Source: https://www.samislaw.com/author/neil-colville-reeves/
Timestamp: 2019-04-20 21:03:31+00:00

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What happens when two insurers cover the same risk and each declare themselves excess to other available insurance? Ontario’s Court of Appeal addressed that issue in the recent case of TD General Insurance v. Intact Insurance­, which involved a claim for bodily injury advanced by a passenger in a boat driven by the insured.
The TD policy covered the specific boat involved in the accident and the driver was covered as he was operating the boat with the owner’s consent. The driver was also covered under his homeowner’s policy with Intact, which provided liability coverage for claims arising out of the insured’s use or operation of any type of watercraft. Each policy declared itself excess to other available insurance.
Which policy specifically described the accident causing instrumentality?
Which premium reflect the greater contemplated exposure?
Is coverage of the risk primary in one policy and incidental to the other?
Unfortunately the Supreme Court of Canada expressly rejected this approach to overlapping coverage in the Family Insurance Corp. v. Lombard Canada Ltd. Case. Instead, the Supreme Court preferred to focus on “whether the insurers intended to limit their obligation to contribute, by what method, and in what circumstances vis-à-vis the insured”. Because the contest, as here was between two insurers, the court held that there was no need to look to surrounding circumstance and instead relies strictly on the policy wording. If there are no limiting intentions or limiting intentions that cannot be reconciled, the burden is shared equally between the insurers. The Court of Appeal considered the identical ‘other insurance clauses’ to be limiting intentions. Because each policy was declared excess to the other, the court concluded that they were irreconcilable. As a result, the policies had to contribute equally. The reasons of the Court of Appeal in this case are nuanced and underscore the importance of a close reading of policy wording when faced with a circumstance of overlapping coverages.
The Court of Appeal has provided further guidance on the issue of prescriptive easements in the case of Hunsinger v. Carter. The case involved one party having uninterrupted use of a shared driveway over a 40 year period for commercial purposes, facing off against a neighbor who purchased the property last year and attempted to restrict his neighbours historic use of the property. The ‘new’ neighbor was operating a daycare and wanted to erect a fence in the middle of the shard driveway for reasons of safety.
On application, the court held that the ‘new’ neighbor could erect the fence, in part relying on the finding that the historic neigbour would be able to maneuver vehicles on their portion of the driveway and that the fence would not provide an absolute impediment to doing so. The application court judge found that the historic neighbor had established a prescriptive easement over the driveway as it was the dominant tenement for over 40 years before 2007 when both properties were registered in the Land Titles system. The appellant and his family had made use of the gravel driveway “openly, continuously, and without licence over this period. However, the application court judge found that the obstruction of the easement in erecting a fence was allowable because that portion of the driveway which was obstructed was not needed to be used by the historic neighbor.
The Court of Appeal disagreed, finding that building the fence would encroach on the easement. It is interesting to note that the Court did not disagree that the proposed fence did not prevent the historic neighbor from utilizing the driveway to access the back of his property. Rather it was clear that the court accepted the argument that the fence would substantially interfere with the neighbours use. Encroachment is only permissible where the encroachment does not substantially interfere with the easement and in this instance, the fence was thought to constitute a substantial interference.
A recent Superior Court decision allowed an appeal from an arbitrator’s award in a priority dispute dealing with financial dependency, on the basis that the decision was not reasonable. In State Farm v. R, the arbitrator determined that two claimants were not financially dependent on State Farm’s insured, leaving the Motor Vehicle Accident Claims Fund as the payor of both claims.
The underlying factual matrix was complex, involving two claimants and a multi-generational extended family. There were a number of family members who had recently moved to Canada and were residing in different family residences. Essentially, the claimants had lived with one family member for a period of 3 months before moving into the residence of another family member for the 3 months prior to the accident. One claimant was in receipt of ODSP and on this basis, no dependency was found regardless of the time frame used. That decision was upheld on appeal as being reasonable.
For the other claimant, who had no means of support other than from the person with whom she was residing, the arbitrator used a 6 month time frame to analyze financial dependency. The critical aspect of the case which informed the Court’s ruling was the arbitrator’s determination that the 3 month period prior to the accident was not the appropriate time frame because it lacked an element of permanency. In the case of Intact v. Allstate, the Court of Appeal ruled that importing a permanency test into the process of determining the appropriate time frame to analyze dependency was inconsistent with applicable legal principles. This was the nub of the determination in Intact v. Allstate.
Therefore, the decision as it pertained to that particular claimant was overturned. In spite of only residing with the State Farm insured for a 3 month time period, with no indication that this was circumstance was permanent, the claimant was found to be a dependent of the State Farm insured.
Establishing the appropriate time frame to analyze dependency is a fundamental and critical part of any dependency analysis. This is an issue that is determined case by case and ultimately depends on finding the time frame that reflects the circumstances of the parties at the time of the accident. The decision in State Farm v R. can be found here.
In Binette v. Salmon Arm, the B.C. Court of Appeal had an opportunity to analyze the difference between policy and operational decision making in the context of a municipal liability claim. In Binette, the plaintiff tripped on the base of a broken traffic sign. The City had previously discovered a detached crosswalk sign in a nearby yard and failed to locate the base of the sign. The failure was initially as a result of snow cover and eventually due to the City no longer looking.
Although the City’s sign replacement policy did not require the sign to be replaced immediately the City acknowledged that its standard practice was to use its best efforts to locate and remediate immediate hazards. In this instance, the City inspector had ‘walked the general area and shoveled some areas’ looking for the broken base but being unable to locate the base he stored the broken sign until the snow melted. This was found not to be ‘best efforts’ given that he knew that the base of the sign was an immediate hazard.
This case presents the classic formulation of the test for municipal liability. Governmental authorities are immunized from liability where a loss stems from policy decisions made in good faith. Resources are finite and municipalities must be able to make decisions regarding allocation of resources without being second guessed. To the contrary they are not immunized when a loss arises from the implementation of the policy decision at an operational level. If you are prosecuting or defending municipal claims (whether it is a slip and fall, infrastructure, construction or inspection failure) it is critical to understand the difference between a policy decision (to identify and remedy an immediate hazard) and the implementation of that policy at an operational level (not continuing to look for the immediate hazard until it was found). It is often a nuanced distinction.

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