate Hotel Ltd. v. Simcoe & Erie General Insurance Co. (1981), 1981 426 (BC CA), 27 B.C.L.R. 89, [1982] I.L.R. 1-1470 (C.A.), affg (1980), 1980 671 (BC SC), 22 B.C.L.R. 374, [1980] I.L.R. 1-286 (S.C.); Simcoe & Erie General Insurance Co. v. Kansa General Insurance Co. (1994), 1994 1741 (BC CA), 93 B.C.L.R. (2d) 1, [1994] 9 W.W.R. 712, [1994] I.L.R. 1-3110 (C.A.) [Leave to appeal to S.C.C. refused (1995), 188 N.R. 400], revg (1992), 1992 12844 (BC SC), 69 B.C.L.R. (2d) 54, [1992] 6 W.W.R. 77, [1992] I.L.R. 1-2855 (S.C.); Weddell v. Road Transport and General Insurance Co., [1932] 2 K.B. 563, [1931] All E.R. Rep. 609, 101 L.J.K.B. 620, 14 L.T. 162, 48 T.L.R. 59, 75 Sol. Jo. 852, 41 L.T.L. Rep. 69 Authorities referred to Ivamy, E.R.H., General Principles of Insurance Law, 6th ed. (London: Butterworths, 1993)

Patrick J. Monaghan, for appellant. Theodore H. Rachlin, Q.C., for respondent.

The judgment of the court was delivered by

Introduction

1FELDMAN J.A.: -- The issue in this case involves a university student residence president who was sued, along with other university officials, as a result of a very unfortunate accident that occurred during freshman orientation week in 1991 in which another student suffered serious injury. The appellant, Canadian Universities' Reciprocal Insurance ("CURIE"), provided a general liability policy covering the university and all of its agents, while the respondent, Co- operators General Insurance Company ("Co-Operators"), provided a homeowners' policy to the parents of the residence president. CURIE settled the lawsuit on behalf of all the defendants in the action brought by the injured student and [page116] sought contribution from Co-Operators on behalf of the residence president. Co-Operators denied coverage and denied any obligation to contribute.

2The trial judge agreed with Co-Operators and dismissed CURIE's claim. For the reasons which follow, I would dismiss the appeal.

Facts

Facts

3Brian Wilson grew up living with his parents in their home in Orillia. In 1988, he began McMaster University as a freshman, and lived in residence at Edwards Hall. He was active in residence affairs and returned to live in residence for each of his four undergraduate years. In February 1991, he was elected president of Edwards Hall for the 1991-92 year. In that position, he lived in the best room at Edwards Hall and received an honorarium of $3,251.47 for the performance of his duties as president. One of his responsibilities was to oversee the Welcome Week activities for freshmen and to ensure that those activities were safe and reasonable.

4In 1990, Brian Wilson had been one of the persons responsible for the freshman activities during the Welcome Week at the residence. He was the senior resident in charge of the mud puddle slide event, an event that had been part of the freshman week activities for several years, was known to University authorities and had been the subject of some controversy because of safety concerns.

5In 1991, another student, Vaughan Marshall was the senior resident in charge of the Welcome Week activities for Edwards Hall. His assistants for the mud slide event were Gino Melo and Kurt Zammit. Brian Wilson had provided them with instructions and safety precautions regarding that event.

6Brian Wilson was present on September 6, 1991, observing the mud slide event as part of a small crowd of observers. When some freshmen received applause from running and sliding, Marshall and Melo intervened and directed the participants not to run, but to lower themselves into the mud from a push-up position. The trial judge found that although he could have intervened further, Wilson was satisfied that Marshall and Melo had the matter safely in hand.

7Although the running and sliding stopped, some freshmen were still trying to amuse the crowd. When Mark Woitzik took his turn, he attempted a pike or jackknife dive. Unfortunately, his chin struck the ground, resulting in a spinal cord injury which left him a partial quadriplegic.

8Mr. Woitzik and his family sued the University as well as a number of individual university officials, both staff and students, for failing in their duty to take reasonable care for Woitzik's safety by allowing the orientation activities to proceed in a dangerous [page117] manner. The defendants included Vaughan Marshall and Brian Wilson. The University and all of its agents were insured under a general liability policy issued by CURIE which provided coverage of $15 million per occurrence. CURIE defended the action on behalf of all the defendants and ultimately reached a settlement with the plaintiffs for $800,000 plus $75,000 for costs.

9During the currency of the lawsuit, CURIE asked the individual defendants to put their personal insurers on notice of the claim. Brian Wilson's parents were insured under a homeowners' policy with Co-Operators in which they were named policyholders and which covered: "relatives . . . who live in your household". Co-Operators took the position that Brian was not covered by the policy, but that even if he was, the policy was excess insurance to the CURIE policy and therefore Co- Operators would not have any exposure. Co-Operators did some investigation of the incident with Brian Wilson and maintained a watching brief, but denied any duty to defend or to contribute.

10Wellington Insurance eventually took over the defence on behalf of Vaughan Marshall. However, the terms of any contribution it may have made were not disclosed.

11In the action, CURIE claimed that Co-Operators should contribute one-eighth of the settlement amount on the basis that liability should be split among the University (including all University officials), Marshall, Melo and Wilson, and that Wilson's one-quarter share be contributed one-half by CURIE and one-half by Co-Operators on the basis of the doctrine of equitable contribution between insurers.

12Co-Operators' position was that its policy did not cover Brian Wilson because: (1) he did not live in his parents' household at the time; (2) there is an exclusion in the policy for claims arising from business, and Brian was engaged in a business as defined; (3) the policy is only excess insurance to the CURIE policy and therefore the doctrine of equitable contribution did not apply; and (4) the amount of the settlement was unreasonable. In this court, the respondent also added that there is no basis to divide the liability four ways when there were 11 defendants and no basis had been determined at trial or on the settlement for properly apportioning liability.

The Terms of the Insurance Policies

A. The Co-Operators Home-Guard policy

The Terms of the Insurance Policies

13The policy was issued to Mr. and Mrs. Wilson, Brian's parents. Section II deals with liability coverage. The persons covered are: [page118]

(a) the person(s) named as Insured, and

(b) his or her spouse and relatives of either who live in your household.

The Legal Liability undertaking is set out as follows:

We will pay all sums for which you become legally responsible as compensatory damages because of unintentional bodily injury or property damage up to the limit of insurance stated on Page 1. ($1,000,000)

There are listed exclusions including the following business exclusion:

You are not insured for claims arising from: . . . your business . . .

The term "business" is defined to mean:

any continuous or regular pursuit undertaken for financial gain including a trade, profession or occupation.

Finally, there is a clause dealing with other insurance which provides:

Insurance Under More Than One Policy

If you have other insurance which applies to a loss or claim, or would have applied if this policy did not exist, our policy will be considered excess insurance and we will not pay any loss or claim until the amount of such other insurance is used up.

B. The CURIE policy

14The CURIE policy is a comprehensive general liability policy covering McMaster University, its employees and volunteers with respect to "acts performed on behalf of the University" which include failure or omission to act.

15The "Other Insurance" provision reads:

OTHER INSURANCE

This policy shall not apply to that portion of any claim made or suit brought against the Insured which is insured by another valid and collectible policy or policies of insurance, whether primary or excess, nor shall CURIE be liable to make any payment in connection with any such portion of a claim or suit.

The Doctrine of Equitable Contribution

The Doctrine of Equitable Contribution

16The doctrine of equitable contribution between insurers was the subject of the recent decision of the Supreme Court of Canada in Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, 212 D.L.R. (4th) 193, where the court took the opportunity to clarify the law with respect to "overlapping insurance coverage and the proper approach to the reconciliation of disputes among two insurers, each of whom has sought [page119] to limit its liability where other insurance covers the same loss" (para. 1). [See Note 1 at end of document]

17The court reviewed the history of the doctrine and the different approaches to determining in what circumstances there will be equitable contribution and in what circumstances the insurance policies can be reconciled to operate together. Therefore, I will summarize the relevant principles only.

18The doctrine was first enunciated by Lord Mansfield C.J. in 1758, [See Note 2 at end of document] that where more than one insurer is liable for a claim, they must share the obligation pro rata. The insured may choose which insurer to call on to satisfy the obligation to him or her and that insurer may look for indemnity to the other insurer or insurers who are also liable for the same loss. The six principles which govern when the right of contribution arises are set out in Ivamy's General Principles of Insurance Law, 6th ed. (London: Butterworths, 1993), at p. 518:

1. All the policies concerned must comprise the same subject-matter.

2. All the policies must be effected against the same peril.

3. All the policies must be effected by or on behalf of the same assured.

4. All the policies must be in force at the time of the loss.

5. All the policies must be legal contracts of insurance.

6. No policy must contain any stipulation by which it is excluded from contribution.

19In this case, three of the requirements for contribution are in question. The first is number (3), whether both policies cover the same assured. Co-Operators takes the position that Brian Wilson did not live in the household of his parents at the relevant time and therefore was not covered under that policy. The second is number (1), whether both policies comprise the same subject matter. Co-Operators takes the position that the claim was excluded by the business exclusion because Brian Wilson was engaged in a continuous pursuit undertaken for financial gain as the residence president and was sued in connection with an alleged breach of his duty in that position. The third is number (6), whether one or both policies contain stipulations which exclude them from contribution. These are the "other insurance" provisions in both policies, and the issue is whether they cancel [page120] each other out requiring each insurer to contribute half, or whether they can live together and govern which insurance is primary and which is excess.

Issue 1: Did Brian Wilson live in his parents' household in September, 1991?

Issue 1: Did Brian Wilson live in his parents' household in September, 1991?

20Brian Wilson lived with his parents until he began University. He lived in residence for the first three years of university and was back for his fourth year. During the summers he returned to his parents' home to live and work. He also returned home for the Christmas holidays and at other times. When he came home, he stayed in his former bedroom, although it had been converted to a study and guest room. The trial judge noted that it was unclear on the evidence whether he came home again after the 1991 summer vacation. Brian Wilson testified that by the time of the accident, he considered the residence, Edwards Hall, to be his home and did not think of himself as a member of his parents' household.

21The trial judge made no final determination of this issue, as he was able to decide the case on the other two grounds. In his discussion of this issue, he referred to the accepted principle stated by the Supreme Court of Canada in Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., 1993 150 (SCC), [1993] 1 S.C.R. 252, 99 D.L.R. (4th) 741, that "coverage provisions should be construed broadly", to the decision of this court in Harris (Litigation Guardian of) v. Pilot Insurance Co. (1997), 1997 4436 (ON CA), 34 O.R. (3d) 633, 30 M.V.R. (3d) 112 (C.A.) which discussed the meaning of the term "resident", and to the case of Wawanesa Mutual Insurance Co. v. Bell, 1957 16 (SCC), [1957] S.C.R. 581, 8 D.L.R. (2d) 577 which considered the meaning of the term "household".

22In Harris v. Pilot, the issue was whether an 18-year-old child of divorced parents resided with his mother at the date he was in a car accident. The relevant provision of the insurance policy extended coverage to: "any relative of the named insured . . . who resides in the same premises as the named insured". The court held that a person can have two residences if the person has a pattern of living part-time with one parent and part-time with the other. The court referred to the case of Arsenault v. Fitzgerald (1985), 1985 4186 (NB QB), 17 C.C.L.I. 58, 66 N.B.R. (2d) 232 (Q.B.) where the daughter of divorced parents spent the summers and holidays with her father but the school year with her mother. The court held that although she was physically at her father's home at the time of the fire, she had two residences, her father's place and her mother's place and therefore she was covered by [page121] her mother's policy. In the Harris case, however, after the Christmas holiday before the accident, the child had stopped returning from Florida to visit his mother in Ontario. His father lived in Florida and the child was working there. His pattern of returning had ended before the accident. The evidence of his intent for the future was unclear. The court included in its analysis the fact that there was no positive evidence of an intent to return that would contradict his actions. The court concluded in those circumstances, that it could not be said that he resided in both places at the relevant time.

23In the Co-Operators policy, the term used is "live", as opposed to "reside". I think it is fair to say that the two terms are effectively interchangeable in the context used. One of the definitions of "live" in the Shorter Oxford English Dictionary, 3rd ed., is "make one's home, dwell, reside; have its place".

24In the Wawanesa case, the issue was the meaning of the term "household" as used in the insuring agreement which covered not only the designated vehicle, but also a vehicle "not owned by . . . any person or persons of the household of which the Insured is a member", and which was used by the insured temporarily while his car was out of service. The insured was killed in an accident when he borrowed his brother's car without permission. The Supreme Court noted that the term "household" can have a flexible meaning, and that in any particular case, the meaning must be gleaned from interpreting its use in the policy of insurance using the rules of interpretation of contracts and of insurance policies, including that any ambiguity is to be resolved in favour of the insured. In that case, the court first considered the purpose of the exemption in the policy which was to prevent the interchange of cars by people within a family-type residence unit which would effectively allow one policy to cover two cars. In that context, the functional test was whether the insured, who occupied a room in his brother's house and paid board, had a relationship such that he was free to take his brother's car. The court concluded, based on all of the circumstances of their relationship, that he did not and therefore, although he was in the household, he was not a member of the household. The court interpreted the exemption narrowly in favour of the insured and held that the exemption did not apply.

25In my view, Brian Wilson clearly had two residences at the time of the mud slide accident. He had established a pattern of living in the university residence during the school year and at his parents' home on holidays and in the summers. Although his parents had made his bedroom useable for when he was not there, he still moved back into it when he was home. He treated his parents' home as his home base and had not moved anywhere [page122] permanent on his own. His situation is actually quite a common one for many, if not most university students of his age. Although in his evidence, Brian Wilson suggested that he considered the university residence his home, it is clear that such a place cannot be one's permanent home. Although it may have been in his interest to avoid having his parent's policy called on to respond to this claim, in circumstances where he may have needed coverage, it is in the insured's interest, and in the interests of most university students in his position, to have such a policy interpreted in the broadest fashion to provide coverage.

26I conclude that Brian Wilson was an assured under the Co-Operators policy at the time of the mud-slide accident. Therefore, the first condition for equitable contribution, that both policies cover the same insured person, is satisfied.

Issue 2: Is the claim excluded by the "business" exclusion in the Co-Operators policy?

Issue 2: Is the claim excluded by the "business" exclusion in the Co-Operators policy?

27The claim against Brian Wilson was covered by the CURIE policy which insured employees and volunteers who were performing functions on behalf of the university. The claim is also covered by the general assuring agreement contained in Schedule II to the Co-Operators policy covering liability for unintentional bodily injury, unless it is excluded by the business exclusion clause. The issue is, as residence president, was Brian Wilson engaged in "any continuous or regular pursuit undertaken for financial gain including a trade, profession or occupation"?

28The trial judge concluded that he was. I find no error in his analysis. Mr. Wilson was paid an honorarium of $3,251.47 for carrying out his responsibilities. He testified that he would not have sought the position if it had not been for pay. The pay was not the sole factor in his decision, but it was an important one. Mr. Wilson was engaged in carrying out his duties at the time of the accident, and it was his alleged failure in that regard which caused him to be named in the action.

29The trial judge's conclusion is also consistent with the intent of a homeowner's policy not to provide business coverage, which involves other risks than those anticipated by such a policy and which would have to be considered in the calculation of the appropriate premium. In this case the premium on the Co-Operators policy was $189 for six months (the premium on the CURIE policy was $59,835 for one year). Furthermore, one would expect that a business would provide its own liability coverage for employees and agents. In this case, the university provided that coverage in the context of its own operations. [page123]

30Although exemption clauses are to be construed narrowly against an insurer and in favour of an insured: Reid Crowther, supra, at p. 269 S.C.R., I am satisfied that the trial judge made no error in his construction of the business exemption clause in the Co-Operators policy and in his application of that provision to the facts in this case.

31Based on the finding that the Co-Operators policy does not apply to Brian Wilson for this particular claim because of the business exemption, there is no concurrence of coverage between the two policies. On that basis, CURIE is not entitled to equitable contribution from Co-Operators. Although the trial judge reached this conclusion which resulted in the dismissal of the action, he went on to consider the third issue, the relationship of the two "Other Insurance" clauses.

Issue 3: The "Other Insurance" clauses

Issue 3: The "Other Insurance" clauses

32In Family Insurance, the Supreme Court confirmed that where there is overlapping coverage and each insurer has attempted to limit its liability and place itself behind another insurer's obligation, the liability of the insurers is to be determined by their intentions as manifested by the terms of the respective policies. The court specifically rejected the so-called "Minnesota approach" which seeks to determine which insurer more clearly intended to cover the particular risk including such factors as the contemplated risks and the premium paid. The court concluded at paras. 27 and 28:

In effect, the Minnesota approach to resolution of overlapping coverage disputes results in the preference and endorsement of the intentions of one insurer over another. This result does not accord with the principles of equitable contribution nor does it respect the intentions of both insurers. The better approach is one that recognizes that the principles of contract interpretation must be applied here in light of the fact that the parties involved have not contracted with one another. Although the intentions of the insurers govern the interpretation exercise, the focus of the examination is to determine whether the insurers intended to limit their obligation to contribute, by what method, and in what circumstances vis a vis the insured. In the absence of such limiting intentions or where those intentions cannot be reconciled, principles of equitable contribution demand that parties under a coordinate obligation to make good the loss must share that burden equally.

33The court approved the Canadian approach which has followed the analysis first set out by Rowlatt J. in the case of Weddell v. Road Transport and General Insurance Co., [1932] 2 K.B. 563, [1931] All E.R. Rep. 609. There Rowlett J. said that where both policies seek to make themselves excess, in effect leaving no primary insurer, the clauses cannot cancel each other out to the detriment of the insured: "On the contrary the reasonable [page124] construction is to exclude from the category of co-existing cover any cover which is expressed to be itself cancelled by such co-existence, and to hold in such cases that both companies are liable, subject of course in both cases to any rateable proportion clause which there may be" (p. 567 K.B.). The Supreme Court noted that this approach had been followed, for example, in Simcoe & Erie General Insurance Co. v. Kansa General Insurance Co. (1994), 1994 1741 (BC CA), 93 B.C.L.R. (2d) 1, [1994] 9 W.W.R. 712 (C.A.); and McGeough v. Stay 'N Save Motor Inns Inc. (1994), 1994 3263 (BC CA), 92 B.C.L.R. (2d) 288, 116 D.L.R. (4th) 137 (C.A.).

34However, the Supreme Court also confirmed that this approach is only taken if there is a true impasse created by the wording of the two policies. If they can be reconciled so that one is primary and the other excess, then as "no mutual repugnancy exists . . . the process is simply one of giving effect to the intent of the insurers" (para. 33). This was the approach taken in Seagate Hotel Ltd. v. Simcoe & Erie General Insurance Co. (1980), 1980 671 (BC SC), 22 B.C.L.R. 374, [1980] I.L.R. 1-286 (S.C.); appeal dismissed (1981), 1981 426 (BC CA), 27 B.C.L.R. 89, [1982] I.L.R. 1-1470 (C.A.).

35I summarize the result of the Family Insurance Corp. v. Lombard Canada Ltd. decision as setting out three propositions which form the basis of interpreting and applying "other insurance" clauses contained in two applicable insurance policies:

(1) If the two clauses are irreconcilable and effectively cancel each other out, then both insurers are liable and must share the obligation rateably as between themselves.

(2) However, if the two clauses can be read as working together so that they do not effectively cancel each other out, then the policies apply as they are stated with one primary and the other either excess or excluded as the case may be.

(3) In interpreting the policies, one determines the intent of each insurer by an examination of the policy language and not by otherwise attempting to determine the subjective intentions of the insurers.

36Following this decision, the only issue for a court when considering the effect of "other insurance" clauses, is to interpret the language of the clauses. The court is not to look at other evidence to determine the intentions of the respective insurers to provide or not provide primary insurance coverage in any particular situation.

37The trial judge in this case concluded that the two "other insurance" clauses could be reconciled, and that he did not have [page125] to hold that they cancelled each other out. In light of my conclusion that CURIE is not entitled to equitable contribution from Co-Operators because of the applicability of the business exclusion in the Co-Operators policy, the issue of how the particular language of the two "other insurance" clauses in this case may or may not fit together need not be decided.

Conclusion

Conclusion

38It is also unnecessary to deal with the other issues relating to the reasonableness of the settlement and the proposed attribution of a quantum of liability to Brian Wilson.

39In the result, I would dismiss the appeal with costs. If the parties cannot agree on the amount of such costs, the respondent may submit a bill of costs with brief submissions within ten days and the appellant may respond within ten days thereafter.

Appeal dismissed.

Notes

Note 1: With the concurrence of counsel, the decision in this case was reserved to await the decision of the Supreme Court of Canada in Family Insurance Corp. v. Lombard Canada Ltd.

Note 2: Godin v. London Assce. Co. (1758), 97 E.R. 419 at p. 420, 1 Burr. 489.