COURT OF APPEAL FOR ONTARIO
RE: YIU CHEUNG POON also known as DANIEL POON, VIVIAN WONG, RICARDO HILARIO also known as RICK HILARIO, and ISABELITA HILARIO also known as LITA HILARIO (Plaintiffs/Appellants) –and– DAVID GORDON and DORA GORDON (Defendants) –and– GENERAL ACCIDENT ASSURANCE COMPANY OF CANADA (Third Party/Respondent)
BEFORE: FINLAYSON, CHARRON and SIMMONS JJ.A.
COUNSEL: Donald G. Cormack and Edward Sung-eun Kim, for the plaintiff/appellant Yiu Cheung Poon
Harvey Poss, Q.C., for the third party/respondent
HEARD: September 17, 2002
RELEASED ORALLY: September 17, 2002
On appeal from the judgment of Justice Arthur M. Gans of the Superior Court of Justice dated February 5, 2002.
E N D O R S E M E N T
1The main action and third-party action arise from an explosion that occurred on May 5, 1995 at the residential premises of the defendants located at 21 Calibre Court, Scarborough. The appellants/plaintiffs are owners of surrounding residential premises that were severely damaged from the explosion. The defendants David and Dora Gordon were the owners of 21 Calibre Court and were insured at the material time under a homeowner’s insurance policy issued by the respondent/third party that provided first party property coverage and third party liability coverage.
1[2] In the main action, the appellants claim against the defendants in negligence and nuisance for the property damage they sustained and the defendants deny that they were at all responsible for the explosion.
2[3] In connection with the explosion, the defendant, David Gordon, was convicted on 43 charges under the Criminal Code. The appellants do not dispute that the defendant, David Gordon, was so convicted. The defendant, Dora Gordon, was not charged with any offence under the Criminal Code.
3[4] The respondent insurer refuses to defend and indemnify the defendants for the claims made against them by the appellants. The respondent takes the position that coverage for both Gordon defendants is excluded under the terms of the homeowner’s insurance policy, as a result of David Gordon’s criminal conduct. The relevant portion of the policy reads as follows:
Loss or Damage Not Insured
You are not insured against claims for bodily injury to or damages to the property of others, . . .
- caused intentionally by you, at your direction, or by or through any criminal act or failure to act by:
a) any person insured by this policy; …
4[5] The Gordon defendants commenced a third-party claim against the respondent insurer for contribution and indemnity for any amount the defendants may be held liable to the appellants and for the costs of defending the main action and costs of the third-party claim. The defendants do not claim for a first party property loss against the respondent insurer.
5[6] The respondent insurer brought a summary judgment motion in the third-party action for a determination that it was not required to defend and indemnify the defendants under the terms of the homeowner’s insurance policy. Prior to the hearing of the summary judgment motion, the Gordon defendants and the respondent insurer arrived at an agreement as to judgment and, therefore, the defendants did not oppose the motion.
6[7] The appellants opposed the motion of the insurer in order to protect their rights of recovery against the respondent insurer under s.132 of the Insurance Act, R.S.O. 1990, c.I.8, in the event they obtained a judgment against the Gordon defendants that remained unsatisfied.
7[8] The motions judge declared as a fact that on the material before him it was conceded that the defendant David Gordon, by criminal act (arson), intentionally caused the gas explosion on May 5th, 1995 at 21 Calibre Court and that he did so with intent to defraud the respondent insurer and by virtue of this concession, neither of the Gordon defendants were entitled to coverage under the exclusionary terms of the insurance policy.
8[9] It was argued in this court that the motions judge was bound by the language of the appellants’ statement of claim in which they claimed against the Gordon defendants in negligence and nuisance and by the language of the statement of defence in which the Gordons simply denied that they were in any way responsible for the explosion. However, on a motion for summary judgment, the court can look beyond the pleadings and examine the facts. Since there was no triable issue that David Gordon had been convicted of a series of criminal offences arising out of his deliberate act in causing a gas explosion and fire in his own home, he was clearly bound by the language of the exclusion in the home owners policy. Calling his actions something else does not serve to avoid the clear and unambiguous language of the policy.
9[10] Dora Gordon is in a different position, but she is an insured within the meaning of the home owners policy and as such is excluded from coverage by the criminal acts of her husband. In this regard weagree with the disposition of the motions judge and his reasons as set out below:
In my opinion the language of the exclusion relied on is clear and unambiguous. Quite simply, it can only mean that Mrs. Gordon, although an insured by operation of the definition sections in the policy of insurance, is bound by the “misconduct” of her spouse. If I accede to the argument of Plaintiff’s counsel then the words “… any person insured by this policy …” would be meaningless, if not redundant, a result which Plaintiff’s counsel acknowledges is patently unreasonable. In my view support for the above conclusion, if such is necessary, can be drawn from the decision of Madam Justice L’Heureux-Dubé in Scott v. Wawanesa Mutual Insurance Co. (1989) 1989 105 (SCC), 59 D.L.R. (4th) 660 at 675-676.
In addition, I believe the decision of Riley J. in Wilkleson-Vaallente v. Wilkleson et al., [1996] I.L.R. 4130 (Ont. Gen. Div.) is of assistance to the moving party in this respect.
10[11] Accordingly, the appeal is dismissed with costs fixed at $10,000 all inclusive payable to the respondent insurer.
Signed: “G.D. Finlayson J.A.”
“Louise Charron J.A.”
“Janet Simmons J.A.”