ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 13-56679
DATE: 20130425
BETWEEN:
RIOCAN PROPERTY SERVICES INC. and RIOCAN MANAGEMENT INC.
Applicants
– and –
THE DOMINION OF CANADA GENERAL INSURANCE CO.
Respondent
Ryan D. Garrett, for the Applicants
Dawn Searle, for the Respondent.
HEARD: April 25, 2013
T.D.RAY, J
Reasons for Decision
[1] The applicants’ seek an order requiring the respondent, as their insurer, to defend or alternatively pay the costs associated with the defence to an action for damages for negligence in which they are named as co-defendants. The negligence action is for damages arising from a slip and fall on shopping centre premises owned and managed by the applicants. The applicants are named as additional insureds under a CGL policy in which the primary coverage is for Franick, a snow removal contractor, who had entered into a contract for snow removal with the applicants. (Franick is also a defendant in the negligence action). The coverage extended to the applicants in the CGL policy is limited to “the operations performed by or on behalf of “Franick. Those “operations” are prescribed in a contract for snow removal between the applicants and Franick- in particular schedule ‘A’ which lists the ‘service specifications and requirements’ and defines the scope of the contract.
[2] As a first order of business, the applicants sought and obtained an unopposed order amending the title of the proceeding in the Notice of Application to read “Riocan Property Services Inc, and Riocan Management Inc, Applicants”.
[3] The applicants’ position is that the respondent should pay at least 80% of their defence costs since the CGL coverage is broad enough to cover almost everything related to the claim.
[4] The respondent takes the position that while certain portions of the negligence claim fall within the scope of the policy, others do not; and it should not be obliged to pay more than 50% of the defence costs associated with those former parts.
[5] The terms of the CGL policy that is extended to the applicants are defined in the policy to be identical to the work required to be performed by Franick, as outlined in the contract.[^1]
[6] The Statement of Claim in the negligence action as against the applicants claims the plaintiff sustained a serious injury when he fell on a treacherous patch of ice in the (applicants’) parking lot. Particulars of negligence are pleaded.
[7] For the purpose of determining the liability of an insurer to defend, one must take the claims in the Statement of Claim as proven. In determining the scope of the insuring agreement, the provisions are to be given a generous interpretation in favour of Franick in accordance with the contra proferendum principle. However the insuring agreement is still limited by its language to the operations described in the contract that Franick is obligated to perform.[^2]
[8] A review of the particulars of negligence shows that there are clearly claims against the applicants which are beyond the scope of the Franick –Riocan agreement. For example, the claim against the applicants is as occupiers, a general obligation ‘to take care in all of the circumstances’. It may be that the terms of the Franick agreement would satisfy that duty; or it may not. At this stage not much is known about the factual foundation of the plaintiff’s claim other than the very broad allegation. Some further examples in the particulars of negligence which extend beyond the contractual obligations of Franick, include the following in paragraph 19:
c. They permitted the entrance of the premises to remain in an unsafe and dangerous condition and by reason of such state and condition to be in the nature of a concealed danger;
j. They failed to take such care as in all the circumstances was reasonable to ensure that the plaintiff was reasonably safe while on the premises;
k. They failed to implement, maintain and follow a procedure of regular inspection to ensure that the premises were maintained and kept reasonably safe for patrons and other users of same;
l. They failed to warn patrons of the premises and other users of same of the dangerous conditions then and there existing;
m. They failed to erect a barricade or some other device around the area to restrict or exclude patrons to protect the plaintiff and other users of the premises from the dangers then and there existing;
o. They failed to provide sufficient or adequately trained staff on duty to supervise and assist patrons and other users of the premises.
[9] Many of the rest of the allegations of negligence clearly fall within the scope of work of Franick, and therefore clearly within the CGL policy.
[10] I am satisfied that there is a sufficient basis for the applicants to be found liable independently of Franick and therefore outside the coverage of the CGL.[^3] This is a case where based on the pleading and the coverage that the respondent should be obliged to pay a portion of the applicants’ defence costs.
[11] At this preliminary stage of the proceeding, the respondent should pay 75% of the applicants’ defence costs as and when they are incurred. Perhaps a quarterly accounting would be best. If there is a disagreement as to the costs, then they may be assessed.
[12] I am mindful that this negligence case is only at the pleadings stage. No mediation or discovery has taken place. As the factual foundation becomes better known to the parties, the nature of the claims and the interests of the parties will likely change. It would therefore make sense to permit the applicants or the respondent to renew this application later in the proceeding – perhaps after discoveries- so that this order can be re-visited.
[13] If the parties cannot agree on costs, they may make submissions of two pages or less within 14 days, and with a further five days for replay.
Honourable Justice Timothy Ray
Released: April 25, 2013
COURT FILE NO.: 13-56679
DATE: 20130425
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RIOCAN MANAGEMENT INC. and RIOCAN PROPERTY SERVICES INC.
Applicants
– and –
THE DOMINION OF CANADA GENERAL INSURANCE CO.
Respondent
REASONS FOR DECISION
Honourable Justice Timothy Ray
Released: April 25, 2013
[^1]: Monenco Ltd v. Commonwealth Insurance Co., 2001 SCC 49.
[^2]: Nichols v. American Home Assurance Co., 1990 144 (SCC), [1990] 1 S.C.R. 801.
[^3]: Cadillac Fairview Corporation v. Olympia Sanitation Products Inc., 2010 ONSC 4309.