



COURT OF APPEAL FOR ONTARIO

CITATION: Keys v.
    Intact Insurance Company, 2015 ONCA 400

DATE: 20150605

DOCKET: C59928

Juriansz, Lauwers and Huscroft JJ.A.

BETWEEN

Spencer Keys

Applicant (Appellant)

and

Intact Insurance Company

Respondent (Respondent)

AND BETWEEN

Sharif Virani

Applicant (Appellant)

and

Intact Insurance Company

Respondent (Respondent)

Owen Bourns, for the appellants

Christopher Reil, for the respondent

Heard: June 2, 2015

On appeal from the order of Justice Timothy D. Ray of the
    Superior Court of Justice, dated December 19, 2014.

ENDORSEMENT

[1]

The appellants appeal from the decision of the application judge that
    the respondent insurance company did not have the duty to defend them in a
    defamation action arising out of a video posted on the internet. The plaintiff
    in the action is the Canadian Federation of Students, a competitor of the
    Canadian Alliance of Student Associations (CASA), the named insured under the
    policy. The insurance policy provides coverage to CASAs "volunteer
    workers" or "employees", while performing duties related to the
    conduct of [CASAs] business".

[2]

The question before the application judge was whether there was a mere
    possibility that the appellants were acting in the course of their employment
    when they made the video and posted it on the internet:
Progressive Homes
    Ltd v. Lombard General Insurance Co of Canada
2010 SCC 33. The application
    judge properly indicated that the pleadings including any cross claims or third
    party claims were relevant in defining the substance of the claim. He found the
    substance of the claim in no way implicated the appellants as employees of CASA
    making the video in the course of their employment.

[3]

However, it is apparent that the application judge did not have a full
    appreciation of the record. He said: There is no cross claim or third party
    claim against either of the applicants. In fact there were cross claims
    against both appellants, and there are third party claims against CASA as well.

[4]

We do not accept the respondents argument that the characterization of
    the claim for the purposes of the duty to defend is limited to the statement of
    claim. That may be the usual case, but our view of the authorities is that all
    the pleadings may be considered, with the most weight placed on pleadings
    against potential insured:
Monenco Ltd. v. Commonwealth Insurance
,
    [2001] 2 S.C.R. 699. The object of the exercise is to ascertain the substance
    and the true nature of the claims:
Monenco
at para. 35, and
Non-Marine
    Underwriters, Lloyd's of London v. Scalera
, [2000] 1 S.C.R. 551, at para.
    79.

[5]

The statement of claim, the cross-claims and third party claims in this
    case are claims against potential insureds within the meaning of the policy.
    The defence to the third party claims is a pleading filed by a party other than
    the appellants.

[6]

When the pleadings in the cross-claims and third party claims are included
    in the consideration with the statement of claim, we have no difficulty
    concluding it may be reasonably inferred that there is at least the mere
    possibility that the appellants were employed by CASA and acting in the course
    of their employment when they made and posted the video on the internet.

[7]

The appeal is allowed.

R.G.
    Juriansz J.A.

P.
    Lauwers J.A.

Grant
    Huscroft J.A.


