Court File and Parties

ONSC 4631

COURT FILE NO.: CV-19-00619449-0000

DATE: 20190802

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Dr. Julie MacFarlane

Applicant

– and –

Canadian Universities Reciprocal Insurance Exchange

Respondent

Counsel:

Natalie C. MacDonald, for the Applicant

Thomas J. Donnelly/Joyce Tam, for the Respondent

HEARD: July 10, 2019

BEFORE: KIMMEL J.

REASONS FOR DECISION

[1] Dr. MacFarlane is being sued for defamation by a former colleague, Emir Crowne, in the High Court of Justice in Trinidad and Tobago. Dr. MacFarlane was at the material times, and still is, a Distinguished University Professor and Professor of Law at the University of Windsor’s Faculty of Law. Emir Crowne was employed as an associate professor with tenure at the University of Windsor when he left in December of 2015.

[2] Mr. Crowne is seeking a restraining order and damages and costs against Dr. MacFarlane for defamation (libel and slander) arising out of statements she made in 2017 and 2018 relating to the circumstances under which he left the University of Windsor Faculty of Law, specifically statements made to: (i) an Ontario law firm that he was formerly affiliated with, KPA Lawyers PC; (ii) the Dean of the University of the West Indies (Mona Campus) where Mr. Crowne was appointed as a senior lecturer in the Faculty of Law; and (iii) to the CBC (the Impugned Statements).

[3] The respondent, Canadian Universities Reciprocal Insurance Exchange (CURIE), issued General Liability Policy no. 1846L to the University of Windsor. It denies that it has a duty to defend Dr. MacFarlane on the basis that she does not fall within the definition of an “Additional Insured”. The University of Windsor is not named as a party and did not appear or take any position on this application.

[4] For the reasons that follow, I find that Dr. MacFarlane is an “Additional Insured” under the policy, at least insofar as the defamatory statements allegedly made to the Dean of the University of the West Indies (Mona Campus) where Mr. Crowne was appointed as a senior lecturer in the Faculty of Law. CURIE therefore has a duty to defend the defamation action launched by Mr. Crowne against Dr. MacFarlane in the High Court of Justice in the Republic of Trinidad and Tobago, CV-2019-00483 (the “Defamation Action”).[^1] I also find that CURIE’s duty to defend carries with it the right to appoint defence counsel.

The Insurance Policy

[5] CURIE acknowledges (in paragraph 33 of its factum) that, but for the “Additional Insured” issue, it would otherwise have had a duty to defend Dr. MacFarlane in that:

a. Clause 1.2 of the policy covers sums that the insured becomes legally obligated to pay as damages because of “Personal Injury” sustained during the policy period;

b. Clause 6.7 of the policy defines “Personal Injury” as including libel, slander and defamation of character (and humiliation); and

c. Mr. Crowne’s pleading seeks damages against Dr. MacFarlane for acts of alleged libel and slander (and defamation of character and humiliation).

[6] The definition of Additional Insured under clause 6.1(a) of the policy means the following additional interests:

Any officer, director, governor or member of directing or governing body, employee, post doctoral trainee, visiting scholar, shareholder or volunteer while acting on behalf of the Insured…with respect to acts performed on behalf of the Insured in that capacity. “Acts performed” shall include failure or omission to act;

[7] To fall within the definition of an “Additional Insured” under clause 6.1(a) of the policy, Dr. MacFarlane must have been at all material times an employee of the University of Windsor (which is not disputed) who was acting on behalf of the University of Windsor, and the claims against her must be with respect to acts performed on behalf of the University of Windsor in that capacity.

Issues to be Decided

[8] The determination of the “Additional Insured” issue depends on whether any of the claims in the Defamation Action raise even the possibility that Dr. MacFarlane was acting in her capacity as a professor employed by the University of Windsor, and on the University’s behalf, when she made the Impugned Statements relating to the circumstances under which Mr. Crowne left the University of Windsor Faculty of Law.

[9] If CURIE does have a duty to defend her, I have also been asked to determine whether Dr. MacFarlane has the right under the policy to retain and instruct counsel of her choice at CURIE’s expense.

Legal/Analytical Framework

[10] It is common ground that the duty to defend is based on the pleaded facts in the underlying litigation, which are assumed to be true: see R.W. Hope Ltd. v. Dominion of Canada General Insurance Co. (2001), 2001 21205 (ON CA), 57 O.R. (3d) 425 (C.A.), at para. 19.

[11] The “Pleadings Rule” starts with, but is not wedded to, the precise words of the statement of claim. The Supreme Court of Canada has said repeatedly that “what is determinative is the true nature or substance of the claim”, as opposed to the specific words or characterization chosen by the plaintiff: see Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, [2010] 2 S.C.R. 245, at para. 20; Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551, at paras. 50, 79 and 80; Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, [2001] 2 S.C.R. 699, at para. 35; Nichols v. American Home Assurance Co., 1990 144 (SCC), [1990] 1 S.C.R. 801, at p. 810.

[12] It is also common ground that the test is whether there exists “the mere possibility that a claim falls within the insurance policy”: see Virani and Keys v. Intact Insurance Company, 2014 ONSC 7369, at para. 9, citing Progressive, at para. 19, reversed on other grounds, 2015 ONCA 400, 50 C.C.L.I. (5th) 189, at para. 2

[13] All that the court must decide at this stage is “whether any of the properly pleaded, non-derivative claims could potentially trigger the insurer’s duty to defend”: see Scalera, at paras. 49 and 52.

[14] The parties agree that the exhibits attached to the Statement of Case in the Defamation Action form part of the pleadings and are properly considered in the coverage analysis. The Supreme Court of Canada in Cooper v. Farmer’s Mutual Insurance Co. (2002), 2002 44938 (ON CA), 59 O.R. (3d) 417 (C.A.), at para. 11, citing Monenco and R.W. Hope, has endorsed consideration of extrinsic evidence that has been explicitly cited or referred to by the parties in their pleadings, in order to “illuminate the substance of the pleadings”, but cautions against allowing the duty to defend application to become “a trial within a trial” and against making evidentiary findings that would affect the underlying litigation. Ultimately, the court should decide the issue of an insurer’s duty to defend by looking at the pleadings, the documents referred to in and underlying the pleadings and the insurance policy: see Halifax Insurance, at paras. 32, 35, 36 and 38.

The Statement of Case Pleaded Against Dr. MacFarlane – Facts Assumed to be Proven

[15] Mr. Crowne makes allegations in his Statement of Case against Dr. MacFarlane about statements that she made to three different organizations: (i) the law firm of KPA Lawyers with whom he was previously affiliated in Ontario; (ii) the University of the West Indies (Mona Campus); and (iii) the CBC. He also pleads that these were all part of an unrelenting campaign against him.

[16] These reasons focus on the statements made to the University of the West Indies (UWI), as it will be sufficient for purposes of triggering the duty to defend if Dr. MacFarlane is found to have been acting in her capacity as a professor on behalf of the University of Windsor when she made those statements. I do not propose to repeat the analysis with respect to the statements Dr. MacFarlane made to the other two organizations, or the allegation of her “unrelenting campaign”, since my decision would remain the same, regardless of whether I find she was acting on behalf of the University of Windsor when she made statements to those other organizations, or not.[^2]

[17] Mr. Crowne pleads the following in his Statement of Case with respect to the Impugned Statements made to UWI:

a. The Defendant [Dr. MacFarlane] is and was at all material times a lecturer at the University of Windsor, Faculty of Law in Ontario, Canada; [para. 3]

b. In January 2017 the Claimant took up an appointment as a Senior Lecturer in the Faculty of Law, University of the West Indies (Mona Campus); [para. 9]

c. By way of an email addressed to the Dean and copied to other officials and persons at the University of the West Indies, including lecturers at the St. Augustine Campus, the Defendant again made further false allegations against the Claimant, which were designed to bring the Claimant into odium and contempt:

i. The Defendant averred that the Claimant has been “terminated for misconduct including sexual misconduct”;

ii. That the Claimant had “harassed and stalked” a number of female students;

iii. That the Claimant had “a number of intimidating and threatening relationships with students;

iv. That some of the Claimant’s qualifications are bogus; and

v. That the Defendant had in respect of the Claimant “numerous accounts of other forms of misconduct and fraudulent manipulations of qualifications and publications.”

Said email communications will be disclosed at the time of the standard disclosure and relied on by the Claimant in these proceedings, some of which are hereto attached as a bundle and marked “C”. [para. 10]

d. This sustained campaign of emails and communications with the University of the West Indies caused the Dean of its Faculty of Law to commence an investigation into the allegations, which ultimately vindicated the Claimant. [para. 11]

[18] The collection of emails at Exhibit “C” to the Statement of Case, forming part of the pleading, include the following:

a. April 19, 2017 email from Dr. MacFarlane to Dean Leighton Jackson of the University of West Indies (Mona Campus) and copied to Tracy Robinson also of the University of West Indies Faculty of Law and John Knechtle of the University of the West Indies (Augustine Campus) about Emir Crowne and various concerns affecting students and faculty, in which she refers to his termination from the University of Windsor for misconduct including sexual misconduct. In this email, Dr. MacFarlane explains:

i. When contacted by Trinidad law school a year ago, I explained this (as did two of my other colleagues) to John Knechtle. As a result of this and their further investigations of Crowne, Trinidad did not hire him.

ii. I am alarmed and very concerned to see that he has persuaded another university law school to hire him under false pretences and warn you that he is a present danger to your students.

b. April 19, 2017 email from Dean Leighton Jackson to Dr. MacFarlane and copied to Tracy Robinson and John Knechtle indicating that prior to hiring Dr. Crowne he had reached out to St. Augustine, Trinidad and to the University of Windsor and its former Dean and that he had not received any negative information. Either there was no response, or the response was not negative, and Dr. Crowne was hired based on the recommendation that came from Windsor and other favourable recommendations received.

c. April 20, 2017 email from Dr. MacFarlane to Dean Leighton Jackson attaching shortened Crowne Chronology.

d. April 20, 2017 email from Dr. MacFarlane to Dean Leighton Jackson and copied to the President of the University of Windsor, Alan Wilderman, and the Provost of the University of Windsor, Douglas Kneale, repeating concerns that she had passed on to them and her “own dismay and shame that the University would morally compromise itself by knowingly passing on this person to you.”

e. April 24, 2017 email from Dean Leighton Jackson to Dr. MacFarlane, copied to Alan Wilderman and Douglas Kneale, correcting certain statements and confirming that he had never spoken to either the President or the Provost of the University of Windsor, but that he had unsuccessfully reached out to the Provost and therefore taken the letter from the Provost presented by Mr. Crowne as the official position of Windsor, which made no reference to any allegations or the reason for his separation from Windsor, and that there was silence from the former Dean whom he had contacted at the time. In this email, Dean Jackson indicated that “I am in the process of conducting a detailed investigation and hope that the University of Windsor can share its official position on the matter with me, which is what will ultimately control” and that he had been advised not to conduct a hearing into the matter that would risk a different conclusion or outcome from the one reached by the University of Windsor.

f. April 24, 2017 email from Dr. MacFarlane to Dean Leighton Jackson, copied to Alan Wilderman and Douglas Kneale, apologizing for any misunderstanding concerning who had been spoken to and responding to the suggestion that she was at fault for bringing turmoil to his faculty as the messenger. In this email, Dr. MacFarlane states that “For as long as institutions including universities pass on these types of serious problems to others, I shall feel a responsibility to inform colleagues about the risks of hiring a man that we know to be a predator.”

[19] Dr. MacFarlane used her University of Windsor email account for all of these emails (Julie. MacFarlane@uwindsor.ca) and signed each email she sent: Dr. Julie MacFarlane, Distinguished University Professor and Professor of Law at the University of Windsor.

Extrinsic Evidence Filed by the Applicant

[20] The Application record contains two affidavits that the respondent objects to. The first one is sworn by Dr. MacFarlane herself in which she states, among other things, that she was at all times acting during the course of her employment, on behalf of the University of Windsor in giving references and/or making statements with respect to Mr. Crowne with the sole objective of the safety of the students. One of the exhibits to this affidavit attaches an unsigned witness statement from John Knechtle (a Senior Lecturer at the Faculty of Law, University of the West Indies, St. Augustine, Trinidad). The second is an affidavit of a legal assistant that attaches an updated signed witness statement from John Knechtle.

[21] I agree with the respondent that Dr. MacFarlane’s affidavit is inadmissible extrinsic evidence based on the jurisprudence from the Supreme Court of Canada noted above. see, for example, Cooper and Monenco.

[22] However, I make an exception for the statement of John Knechtle. I have considered this statement for the limited purpose of the context it provides, which negates the inference the respondent asks me to draw from the other emails – that Dr. MacFarlane’s contact with UWI in 2017 was unsolicited. While the Knechtle statement itself is not specifically identified in the Statement of Case or in the emails that Mr. Crowne has selectively attached, the Knechtle statement is an account from a non-party that “illuminates the substance of” those pleadings insofar as I am being asked to draw inferences from them by the respondent. Another approach might have been to rule that it is not appropriate to draw or consider the suggested inferences on a coverage application such as this, in which case there also would have been no need to consider the illumination that the Knechtle statement provides. Either approach gets me to the same outcome.

[23] Another way of looking at this statement is that could also be said to form part of Dr. MacFarlane’s pleadings in the Defamation Action as I would expect it to be part of the “other documentation necessary and relevant to supporting the defence” referred to at sub-paragraph (e) on page 3 of the Statement of Defence.[^3] In this respect, the respondent makes the further argument that allegations forming part of a statement of defence should not be permitted to inform the coverage analysis based on the previously referenced Supreme Court jurisprudence in this area. I do not agree that there is a hard rule that the statement of claim is the only relevant pleading.

[24] The “Pleadings Rule” has primarily developed in the context of cases where the issue to be defined by the pleadings was whether the nature of the claims alleged fell within the policy coverage. Defining the nature of the plaintiff’s claims is something that is within the knowledge and control of the plaintiff; in that context, the statement of claim, with some exceptions, would logically be the controlling document. However, the Court of Appeal in Keys (at para. 4) concluded that even the characterization of the claim for purposes of the duty to defend is not limited to the statement of claim: “That may be the usual case, but our view of the authorities is that all of the pleadings may be considered, with the most weight placed on pleadings against the potential insured.”

[25] In this case, the issue is whether the defendant is an “Additional Insured” under the policy. That is not something that the plaintiff has knowledge or control over. This context dictates a policy-oriented approach to the coverage analysis, with emphasis on the Supreme Court of Canada’s policy of looking at the substance to illuminate the context of what is being alleged in the pleadings.

[26] The pleadings that I am required to look at have already been broadened to include a select bundle of email correspondence between Dean Jackson and Dr. MacFarlane, the first of which was copied to John Knechtle. In this context, it is appropriate and consistent with the Supreme Court of Canada’s policy to consider the Statement of Defence and documents forming part of the Statement of Defence (and, in the context of the inference the respondent relies on, a document that also illuminates the substance of the allegations contained in the emails forming part of the Statement of Case).

[27] The court is not receiving Mr. Knechtle’s statement (which is appended to an affidavit of a legal assistant) as sworn evidence, and I am not concerned about it from the perspective of formal proof because, like the emails themselves, the facts it alleges are not being proven for purposes of this application. This is not a “trial within a trial” that the Supreme Court of Canada has cautioned against: see Cooper, Monenco, and Halifax Insurance; Rather, I must assess the substance of the claims raised by the expanded pleadings that include the Statement of Case and the selectively attached emails, the substance of which may also be illuminated by the Statement of Defence and the Knechtle statement.

[28] John Knechtle’s statement is not reproduced in its entirely, but some selected excerpts include:

a. That he handled the background check for Dr. Crowne when Crowne originally applied to the University of the West Indies in 2016. Knechtle contacted a colleague who he knew at the University of Windsor to ask if he could serve as an off-list reference, which was a known practice on hiring committees at universities to contact people who worked with a candidate who were not on their reference list. [para. 5]

b. The colleague who he contacted told him “under no circumstances should you hire Emir Crowne” and provided various explanations for saying this. [para. 6]

c. Further information was also provided about the circumstances surrounding Mr. Crowne’s departure from the University of Windsor, and he was referred to Dr. MacFarlane for another off-list reference. [paras. 7, 8, 9, 10 and 11]

d. Dr. MacFarlane provided more information about the sexual harassment claims that had been made against Mr. Crowne, the investigation of those claims, his termination, grievance and settlement, including a non-disclosure agreement. [paras. 12-18]

e. Mr. Crowne was not nominated for a position at the UWI Faculty of Law in Trinidad. [para. 19]

f. Unbeknownst to Mr. Knechtle, Mr. Crowne was hired the following year at the Mona Campus of the UWI Faculty of law. Given what he knew, he put Dr. MacFarlane in touch with Dean Jackson and Tracy Robinson at the UWI Mona Campus.

[29] Mr. Knechtle’s statement must be considered in context and without undue weight being placed upon it. The respondent concedes (at para. 62 of its factum) that without even looking at the Knechtle statement, it can be derived from the emails appended to the Statement of Case that:

a. Dr. MacFarlane had given a reference when Crowne sought employment on one campus at the UWI, and Crowne was not hired;

b. Mr. Crowne was subsequently hired a year later by a different campus at the UWI;

c. Dr. MacFarlane contacted UWI again after he was already hired.

[30] Paragraph 13 of the respondent’s factum illustrates the importance of the illuminating context that the Knechtle statement provides about the substance of the allegations against Dr. MacFarlane raised by the emails that the respondent seeks to rely upon. The respondent seeks to have the court infer from the email chain at Exhibit “C” to the Statement of Case that the information provided by Dr. MacFarlane to Dean Jackson was not solicited by Dean Jackson at UWI. The Statement of Case and attached emails do not address the question of whether Dr. MacFarlane’s statements in 2017 were solicited by the UWI. What the Knechtle statement illuminates and contextualizes is that when Mr. Knechtle became aware that Mr. Crowne had been hired for another position by the UWI Mona Campus in 2017, Mr. Knechtle put Dr. MacFarlane in touch with Dean Jackson which makes the suggested inference less compatible. I am not prepared to draw the inference suggested by the respondent.

The Arguments For and Against the Duty to Defend

[31] The applicant’s position is relatively straightforward and is summarized at paragraph 24 of her factum – she was acting on behalf of the University of Windsor, and in the course of her employment as a faculty member, in all of her dealings with UWI about Mr. Crowne. She maintains that this can be derived from the emails and Mr. Knechtle’s statement[^4], which demonstrate that:

a. She at all times identified herself as a University of Windsor Professor at the Faculty of Law;

b. She at all times used her University of Windsor email address in correspondence with faculty at the University of the West Indies;

c. The alleged statements were made to Mr. Crowne’s then employers by her in her capacity as a professor at the institution from which his employment had been terminated;

d. The alleged statements were about Mr. Crowne’s employment while at the University of Windsor and his conduct towards students during that period;

e. She was advised that Dean Jackson of the University of West Indies (Mona) had reached out to the Provost and the Dean of the University of Windsor about Mr. Crowne before hiring him, but that neither of them had responded;

f. A professor at the University of West Indies (St. Augustine) who had previously contacted her for an off-list reference for Mr. Crowne when he had previously applied to that university put her in touch with Dean Jackson.

[32] The respondent presents various arguments against a finding that Dr. MacFarlane was “acting on behalf of” the University of Windsor, which I will address in turn.

The Meaning and Interpretation of the Phrase: “Acting on Behalf of ”

[33] The allegations in the Statement of Case about the Impugned Statements made to Dean Jackson at UWI, when read to include the email correspondence appended to it, refer to Dr. MacFarlane in her capacity as a professor at the University of Windsor. The issue is whether she was acting on behalf of the University of Windsor when she made those Impugned Statements.

[34] It is commonly understood that employees can act in different capacities when acting in the course of their employment and discharging their duties. The distinction can be important, for example, in cases where there is a question of whether an employee can also be held personally liable for their actions – ordinarily when this comes up there is no question that the employee was acting on behalf of their employer and the issue is whether they were also acting in any other capacity that could attract personal liability. It is recognized that an employee, when acting on behalf of their employer, can at the same time also be acting in a personal capacity that can attract personal liability. These capacities are not mutually exclusive.[^5]

[35] Clause 6.1(a) is not limited to employees but also includes officers, directors, members of governing bodies, scholars, trainees, shareholders and volunteers, with respect to acts performed on behalf of the University of Windsor in that capacity (as employees, officers, directors etc.). The concept of acting on behalf of the University under this clause must be read and understood in the context of the need for it to cover all of these different capacities. In this context, this phrase should not be read to exclude acts undertaken by an employee in the course of employment and the discharge of their duties as the respondent contends, but rather should be read and understood to include those acts with reference to employees, and more broadly to include acts that are undertaken by individuals acting in the other capacities expressly provided for (such as directors, officers, members of governing bodies, scholars, trainees, shareholders and volunteers). A common sense reading of the phrase “acting on behalf of” requires it to be read broadly to include all acts that might be taken by persons acting in each of these various different capacities.

[36] The respondent also relies on a compare and contrast of clause 6.1(a) and clause 6.1(f). Clause 6.1(f) includes students as Additional Insureds: “while performing any duty” connected to the University of Windsor. I agree that this may have a different scope than “on behalf of”, and that the difference in the wording of these two clauses must be given full effect: see Canadian Indemnity Co. v. Walkem Machinery & Equipment Ltd., 1975 141 (SCC), [1976] 1 S.C.R. 309, at p. 314. However, this does not lead to the interpretive result the respondent suggests.

[37] The respondent argues that because the words “performing any duty” appear in this clause 6.1(f) and not in clause 6.1(a) dealing with professors, that means that the coverage for professors was not intended to extend to when they are simply performing duties connected to the University of Windsor and requires something more. I disagree. The choice of different words does not necessarily imply that they are mutually exclusive. Where one phrase can be read to be included in the other, the use of the broader term does not exclude the narrower one. Acting on behalf of the University of Windsor can include performing a duty connected with the University of Windsor, including those undertaken in the course of employment.

The Claims Against Dr. MacFarlane Raise the Possibility that she was Acting on Behalf of the University of Windsor

The True Nature and Substance of the Claims Raised

[38] The respondent points to statements of Dr. MacFarlane from the email bundle at Exhibit “C” to the Statement of Case to demonstrate that the Impugned Statements are personal to her, such as:

a. [my]“own dismay and shame that the university would morally compromise itself by knowingly passing on this person to you.”

b. that “For as long as institutions including universities pass on these types of serious problems to others, I shall feel a responsibility to inform colleagues about the risks of hiring a man that we know to be a predator.”

[39] Even if Dr. MacFarlane was motivated for personal reasons to make the Impugned Statements, as the above examples suggest she was, I still must consider whether the substance of the claims raise even the possibility that she was also acting in her capacity as a professor of the University of Windsor, and not acting solely in her personal capacity. These two capacities are not mutually exclusive.

[40] Having regard to the true substance of the Statement of Case (when read to include the attached emails, as both parties say I must do, as well as the statement of John Knechtle insofar as it illuminates the inferences the respondent asks be drawn), I have no difficulty concluding that that there is at least a mere possibility that a claim is being asserted in the Statement of Case against Dr. MacFarlane in her capacity as a professor acting on behalf of the University of Windsor, having regard to the substance of the allegations previously summarized that:

a. She at all times identified herself as a University of Windsor Professor at the Faculty of Law;

b. She at all times used her University of Windsor email address in correspondence with faculty at the University of the West Indies;

c. The alleged statements were made to Mr. Crowne’s then employers by her in her capacity as a professor at the institution from which his employment had been terminated;

d. The alleged statements were about Mr. Crowne’s employment while at the University of Windsor and his conduct towards students during that period;

e. She was advised that Dean Jackson of the University of West Indies (Mona) had reached out to the Provost and the Dean of the University of Windsor about Mr. Crowne before hiring him, but that neither of them had responded;

f. A professor at the University of West Indies (St. Augustine), who had previously contacted her for an off-list reference for Mr. Crowne when he had previously applied to that university, put her in touch with Dean Jackson.

[41] Dr. MacFarlane’s dealings with the UWI did not begin with the April 19, 2017 emails attached to the Statement of Case. The respondent seeks to separate Dr. MacFarlane’s dealings with the UWI Mona Campus in 2017 from those in 2016 with the St. Augustine campus and asks me to infer that Dr. MacFarlane’s statements to Dean Jackson were unsolicited by him without regard to the earlier context or the connection provided by Mr. Knechtle. That approach is not consistent with the policy looking for the true nature and substance of the claims raised. Having considered the pleadings in that context, I find that there is at least a possibility that Dr. MacFarlane’s statements are all part of the continuum of her dealings with that University concerning Mr. Crowne’s suitability as a university lecturer and the off-list reference that she was asked to provide to the UWI.

Statements Contrary to the Official Position of the University of Windsor

[42] The respondent contends that Dr. MacFarlane cannot in this case be found to have been acting on behalf of the University of Windsor when the email chain attached to and forming part of the Statement of Case indicates that the University of Windsor’s “official” position was to remain silent about the circumstances of Mr. Crowne’s separation, in light of a non-disclosure agreement (“NDA”) that they signed.

[43] I disagree. A university is not an institution with a single voice or a single set of interests- the interests of a university will be broad and diverse and may even be in conflict with each other from time to time. While the University of Windsor may have an official position, as it did here, that does not mean that others within the institution no longer speak on its behalf just because they have a different view or perspective.

[44] “Acting on behalf of” does not require that the specific act be authorized, instructed, permitted or approved by the University of Windsor (and does not imply a legal agency relationship, as discussed later in these reasons). According to the emails attached at Exhibit “C” to the Statement of Case, the Impugned Statements made by Dr. MacFarlane to Dean Jackson were not part of the official position of the University of Windsor due to restrictions under the NDA, and presumably would not have been specifically authorized or approved by the University of Windsor. However, even if that is so, there is nothing to suggest that the NDA prevented Dr. MacFarlane from providing an off-list reference to another university, or from later re-confirming it.

[45] Furthermore, the fact that it signed an NDA with Mr. Crowne and may have an interest in upholding that agreement does not mean that the University does not also have an interest in protecting itself and its reputation by endorsing the practice of its professors providing honest and truthful and complete off-list references. Similarly, signing the NDA with Mr. Crowne does not mean that the University of Windsor does not have an interest in protecting itself against claims by students at other universities to whom it may be found to have owed a legal and moral duty. In the latter respect, the applicant referred me to two cases from the United States, Randi W. v. Muroc Joint Unified School Dist. 929 P. 2d 582 (1997 Sup.Ct. CA) and Doe-3 v. McLean County Unit Dist. No. 5 Bd. of Dirs. 973 N.E. 2d. 880 (2012 Sup.Ct. Ill.).

[46] There is at least a possibility that Dr. MacFarlane was acting in the interests of the University of Windsor where the disclosures she made in the Impugned Statements may protect it from reputational damage or exposure to further third-party tort liability. The NDA does not foreclose the possibility that Dr. MacFarlane was acting on behalf of the University of Windsor when she made the Impugned Statements to UWI in 2017.

No Plea of a Legal Agency Relationship

[47] The respondent asserts (in paragraphs 35(b) and 74 of its factum) that to act on behalf of the University of Windsor Dr. MacFarlane would have to be acting as the university’s agent at law.

[48] I disagree. The words of the policy do not require this, no caselaw was provided to support it, and I am not prepared to read the words of the policy in this restrictive manner. If that is what the insurer intended this phrase to mean then it should have said so, and it did not.

[49] It is suggested that if Dr. MacFarlane was “acting on behalf of” the University of Windsor, Mr. Crowne would have sued the University as well and not just her, as her principal in the agency relationship. I am not prepared to draw this inference. The full terms of his settlement agreement with the University are not known and there may be other reasons why he has not sued the University.

No Plea of “Acting on Behalf of”

[50] The respondent argues that neither Mr. Crowne nor Dr. MacFarlane use the phrase “acting on behalf of” in connection with the description of her Impugned Statements. This is a phrase that comes from the policy and is not one that the parties, other than CURIE, would be expected to be versed in so it is not particularly surprising to me that it does not appear in the pleadings in the Defamation Action.

[51] As indicated earlier in these reasons, the Supreme Court of Canada has been clear that the precise words used in the pleading do not control the outcome of the determination of whether a claim has been raised that triggers the policy. It is the substance of the allegations that matters and thus I place little or no weight on this argument: see Progressive, Scalera, Monenco and Nichols

Appointment of Defence Counsel

[52] The applicant claims that she should be entitled to appoint counsel of her choice to defend her.

[53] The respondent maintains that the policy gives it the right and duty to defend her and investigate and settle the claims, and that carries with it the right to appoint counsel. The mere fact that CURIE resisted the duty to defend does not create a conflict that would deprive it of this right: see Fridel Limited v. Intact Insurance Co., 2018 ONSC 5923, at paras. 20-24.

[54] I agree with the respondent that it has the right to appoint counsel. I understand that defence counsel will have to be appointed in a foreign jurisdiction and may have to get up to speed quickly. I was asked to expedite my reasons in this case because, among other reasons, of the uncertainty of the process and timing of the proceedings in Trinidad and Tobago. In these circumstances, the insurer should consider approving a limited retainer of the applicant’s current counsel in Ontario to provide support and assistance to defence counsel. That is not an order or direction, just a suggestion.

Disposition and Costs

[55] For these reasons, the application is granted insofar as the relief sought with respect to the duty to defend, and a declaration shall issue that the respondent, Canadian Universities Reciprocal Insurance Exchange has a duty to defend the Defamation Action brought against Dr. Julie MacFarlane in the High Court of Justice in the Republic of Trinidad and Tobago, CV-2019-00483.

[56] The applicant seeks her full indemnity legal costs of this application and of her defence of the action to date. I would expect she may be entitled to the latter, but I have not had full submissions on costs. I encourage the parties to try to reach an agreement on costs now that they have my decision. If an agreement is reached, I may be advised of such in writing by August 22, 2019 and provided with a draft order reflecting the parties’ agreement on costs together with a brief submission (by letter) to explain to me the basis of the agreement.

[57] If no agreement is reached on costs, then the applicant may make written costs submissions (to be accompanied by a costs outline) within 20 days after the August 22, 2019 deadline for reaching agreement. The respondent may make written responding costs submissions (to be accompanied by a costs outline) within 20 days thereafter. The applicant may make brief written reply submissions, if so advised, within 10 days thereafter. All submissions should be served on the opposing counsel and delivered to my attention at Judges’ Adminstration, Superior Court of Justice at 361 University Avenue (Room 106), Toronto, Ontario M5G 1T3.

Kimmel J.

Released: August 2, 2019

ONSC 4631

COURT FILE NO.: CV-19-00619449-0000

DATE: 20190802

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Dr. Julie MacFarlane

Applicant

– and –

Canadian Universities Reciprocal Insurance Exchange

Respondent

REASONS FOR decision

Kimmel J.

Released: August 2, 2019

[^1]: Both sides agree that this is a broader and different duty than the duty to indemnify, which is not being decided at this time: see Halifax Insurance Co. v. Innopex Ltd. (2004), 2004 33465 (ON CA), 72 O.R. (3d) 522 (C.A.), at para. 34, leave to appeal to S.C.C. refused (2005), 207 O.A.C. 399.

[^2]: It is my observation that Dr. MacFarlane would have a more difficult time establishing that she was acting in her capacity as a professor on behalf of the University of Windsor in respect of the statements that she made to the KPA law firm and the CBC.

[^3]: I note that the pleading requirements appear to be broader in the High Court of Trinidad and Tobago, leading in this case to a broader scope of documents being identified in the Defamation Action than might be typical in Ontario.

[^4]: Some of the support Dr. MacFarlane cited for these points also came from her own affidavit, which I have ruled inadmissible on this motion. I have not considered that affidavit or any grounds that are dependent solely upon it.

[^5]: This point was not argued before me but I do not consider it to be controversial. An example of a case that discusses these capacities is Laurier Glass Ltd. v. Simplicity Computer Solutions Inc., 2011 ONSC 1510, 80 B.L.R. (4th) 305, at paras. 44 and 45, citing two of the leading cases in this area of ScotiaMcLeod Inc. v. Peoples Jewellers Ltd. (1995), 1995 1301 (ON CA), 26 O.R. (3d) 481 (C.A.) and Craik v. Aetna Life Insurance Co. of Canada, 1996 2330 (Ont. C.A.), affirming, [1995] O.J. No. 3286 (C.J. (Gen. Div.)).