Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada

[Indexed as: Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada]

74 O.R. (3d) 79

[2004] O.J. No. 4641

Docket: C40975

Court of Appeal for Ontario,

Doherty, Moldaver and Gillese JJ.A.

November 12, 2004

• Application for leave to appeal to the Supreme Court of Canada was granted with costs to the applicant in any event of the cause May 19, 2005 (Bastarache, LeBel and Deschamps JJ.)

Insurance -- Insurer's obligation to defend -- Insurer providing insurance coverage to religious order in form of comprehensive general liability policy from 1988 to late 1994 -- Policy covering legal liability for damages for injury arising out of rendering or failure to render "professional services" -- Bodily injury caused intentionally by or at direction of insured excluded from coverage -- Specific claim by former student in early 1994 that he was abused at residential school operated by religious order and letter to insurer from order's lawyer reporting on other specific allegations of abuse constituting "claims" under policy -- Administration of school constituting "professional service" -- Coverage not negated by intentional acts exclusion -- Insurer having duty to defend claims -- Insurer not having duty to defend other claims which were not made or discovered during policy period.

NOTE: The catchlines above relate to a decision of the Superior Court of Justice. An appeal of this judgment to the Court of Appeal for Ontario (Doherty, Moldaver and Gillese JJ.A.) was dismissed on November 12, 2003 23199 (ON SC), 2004, 68 O.R. (3d) 178. The endorsement of the court was as follows:

Counsel:

W. Zimmerman and D. McLean, for appellant.

Vernol I. Rogers and Thomas J. Donnelly, for respondents.

Endorsement

[1] BY THE COURT:-- The respondent's duty to defend under the terms of its comprehensive general liability policy with the [page80] appellant depended on whether the claims made in the lawsuits were "first made against the insured during the policy period". The application judge's reasons reported at (2003), 2003 23199 (ON SC), 68 O.R. (3d) 178, [2003] O.J. No. 4534 (S.C.J.) set out the relevant factual background and the pertinent provisions of the policy.

[2] We agree with the application judge's description of the terms of the policy and with his application of the principles of interpretation set out in Reid Crowther and Partners Ltd. v. Simcoe & Erie General Insurance Co., 1993 150 (SCC), [1993] 1 S.C.R. 252, [1993] S.C.J. No. 10 to the terms of the policy. On that analysis, the appellant's knowledge of circumstances or prior events that could give rise to claims against the appellant for compensation at some point in the future could not be equated with a claim for the purposes of the insuring agreement provisions in the policy.

[3] We are satisfied that the application judge was correct in concluding that the alleged victims could not be said to have made a claim during the policy period. They had not been identified to the appellant, nor had they had any communication with the appellant. It cannot be said that there was a demand express or implicit for compensation during the policy period from these unidentified persons. As the application judge noted at para. 125 of his reasons:

A general understanding of a problem, in the absence of sufficient detail, will not constitute a "claim" within the policy.

[4] Consequently, when some of these unidentified individuals in fact sued the appellant, the respondent owed no duty to defend those actions.

[5] The appeal is dismissed. The respondent is entitled to its costs on a partial indemnity basis. In keeping with the submissions of counsel, we fix those costs at $30,000, inclusive of disbursements and GST.