Appeal of a dismissal of third party claims against the Vernon Vipers Hockey Club and its insurer. Appeal dismissed. The phrase “arising out of” was to be construed as requiring an unbroken chain of causation. No aspect of the Vernon Vipers Hockey Club’s operations was alleged to have caused the plaintiff’s injuries.

[2012] B.C.J. No. 1337

2012 BCCA 291

British Columbia Court of Appeal

L.S.G. Finch C.J.B.C., M.E. Saunders and S.D. Frankel JJ.A.

June 29, 2012

The Vernon Multiplex is a recreational facility owned by the Regional District of North Okanagan (“NORD”) and managed by Canadian Recreational Excellence (Vernon) Corporation (“CRE”). The Vernon Multiplex is the home of the Vernon Vipers Hockey Club (the “Hockey Club”). NORD and CRE were named additional insureds on an endorsement to the Hockey Club’s comprehensive liability policy with American Home Assurance Company, “but only in respect of liability arising out of the Named Insured’s operations”.

The plaintiff attended a Vernon Vipers hockey game and fell while leaving the Vernon Multiplex property. The plaintiff commenced an action against NORD and CRE who subsequently issued third party proceedings against the Hockey Club and its insurer. NORD and CRE claimed that as additional insureds they were entitled to be defended by American Home Assurance Company and were also entitled to contribution and indemnity for any amounts found owing to the plaintiff.

The chambers judge allowed an application by the Hockey Club and its insurer and dismissed the third party claims. The chambers judge concluded:

In this case before the court today, the fall occurred in an area solely within the control and responsibility of NORD and CRE. None of the plaintiff’s allegations relate to the operations of the Vipers Hockey Club. I am satisfied something more is required than the mere attendance by the plaintiff at the game or, as Mr. Kinnear has said at discoveries, a temporary departure from the game to find better food than CRE or NORD offered inside the multiplex.

NORD and CRE appealed the chambers judge’s decision. The issue on appeal was the degree of connectedness required by the phrase “arising out of” and whether it meant simple "but for" causation or required a stronger nexus.

It was NORD and CRE's position that the plaintiff’s injury arose out of the Hockey Club’s operations, because “but for” his attendance at the hockey game, he would not have been injured.

In contrast, the Hockey Club and its insurer argued that the mere presence of the plaintiff at the Vernon Multiplex to attend a hockey game was insufficient to bring NORD and CRE within the scope of the Hockey Club’s insurance coverage as additional insureds. The Hockey Club and its insurer submitted that a closer causal connection than mere "but for" was required.

The court agreed with the Hockey Club and its insurer and found that the correct interpretation of “arising out of” and “arising from” requires a closer causal nexus than a simple “but for” test. The court found that the phrase “arising out of” should be construed as requiring an unbroken chain of causation and a connection that is more than merely incidental or fortuitous.

In the result, the court dismissed the appeal and upheld the chambers judge’s decision.