Co-operators Life Insurance Co. v. Gibbens

Co-operators Life Insurance Co. v. Gibbens
Collection
Supreme Court Judgments
Date
2009-12-18
Neutral citation
2009 SCC 59
Report
[2009] 3 SCR 605
Case number
32677
Judges
McLachlin, Beverley; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Charron, Louise; Rothstein, Marshall; Cromwell, Thomas Albert
On appeal from
British Columbia
Subjects
Insurance
Notes
SCC Case Information: 32677
Decision Content
SUPREME COURT OF CANADA
Citation: Co‑operators Life Insurance Co. v. Gibbens, 2009 SCC 59, [2009] 3 S.C.R. 605
Date: 20091218
Docket: 32677
Between:
Co‑operators Life Insurance Company
Appellant
and
Randolph Charles Gibbens
Respondent
‑ and ‑
Canadian Life and Health Insurance Association Inc.
Intervener
Coram: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.
Reasons for Judgment:
(paras. 1 to 67)
Binnie J. (McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ. concurring)
______________________________
Co‑operators Life Insurance Co. v. Gibbens, 2009 SCC 59, [2009] 3 S.C.R. 605
Co‑operators Life Insurance Company Appellant
v.
Randolph Charles Gibbens Respondent
and
Canadian Life and Health Insurance Association Inc. Intervener
Indexed as: Co‑operators Life Insurance Co. v. Gibbens
Neutral citation: 2009 SCC 59.
File No.: 32677.
2009: April 16; 2009: December 18.
Present: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.
on appeal from the court of appeal for british columbia
Insurance — Accident insurance — Accident and Disease benefit — Insured person becoming paralyzed below his mid‑abdomen after acquiring genital herpes by engaging in unprotected sexual intercourse — Whether insured’s paralysis caused by “external, violent and accidental means” within meaning of insurance policy.
The insured had unprotected sex with three women and acquired genital herpes, which in turn caused transverse myelitis, a rare complication of herpes that resulted in total paralysis from his mid‑abdomen down. He was aware of the risk of contracting a sexually transmitted disease but did not know that any of the women had genital herpes. He claimed compensation under his group insurance policy which provided coverage for losses sustained “as a direct result of a Critical Disease or resulting directly and independently of all other causes from bodily Injuries occasioned solely through external, violent and accidental means, without negligence” on the insured’s part. The definition of (critical) diseases in the policy does not include transverse myelitis. The insured commenced an action and the parties applied to the British Columbia Supreme Court for a determination of whether his paraplegia qualifies as a “bodily injur[y] occasioned solely through external, violent and accidental means”. The trial judge answered the question in the affirmative and awarded the insured $200,000. The Court of Appeal upheld the trial judge’s decision.
Held: The appeal should be allowed.
The insured’s loss is not covered by the policy. The interpretation of insurance policies should avoid unrealistic results that would not have been contemplated by the insured and the insurer when they entered into the policy agreement. The word “accident” is an ordinary word to be interpreted in ordinary language as it would be understood by the average person applying for insurance. That said, the definition of accident has proven, in practice, to be one of the more philosophically complex simple questions. [16] [20‑21]
Traditionally, the courts have carved out of the potential universe of “unlooked‑for mishaps or untoward events which are not expected or designed” the sub‑universe of bodily “infirmit[ies] caused by disease in the ordinary course of events”. Accident insurance is not comprehensive health insurance and it is evident that the parties in this case did not expect the policy to cover all loss or bodily injury. Quite apart from the usual concept of “accident” as itself excluding a bodily infirmity caused by disease in the ordinary course of events, the policy provided separate coverage against the risk of enumerated “critical diseases”. Transverse myelitis is not listed among them. [2] [19] [29]
In ordinary speech “accident” does not include ailments proceeding from natural causes. Genital herpes is a sexually transmitted virus that spreads by sexual intercourse. The causal chain that led to the insured’s bodily injury was sex that transmitted herpes that led to transverse myelitis. Transverse myelitis is an unexpected consequence of genital herpes that occurs rarely but it is a normal incident or consequence of the disease. Since the transmission followed the normal method by which sexually transmitted diseases replicate, the bodily injury proceeded from natural causes. [58‑59] [62]
The insured argued that Martin v. American International Assurance Life Co., 2003 SCC 16, [2003] 1 S.C.R. 158, did away with the need to consider the “accidental means” if the resulting death or disease was “unexpected” but this is not so. In Martin, a doctor, who was addicted to morphine and Demerol, killed himself by a self‑administered drug overdose. Martin, not being a “disease” case, found it unnecessary to address the traditional distinction between “disease” and “accident”. The Court was able to infer accidental means from the circumstances of the death (a fatal injection) that pointed to a miscalculation. There is no necessary equivalence between “unexpected” and “accident”. If a man, sitting at a bus station, is hit by a bus that has careened out of control, that is unquestionably an accident — but it is not an accident by virtue of the fact that the man did not expect it. [40] [45]
Diseases are transferred from person to person through natural processes such as coughing or sneezing in someone’s presence “in the ordinary course of events”. The viruses thus transmitted may, in some situations, prove to have calamitous and unexpected consequences. However if such transmissions were classified as accidents, then an accident policy would become a comprehensive health policy despite the substantially lower premium. On the other hand, the insurance industry cannot use “disease” to extricate itself from valid accident claims. Unlisted diseases or other bodily infirmities might still be covered if attributable to some antecedent event or events that could, together with an unexpected result, be characterized as accidental. [38‑39] [48]
The onus is on the claimant to show that the loss is covered by the policy. However, once the claimant leads evidence sufficient to establish a prima facie case that the bodily injury was caused by an “unlooked-for mishap or an untoward event which is not expected or designed”, the tactical burden then shifts to the insurance company to displace the prima facie case by some evidence that the bodily injury is not an accident but its “antithesis”, namely, the result of a disease picked up in the ordinary course of events. The burden of proof however, remains squarely with the plaintiff. If he or she fails to establish on a balance of probabilities that the bodily injury resulted from an accident, the claim will fail. And so it is in this case. [51]
Cases Cited
Explained: Martin v. American International Assurance Life Co., 2003 SCC 16, [2003] 1 S.C.R. 158; referred to: Fegan v. State Mutual Life Assurance Co. of America, 945 F.Supp. 396 (1996); Smith v. British Pacific Life Insurance Co., [1965] S.C.R. 434; Milashenko v. Co‑operative Fire & Casualty Co. (1970), 11 D.L.R. (3d) 128; Columbia Cellulose Co. v. Continental Casualty Co., [1964] I.L.R. ¶ 1‑119; De Souza v. Home and Overseas Insurance Co., [1995] L.R.L.R. 453; Landress v. Phoenix Mutual Life Insurance Co., 291 U.S. 491 (1934); Consolidated‑Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; Mutual of Omaha Insurance Co. v. Stats, [1978] 2 S.C.R. 1153; National Bank of Greece (Canada) v. Katsikonouris, [1990] 2 S.C.R. 1029; Canadian Indemnity Co. v. Walkem Machinery & Equipment Ltd., [1976] 1 S.C.R. 309; Fenton v. Thorley & Co., [1903] A.C. 443; Wang v. Metropolitan Life Insurance Co. (2004), 242 D.L.R. (4th) 598, leave to appeal refused, [2005] 1 S.C.R. xvii; Brissette Estate v. Westbury Life Insurance Co., [1992] 3 S.C.R. 87; Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252; Algoma Steel Corp. v. Allendale Mutual Insurance Co. (1990), 72 O.R. (2d) 782, leave to appeal refused, [1991] 1 S.C.R. v; Sinclair v. Maritime Passengers’ Assurance Co. (1861), 3 E.L. & E.L. 478, 121 E.R. 521; Wyman v. Dominion of Canada General Insurance Co., [1936] 2 D.L.R. 268; Brintons, Ltd. v. Turvey, [1905] A.C. 230; Toronto Professional Firefighters’ Association v. Toronto (City) (2007), 223 O.A.C. 146; Glenlight Shipping Ltd. v. Excess Insurance Co., 1983 S.L.T. 241; Cornish v. Accident Insurance Co. (1889), 23 Q.B.D. 453; Brown v. Continental Casualty Co., 108 So. 464 (1926); Bertalan Estate v. American Home Assurance Co. (1999), 68 B.C.L.R. (3d) 118; N. W. Commercial Travellers’ Association v. London Guarantee and Accident Co. (1895), 10 Man. R. 537; Bacon v. U.S. Mutual Accident Assn., 44 Hun. 599 (1887); Derksen v. 539938 Ontario Ltd., 2001 SCC 72, [2001] 3 S.C.R. 398; C.C.R. Fishing Ltd. v. British Reserve Insurance Co., [1990] 1 S.C.R. 814; Re Etherington and The Lancashire and Yorkshire Accident Insurance Co., [1909] 1 K.B. 591; Carroll v. CUNA Mutual Insurance Society, 894 P.2d 746 (1995); Peoples Life Ins. Co. v. Menard, 117 N.E.2d 376 (1954); American Accident Co. of Louisville v. Reigart, 23 S.W. 191 (1893); Koch v. Empire Life Insurance Co. (1981), 29 A.R. 49; Jones v. Aetna Life Insurance Co., 439 S.W.2d 721 (1969); Claxton v. Travellers Insurance Co. of Hartford (1917), 36 D.L.R. 481; Voison v. Royal Insurance Co. of Canada (1988), 66 O.R. (2d) 45; Guillet v. American Home Assurance Co. (2004), 72 O.R. (3d) 641; Kolbuc v. ACE INA Insurance, 2007 ONCA 364, 85 O.R. (3d) 652.
Authors Cited
Butterworths Medical Dictionary, 2nd ed. London: Butterworths, 1978, “disease”.
Couch on Insurance, 3rd ed. by Lee R. Russ and Thomas F. Segalla. Deerfield, Ill.: Clark Boardman Callaghan, 1995.
Hall, Geoff R. Canadian Contractual Interpretation Law. Markham, Ont.: LexisNexis, 2007.
Ivamy, E. R. Hardy. General Principles of Insurance Law, 6th ed. London: Butterworths, 1993.
MacGillivray on Insurance Law, 10th ed. by Nicholas Legh‑Jones. London: Sweet and Maxwell, 2003.
Milton, John. Paradise Lost. Edinburgh: A. Donaldson, 1767.
Norwood, David, and John P. Weir. Norwood on Life Insurance Law in Canada, 3rd ed. Toronto: Carswell, 2002.
Scales, Adam F. “Man, God and the Serbonian Bog: The Evolution of Accidental Death Insurance” (2000‑2001), 86 Iowa L. Rev. 173.
Welford, A. W. Baker. The Law Relating to Accident Insurance, 2nd ed. London: Butterworths, 1932.
APPEAL from a judgment of the British Columbia Court of Appeal (Newbury, Saunders and Frankel JJ.A.), 2008 BCCA 153, 77 B.C.L.R. (4th) 26, 292 D.L.R. (4th) 492, 61 C.C.L.I. (4th) 32, [2008] 7 W.W.R. 323, 254 B.C.A.C. 120, [2008] B.C.J. No. 625 (QL), 2008 CarswellBC 702, upholding a decision of Cole J., 2007 BCSC 1076, 74 B.C.L.R. (4th) 393, 51 C.C.L.I. (4th) 144, [2008] 7 W.W.R. 314, [2007] B.C.J. No. 1606 (QL), 2007 CarswellBC 1665. Appeal allowed.
Bruce Laughton, Q.C., and Leah Terai, for the appellant.
Guy J. Collette, Michael Sobkin and A. C. Richard Parsons, for the respondent.
Patricia D. S. Jackson and David Outerbridge, for the intervener.
The judgment of the Court was delivered by
[1] Binnie J. — This appeal concerns a claim under an accident insurance policy by Mr. Gibbens who had unprotected sex with three women during January and February 2003. He thereby acquired genital herpes (HSV-2), which in turn caused inflammation of his spinal cord (transverse myelitis), a rare but known complication of herpes, which resulted in total paralysis from his mid-abdomen down. He claimed compensation under a group insurance policy on the basis that the paralysis resulted “directly and independently of all other causes from bodily Injuries occasioned solely through external, violent and accidental means, without negligence” on his part.
[2] Accident insurance is not comprehensive health insurance. Mr. Gibbens contracted a sexually transmitted disease in the ordinary way through sexual intercourse. In most cases genital herpes is a minor irritant (if indeed there are any symptoms at all). I agree with the courts in British Columbia that Mr. Gibben’s paralysis was tragic and unexpected but I do not agree with them that it was caused by “external, violent and accidental means” within the meaning of the insurance policy. I would therefore allow the appeal.
I. Facts
[3] Mr. Gibbens is a beneficiary under a Group Insurance Policy issued by the Co-operators Life Insurance Company, that covered certain specified risks as follows:
ACCIDENTAL DEATH, DISEASE AND DISMEMBERMENT BENEFIT
Section A1.2
“Covered Loss” means a Critical Disease Benefit, Accidental Death Benefit or an Accidental Disease/Dismemberment Benefit covered under this Benefit Provision. The Covered Loss must occur prior to the Member’s 71st birthday and while the Member is insured under this Provision. In the case of an accident, the Covered Loss must occur within 365 days after the date of the accident.
CRITICAL DISEASE BENEFIT
The Insurance Company will pay to the Member an amount equal to 10% of the Principal Sum provided the Member has been diagnosed with a Critical Disease while insured under this Provision and has been Totally Disabled from that disease for at least nine (9) months. Benefits are limited to the first covered Critical Disease in the Member’s lifetime.
. . .
ACCIDENTAL DISEASE/DISMEMBERMENT BENEFIT
If the Insurance Company is furnished with proof that a Member, sustains one of the following losses, as a direct result of a Critical Disease or resulting directly and independently of all other causes from bodily Injuries occasioned solely through external, violent and accidental means, without negligence on the Member’s part, the Insurance Company will pay:
(1) An amount equal to 200% of the Principal Sum for:
(a) paraplegia (total paralysis of both lower limbs) . . . [Emphasis added.]
The policy does not contain any definition of “accident” or “accidental means”. It does, however, define “Critical Disease”:
“Critical Disease” shall mean any of the following diseases diagnosed after the Effective Date of the Member’s Insurance: Poliomyelitis, Parkinson’s Disease, Huntington’s Chorea, Multiple Sclerosis, Alzheimers Disease, Type I Diabetes (Insulin Dependent), Amyotrophic Lateral Sclerosis (ALS), Peripheral Vascular Disease and Necrotizing Fascitis.
[4] Mr. Gibbens was employed in high pressure water blasting. The group policy was a benefit provided by his union. At the time of the trial he was 45 years old.
[5] According to an agreed statement of facts Mr. Gibbens did not know that any of the three women with whom he had sexual intercourse during January and February 2003 had Herpes Simplex Virus Type-2 (HSV-2).
[6] On February 17, 2003, Mr. Gibbens consulted his family physician complaining of headaches and myalgia (muscular pain) with back pain. His doctor diagnosed a viral illness and prescribed symptomatic treatment.
[7] On February 21, 2003, Mr. Gibbens went to the emergency department at Eagle Ridge Hospital complaining of urinary retention for two days, some recent kidney/flank pain, supra pelvic discomfort, vomiting for two days, and poor physical coordination. On examination he was noted to be shaky/weak and it was hard for him to sit up. He was diagnosed with urinary retention, possible alcohol withdrawal and epigastric pain not yet diagnosed. Mr. Gibbens continued to deteriorate and by February 23, 2003, he was paraplegic.
[8] In terms of causation, the parties agreed that by reason of the unprotected sex Mr. Gibbens had been infected with HSV-2 which caused the inflammation of his spinal cord (transverse myelitis) resulting in a permanent T3 ASIA C spinal cord injury (total paralysis from mid-abdomen down).
[9] Under the policy, Co-operators Life was obligated to pay $200,000 if Mr. Gibbens suffered the paraplegia through “external, violent and accidental means”.
[10] Mr. Gibbens acknowledged that he was aware of the risk of contracting a sexually transmitted disease when having unprotected sexual intercourse, but stated that he did not intend or expect to contract HSV-2 or to develop transverse myelitis.
II. Judicial History
A. British Columbia Supreme Court, 2007 BCSC 1076, 74 B.C.L.R. (4th) 393
[11] Cole J. found for Mr. Gibbens. He concluded, based on Martin v. American International Assurance Life Co., 2003 SCC 16, [2003] 1 S.C.R. 158, that to ascertain whether a given means is “accidental”, what must be considered is whether the consequences were unexpected. Accordingly, the question in this case was whether Mr. Gibbens expected to become a paraplegic as a result of having unprotected sexual intercourse. The answer was that he did not. The fact that his sexual conduct was foolish and risky did not preclude the consequences from being considered accidental within the meaning of the policy.
[12] The trial judge rejected the insurer’s argument that Mr. Gibben’s paraplegia was caused by a disease and could not, in the circumstances, be considered to be the product of external, violent and accidental means. The trial judge held that “[d]iseases which do not result from a natural cause may be accidental” (para. 16). Mr. Gibbens was awarded $200,000 plus interest and costs.
B. British Columbia Court of Appeal (Newbury J.A. (Frankel J.A. Concurring)), 2008 BCCA 153, 77 B.C.L.R. (4th) 26
[13] Newbury J.A. rejected the idea that the decision in Martin meant that the question of whether an event was accidental could be determined solely by considering whether it was unexpected. As the Martin decision made clear, it was equally important that the words “accident” and “accidental” be construed in accordance with the “ordinary person’s understanding”, or in “ordinary parlance” (citing paras. 19-20). Newbury J.A. agreed with the trial judge that in light of the decided cases, Mr. Gibbens’ transverse myelitis did not arise “naturally”. Rather, it arose from an external factor or “unlooked-for mishap” — the introduction of the HSV-2 virus into his body by a sexual partner. This was close to the line, but was sufficient to qualify as “accidental” in the ordinary meaning of that term.
[14] Newbury J.A. added that if she were wrong in her view of Martin and the only question was whether Mr. Gibbens’ bodily injury was unintended or unexpected, it was obvious that it was, and applying that test the loss was caused by “accidental means” as required by the policy (paras. 14-23).
[15] Saunders J.A., concurring, pointed out that Martin “did not concern the introduction of a pathogen into the insured’s body or the development of what by any standards must be considered a disease” (para. 35). “The world is populated with pathogens”, she observed, which are acquired through the “regular activities of living” (para. 37), and it may be difficult to perceive a principled difference between the unintended and unexpected contraction of a common ailment (which would not be considered an accident) and genital herpes acquired through sexual intercourse, yet the “state of jurisprudence weighs in favour of Mr. Gibbens” (para. 34). The prudent course is “to follow the view that has already been judicially taken” (para. 38), and leave it to the insurance industry to adapt the wording of its policies in light of jurisprudence.
III. Analysis
[16] A century and a half of insurance litigation has failed to produce a bright line definition of the word “accident”. Insurers have consistently declined to attempt to define the term in their policies. It has been left to the courts to interpret it, and the courts have found the analysis to pose, as an American court put it, “one of the more philosophically complex simple questions”: Fegan v. State Mutual Life Assurance Co. of America, 945 F.Supp. 396 (D. N.H. 1996), at p. 399.
[17] Generally speaking the cases exclude from the concept of accident a “bodily infirmity caused by disease in the ordinary course of events”, as summarized in Mr. Welford’s book:
The word “accident” involves the idea of something fortuitous and unexpected, as opposed to something proceeding from natural causes; and injury caused by accident is to be regarded as the antithesis to bodily infirmity caused by disease in the ordinary course of events.
(A. W. Baker Welford, The Law Relating to Accident Insurance (2nd ed. 1932), at p. 268)
The Welford definition was accepted as authoritative by this Court in Smith v. British Pacific Life Insurance Co., [1965] S.C.R. 434, and in two other cases adopting reasons from the courts below, namely, Milashenko v. Co-operative Fire & Casualty Co. (1970), 11 D.L.R. (3d) 128 (S.C.C.), and Columbia Cellulose Co. v. Continental Casualty Co., [1964] I.L.R. ¶ 1-119 (S.C.C.). More recently, it was adopted by the English Court of Appeal in De Souza v. Home and Overseas Insurance Co., [1995] L.R.L.R. 453, per Mustill L.J., at p. 458.
[18] Welford argued that the element of accident may be manifested in the cause or in the result (p. 269). The distinction between accidental cause (or means) and accidental result has been controversial. Cardozo J. (in dissent) famously invoked Milton’s Paradise Lost in warning that “[t]he attempted distinction between accidental results and accidental means will plunge this branch of the law into a Serbonian Bog”*: Landress v. Phoenix Mutual Life Insurance Co., 291 U.S. 491 (1934), at p. 499. While the recent jurisprudence amply shows the existence (perhaps even the flourishing) of a Serbonian bog, we cannot entirely overlook the fact that Mr. Gibbens’ accident policy contains the time-honoured formula confining the risk to bodily injuries that are “occasioned solely through external, violent and accidental means” (emphasis added). The question is what meaning is to be given to those words in context.
[19] It is evident that the parties did not expect the policy to cover all loss or bodily injury. Quite apart from the usual concept of “accident” as itself excluding a bodily infirmity caused by disease in the ordinary course of events, the policy provided separate coverage against the risk of enumerated “critical diseases”. Transverse myelitis is not listed among them (although poliomyelitis — which may also result in paraplegia — is so listed). Yet the decision of the B.C. Court of Appeal in this case effectively makes the insurer liable for all sexually transmitted diseases where, as here, the insurer does not contend that the claimant courted the disease either deliberately or negligently. Moreover, as will be seen, the decision would have considerable impact on liability for infectious diseases generally, which are spread in the usual course of events by viruses and bacteria passed from person to person, whether by sneezing in a bus, an unprotected cough in a crowded elevator, or a simple handshake. In my view, for the reasons that follow, the policy here excludes bodily injury from processes that occur naturally within the body in the ordinary course of events and, as well, from diseases that are transmitted in the ordinary way without any associated mishap or trauma except the spread (or inception) of the disease itself.
A. General Principles of Interpretation
[20] The courts have developed a number of general interpretative principles that reflect a concern that customers not suffer from the imbalance of power that often exists between insurers and the insured but, on the other hand, that customers obtain no greater coverage than they are prepared to pay for. The exercise of interpretation should avoid “an unrealistic result or a result which would not be contemplated in the commercial atmosphere in which the insurance was contracted”: Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888, per Estey J., at p. 901.
(1) Words Like “Accident” Should Be Given Their Ordinary Meaning
[21] In Mutual of Omaha Insurance Co. v. Stats, [1978] 2 S.C.R. 1153, Spence J. stated that the word “accident” is “an ordinary word to be interpreted in the ordinary language of the people” (p. 1164). Such terms should be construed “as they would be understood by the average person applying for insurance, and not as they might be perceived by persons versed in the niceties of insurance law”: National Bank of Greece (Canada) v. Katsikonouris, [1990] 2 S.C.R. 1029, at p. 1043. This approach was affirmed by McLachlin C.J. in Martin, at para. 19.
[22] What then is the “ordinary meaning” of “accident”? In Canadian Indemnity Co. v. Walkem Machinery & Equipment Ltd., [1976] 1 S.C.R. 309, at pp. 315-16, Pigeon J. suggested that an accident is “any unlooked for mishap or occurrence” (p. 316). This definition was endorsed in Martin, at para. 20. Martin also quoted Stats which similarly held that “‘accident’ . . . denot[es] an unlooked-for mishap or an untoward event which is not expected or designed”. The verbal formula stems from Fenton v. Thorley & Co., [1903] A.C. 443 (H.L.), at p. 448. Of course, as Welford points out, not every unexpected mishap is an accident. Someone who picks up a disease “in the ordinary course of events” would not ordinarily be described as having been in “an accident”.
(2) A Generous Interpretation Should Be Given to the Term “Accident”, Unless a Policy Clearly Restricts It
[23] In Walkem, Pigeon J. observed that the jurisprudence assigns a generous meaning to “accident” in the absence of limiting language in the policy (p. 316). Yet, generosity has its limitations as a principle of contractual interpretation. Insurance is written to protect against certain defined risks. Care should be taken not to convert, for example, an accident policy into a general health, disability, or life insurance policy. Accident insurance is relatively cheap compared to the more comprehensive forms of insurance.
[24] Different policies are written to address different needs, although inevitably there will be some overlapping of coverage. In Wang v. Metropolitan Life Insurance Co. (2004), 242 D.L.R. (4th) 598 (leave to appeal refused, [2005] 1 S.C.R. xvii), discussed below, there was no doubt the husband was entitled to the death benefit under the life insurance policy where his wife died as a result of complications that arose in giving birth to their child. At issue was whether he was also entitled to a double indemnity in the form of an accidental death benefit. The Ontario Court of Appeal, Laskin J.A. dissenting, held that he was not so entitled. The added element of “accident”, the majority held, was absent.
(3) The Words of an Insurance Contract, When Ambiguous, Should Be Construed Against the Drafter (i.e. the Insurer) (Contra Proferentem)
[25] Whoever holds the pen creates the ambiguity and must live with the consequences. In Brissette Estate v. Westbury Life Insurance Co., [1992] 3 S.C.R. 87, at p. 114, Cory J. wrote:
It is right and just to interpret the ambiguities in favour of the insured. It is the insurance company which draws up a contract of insurance. It is the company which determines the clauses which will go into a standard form of contract. It is that standard form of contract which is offered to the people in all walks of life on a take-it-or-leave-it basis.
(See also Consolidated-Bathurst, at p. 899.)
This doctrine is complemented by other rules of contractual interpretation which can assist courts where ambiguity is present. None is relevant here.
(4) Where a Policy Is Ambiguous, Effect Should Be Given to the Reasonable Expectations of the Parties
[26] In Consolidated-Bathurst, Estey J. wrote at pp. 901-2 that
the courts should be loath to support a construction which would either enable the insurer to pocket the premium without risk or the insured to achieve a recovery which could neither be sensibly sought nor anticipated at the time of the contract.
Similarly, in Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252, McLachlin J. urged “the desirability, at least where the policy is ambiguous, of giving effect to the reasonable expectations of the parties” (p. 269).
(5) Continuity of Interpretation
[27] As Newbury J.A. pointed out in the court below, “courts will normally be reluctant to depart from [authoritative] judicial precedent interpreting the policy in a particular way” (para. 30) where the issue arises subsequently in a similar context, and where the policies are similarly framed. Certainty and predictability are in the interest of both the insurance industry and their customers. See Algoma Steel Corp. v. Allendale Mutual Insurance Co. (1990), 72 O.R. (2d) 782 (C.A.) (leave to appeal refused, [1991] 1 S.C.R. v); MacGillivray on Insurance Law (10th ed. 2003), at para. 11-3; G. R. Hall, Canadian Contractual Interpretation Law (2007), at pp. 93-94; and E. R. Hardy Ivamy, General Principles of Insurance Law (6th ed. 1993), at p. 355.
[28] It was not suggested in the present case that these principles of interpretation should be modified because Mr. Gibbens’ claim is under a group policy. The contractual nature, and the process of negotiation, of group policies is somewhat different than that of individual policies: see generally D. Norwood and J. P. Weir, Norwood on Life Insurance Law in Canada (3rd ed. 2002), at p. 212. Nevertheless, in the absence of argument to the contrary, I proceed on the basis that the usual principles of interpretation apply here.
B. The Relationship Between Accident and Disease
[29] Traditionally, the courts have carved out of the potential universe of “unlooked-for mishaps or untoward events which are not expected or designed” the sub-universe of bodily “infirmit[ies] caused by disease in the ordinary course of events”. In adopting this approach to the definition of “accident”, Welford was treading a well-worn path reaching back at least to 1861 when Cockburn C.J. decided Sinclair v. Maritime Passengers’ Assurance Co. (1861), 3 E.L. & E.L. 478, 121 E.R. 521, at p. 524. In that case, a sea captain had sailed his ship The Sultan to the southwest coast of India, and while “superintending the turning of the said ship . . . was struck down by a sunstroke, and died the same day from the effects of the said sunstroke” (p. 523). The court held that sunstroke “is a disease to which persons exposing themselves to the sun in a tropical climate are more or less liable” (pp. 524-25), and the sea captain’s death must therefore “be considered as having arisen from a ‘natural cause,’ and not from ‘accident,’ within the meaning of this policy” (p. 525). A similar conclusion was reached in Wyman v. Dominion of Canada General Insurance Co., [1936] 2 D.L.R. 268 (Ont. S.C.), where a street cleaner died from heat exposure while working the streets of Toronto on the second hottest summer day of 1935. In England the more recent De Souza (1995) case reached the same conclusion on similar facts (tourist goes to hot climate, spends too much time in the sun, succumbs to sunstroke).
[30] In the course of giving his judgment in Sinclair, Cockburn C.J. offered an illustration of how, in his view, the concepts of accident, disease and natural causes related to one another:
Thus disease or death engendered by exposure to heat, cold, damp, the vicissitudes of climate, or atmospheric influences, cannot, we think, properly be said to be accidental; unless at all events, the exposure is itself brought about by circumstances which may give it the character of accident. Thus (by way of illustration), if, from the effects of ordinary exposure to the elements, such as is common in the course of navigation, a mariner should catch cold and die, such death would not be accidental; although if, being obliged by shipwreck or other disasters to quit the ship and take to the sea in an open boat, he remained exposed to wet and cold for some time, and death ensued therefrom, the death might properly be held to be the result of accident. [p. 524]
For present purposes, keeping in mind the importance of continuity of interpretation, I make three observations on the interpretation of “accident” in an insurance policy. Firstly, in both of Cockburn C.J.’s alternative fact situations, as well as in Wyman and De Souza, death occurred from natural causes (i.e. exposure). Such a death may be classified as the outcome of an accident, or it may not, depending on how the court characterizes the facts that gave rise to it. Secondly, the traditional key to liability under an accident policy has been to identify a “mishap or untoward event” to which the disease or death can be attributed. Unless the bodily injury arose from a mishap of some sort there can generally be no liability under an accident policy. Thirdly, in choosing the example of “catching a cold” in the context of deciding a “sunstroke” case, Cockburn C.J. made it doubly clear that by “disease” he did not limit himself to degenerative diseases brought about by age or wear and tear. Young and healthy people suffer sunstroke and catch colds. Such ailments can, when shown to be the product of an antecedent event correctly characterized as accidental, be covered. Sinclair is also an early example of the principle that the entire chain of events must be looked at, and not just the means or the end result, to determine if the loss can be considered accidental, an approach recently affirmed by this Court in Martin, at para. 14.
[31] Disease for present purposes may be defined as:
In general, a departure from the normal state of health. More specifically, a disease is the sum total of the reactions, physical and mental, made by a person to a noxious agent entering his body from without or arising within (such as a micro-organism or a poison), an injury, a congenital or hereditary defect, a metabolic disorder, a food deficiency or a degenerative process. These cause pathological changes in organs or tissues which are revealed by characteristic signs and symptoms.
(Butterworths Medical Dictionary (2nd ed. 1978), at p. 523)
[32] The distinction between “accidents” and “diseases contracted in the ordinary course of events” is often not an easy one to make in practice. The difficulty is illustrated by Brintons, Ltd. v. Turvey, [1905] A.C. 230. In that case a man died after working with wool in the defendant’s factory. A bacillus from infected wool had found its way into the man’s eye, and it developed into anthrax. The insurer argued that this was death from disease, not by accident. Lord Lindley in the House of Lords, in rejecting this position, held that “[t]he fact that an accident causes injury in the shape of disease does not render the cause not an accident” (p. 238), but the dissenting judgment of Lord Robertson supplied a pertinent caution. He expressed the concern that as a result of allowing such a claim “[I]n every case in which a man dies of any infectious disease . . . all he has got to do is to get the doctor to prove (what could not be disputed) that a bacillus did it, and the accident is there” (p. 235). Referring to illustrations given by his colleague the Earl of Halsbury L.C. in the same case of “tetanus, pneumonia, or erysipelas ensuing on accident”, he continued that such illustrations “differ from the present case in the one point essential to the controversy, for in the illustrations there is postulated an accident distinct from the disease, while in the case before your Lordships the so-called ‘accident’ is simply the inception of the disease” (p. 236). In this, perhaps, Lord Robertson anticipated the dictum of Cardozo J. that “[i]f there was no accident in the means, there was none in the result” (Landress, at p. 501).
[33] Brintons was decided under a legislative scheme to compensate workers injured on the job. Such schemes are, as they ought to be, generously interpreted in favour of injured workers. Decisions about the meaning of “accident” under such legislative schemes often turn on the particular statutory text, purpose and legislative history. Accordingly, such decisions should be viewed with caution when it is sought to apply them to private insurance policies. Nevertheless, the debate in Brintons about the general relationship between accident and disease helpfully illustrates an analytical issue at the heart of the present appeal. I quote it only for that limited purpose.
[34] A more recent illustration of the problematic relationship between accident and disease is Toronto Professional Firefighters’ Association v. Toronto (City) (2007), 223 O.A.C. 146 (Div. Ct.). In that case a claim was brought on behalf of a firefighter who died of renal failure caused by his contact with toxic substances over his 20 years fighting fires. A claim for accident coverage was made under the terms of a collective agreement. A labour arbitrator decided that the insured did not die as a result of an “accident” but his decision was quashed by the Ontario Divisional Court. It was established that the firefighter’s renal cancer was caused by “exposures to toxic substances . . . when the dangers were unknown and the safety equipment was unsafe” (para. 53). This was a case where an “unlooked-for mishap or occurrence” caused a disease. It was not a case of the spread of the disease itself in the ordinary course of events. In the language of Brintons, there was “postulated” in Toronto Professional Firefighters an accident (or chain of events) distinct from the disease.
C. The Definition of “External, Violent and Accidental Means”
[35] As Sinclair shows, the fact that Mr. Gibbens’ paraplegia was caused by a disease does not in itself bar his claim. The question according to the insurer, relying on Welford, is whether Mr. Gibbens acquired the disease “in the ordinary course of events”. The insurer says that nothing could be a more ordinary part of life than sexual intercourse with a willing partner. Mr. Gibbens responds that paraplegia, being a totally unexpected outcome of sex “in the ordinary course of events”, should be deemed to have come about through “accidental means” within the meaning of the policy.
[36] Welford’s definition of accident is a good starting point. For ease of reference I repeat it:
The word “accident” involves the idea of something fortuitous and unexpected, as opposed to something proceeding from natural causes; and injury caused by accident is to be regarded as the antithesis to bodily infirmity caused by disease in the ordinary course of events. [p. 268]
[37] Welford defines accident as much by what it is not, i.e. “bodily infirmity caused by disease in the ordinary course of events”, as by what it is, i.e. “something fortuitous and unexpected”. In the present appeal, as might be anticipated, counsel for Mr. Gibbens spent much time emphasizing the latter phrase at the expense of the former, and counsel for the insurance company did the opposite. The acquisition of a disease can frequently be considered an “unlooked-for mishap”, broadly speaking. The challenge in this appeal is to relate different types of insurance risk and coverage in a way that makes sense “in the commercial atmosphere in which the insurance was contracted”: Consolidated-Bathurst, at p. 901.
[38] For present purposes it is important to keep in mind that diseases are transferred from person to person through natural processes such as coughing or sneezing in someone’s presence “in the ordinary course of events”. The viruses thus transmitted may, in some situations, prove to have calamitous and unexpected co