Homeowner Policy Required to Defend person - Pembridge Insurance Company of Canada v. Chu, 2019 ONCA 904

November 27, 2019, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Homeowner Policy Required to Defend person - Pembridge Insurance Company of Canada v. Chu, 2019 ONCA 904

Date of Decision: November 15, 2019
Heard Before: Simmons, Pardu and Nordheimer JJ.A.


INTENT: What is the intent of the act; is this a car accident; does the home owner policy apply; but for; costs

On appeal from the judgment of Justice Chris De Sa of the Superior Court of Justice, dated February 27, 2019, with reasons reported at 2019 ONSC 1359.


Dominion appeals from an application judge’s decision that was under no duty to defend Dennis Chu and John Chu from claims related to a motor vehicle accident.

Dominion is Dennis Chu’s auto-insurer and conceded a duty to defend allegations of negligent driving against him. Pembridge provides John Chu’s homeowner insurance. Dennis Chu is John Chu’s son, and was living at home at the time of loss. Pembridge therefore covers Dennis Chu under the homeowner’s policy.

In the underlying litigation, Tate Moran, claims Ottavio Fabrizi caused her injuries by driving through a red light. Fabrizi made a third-party claim against Dennis Chu, alleging, among other things, that Dennis Chu not only drove negligently but also:

  • Got out of his vehicle;
  • Threatened Fabrizi and a passenger in Fabrizi’s vehicle with violence;
  • Yelled at them, hit the window and other parts of the vehicle; and
  • Made other gestures causing Fabrizi and his passenger to fear for their lives.

Fabrizi claimed, among other things, that his flight from Dennis Chu led to the collision which caused Moran’s injuries.  The Pembridge homeowner’s policy insured the policy holder for “legal liability arising out of [their] personal actions anywhere in the world” but excluded claims made arising from “the ownership, use or operation of any motorized vehicle”.

The appellant submits that the motion judge erred in three respects:

  1. He did not compare the allegation against the Chus in the pleading with the homeowner policy’s language, as binding jurisprudence mandates. Instead, the motion judge considered that it was “more appropriate” for the auto-insurer, Dominion to provide coverage.
  2. He erred in concluding that the intentional act exclusion in the homeowner’s policy meant that Pembridge was under no duty to defend. The homeowner policy excludes coverage for bodily injury “caused by any intentional or criminal acts or failure to act”. Binding jurisprudence confines that exclusion to acts intended to cause harm. On this point, the motion judge erred by conflating the issue over the duty to defend with the issue of the duty to indemnify, the latter of which can only be determined after the facts are found at trial.
  3. He inappropriately made factual findings that Dennis Chu’s actions after getting out of the vehicle would be deemed “incident to the ownership, use or operation of a vehicle” and therefore covered by the auto-insurer and not by the homeowner insurer. Factual findings are to be made at trial. The duty to defend issue is to be based on the allegations as pleaded.


  1. We agree with those arguments.


The insurer is obliged to defend if a claim alleges facts which, if proven, would fall within the insurer’s policy coverage. A judge hearing a duty to defend coverage dispute is precluded from fact-finding on matters at issue in the underlying tort action: Cooper v. Farmers’ Mutual Insurance Co. (2002), 59 O.R. (3d) 417 (C.A.), at para. 13.  The mere possibility that a claim on the policy may succeed is sufficient to engage an insurer’s contractual duty to defend: Cooper at para. 15.

If pleadings are not framed with sufficient precision to determine whether the policy covers the claims, the insurer’s obligation to defend will be triggered where, on a reasonable reading of the pleadings, a claim within coverage can be inferred. Coverage clauses are construed broadly, while exclusion clauses should be interpreted narrowly: Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, [2001] S.C.R. 699, at para. 31. 

Whether or not another insurer also has a duty to defend based on the construction of another policy and a comparison with the pleadings is not relevant to this determination.


At the time of the threats and assaults attributed to Chu, he was no longer in his vehicle and was not using the car. This gives rise to an argument that the chain of causation — connecting use of Chu’s car with the alleged threats and assaults, Fabrizi’s flight, and Fabrizi’s collision with Moran — was broken.

We note that, under similar circumstances the court in Tench v. Erskine (2006concluded that the claim could not be said to have arisen out of the ownership, use or operation of a vehicle, and the auto insurer was under no duty to defend.

Without deciding whether the decision in Tench would be the same in Ontario, it serves to demonstrate that there is more than one possible outcome to the events in this case.

It is arguable that the exclusion in the Pembridge homeowner policy for acts arising from “the ownership, use or operation of any motorized vehicle”, when construed narrowly, does not apply to Chu’s alleged assaults. In other parts of the policy, Pembridge excluded coverage for matters such as terrorism or fungal contamination where there are other causes of the losses, whether concurrent or sequential. In other exclusions, Pembridge uses the language of bodily injury arising “directly or indirectly” from an excluded event. The automobile exclusion does not include that language. Consequently, a court might conclude that the automobile exclusion in the Pembridge homeowner policy did not apply so as to exclude coverage for Chu’s actions after he got out of his car: see, for instance, the discussion in Consolidated Bathurst Export Ltd. v. Mutual Boiler & Machinery Insurance Co. [1980] 1 S.C.R. 888 at pp. 898-899.

Under these circumstances, the motion judge erred in concluding that Pembridge had no duty to defend under the use of an automobile exclusions.

The Pembridge homeowner policy also excludes bodily injury “caused by any intentional or criminal acts” by any person insured by the policy. Dennis Chu’s alleged conduct after he left his vehicle was intentional in the sense that it was advertent behaviour. However, in Non-Marine Underwriters Lloyd’s London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551, a clause excluded insurance coverage for bodily injury “caused by any intentional or criminal act”. In the context of damage claims for sexual battery, the Supreme Court of Canada concluded that this clause could not be read literally. Instead, the exclusion clause had to be read to require that in addition to the intentional act, there was also an intent to injure: Scalera, at paras. 37 and 92.

Here, there is no allegation that Dennis Chu intended to harm the plaintiff, Moran. There is also no allegation that Dennis Chu intended to harm Fabrizi, it is not clear that the assaults and threats attributed to Dennis Chu would be sufficient to invoke the exclusion. Based on Scalera, it is arguable that the intentional or criminal act exclusion has no application. Again, since the exclusion clause may be narrowly construed, and since there is a possibility that Pembridge may have to indemnify the Chus depending on what facts are ultimately found, there is a duty to defend.

Finally, as indicated above, a duty to defend motion does not resolve the ultimate factual issues as to a duty to indemnify. That motion involves comparing allegations in the pleadings and the relevant policy. Findings of fact are not made about the accident’s circumstances. Determination of ultimate responsibility for indemnity must await those findings of fact.

The motion judge erred in ordering that “Dennis Chu’s actions after exiting the vehicle is now deemed to be incident to the ownership, use or operation of a vehicle”. He also erred in giving judgment that the Chus were not entitled to indemnity from Pembridge, and that Dominion, and the trial judge, were bound by his determination of coverage as between Pembridge and the Chus.

Accordingly, we set aside paras. 1 and 2 of the judgment of February 27, 2019, and substitute the following:

THIS COURT DECLARES that John Chu and Dennis G. K. Chu are entitled to a defence under the Homeowner’s Policy in place with Pembridge Insurance Company of Canada on October 8, 2013 for the Third Party Claim action No. CV-13-475467-00A1 at Toronto.

For the first time on appeal, Pembridge argues that Dominion should be considered to have waived the right to assert that Pembridge had a duty to defend, because Dominion acknowledged its duty to defend, based on the claim relating to Dennis Chu’s driving and did not, in any way, reserve its rights. This is not necessarily inconsistent with another insurer’s duty to defend under a different policy. There is no clear evidence of waiver here, and the motion judge did not deal with this issue as it was not argued before him. It would be inappropriate to deal with this new issue on appeal, particularly given the state of the record: Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130, at para. 18.

Pembridge shall pay the costs of the appeal fixed in the agreed sum of $10,000 inclusive of disbursements and taxes to Dominion.


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