On August 3 2008 Mark McLean was killed in the crash of a Grumman G-21-A Goose floatplane in a remote area of Vancouver Island. At the time of the crash, McLean worked as a log barge loader for Seaspan International Ltd and was en route, with five other Seaspan employees, from Port Hardy to Chamiss Bay, British Columbia as part of his employment.
The flight was operated by Pacific Coastal Airlines (PCA) under charter to Seaspan. Seaspan had arranged and paid for the flight and had given instructions as to the destination, departure time and employees to be carried on the flight. The arrival time was coordinated to correspond with the availability of a barge and tugboat, for use by the Seaspan employees.
PCA, a licenced domestic air carrier under the Canada Transportation Act, also operated a scheduled air service in British Columbia, but the flight in question was undertaken pursuant to the Seaspan charter and was not available to any members of the general public. PCA serves Chamiss Bay only when hired on a charter basis to do so.
Following Mr McLean's death, his wife sought to recover as the beneficiary under her husband's life insurance policy issued by Canadian Premier Life Insurance Company. The policy provided coverage in the amount of C$25,000 (which was paid by the life insurer without controversy) and, in addition, an accidental death benefit rider granted coverage for C$1 million.
In order to collect under the rider, Mrs McLean had to establish that her husband's death fell within the following language:
"Part 1– Benefit for travel by common carrier
If a Covered Person suffers a Loss as a direct result of a collision, crash or sinking of a duly licensed Common Carrier while riding as a fare paying passenger inside such Common Carrier, we will pay the applicable benefit stated on the Summary of Coverage page."
The term 'common carrier' was defined in the policy as follows:
"Common carrier means a public conveyance which is:
licensed to transport passengers for hire;
provided and operated:
- for regular passenger service by land, water or air; and
- on a regular passenger route with a definite regular schedule of departures and arrivals between established and recognized points of departure and arrival; and
provided and operated under a Common Carrier licence at the time of the Loss."
In a bid to have the rider apply to the death of her husband, Mrs McLean commenced an action in British Columbia(1) alleging that the definition of 'common carrier' was ambiguous and, consequently, the policy should be interpreted in her favour as a result of the rule of contra proferentem (ie, if a clause appears to be ambiguous, it should be interpreted against the interests of the party which insisted that it be included).
As a starting point, she argued that, in this case, the term 'common carrier' referred to PCA, and not to a type of transportation (ie, aircraft) because, following along in the definition of the term, only a business entity can be licensed under the legislation, not a particular aircraft.
Mrs McLean argued that if she were correct on this point, then a great deal of ambiguity existed in the accidental death rider. That is, the wording that triggers coverage ("riding as a fare paying passenger inside [a] common carrier") did not make sense because a passenger does not ride inside a business entity that is licensed to offer passenger services.
Further, Mrs McLean argued that if the term 'common carrier' meant PCA, then the words "public conveyance" (in the definition of 'common carrier') could not also mean a mode of transportation (such as an aircraft), but rather, must mean a public conveyor (ie, the business entity that provides the transportation).
Mrs McLean argued that, if the following changes were made to the policy wordings, then no ambiguity would arise and she would be entitled to collect the C$1 million benefit:
"Part 1 – Benefit for travel by common carrier
If a Covered Person suffers a Loss as a direct result of a collision, crash or sinking of a duly licensed Common Carrier while riding as a fare paying passenger of inside such Common Carrier, we will pay the applicable benefit stated on the Summary of Coverage page.
Common carrier means a public convey or conveyance which is:
- licensed to transport passengers for hire; and
- provided and operated:
- for regular passenger service by land, water or air; and
- on a regular passenger route with a definite regular schedule of departures and arrivals between established and recognized points of departure and arrival; and
- provided and operated under a Common Carrier licence at the time of the Loss."
Finally, Mrs McLean argued that her husband was, in fact, a fare-paying passenger, even though he was not the person who paid the fee. Her counsel made the point that it was never intended that Mr McLean would be transported without charge.
In short, Mrs McLean's position was that the above confusion resulting from the allegedly poor wording resulted in ambiguity and, therefore, the ambiguity should be resolved in her favour.
The life insurer argued that the definition in the rider was clear and unambiguous. It argued that 'public conveyance' meant the aircraft in which McLean was carried and not the business entity which operated the aircraft. It argued that this interpretation was bolstered by the fact that payment of the benefit is triggered when a fare paying passenger is injured inside the common carrier. Further, the language in the rider related to a collision, crash or sinking of a common carrier meaning a physical object, not a business entity.
Additionally, the life insurer argued that, at the time of the crash, PCA was not operating a service that was consistent with the definition of a 'common carrier'. On this point, it argued that:
- even though PCA did, in other instances, offer scheduled transportation for hire to the general public, it was not doing so in this instance;
- there was no regular schedule of departures between established and recognised points under the Seaspan charter; and
- Seaspan, not PCA, determined who the passengers would be, meaning that the flights were not available to the general public.
The court accepted the life insurer's arguments, concluding that the crash did not occur on a common carrier, as defined in the policy. The court also found that it is not necessary to interpret the words of the rider in a way that was consistent with the Canada Transportation Act's terminology.
Mrs Maclean's action was dismissed. Her recovery under the policy was restricted to the C$25,000 that had already been paid to her.
For further information on this topic please contact Carlos P Martins at Bersenas Jacobsen Chouest Thomson Blackburn LLP by telephone (+1 416 982 3800), fax (+1 416 982 3801) or email ([email protected]).
Endnotes