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THE INSURANCE CONTRACT - Interpretation - Coverage provisions and exclusion clauses

Tuesday, October 31, 2017 @ 8:42 AM  


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Appeal by the petitioner, Coast Capital Savings Credit Union, from an order refusing to find an indemnity obligation owed by the respondents, the Liberty Mutual insurers. The petitioner was a defendant in a class proceeding alleging it imposed unlawful surcharges on members' foreign currency transactions. The claim alleged a failure to properly disclose those surcharges and a breach of the petitioner's contractual obligations to its members. The petitioner took the position that any such charges were authorized under the account agreement and/or, were not deceptive, and/or were levied by third party entities that provided the network to facilitate the transactions. The petitioner applied for an order requiring the respondents to indemnify it for defence costs pursuant to a professional liability insurance policy. A chambers judge denied the relief sought on the basis that an exclusion clause in the insurance contract regarding claims based upon charges for services applied to the class proceeding claims. The petitioner appealed.

HELD: Appeal dismissed. There was no evidence that the parties negotiated the respondents' standard form professional liability policy. The chambers judge's interpretation of the policy was reviewable on a standard of correctness. The approach taken by the judge was consistent with the jurisprudence and indicated a clear understanding of the scope of coverage. The judge did not err in concluding that the exclusion of claims based upon or arising from charges for services, including commissions and fees, was applicable. The fact that misrepresentations or deceptive practices were alleged did not diminish the connection between the foundation of the claim and the charges for services, and could not be said to constitute concurrent independent causes of a loss. The intimate causal connection between the alleged deceptive business practices and charges for service resulted in the exclusion clause being effective to exclude coverage.

Coast Capital Savings Credit Union v. Liberty International Underwriters, [2017] B.C.J. No. 2074, British Columbia Court of Appeal, D.F. Tysoe, H. Groberman and G. Dickson JJ.A., October 20, 2017. Digest No. TLD-October302017003