Liability waivers for high-risk recreational activities are the focus of our first case this month.
Our second case this month deals with evidence in support of applications to determine an insurer’s duty to defend.
Foster & Company is pleased to announce that Donna McLaughlin, CIP, has joined our team as a litigation paralegal.
Donna has over 20 years of claims handling experience having worked and trained with an independent adjuster. In 2002, she obtained her Chartered Insurance Professional (CIP) designation and commenced her extensive traveling career as a road adjuster handling multi-line losses. Donna has also continued her education attending elective courses provided through the Insurers Advisory Organization.
Donna is looking forward to working with you and can be reached by:
Telephone: (506) 462-4018
Fax: (506) 462-4001
Loychuk v. Cougar Mountain Adventures Ltd., 2012 BCCA 122
The appellants were two women who had gone through a zip-line adventure tour operated by the respondent. The tour involved strapping a person into a harness and trolley attached to cable lines strung between platforms in an old-growth forest. The cables were up to 500 metres long and 65 metres off the ground. Participants travelled along these lines at speeds of up to 100 kilometres per hour.
The appellants were injured when they collided while travelling on the same zip-line. The respondent conceded that the accident was caused solely by the negligence of its employees, who failed to ensure that the first appellant had cleared the line before sending the second appellant down.
Prior to entering the course, all participants, including the appellants, were required to sign a comprehensive release waiving all rights against the respondent, including claims arising from the respondent’s own negligence.
At a summary trial, the respondent argued that the appellants had waived their cause of action by signing the release. The trial judge agreed, and dismissed the action.
The appellants argued that the release was unenforceable and unconscionable under British Columbia’s Business Practices and Consumer Protection Act; that it was void because of the respondent’s deceptive or misleading advertising regarding the safety of zip-lining; that it was invalid as it had been obtained without consideration; and that it should be nullified on ground of public policy.
The Court of Appeal held that the release was not unconscionable, either under the BC statute or at common law. There is no power imbalance or inequality of bargaining position where a person wishes to engage in an inherently risky activity that is controlled or operated by another. As well, it is not unfair for the operator of such an activity to require a release or waiver as a condition of participating.
The deceptive-advertising argument failed because the appellants failed to show they had relied on, or were aware of, this advertising, and the information advertised only referred to the course’s infrastructure and not overall safety or risk of the activity. There was also found to be consideration, in that by signing the release the appellants were allowed to participate in the activity. Finally, there was no overriding public policy for not enforcing the release, which was knowingly and voluntarily entered into by the appellants.
The Court of Appeal concluded that the release was valid and enforceable and provided a complete defence to the appellants’ claims. The appeal was dismissed.
1540039 Ontario Ltd. v. Farmers' Mutual Insurance Co., 2012 ONCA 210.
This matter arose due to the death by electrocution of an independent contractor while installing a sign in front of a commercial plaza owned by the appellant.
The deceased’s family sued the appellant as owner/occupier of the plaza, the power company that owned and maintained the power lines above the sign, and the sign company that subcontracted the work on the sign to the deceased. The sign installation was being done for one of the plaza’s tenants, Design Depot. However, the plaintiffs did not sue Design Depot, and the parties’ pleadings provided no clear answer as to who had hired the contractor.
The appellant had primary coverage under its own commercial general liability (CGL) policy. By the terms of Design Depot’s commercial lease, Design Depot’s CGL policy, which was issued by the respondent insurer, added the appellant as a named additional insured, though with coverage limited to liability arising out of occurrences within the leased premises.
The appellant brought an application for a declaration that Design Depot’s policy bound the respondent insurer to share in the defence of the claim against the appellant.
In the application, the parties attempted to introduce extrinsic evidence, namely affidavits establishing that the deceased was hired by the sign company retained by Design Depot.
The application judge determined that this extrinsic evidence was inadmissible because it would require findings to be made before trial that would affect the underlying litigation. He also concluded that on the facts contained in the pleadings, there would be no possibility of coverage under Design Depot’s policy, even if the extrinsic evidence were admitted.
The Court of Appeal had to determine if the application judge erred in failing to consider the extrinsic evidence in determining whether the respondent insurer had a duty to defend the appellant.
The Court of Appeal held that while the duty to defend is typically determined by the pleadings, extrinsic evidence as to underlying facts may be admissible in cases where those facts are undisputed and where the insured rather than the insurer seeks to rely on the extrinsic evidence. In this case, however, there was a dispute between the insured and the insurer as to the underlying facts.
As well, the Court of Appeal agreed with the application judge that the extrinsic evidence would not support a duty to defend, for the reason that the substance and true nature of the claim was in negligence arising out of the appellant’s conduct as owner/occupier of the plaza, not as landlord of the premises leased to Design Depot.
The appeal was dismissed, with the Court of Appeal warning that the extrinsic evidence exception to the pleadings rule cannot be used to change the meaning of pleadings.
Notice: Small Claims Court in New Brunswick
In July 2010, the repeal of New Brunswick’s Small Claims Act was proclaimed and Rule 80, a new Rule of Court governing small claims proceedings, came into effect. The former Small Claims Court was eliminated and cases which had been heard by adjudicators were transferred to the Court of Queen’s Bench, with the monetary limit for such cases raised from $6,000 to $30,000.
The Law Society of New Brunswick recently announced it had been informed by the Department of Justice that the Small Claims Court will be reestablished and the procedures for filing and hearing small claims will revert back to those used in previous small claims proceedings.
The new Small Claims Court will differ from the previous one in that the monetary limit will be $10,000. Some aspects of the current Rule 80 (amending and withdrawal of pleadings, service of documents and applications to the Court of Appeal) will be reflected in the new Small Claims Court procedures.
Hearings will therefore be held more quickly and although they are conducted in a more “relaxed” fashion, parties will file evidence to support their claims prior to the hearing allowing them to better assess claims and provide further evidence to counter or support the position, should it be required.
We will keep our readers posted as this change is brought to fruition.