CITATION: Stewart v. TD General Insurance Company, 2014 ONSC 854

DIVISIONAL COURT FILE NO.: 13/454

DATE: 20140304

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

MATLOW, ASTON, DONOHUE, JJ.

BETWEEN:

Darren Stewart and Vanessa Miller

Plaintiffs/Appellants in Appeal

– and –

TD General Insurance Company

Defendant/Respondent in Appeal

Keith R. Millikin, for the Appellants

Dwain C. Burns and Cynthia Jones, for the Respondent

HEARD: October 3, 2013 in Hamilton

aSTON, j.

Nature of the Appeal

[1] The plaintiffs’ claim indemnification under their homeowners’ insurance policy for a loss due to the theft of marijuana plants which had been growing in their backyard.

[2] The defendant denied that the plants are “personal property” within the meaning of the policy but admitted limited liability is afforded to the plaintiffs under their “extended coverage” for “landscaping”. The defendant paid the limited coverage of $1,000 per plant, a total of $11,000 for the 11 stolen plants. It then brought a motion to dismiss the plaintiffs’ action on the basis that the policy afforded no other coverage. The plaintiffs brought a cross-motion, essentially for a declaration that their loss was an insured risk, without a limit on the amount payable per plant.

[3] The motions judge granted the defendant’s motion and dismissed the plaintiffs’ cross-motion. The plaintiffs appeal that decision. For the reasons that follow the appeal is dismissed.

Background Facts

[4] The plaintiffs are husband and wife. They own a residence in Rockwood, Ontario, the insured premises. In 1997, Mr. Stewart suffered severe and permanent injuries in a motor vehicle accident. As a consequence of his injuries, he suffered, and continues to suffer, physical disabilities and severe and intractable pain. Mr. Stewart applied for and received Health Canada authorization to possess marijuana for his personal medical use and to cultivate marijuana for his personal use at the premises.

[5] On two separate occasions, once in 2009 and again in 2011, Mr. Stewart’s medical marijuana plants were stolen just prior to harvest. He claims for the loss of the plants on his homeowners’ insurance policy, a loss which he pegs at just under $50,000 for the replacement value of the plants.

[6] Mr. Stewart claims indemnification under the policy on the basis that the stolen plants were his “personal property” and that the plants in his backyard were “usual to the ownership or maintenance of a dwelling”. The relevant portions of the policy provide as follows:

COVERAGE

Coverage B – Personal Property (contents)

1. We insure the contents of your dwelling and other personal property you own, wear or use while on your premises which is usual to the ownership or maintenance of a dwelling.

EXTENSIONS OF COVERAGE

15. Trees, shrubs and plants

Trees, shrubs and plants being part of your landscaping on your premises. We will pay up to 5% of the limit of insurance applicable to your dwelling, subject to a maximum of $1,000 for any one tree, shrub or plant including debris removal. You are insured against loss cause (sic) by fire, lightning, explosion, impact by aircraft or land vehicle, riot, vandalism or malicious acts, theft or attempted theft.

PERILS EXCLUDED

We do not insure loss or damage:

8.Grow-op

arising directly or indirectly from the growing, manufacturing processing or storing by anyone of any drug, narcotic or illegal substances or items of any kind the possession of which constitutes a criminal offence. This includes any alteration of the premises to facilitate such activity whether you have any knowledge of such activity.

[7] The bold print is contained in the original. Aside from the headings, the words in bold print are terms defined in the policy. The definition of “dwelling” is the building occupied by the plaintiffs as their private residence. The “premises” includes more broadly the entirety of the land upon which the building is situate.

Standard of Review

[8] There are no contested facts. The interpretation of the policy of insurance in this case is a question of law and the standard of review on appeal is correctness.

Issues and Analysis

[9] Except perhaps inferentially, the motions judge did not address whether the stolen plants were “personal property” under Coverage B. In my view, this is the threshold consideration. It is only necessary to resort to the “Extensions of Coverage” in paragraph 15 if the loss is not already encompassed by the general provisions of Coverage B. The first issue is whether the stolen marijuana plants constitute “other personal property … on your [the insureds’] premises … usual to the ownership or maintenance of a dwelling”. If so, coverage is afforded under Coverage B unless excluded by some other provision in the policy.

[10] There is no other provision in the policy excluding coverage. The Grow-Op exclusion quoted above does not apply in this case because of Mr. Stewart’s Health Canada authorization to possess and cultivate the marijuana for his personal medical use. Paragraph 15 of the policy is not an exclusion of coverage; it is an extension of coverage.

[11] Do the stolen plants constitute personal property? Personal property is property other than real property, consisting of things only temporarily attached to the land or movable. Trees, shrubs and plants that are part of the landscaping of premises generally are not personal property. They grow in the ground and are attached to the soil in a manner that makes them part of the realty. Generally speaking, their location is not just temporary. If they are “real” property, Coverage B does not apply. That would seem to be the very reason that plants for landscaping are considered an “extension” of personal property coverage.

[12] While the marijuana plants are still attached to the soil, they may not fall within the category of personal property[^1]. For the purpose of defining the criminal act of theft, a theft occurs when the thief first begins to pull the plant out of the ground or detach it from the rest of the plant still attached to the ground[^2]. However, this is not a criminal case. In the context of determining insurance coverage for loss by theft, the material time is when the thief actually removes the plant from the premises. Until then, there is no loss. By the time the loss occurs, the thief has converted immovable property to movable property, from real property to personal property.

[13] In my view, the theft of the plants was a loss by theft of personal property “on your [the plaintiffs’] premises”. I disagree with the conclusion of the motions judge in paragraph 9 of his reasons that coverage does not include items that are not contained within the dwelling. The plain language of Coverage B is for “contents of your dwelling and other personal property … on your premises”. [emphasis added]

[14] However, there is another qualifier contained in Coverage B. The marijuana plants must be “usual to the ownership or maintenance of a dwelling”. The policy does not specify “your dwelling”. It reads “a dwelling”. The fact that marijuana plants might be usual to the ownership of Mr. Stewart’s dwelling because he is an authorized cultivator or marijuana is beside the point.

[15] Moreover, at the material times in this proceeding, fewer than one-third of one percent of the population of Canada were authorized to grow marijuana for their own medical purposes. It seems quite evident that marijuana plants in the backyard are not “usual to” the ownership or maintenance of a dwelling itself.

[16] I therefore agree with the conclusion of the motions judge that the loss does not fall within the ambit of Coverage B, albeit for a different reason.

[17] As a consequence, I also