COURT OF APPEAL FOR ONTARIO

CITATION: Chynoweth v. Economical Mutual Insurance Company, 2008 ONCA 643

DATE: 20080922

DOCKET: C47040

Laskin, Sharpe and Epstein JJ.A.

BETWEEN:

James Chynoweth

Applicant (Respondent/ Appellant by way of cross-appeal)

And

Economical Mutual Insurance Company

Respondent (Appellant/ Respondent by way of cross-appeal)

Mario R. Pietrangeli and Tyler P. Dellow, for the appellant/respondent by way of cross-appeal

Christopher J. McKibbin and Jamieson Halfnight, for the respondent/appellant by way of cross-appeal

Heard and released orally: September 17, 2008

On appeal from the order of Justice Margaret A.C. Scott of the Superior Court of Justice, dated April 5, 2007.

ENDORSEMENT

[1] This is a duty to defend appeal. The main issue is whether the application judge erred in concluding that the allegations in the statement of claim, if proved, fall within the scope of the policy. In our view, the application judge did err. We accept, of course, that the duty to defend will be triggered if there is a possibility of coverage. However, we see no possibility of coverage on the basis of the allegations in this statement of claim.

[2] The insuring agreement covers personal injuries but only those “arising out of the conduct of your business”. The “offences” alleged in the statement of claim are personal injuries as defined in the policy. But these personal injuries do not arise out of the conduct of the respondent’s business.

[3] The allegations in the statement of claim refer entirely to a family matter between the respondent, and his daughter and now son-in-law who are the two plaintiffs. The fact that the plaintiffs were employed in the business is not by itself enough to trigger the duty to defend. Nothing else in the pleadings connects the plaintiffs’ claim to the respondent’s business. Accordingly, the appellant insurer has no duty to defend.

[4] The appeal is allowed and the cross-appeal is dismissed. The judgment of Scott J. is set aside and the application is dismissed. The appellant is entitled to its costs of the application and the appeal, in the total amount of $12,000, all inclusive.

“John Laskin J.A.”

“Robert J. Sharpe J.A.”

“G. Epstein J.A.”