Canadian Universities Reciprocal Insurance Exchange v. CGU Insurance Co. of Canada et al.

[Indexed as: Canadian Universities Reciprocal Insurance Exchange v. CGU Insurance Co. of Canada]

87 O.R. (3d) 672

Court of Appeal for Ontario,

Simmons, Cronk and Blair JJ.A.

September 25, 2007

Insurance -- Liability insurance -- Interpretation and construction -- Coverage under policy turning on whether judo club was "member club" of Judo Ontario -- Judo club a member of Judo Ontario in 1994/1995 but not taking steps to "re-register" for 1995/1996 by paying dues -- Injury occurring in 1996 -- Judo Ontario's by-law providing that member may resign by submitting resignation to secretary and that board may expel any member for non-payment of fees upon service of notice and after following specified procedure -- Judo club not having submitted resignation and Judo Ontario not having taken any steps to suspend or expel club for non-payment of fees -- Judo club continuing to be "member club" of Judo Ontario at time of injury.

L was injured in 1996 while sparring with a fellow classmate following formal judo class sessions at a university judo club (the "Club"). His claim was settled and paid by the plaintiff as the university's insurer. The plaintiff then brought an action seeking contribution to that settlement from the defendant, Judo Ontario's insurer. The trial judge found that the defendant's policy did not provide coverage in the circumstances. Coverage turned on whether or not the Club was a "member club" of Judo Ontario at the time of L's injury. The Club was a registered member of Judo Ontario for the academic year 1994/1995, but had not taken steps to "re-register" for the academic year 1995/1996 by paying fees. The trial judge found that the Club was not a "member club" at the time of the injury. The plaintiff appealed.

Held, the appeal should be allowed.

Under Judo Ontario's governing by-law, "members" are those admitted to membership by the Judo Ontario board of directors. The by-law makes no reference to "registration". A "member in good standing" means a person who is a member of Judo Ontario and who is not in arrears with regard to fees. Any member may resign by submitting his written resignation to the secretary, and the resignation becomes effective upon its acceptance by the board. The board may suspend and expel any member for being more than six months in arrears in the payment of fees, but only upon service of written notice, and after being given 30 days to cure the default. Members remain members until they resign or are suspended or expelled. Neither happened with respect to the Club. While the Club had not paid its fee for the 1995/1996 academic year, and hence was not "registered" in the eyes of Judo Ontario, it had not been given notice of its default or an opportunity to cure the default within 30 days. As a result, it was still a member, albeit not a "member in good standing". The defendant's policy provided coverage.

APPEAL from the judgments of Siegel J., 2005 28177 (ON SC), [2005] O.J. No. 3375, 27 C.C.L.I. (4th) 248 (S.C.J.) and 2006 7284 (ON SC), [2006] O.J. No. 950, 35 C.C.L.I. (4th) 39 (S.C.J.), dismissing an action for contribution to settlement of a claim.

Cases referred to Broadhurst & Ball v. American Home Assurance Co. (1990), 1990 6981 (ON CA), 1 O.R. (3d) 225, [1990] O.J. No. 2317, 42 O.A.C. 161, 76 D.L.R. (4th) 80, [1991] I.L.R. ÂI-2675 (C.A.) (sub nom. Guardian Insurance v. Gestas Inc.); Nichols v. American Home Assurance Co., 1990 144 (SCC), [1990] 1 S.C.R. 801, [1990] S.C.J. No. 33, 72 O.R. (2d) 799n, 39 O.A.C. 63, 68 D.L.R. (4th) 321, 107 N.R. 321, [1990] I.L.R. ÂI-2583 [page673] Statutes referred to [Courts of Justice Act, R.S.O. 19