If the SCC quotes any propostions of statutory interpretation, they’ll probably cite the current mantra “Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: see, for example, Marche v. Halifax Insurance Co., [2005] 1 S.C.R. 47, 2005 SCC 6 at para. 54

Relevant precedent is what the SCC says is relevant (

Precedent has to be relevant to be of value. The interpetation of a marine insurance policy is not relevant precedent, and indeed is dangerously inappropriate in this context.

This wording in the Ontario OAP isn’t actually government imposed. It’s industry drafted, the gov’t approves it, then it becomes standard.

As to what the insurance industry’s actual intention was, I’d be surprised if the SCC allowed or heard any arguments on that issue. I say this based on how the cases below seem to have been argued and decided. I’ve gone through the Herbison trial and appeal judgments and don’t see that that sort of evidence was ever presented. It appears that the case was argued on the interpretation of the words as written; that is, that any rule allowing the introduction of extrinsic evidence wouldn’t apply.

This is guesswork on my part. I don’t know what was in the facta or the evidence actually called. I’m just assuming that the trial judge would have referred to some of it if it were called and similarily the Ont CA, at the least because both trial and appellate courts would have to mention that Lumberman called the evidence etc.

So, if the SCC has no actual evidence as to the insurance industry’s expectation because the evidence wasn’t introduced at all, or wasn’t admissible if introduction was attempted, what can it do but decide the meaning of the words based on prior precedent, what’s written and so called natural (or dictionary) meanings?

The cited remarks from the Supreme Court in Derksen show a disregard for context that is worth criticising. Marine insurance is not carried on according to a statutory scheme dictated by the legislature. Underwriters are free to agree as they think prudent. If they choose a wording that can be interpreted against them, so be it. They pay one claim, and they (and anyone in the industry paying attention) can then change their ways accordingly. But a provision imposed by statute expresses the will of Parliament. The underwriter uses this wording or he can’t do business. The wording is part of an elaborate scheme of regulation of autos and auto insurance, which includes regulation of rates, and which is intended to produce a stable industry with the resources to pay this portion of the costs of the automobile society. If Parliament chooses a wording that can be interpreted so as to wreck the entire scheme beyond salvage, the court is under a duty not to adopt that interpretation. And if the court expands coverage beyond the insurer’s expectation, the entire industry suffers until the legislature can respond. The idea that one can adopt the same rakish, devil-may-care attitude here as you would with Lloyd’s and the Greek merchant marine is neither realistic nor responsible.

The SCC has itself in a jurisprudential, metaphysical, quagmire no matter how it approaches the cases no matter how it tries to analyze the problem, if it claims that the analysis it adopts is consistent with existing principle and mandates one conclusion or the other

Apply the method of analyses suggested by either of Amos v. Insurance Corp. of British Columbia, [1995] 3 S.C.R. 405 or Heredi v. Fensom, 2002 SCC 50, [2002] 2 S.C.R. 741 and ask yourself whether both cases can be validly, equally, used to support both the insurers and the insureds in the Herbison and Vytlingam cases. If Amos and Heredi validly support both sides, they can’t be used for either at the expense of the other. However, it’s almost certain that that, in effect, is what will happen since the SCC has to choose one or the other of the insurers or the insureds. It doesn’t have Solomon’s option of cutting the subject matter in half.

Bear in mind that the SCC is already on record as saying that questions of cause in insurance policy interpretation are not a matter of metaphysics: see, C.C.R. Fishing ltd. v. British Reserve Insurance Co., [1990] 1 S.C.R. 814, 1990 CanLII 145 and more recently, Derksen v. 539938 Ontario Ltd., 2001 SCC 72, [2001] 3 S.C.R. 398, 205 D.L.R. (4th) 1 on the meaning of “cause” and “proximate cause” in insurance policy analysis. In CCR Fishing, McLachlin J (as he then was) wrote:

The trial judge was right to take the view that he need not analyze which of the two causes of the loss was proximate, given that it was clear on his findings that the sinking of the ship would not have occurred but for the unusual and fortuitous event of the valve being negligently left open.

This broader approach has much to recommend it, in my view.  The question of whether insurance applies to a loss should not depend on metaphysical debates as to which of various causes contributing to the accident was proximate.   Apart from the apparent injustice of making indemnity dependent on such fine and contestable reasoning, such a test is calculated to produce disputed claims and litigation. It should be sufficient to bring the loss within the risk if it is established that, viewed in the entire context of the case, the loss is shown to be fortuitous in the sense that it would not have occurred save for an unusual event not ordinarily to be expected in the normal course of things.”

And, there’s this from Derksen

36  In any event, the utility of the “proximate cause’ analysis with respect to insurance policies is questionable.  In C.C.R. Fishing Ltd. v. British Reserve Insurance Co., 1990 CanLII 145 (S.C.C.), [1990] 1 S.C.R. 814, McLachlin J. (as she then was) stated (at p. 823):

 The question of whether insurance applies to a loss should not depend on metaphysical debates as to which of various causes contributing to the accident was proximate.  Apart from the apparent injustice of making indemnity dependent on such fine and contestable reasoning, such a test is calculated to produce disputed claims and litigation.

Although McLachlin J. was analysing insurance policies with respect to perils of the sea, her comments are equally applicable here.  The courts below recognized that there were both auto-related and non-auto-related negligence.  Furthermore, as the motions judge concluded, s. 267.1 of the Insurance Act recognizes that there may be concurrent causes.  In such circumstances, it is undesirable to attempt to decide which of two concurrent causes was the “proximate’ cause.

The SCC is also generally on record that causation, generally, is not a matter of metaphysics. That case is, of course, Snell v Farrell. Whether the SCC’s adherence to that mantra is more in the range of do what I say, not what I do, is something over which much ink has already been spilled, and much more is likely to be spilled.

I don’t disagree with you. The issue arising in Lumbermens Mutual is very much an artifact of the statutory language engaged. You might be interested in knowing that there is also a companion case to Lumbermens that was heard on the same day: Citadel General Assurance Company v. Michael Vytlingam by his Litigation Guardian, Chandra Vytlingam, et al. (docket no. 31083). This case involves an Ontario man who suffered extensive brain injury when a boulder was intentionally dropped onto his car from an overpass in North Carolina. As you might have guessed, the boulder was transported to the overpass by the perpetrators using their own vehicle.

Eric Baum

The policy form in Lumberman’s uses the phrase “arising … directly or indirectly from” as the term that defines the required relationship between the events and the harm.

Regardless of what one thinks the answer should be, ask yourself this question: can there be anything which might be a cause that doesn’t fall within the set defined as all causes which are direct or indirect.

If we agree that logic – even that which sometimes passes for legal logic – requires a “no” answer to question, then we’ll have to agree that any decision the SCC makes that finds that the events were not a cause is a decision based on [scare quotes time] “policy” factors.

That, as you correctly indicate, is the problem the SCC has to wrestle with.

Putting this another way, in order to restrict the ordinary language meaning of “arising … directly or indirectly from”, the SCC will have to say, again, that legal causation is not scientific causation; but this time to restrict the scope of the causal relationship rather than to enlarge it.

David Cheifetz