



COURT OF APPEAL FOR ONTARIO

CITATION: Van Huizen v. Trisura Guarantee
    Insurance Company, 2020 ONCA 222

DATE: 20200318

DOCKET: C66699

Hoy A.C.J.O., van Rensburg and
    Roberts JJ.A.

BETWEEN

John
    Van Huizen and Hastings Appraisal Services

Plaintiffs (Respondents)

and

Trisura
    Guarantee Insurance Company

Defendant
    (Appellant)

Heather Gray, for the appellant

R. Steven Baldwin, for the respondents

Heard: October 9, 2019

On appeal from the order of Justice
    Patrick Hurley of the Superior Court of Justice dated February 15, 2019, with
    reasons reported at 2018 ONSC 4828, [2019] I.L.R. I-6088.

Roberts J.A.:

A.

OVERVIEW

[1]

The appellant insurer appeals from the order of
    the motion judge dismissing its motion for summary judgment and granting
    judgment to the respondents. The motion judge found that the appellant had a
    duty to defend the respondents under the policy of professional liability
    insurance issued by the appellant.

[2]

I would allow the appeal. In my view, the motion
    judge erred in his interpretation of the insurance contract between the
    appellant and the respondent, Mr. Van Huizen. Specifically, the motion judge
    erred by effectively treating a master policy as the entire insurance contract
    for all members of the Appraisal Institute of Canada (the AIC). This
    misconstruction caused the motion judge to conflate two insurance contracts
    that shared standard terms set out in a master policy.

[3]

According to the terms of the insurance contract
    between the appellant and Mr. Van Huizen, there was no duty to defend in the
    circumstances of this case. However, I would not grant summary judgment to the
    appellant. The issue of whether the appellant had a duty to defend the
    respondents under another insurance contract between the appellant and the
    allegedly negligent appraiser was not decided by the motion judge nor raised as
    an issue on this appeal. It requires determination on a complete record after
    full argument.

B.

Background

[4]

The appellant issued the professional liability
    insurance policy number TPL1003399 (the master policy) to the AIC for the
    relevant period. The master policy relates to claims made against AIC members,
    as well as their personal corporations, employers, and the AIC, for the
    negligent provision of professional appraisal services by members.

[5]

The defence and settlement section of the master
    policy reads, in part:

The Insurer shall have the right and the duty
    to defend, with respect to such insurance as is afforded by this Policy, any
    Claim made against an Insured .

[6]

Coverage under the master policy is extended to
    individual members of the AIC by way of individual application. On assessment
    of the individual members risk, acceptance of the individuals application,
    and payment of the premium, an individual certificate of insurance is issued to
    that member.

[7]

Mr. Van Huizen is a professional appraiser and
    member of the AIC. He carries on business through a corporation, Inpho Limited,
    operating under the business style of the other respondent, Hastings Appraisal
    Services. The respondents were insured under the master policy and an
    individual certificate of insurance, number AIC 02408, issued by the appellant
    to Mr. Van Huizen (the Van Huizen insurance contract).

[8]

David Barkley was a professional appraiser and a
    member of AIC. He was also insured under the master policy and his own
    individual certificate of insurance, number AIC 03188, issued by the appellant
    (the Barkley insurance contract). Mr. Barkley passed away in October 2016.

[9]

In March 2008, under the auspices of Hastings
    Appraisal Services, Mr. Barkley appraised a residential property at the
    request of Sandra Behlok Insurance Agency Ltd.

[10]

Three claims were brought in relation to this
    appraisal (collectively the Behlok proceedings). Two actions commenced by
    Behlok alleged that the respondents, as the employers or principals of Mr.
    Barkley, were vicariously liable for his negligently performed appraisal of the
    residential property. In his third party claim, Mr. Barkley claimed
    contribution and indemnity from the respondents as his employers or principals
    for any damages payable to the client.

[11]

Mr. Van Huizen made a claim under the Van Huizen
    insurance contract in relation to the Behlok proceedings. The appellant denied
    coverage, partly because the respondents sought coverage under the Van Huizen
    insurance contract and not the Barkley insurance contract. While acknowledging
    that Mr. Van Huizen was an insured as defined in the master policy under the
    Van Huizen insurance contract, the appellant took the position that the Van
    Huizen insurance contract did not provide coverage for the alleged professional
    negligence of Mr. Barkley. With respect to the Van Huizen and Barkley insurance
    contracts, the appellant maintained that the respondents were not Mr. Barkleys
    employer and therefore were not covered.

[12]

The respondents commenced the underlying action
    against the appellant for a declaration that the appellant had a duty to defend
    and indemnify them under the Van Huizen insurance contract in response to the
    Behlok proceedings.

[13]

The appellant brought a motion for summary
    judgment to dismiss the respondents action against it on the ground that it
    had no duty to defend them under that contract in response to a claim involving
    Mr. Barkleys appraisal.

C.

DECISION Below

[14]

By the time the appellants motion was heard, the
    Behlok proceedings were settled, save for the disposition of costs. As a
    result, the motion judge had to consider only whether the appellant had a duty
    to defend the respondents and indemnify them for their defence costs.

[15]

The motion judge reviewed the pleadings,
    interpreted the definitions under the master policy, but did not consider the
    significance of the separately issued certificate. He determined that the
    terms, Member and Insured, were broad enough to include both Mr. Van Huizen
    and Mr. Barkley who were insured under the same master policy but different
    certificates. As a result, he concluded that Mr. Van Huizen has coverage for a
    legal claim arising from his own actions and also when it flows from his legal
    status as an employer of the alleged wrongdoer. He was not asked to consider
    and therefore did not decide whether the respondents were covered as Mr.
    Barkleys employer under the Barkley insurance contract.

[16]

The motion judge also determined that the
    appellant had a duty to defend Mr. Van Huizen in the Behlok proceedings. He
    explained that, in his view, this interpretation was necessary if the vicarious
    liability provision was to have any practical effect:

If this was not the case, there would be no
    need for the vicarious liability provision in the contract. Such liability
    attaches in the absence of any negligence or other fault on the part of the
    employer. If it was the intent of the parties that an insured would only have
    coverage when he or she personally committed the negligent act or omission, the
    vicarious liability protection would be superfluous.

[17]

In a subsequent endorsement dated September 20,
    2018, the motion judge clarified that the duty to defend included both Mr. Van
    Huizen and Hastings Appraisal Services.

[18]

In his further reasons dated February 15, 2019,
    the motion judge ordered that the respondents were entitled to reimbursement of
    their defence costs in the amount of $42,000 plus interest. He declined to
    apply and reduce those costs by the $7,500 deductible under the policy. He
    concluded it was premature to do so because the underlying litigation had not
    been resolved and the appellant would recover costs in the litigation that
    could eliminate the deductible.

D.

ISSUES

[19]

The appellant raises several grounds of appeal.
[1]
In my view, the appeal turns on the following issues:

(i)

Did the motion judge err in finding that the
    appellants duty to defend the respondents in the Behlok proceedings was
    engaged under the Van Huizen insurance contract?

(ii)

If the appeal is allowed, should summary judgment
    be granted to the appellant?

[20]

I agree that the motion judge erred in his
    interpretation of the Van Huizen insurance contract and in finding that the
    appellant had a duty to defend the respondents on this basis. However, as I
    will explain, I do not agree that summary judgment should be granted to the
    appellant.

E.

Applicable Legal Principles

[21]

The motion judge had to consider the question of
    whether the appellant had a duty to defend the respondents in response to the
    Behlok proceedings, as he acknowledged, under the Van Huizen insurance
    contract. The motion judge erred by effectively treating the master policy as
    the entire insurance contract for all AIC members. This led him to conflate the
    Van Huizen and Barkley insurance contracts.

[22]

It is therefore important for the purpose of
    this appeal to clarify the distinction between an insurance policy and an
    insurance contract. These words are often used interchangeably. This conflation
    can give rise to considerable confusion, as it did here.

[23]

An insurance policy is an instrument. Without
    parties entering into an agreement to be bound by its terms and conditions, it
    is not an insurance contract. By itself, it is merely a recitation of terms
    and conditions which do not attach to a particular person, item or interest:
    Barbara Billingsley,
General Principles of Canadian Insurance Law
, 2nd
    ed. (Markham: LexisNexis, 2014), at p. 58. No legal obligations are created by
    the mere existence of a written insurance policy. Absent a contractual
    relationship incorporating its terms, the words of a policy are worth less
    than the paper on which they are printed: Denis Boivin,
Insurance Law
,
    2nd ed. (Toronto: Irwin Law, 2015), at p. 242.

[24]

An insurance contract, by contrast, creates
    contractual obligations between parties:
Rayner v. Preston
, (1881) 18
    Ch. D. 1 (Eng. C.A.), at p. 10. The formation of insurance contracts is
    governed by the law of contracts. There must be offer and acceptance, and
    agreement on all material terms, including the premium, the nature and duration
    of the risk to be covered, and the extent of liability:
McCunn Estate v.
    Canadian Imperial Bank of Commerce
(2001), 53 O.R. (3d) 304 (C.A.), at
    paras. 18-19, leave to appeal granted but appeal discontinued, [2001] S.C.C.A.
    No. 203. In determining whether to enter into a particular insurance contract,
    the insurer assesses the risk and determines an acceptable premium based on the
    representations made by the applicant for insurance: Craig Brown & Andrew
    Mercer,
Introduction to Canadian Insurance Law
, 3rd ed. (Markham:
    LexisNexis, 2013), at p. 23.

[25]

An insurance policy may evidence the existence
    of an insurance contract because often parties will agree, as part of their
    contract, to be bound by terms and conditions as set out in an appropriate
    policy: Billingsley, at p. 59; Brown & Mercer, at p. 23. When an insurer
    uses a standard policy, it may issue a certificate of insurance as proof of the
    underlying contract on the terms set out in an applicable policy: Boivin, at p.
    258. But an insurance policy or certificate of insurance is only the
    instrument; it evidences the existence of the insurance contract by which the
    parties have agreed to be bound.

[26]

This relationship between an insurance contract
    and an insurance policy is recognized by the statutory definitions of
    contract and policy:
Insurance Act
, R.S.O. 1990, c. I.8, s. 1.
    Under s. 1 of the
Insurance Act
, contract means an insurance
    contract, and
includes
a policy and certificate of
    insurance evidencing the contract. By contrast, policy means the
instrument
evidencing a contract.

[27]

Therefore, while an insurance policy sets out
    terms that may govern the relationship between the parties to an insurance
    contract, it is the contract that gives rise to legal consequences and must be
    the subject of interpretation for the purposes of determining the parties
    rights and obligations.

F.

Analysis

(i)

There is No Duty to Defend the Behlok
    Proceedings Under the Van Huizen Insurance Contract

(a)

The Motion Judge Erred by Interpreting the
    Insurance Policy Rather than the Insurance Contract

[28]

The motion judge correctly recognized that the
    duty to defend arises if there is the mere possibility that a claim falls
    within the insurance policy:
Progressive Homes Ltd. v. Lombard General
    Insurance Co.
, 2010 SCC 33, [2010] 2 S.C.R. 245, at para. 19. The motion
    judge also recognized that it was necessary to search for an interpretation
    from the whole of the contract which promotes the true intent of the parties at
    the time of entry into the contract:
Coast Capital Equipment Finance Ltd.
    v. Old Republic Insurance Company of Canada
, 2018 ONCA 540, 81 C.C.L.I.
    (5th) 220, at para. 19.

[29]

While the motion judge correctly set out the
    relevant interpretative principles in determining whether the pleadings and the
    master policy created a duty to defend, he erred in his application of them.
    The duty to defend is a contractual obligation. The motion judge erred by
    narrowing his inquiry to the language of the pleadings and the master policy
    and effectively considering the master policy as the insurance contract between
    Mr. Van Huizen and the appellant. This led him to conflate the Van Huizen and
    Barkley insurance contracts.

[30]

To be fair to the motion judge, it is easy to
    see why he fell into error. As I earlier observed, the terms insurance policy
    and insurance contract are often treated synonymously. Nevertheless, in this
    case it was necessary to distinguish between the Van Huizen and Barkley
    insurance contracts and the documents evidencing their terms.

[31]

The motion judge interpreted the master policy
    as if it constituted a binding contract between the insurer and
all
members who had been issued a certificate. Given
    that both Mr. Van Huizen and Mr. Barkley held certificates, the motion judge
    concluded that they were both Insured, and that Mr. Van Huizen was therefore
    covered under the master policy for liability arising out of Mr. Barkleys
    alleged negligent appraisal.

[32]

For the reasons I have already stated, the
    master policy does not, however, constitute such a binding agreement on its
    own. It cannot. The master policy merely sets out the terms of professional
    liability insurance being offered to the members of the AIC. It is missing key
    terms on which agreement is necessary to form an insurance contract, including
    the assessed risk, the premium to be paid and the term of insurance:
McCunn
    Estate
, at para. 19.

[33]

Each member who desires coverage must
apply
for the coverage on terms set out in the master
    policy. The insurer can then assess the individual risk of the applicant in
    determining the premium and in deciding whether to enter into a contract with
    the applicant. Provided the member and insurer come to an agreement on the
    remaining essential terms of the contract and agree to be bound by the master
    policy, the insurer will issue a certificate to the member, evidencing the
    existence of that contract.

[34]

It follows that while each member who holds a
    certificate will be bound by identical terms as set out in the master policy,
    they are also bound by the unique terms as set out in their certificates and
    are therefore necessarily party to separate contracts with the insurer. In
Re
    Lawton
, [1945] 4 D.L.R. 8 (Man. C.A.), at p. 37, Bergman J.A., concurring,

noted a similar phenomenon in the context of a group life insurance policy
    for employees of a certain employer:

The master policy is, in effect, merely an
    agreement by the [insurer] with the [employer] to insure the individual
    employees who are eligible, on the terms specified in the master policy. In my
    opinion the certificates issued to the individual employees pursuant to, and in
    performance of, that agreement, constitute the real and effective insurance. I
    am further of the opinion that these certificates are not incorporated in, and
    made part of, the master policy. It is the other way about; the master policy
    is incorporated in, and made part of, each individual certificate of insurance.

[35]

Similarly, the certificates issued to Mr. Van
    Huizen and Mr. Barkley each evidence a separate insurance contract on terms
    including those set out in the master policy. The declarations specify exactly
    what constitutes these contracts of insurance: These Declarations along with
    any completed and signed Application and the Policy,
each
    Member Certificate of Insurance
, and endorsements, if any, shall
    constitute the entire contract between the Insured and [the appellant]
    (emphasis added).

[36]

The individual nature of the insurance contract
    is also reflected in the declarations, which say that the name of the insured
    is [a]s per individual certificate, as well as that the policy period is
    [a]s per individual certificate, and that the premium is [a]s per individual
    certificate. Further, the master policy summarizes the bargain that underlies
    the insurance contract, namely, that it is in consideration of the payment of
    the premium and in reliance upon all statements made and information furnished
    to the appellant, including the statements made in the Application, that
    insurance is agreed to be provided.

[37]

The appellants duty to defend must be
    ascertained within the entirety of the relevant insurance contract, properly
    interpreted, and cannot be determined solely in reference to the master policy,
    which is not an insurance contract and does not on its own bind the parties.

[38]

In my view, the motion judge fell into error by
    deciding the question of the duty to defend on the basis of the terms of the
    master policy untethered to the particular contractual relationship between the
    appellant and Mr. Van Huizen. As a result, his conclusion that the appellant
    owed a duty to defend the respondents under Mr. Van Huizens standard form
    insurance contract is not owed deference:
Ledcor Construction Ltd. v.
    Northbridge Indemnity Insurance Co.
, 2016 SCC 37, [2016] 2 S.C.R. 23, at
    para. 24. The question must therefore be considered afresh.

(b)

The Meaning of Employer Under the Master
    Policy

[39]

While not strictly necessary given my proposed
    disposition of this appeal, I deal with this issue for the purpose of providing
    some guidance concerning the preferred analytical approach. The appellant
    submits that there is no duty to defend under the Van Huizen insurance contract
    because in their statement of defence in the Behlok proceedings, the
    respondents deny that they were Mr. Barkleys Employer as defined in the
    master policy and therefore cannot be insured under the Van Huizen insurance
    contract.

[40]

The motion judge properly rejected this
    submission.

[41]

When determining whether there is a duty to
    defend, the court interprets the pleadings and the insurance contract to
    determine if there is the mere possibility that the claim, as pleaded, falls
    within the scope of coverage under the insurance contract. The duty to defend
    is not dependent on the insured actually being liable and the insurer actually
    being required to indemnify. It is irrelevant whether the allegations in the
    pleadings can be proven in evidence; for this interpretative purpose, the
    allegations in the statement of claim are to be taken as true: see
Progressive
    Homes
, at paras. 19-20. An insurer is obliged to provide a defence if the
    pleadings allege facts which, if true, could potentially require the insurer to
    indemnify the insured for the claim:
Nichols v. American Home
    Assurance Co.,
[1990] 1 S.C.R. 801, at p. 810-11;
Monenco
    Ltd. v. Commonwealth Insurance Co
., 2001 SCC 49, [2001] 2 S.C.R.
    699, at para. 28.

[42]

It is clearly alleged in the statements of claim
    in the Behlok proceedings that the respondents are the employer of Mr. Barkley.
    This allegation is accepted as true for the purpose of determining the duty to
    defend. The respondents denial does not affect this presumption nor the
    possibility that the allegation could prevail at trial.

[43]

As discussed more fully below, the master policy
    provides for a duty to defend claims made against any Insured (defined to
    include a Member and, in certain cases, an Employer) for a Wrongful Act.
    Under the master policy, Employer means any partnership, corporation, or
    sole proprietorship in which
a Member
was or is
    now an employee (emphasis added).

[44]

That, however, is not the end of the analysis to
    determine whether the appellant has a duty to defend the respondents under the
    Van Huizen insurance contract. As I will now explain, when the Van Huizen
    insurance contract is considered as a whole, the appellant has no duty to
    defend the respondents under that insurance contract.

(c)

The Van Huizen Insurance Contract Covers Only
    Mr. Van Huizens Professional Negligence

[45]

I am of the view that the Van Huizen insurance
    contract, properly interpreted, does not impose a duty to defend on the
    appellant in relation to the Behlok proceedings.

[46]

There is no question that the Behlok proceedings
    assert a civil claim for monetary damages arising from
Mr.
    Barkleys
allegedly negligent provision of professional appraisal
    services. The pleadings, however, do not allege a claim against Mr. Van Huizen
    or Hastings Appraisal Services as his employer for
his
allegedly negligent provision of professional appraisal services. Rather, the
    claim is framed against the respondents on the basis of their vicarious
    liability for Mr. Barkleys alleged negligent provision of professional
    appraisal services.

[47]

As a result, the interpretative issue is whether
    Mr. Van Huizens insurance contract requires the appellant to defend
the respondents
in relation to the claim that they are
    vicariously liable for the alleged wrongful act of
another
    insured
AIC member, Mr. Barkley, in his provision of professional
    appraisal services.

[48]

The determination of this question requires
    consideration of the master policy definitions in the context of the specific
    insurance contract between the appellant and Mr. Van Huizen.

[49]

For the purposes of this appeal, the relevant
    provisions of the definitions are as follows:

Claim means:



(ii) a civil proceeding commenced by the
    issuance of a notice of action, statement of claim, writ of summons, complaint
    or similar proceeding;



against any Insured for a Wrongful Act .

Employer means any partnership, corporation,
    or sole proprietorship in which a Member was or is now an employee.

Insured means:

(i) any Member



(iii) an Employer, but solely for its for [
sic
]
    vicarious liability arising out of Professional Services rendered, or alleged
    to have been rendered, by a Member, but only if a Claim is initially made and
    continuously maintained against such Employer and the Member



Member means any natural person named in Item
    3 of the Declarations [item 3 of the Declarations states: Name and Address of
    the Insured: As per individual certificate]  who is in good standing with the
    [AIC].



Wrongful Act means any actual or alleged negligent
    act, error or omission, misstatement or misleading statement committed solely
    by the Member in the performance of Professional Services while a Member is in
    good standing with the [AIC].

[50]

There is no doubt that Mr. Van Huizen is an
    Insured, as defined in his insurance contract. He meets all the criteria to
    be a Member. He is a natural person named in item 3 of the declarations
    because the individual certificate, referenced in that item, provides that the
    Insured is John Van Huizen. There is no dispute that Mr. Van Huizen fulfills
    the other criteria required to fall within the definition of a Member.

[51]

Similarly, Hastings Appraisal Services, as the
    alleged employer of Mr. Van Huizen, is also an Insured. As already
    noted, under clause (iii) of the definition an Insured can be an Employer
    (subject to certain qualifications). The use of the qualifier any before
    Insured in the definition of Claim makes clear that the appellant has a
    duty to defend any Insured as defined under Mr. Van Huizens insurance contract
    and not just Mr. Van Huizen who is a Member.

[52]

However, the definition of Claim is limited to
    claims against any Insured for a Wrongful Act. For ease of reference, I
    repeat the definition of Wrongful Act:

Wrongful Act means any actual or alleged
    negligent act, error or omission, misstatement or misleading statement
    committed solely by
the Member
in the performance
    of professional services while
a Member
in good
    standing with the [AIC]. [Emphasis added.]

[53]

In this case, the alleged negligent act was
    committed by Mr. Barkley and not Mr. Van Huizen. It appears undisputed that Mr.
    Barkley was an AIC member and that the alleged negligent act was committed by
    him in the performance of professional services while in good standing.

[54]

However, Mr. Van Huizen relies on
his
insurance contract, and not
Mr. Barkleys
insurance contract, in asking the appellant to defend him. The key question
    then becomes who is the Member under the Van Huizen insurance contract, as
    that term is incorporated by reference in the definitions of Insured and
    Wrongful Act. Its definition refers the reader to item 3 of the declarations,
    which, as noted above, states that the name and address of the insured is [a]s
    per individual certificate.

[55]

At para. 23 of his reasons, the motion judge
    concluded:

While the definition of wrongful act uses
    the definite article the referring to member, it must be interpreted in a
    manner consistent with the definitions of claim and insured. Under the
    policy, an insured does not have to be an appraiser; but he or she has to be an
    employer of someone who is and, if they are, the policy grants them coverage if
    they are alleged to be vicariously liable for the negligent acts or omissions
    of that member. As a result, [the appellant] has a duty to defend Mr. Van
    Huizen.

[56]

In my view, the motion judge erred by seizing on
    the fact that Mr. Van Huizen meets the definitions of an Insured and a
    Member under the master policy without giving effect to the language in the
    Van Huizen insurance contract that limited the nature of a claim against the
    respondents that the appellant is required to defend. As a result, the motion
    judge effectively conflated the Van Huizen and Barkley insurance contracts.

[57]

The only certificate of insurance that forms
    part of the relevant insurance contract is Mr. Van Huizens certificate. In
    that certificate, only Mr. Van Huizen is identified as an insured. Only his
    insurable risk is the subject of the contract. It is on that basis that the
    appellant determined the risk to be insured, set the premium to be paid, and
    entered into the insurance contract with Mr. Van Huizen.

[58]

Mr. Barkleys certificate does not form part of
    the Van Huizen insurance contract. It is different from the one issued to Mr.
    Van Huizen. While issued under the same master policy, the certificate is
    particular to the individual to whom it is issued and evidences only the
    individual insurance contract between the insurer and that member.

[59]

Since Mr. Van Huizen alone is named as an
    insured in the relevant certificate, he alone is the Member for the purposes
    of the Van Huizen insurance contract as that term is defined in the master
    policy. As a result, clause (i) of the definition of Insured captures Mr. Van
    Huizen and not Mr. Barkley. Further, vicarious liability under clause (iii) is
    limited to professional services rendered by a Member, which again, means
    only Mr. Van Huizen. The definition of Wrongful Act is similarly limited to
    professional services provided solely by the Member, Mr. Van Huizen.

[60]

According to the plain language of the master
    policy, the certificate of insurance and their definitions, then, coverage is
    provided for any claims against Mr. Van Huizen or his employer respecting Mr.
    Van Huizens provision of professional services. The Behlok proceedings did not
    allege that Mr. Van Huizen had committed a wrongful act in rendering or failing
    to render professional services. There is no coverage under the Van Huizen
    insurance contract for any claim related to an act of professional negligence
    committed by anyone other than Mr. Van Huizen.

[61]

I respectfully disagree with the suggestion of
    the motion judge that this interpretation renders the provision for vicarious
    liability on the part of the employer superfluous or a commercial absurdity. Rather,
    it acknowledges the privity of contract between the member and the insurer and
    provides for the possibility that the member named in the individual
    certificate may offer professional services not merely as an individual but
    through or on behalf of any partnership, corporation, or sole proprietorship
    in which a Member was or is now an employee. Each members insurance contract
    provides for coverage for their employers in any claim for the wrongful acts of
    that member. This makes practical, commercial sense.

[62]

Therefore, I conclude that this insurance
    contract does not give rise to a duty to defend the respondents for the alleged
    wrongful act of Mr. Barkley.

(ii)

Summary Judgment Should Not Be Granted to the
    Appellant

[63]

I would not grant summary judgment to the
    appellant. The issue as to whether the appellant has a duty to defend the
    respondents as Mr. Barkleys alleged Employer under the Barkley insurance
    contract with the appellant has not yet been decided.

[64]

In its statement of defence, the appellant
    expressly addresses the question as to whether the respondents are entitled to
    coverage under the Barkley insurance contract. The appellant pleads they are
    not Insureds because they are not Mr. Barkleys employer. However, the
    parties did not bring forward this issue for determination on the motion for
    summary judgment. Rather, they limited the question to whether the appellant
    owed them a duty to defend under the Van Huizen insurance contract. As a
    result, the motion judge only dealt with the issue of whether the appellant
    owed the respondents a duty to defend the Behlok proceedings under the Van
    Huizen insurance contract. Similarly, the issue of coverage under the Barkley
    insurance contract was not raised or argued on appeal.

[65]

Given the way the motion for summary judgment
    was argued and disposed of before the motion judge and on appeal, the question
    of coverage under the Barkley insurance contract for the respondents as Mr.
    Barkleys alleged Employer remains to be determined.

[66]

My proposed disposition of this appeal renders
    it neither necessary nor desirable to determine this issue. The record and
    submissions are incomplete because they focussed on the issue of coverage under
    the Van Huizen insurance contract.

[67]

Accordingly, in my opinion, there remains a live
    issue to be determined as to whether the appellant owes the respondents a duty
    to defend under the Barkley insurance contract. I would therefore dismiss the
    appellants motion for summary judgment.

G.

Disposition

[68]

Accordingly, it was an error for the motion judge
    to grant summary judgment to the respondents. The motion judges order should
    be set aside.

[69]

I would not allow the appellants motion for
    summary judgment nor dismiss the respondents action because there is a live
    issue requiring determination as to whether the appellant owes the respondents
    a duty to defend under Mr. Barkleys insurance contract with the appellant.

[70]

The appellant should be entitled to its partial
    indemnity costs of the appeal in the amount of $9,460.64 and, because of its
    success in overturning the judgment granted to the respondents, of the motion
    below in the amount of $6,343.50, both inclusive of all disbursements and
    applicable taxes.

Released: March 18, 2020 (L.B.)

L.B.
    Roberts J.A.

I agree. Alexandra Hoy A.C.J.O.


I agree. K. van Rensburg J.A.





[1]

The appellant
raises
the alternate
    issue of whether the motion judge erred in failing to apply the $7,500
    deductible under the Van Huizen insurance contract to the award of defence
    costs to the respondents. This issue only arises in the context of the Van
    Huizen insurance contract if the motion judges conclusion that there is a duty
    to defend is upheld. Given my proposed disposition of the appeal, it is
    unnecessary to determine this issue.


