ING Insurance Co. of Canada v. Sportsco International L.P.,  O.J. No. 2254 Ontario Superior Court of Justice
On April 12, 2001 a portion of the SkyDome’s retractable roof was damaged when it was being opened and pieces of the roof fell on the playing field. It was determined that the stadium was unsafe for use and a regularly scheduled Major League Baseball game between the Toronto Blue Jays and the Kansas City Royals was postponed. The Blue Jays sued Sportsco, the owner/operator of SkyDome, for damages in the amount of $1,000,000.00 alleging a loss of revenues from the loss of use of the building on April 12, 2001. Sportsco was insured under a CGL policy with ING and sought a defence to the action commenced by the Blue Jays. ING denied coverage and brought an application seeking a declaration that it did not owe Sportsco a defence.
In determining the defence obligation, the court indicated that two issues must be decided:
1) Did Sportsco bring itself within the terms of coverage? Was there an “occurrence”?
2) If there was an “occurrence”, do any of the exclusions raised by ING apply?
The court noted that Sportsco had the onus of demonstrating that its claim fell within the ING policy wording. To determine this, the court reviewed the allegations of the Blue Jays’ Statement of Claim against Sportsco and noted that it alleged that the damage to the SkyDome roof occurred as a result of the negligence of Sportsco, including negligence in the maintenance of the roof. The court rejected ING’s argument that the thrust of the Blue Jays claim was for “defective manufacture” and found that the true nature of the claim advanced against Sportsco was for negligence in maintaining the roof. The court found that the collapse of the roof did constitute an “accident” and that therefore “an occurrence” happened giving rise to property damage. Based on this finding, the court indicated that Sportsco had brought itself within the coverage provisions of the policy subject to any exclusion clause.
ING raised six separate exclusions clauses which it argued excluded coverage for this loss. The court made a critical finding that the SkyDome was not “Sportsco’s product” and as a result of this finding, the majority of the exclusion clauses raised by ING were held not to apply. The other exclusion clauses raised by ING were also rejected as they were intended to apply to a circumstance in which the policy holder was using its own property. In reviewing the case law on duty to defend, the court cited the decision of the Supreme Court of Canada in Non-Marine Underwriters, Lloyds of London v. Scalera,  1 S.C.R. 551 as affirming the test that the mere possibility that a claim within the policy may succeed was sufficient to find a duty to defend. In the case at bar, the court accepted that the Blue Jays’ factual allegations as pleaded, if proven, would create, at the very least, a mere possibility that the claim could succeed against Sportsco. Therefore, the court held that the claim fell within the policy’s coverage. In the result, the court made a declaration that ING owed a defence to Sportsco in the action commenced by the Blue Jays.
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