|
|
Docket: |
CA028125 |
|
|
|
Registry: Vancouver |
|
|||
COURT OF APPEAL FOR BRITISH COLUMBIA |
|
|||
|
BETWEEN: |
|
|||
|
BRITISH COLUMBIA INSURANCE CORPORATION |
|
|||
|
RESPONDENT (PLAINTIFF) |
|
|||
|
AND: |
|
|||
|
JEREMY KRAIGER |
|
|||
|
APPELLANT (DEFENDANT) |
|
|||
|
Before: |
The Honourable Madam Justice Southin |
|
|
The Honourable Madam Justice Ryan |
|
|
The Honourable Madam Justice Saunders |
|
J.N. Laxton, Q.C. and R.D. Gibbens
|
Counsel for the Appellant |
|
|
D.W. Yule, Q.C. and J.A. McJannet
|
Counsel for the Respondent |
|
|
Place and Date of Hearing: |
Vancouver, British Columbia |
|
|
February 1, 2002 |
||
|
Place and Date of Judgment: |
Vancouver, British Columbia |
|
|
September 20, 2002 |
||
Written Reasons by:
The Honourable Madam Justice Ryan
Concurred in by:
The Honourable Madam Justice Southin
The Honourable Madam Justice Saunders
Reasons for Judgment of the Honourable Madam Justice Ryan:
INTRODUCTION
[1] On July 20, 1994 a fire occurred in the Ellis Creek Canyon near Penticton ("the Garnet fire"). The fire spread through the forest to nearby residential areas. As a result of the fire, a number of people residing or carrying on business in the area suffered loss or damage to their homes, places of business and personal property.
[2] On January 11, 1996 the appellant, Jeremy Kraiger, pleaded guilty to two counts of arson relating to the Garnet fire.
[3] Several residents who suffered loss in the fire sued Jeremy Kraiger and obtained summary judgment against him on April 14, 1998 (Action No. 13110) for damages to be assessed.
[4] Prior to 1994, the respondent insurance company, the British Columbia Insurance Corporation ("BCIC") had issued Jeremy Kraiger's parents a homeowner's insurance policy (the "Policy"). By way of this contract of insurance BCIC agreed to indemnify the insured against claims for compensatory damages arising out of property damage, subject to the terms and conditions therein. It is common ground that Jeremy Kraiger, who was under 21 at the time of the fire and lived at home with his parents, was an insured under the Policy.
[5] BCIC refused to defend Jeremy Kraiger in Action No. 13110. BCIC took the position that the acts of Jeremy Kraiger causing the damage were criminal and thus excluded from coverage by reason of an express provision to that effect in the contract of insurance. BCIC sought a declaration that it was not required to indemnify Jeremy Kraiger with respect to the judgment in Action No. 13110. By cross-application Jeremy Kraiger sought a declaration that BCIC was obliged to indemnify him under the Policy in respect of the judgment.
[6] On January 3, 2001 a Supreme Court justice held that BCIC was entitled to a declaration that it was not required to indemnify the appellant under the Policy.
THE GROUNDS OF APPEAL
[7] The appellant raised two grounds of appeal. He argued that the trial judge erred in finding that the exclusion clause in question applied to the portion of the Policy setting out coverage for legal liability relating to unintentional direct damage to property. Alternatively, he contended that the trial judge erred in finding that the acts of Jeremy Kraiger were contemplated by the exclusion clause in question. He contends that Jeremy Kraiger's acts were not criminal in nature.
THE FIRST GROUND OF APPEAL – THE TERMS OF THE POLICY
[8] Section II of the Policy is entitled "PERSONAL LIABILITY COVERAGE." The Index reflects the organization of the section. It reads:
SECTION II – PERSONAL LIABILITY COVERAGE
DEFINITIONS
COVERAGES
E - Legal Liability
-- Personal Liability
-- Premises Liability
-- Tenant's Legal Liability
-- Employer's Liability
-- Personal Injury Liability
-- Strata/Condominium Corporation Loss Assessment
LOSS OR DAMAGE NOT INSURED
DEFENSE, SETTLEMENT,
SUPPLEMENTARY PAYMENTS
F - Voluntary Medical Payments
G - Voluntary Payments for Damage to Property
BASIS OF PAYMENT
SPECIAL LIMITATIONS
- Watercraft
-- Watercraft You Own
-- Watercraft You Do Not Own
- Motorized Vehicles
-- Vehicles You Own
-- Vehicles You Do Not Own
- Trailers
- Business and Business Property
LOSS OR DAMAGE NOT INSURED
CONDITIONS
VOLUNTARY COMPENSATION FOR
RESIDENCE EMPLOYEES
CONDITIONS REQUIRED BY LAW
STATUTORY CONDITIONS
ADDITIONAL CONDITIONS
STANDARD MORTGAGE CLAUSE
[9] The Policy provision providing indemnity is contained in Section II under the title "COVERAGE E – LEGAL LIABILITY". It reads:
We will pay you all sums which you become legally liable to pay as compensatory damages because of unintentional bodily injury or property damage.
[10] An examination of the Index reproduced in para. [8] above reveals that there are two sub-sections in Section II headed "Loss or Damage Not Insured". The first sub-section entitled "Loss or Damage Not Insured" follows Coverage E, the second is placed two sub-sections below Coverage G. The exclusion clause relied upon by BCIC is found in the second Loss or Damage Not Insured sub-section. This sub-section contains 13 paragraphs. Paragraph 5 sets out the exclusion in question. It reads:
You are not insured for claims arising from:
. . .
5. Bodily injury or property damage caused by intentional or criminal acts or failure to act by or at the direction of any person insured by this Policy.
[11] In the course of these reasons for judgment I will refer to this exclusion clause as "paragraph 5".
[12] At trial, counsel for the appellant contended that paragraph 5 did not apply to Coverage E because of its placement in the Policy.
[13] As I mentioned earlier Coverage E provides indemnification for sums the insured is legally liable to pay as compensatory damages because of unintentional bodily injury or property damage. As noted earlier, immediately following Coverage E is the first Loss or Damage Not Insured sub-section. The paragraphs of this sub-section read in their entirety:
1. To liability assumed under any contract or agreement;
2. To liability arising out of the deliberate violation of a statute or ordinance committed by, or with the knowledge or consent of the Insured;
3. To liability arising out of personal injury sustained by any person as a result of an offence directly or indirectly related to the employment of such person;
4. To liability arising out of any business, professional or occupational pursuits of the Insured;
5. Liability arising out of any publication, utterance or the making of a statement if the first injurious publication, utterance or statement of the same or similar material by or on behalf of the insured was made prior to the effective date of this insurance;
6. To liability arising out of any civic or public activities performed by the Insured for remuneration.
[14] It is common ground that these exclusions apply to Coverage E. No argument was made that the acts of the appellant fall under any of these exclusions.
[15] Counsel for the appellant submitted that because of this placement, and the fact that there are two Loss or Damage Not Insured sub-sections, a reasonable homeowner reading this Policy would assume that only the first Loss or Damage Not Insured sub-section applied to Coverage E. He submitted that the second Loss or Damage Not Insured sub-section must apply to Coverage G.
[16] "Coverage G – Voluntary Payment for Damage To Property"
provides:
COVERAGE G – VOLUNTARY PAYMENT FOR DAMAGE TO PROPERTY:
We will pay for unintentional direct damage you cause to property even though you are not legally liable. You may also use this coverage to reimburse others for direct property damage caused intentionally by an insured 12 years of age or under.
You are not insured for claims:
1. Resulting from the ownership, use or operation of motorized vehicles, aircraft, trailer or watercraft, except those for which coverage is provided in this policy;
2. For property you or your tenants own or rent;
3. Which are insured under Section I;
4. Caused by the loss of use, disappearance or theft of property.
[17] The paragraphs of the second Loss or Damage Not Insured sub-section read in their entirety:
LOSS OR DAMAGED NOT INSURED:
You are not insured for claims arising from:
1. War, invasion, act of a foreign enemy, declared or undeclared hostilities, civil war, rebellion, revolution, insurrection or military power;
2. Bodily injury or property damage which is also under a nuclear energy liability policy issued by the Nuclear Insurance Association of Canada, or any other group or pool of Insurers regardless of exhaustion of such policy limits or its termination;
3. Your business or any business use of your premises except as specified in this policy;
4. The rendering or failure to render any professional service;
5. Bodily injury or property damage caused by intentional or criminal acts or failure to act by or at the direction of any person insured by this Policy;
6. The ownership, use or operation of any aircraft or premises used as an airport or landing strip, and all necessary or incidental operations;
7. The ownership, use or operation of any motorized vehicle, trailer or watercraft except those for which coverage is provided in this policy;
8. The transmission of communicable disease by any person insured by this policy;
9. Any damages for any covered person's actions or failure to act as an officer or member of a board of directors of any corporation or organization. This exclusion does not apply to a non-profit corporation or organization, or to a condominium or cooperative association;
10. Any damages arising out of discrimination due to age, race, colour, sex, creed or national origin; sexual harassment, sexual abuse or any other discrimination;
11. Any damages for any covered person's financial guarantee of the financial performance of any covered person, other individual or organization;
12. Any damages for any covered person's performing or failure to perform professional services, or for professional services for which any covered person is legally responsible or licensed;
13. Punitive or exemplary damages, meaning that part of the award by a court which is in excess of compensatory damages and is stated or intended to be a punishment to you.
[18] Counsel for the appellant also submitted that there is some overlap between the two Loss or Damage Not Insured sub-sections. He said that this implicitly suggested that they apply to different coverage provisions because they are trying to do the same job. He pointed, as well, to the organization of the Endorsements at the end of the Policy which carry a series of Loss or Damage Not Insured sections that are applicable to the coverage provisions within which they are contained.
[19] Counsel for the respondent submitted that on a proper reading of the Policy it is clear that the first Loss or Damage Not Included sub-section of Section II of the Policy applies only to Coverage E while the second is an omnibus provision which applies to all Section II coverages.
[20] In my view the respondent's interpretation of the Policy is correct. Although the second Loss or Damage Not Included sub-section is physically placed after Coverage G it does not follow it directly. After Coverage G there follows the sub-section entitled "Basis of Payment" followed in turn by "Special Limitations". The "Special Limitations" sub-section provides:
SPECIAL LIMITATIONS:
Watercraft:
You are not insured for claims arising from the ownership, use or operation of any watercraft, except as follows:
Watercraft You Own:
You are insured against claims arising out of your ownership, use or operation of a watercraft equipped with an outboard motor or motors of not more than 18 kw (24 H.P.) in total when used with or on a single watercraft. You are also insured if your watercraft has an inboard or an inboard-outboard motor of not more than 38 kw (50 H.P.), or for any other type of watercraft not more than 8 metres (26 feet) in length.
If you own any motors or watercraft larger than those stated above, you are insured only if they are specified in the Coverage Summary-Declaration Page. If they are acquired after the effective date of this policy, you will be insured automatically for a period of thirty (30) days only from the date of their acquisition.
Watercraft You Do Not Own:
You are insured against claims arising out of your use or operation of watercraft which you do not own, but not for damage to the watercraft itself provided that:
1. The watercraft is being used or operated with the consent of the owner;
2. The watercraft is not owned by anyone included in the definition of "you" and "your" in Section II of this policy.
Motorized Vehicles:
You are not insured from claims arising from the ownership, use or operation of any motorized vehicles, except as follows:
Vehicles You Own:
You are insured for claims arising out of your ownership, use or operation of the following including their trailers or attachments:
1. Self-propelled lawn mowers, snow blowers, garden-type tractors, farm implements or gardening implements of not more than 25 H.P., used or operated mainly on your property, provided they are not used for compensation or hire;
2. Motorized golf carts while in use on the golf course;
3. Motorized invalid chairs and their trailers;
4. In the Province of British Columbia only, unlicensed motorcycles or scooters for use principally off public roads while not required by law to carry a license, or while not being used in a race or speed test. Bodily injury to you or your passenger is excluded;
Vehicles You Do Not Own:
You are insured against claims arising out of your use or operation of any self-propelled land vehicle, amphibious vehicle or air cushion vehicle including their trailers, which you do not own, provided that:
1. The vehicle is not licensed and is designed primarily for use off public roads;
2. You are not using it for business or organized racing;
3. The vehicle is being used or operated with the owner's consent;
4. The vehicle is not owned by anyone included in the definition of "you" or "your" in Section II of this policy.
You are not insured for damage to the vehicle itself.
Trailers:
You are not insured against claims arising out of your ownership, use or operation of any trailer or its equipment, if such trailer is being towed by, attached to or carried on a motorized vehicle.
Business and Business Property:
You are not insured against claims arising out of:
1. Your work as a teacher, provided the claim does not involve physical disciplinary action to a student or injury to a fellow employee;
2. The occasional rental of your residence to others; rental to others of a one or two-family dwelling usually occupied in part by you as a residence, provided no family unit includes more than two roomers or boarders;
3. The rental of space in your residence to others for incidental office, school or studio occupancy;
4. The rental to others, or holding for rent, of not more than three car spaces or stalls in garages or stables;
5. The temporary or part time business pursuits of an insured person under the age of nineteen years including but not limited to newspaper carriers, baby sitting, lawnmowing and snow blowing.
[21] These provisions do not relate to Coverage G. They extend or add limited coverage against claims arising out of ownership, use or operation of watercraft, certain motorized vehicles, and against claims arising out of some types of business and business property.
[22] The second sub-section Loss or Damage Not Insured follows "Special Limitations". As the trial judge noted, while Coverage G relates exclusively to property damage, several of the 13 paragraphs in the second Loss or Damage Not Insured sub-section do not. Included in the 13 paragraphs are damages from a person's actions or failure to act as an officer or member of a board of directors; damages arising out of discrimination due to age, race, sex, etc.; and damages relating to a person's financial guarantee of the financial performance of any covered person, other individual or organization – none of which would apply to coverage G.
[23] The rules of construction are designed to lead the Court to search for an interpretation which, from the whole of the contract would appear to promote or advance the true intent of the parties at the time of entry into the contract. (Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Company, [1980] 1 S.C.R. 888 at 901, per Estey J.). In my view, the only rational interpretation of this Policy is that the second Loss or Damage Not Insured sub-section must operate as an omnibus provision relating to all of the coverages.
[24] Finally, the appellant submitted that s. 88 of the Insurance Act R.S.B.C. 1996 c. 226, applied to the Policy in the case at bar. Section 88 requires that a policy set out every exception or reduction either in the provision affected by the exception or reduction or under a heading such as Exceptions or Reductions.
[25] I agree with the respondent that s. 88 does not apply to the homeowner policy in this case. Section 88 is found in Part 4 of the Insurance Act and applies to policies of personal accident insurance, sickness insurance, or personal accident insurance and sickness insurance. There is no Part of the Insurance Act that applies specifically to liability insurance. Part 2 of the Act, the General Provisions Part, does not contain a section dealing with the placement of exception clauses. There is no section in Part 3 in the Act dealing with life insurance that is equivalent to s. 88. Both Parts 3 and 4 of the Act themselves have multiple exceptions sections (Part 3, ss. 33, 42, 44 and 47; Part 4, ss. 85 and 88). In my view s. 88 of the Insurance Act has no application to the homeowner's policy in this case.
THE SECOND GROUND OF APPEAL – WAS THE ACT THAT CAUSED THE DAMAGE CRIMINAL?
[26] Jeremy Kraiger pleaded guilty to two counts of arson. Those counts read as follows:
Count 1
Jeremy Blake KRAIGER, between the 20th day of July, 1994, and the 30th day of August, 1994, all dates inclusive, at or near Penticton, in the Province of British Columbia, did intentionally or recklessly cause damage by fire to standing timber the property of the Government of British Columbia, Ministry of Forests, contrary to Section 434 of the Criminal Code.
Count 2
Jeremy Blake KRAIGER, between the 20th day of July, 1994, and the 30th day of August, 1994, all dates inclusive, at or near Penticton, in the Province of British Columbia, did intentionally or recklessly cause damage by fire to property namely to dwelling houses, garages, automobiles, sheds and other personal and real property situate along Carmi Road, Panorama Ridge, Saliken Drive, Ealoc Road, and other locations, which property was not wholly owned by Jeremy Kraiger, contrary to Section 434 of the Criminal Code.
[27] Section 71 of the Evidence Act, R.S.B.C. 1996, c. 124, provides that evidence of a conviction is admissible in a subsequent proceeding. The relevant sections provide:
71 . . .
(2) Subject to subsection (3), if
(a) a person has been convicted of or is found guilty of an offence anywhere in Canada, and
(b) the commission of that offence is relevant to any issue in an action,
proof of the conviction or the finding of guilt, as the case may be, is admissible in evidence to prove that the person committed the offence, whether or not that person is a party to the action.
. . .
(5) A certificate containing the substance and effect of the charge and of the conviction or finding of guilt, as the case may be, purporting to be signed by
(a) the officer having custody of the records of the court in which the offender was convicted or found guilty, or
(b) a person authorized to act for the officer,
is, on proof of the identity of a person named in the certificate as the offender, sufficient evidence of the conviction of that person or the finding of guilt against that person, without proof of the signature or of the official position of the person purporting to have signed the certificate.
. . .
(7) If proof of a conviction or a finding of guilt is admitted in evidence under this section, the contents of the information, complaint or indictment relating to the offence for which the person was convicted or found guilty is admissible in evidence.
(8) Subject to subsection (6), the weight to be given to the conviction or finding of guilt must be determined by the judge or jury, as the case may be.
[28] Jeremy Kraiger gave evidence in the case at bar to counteract the weight of the conviction. His counsel submitted that his evidence explained his guilty pleas and demonstrated that he was not, in fact, guilty of the arson which damaged the plaintiffs' property in Action No. 11310.
a. The Evidence at Trial
[29] The evidence called by the appellant revealed that Jeremy Kraiger pleaded guilty in return for a conditional sentence. The appellant testified that he pleaded guilty because his family could not afford to pay a criminal lawyer for a lengthy trial, he could not survive a jail term, and he acted on the advice of counsel. This evidence was not challenged.
[30] Jeremy Kraiger lived in Penticton at the time of the fire. He testified that at about 9 o'clock on the morning of July 20, 1994 he stopped by a gas station close to his house and bought a Bic lighter. He said, "I had the intentions of setting a fire." Around 2 o'clock he bicycled up to the Ellis Creek Canyon area to look for a place to light the fire. He said he was "looking for a place where there was [sic] no houses or residential areas, somewhere where there wouldn't be a lot of danger being brought upon."
[31] The appellant road his bicycle past a gravel pit and down a dirt road. He crossed a wooden bridge and up to a reservoir. The road ended at the reservoir so the appellant left his bicyle and walked around the reservoir to the other side. It was a hot day and had been hot and dry for sometime. He chose a place to set the fire at the base of a bank. He hoped to find a place to set the fires where they would catch quickly. He agreed with counsel for the respondent that he wanted the fires to go up the bank "to expand the fire for the firemen". He was asked whether he set the fires so far off the roadway to make it more difficult for the firemen to get there. He replied, "Maybe a little bit, yes."
[32] The appellant said he got two piles of pine needles two metres in diameter and about four or five feet apart and lit them. The fires joined together and raced up the bank. The appellant guessed that the fire grew to about four or five feet across and moved about seven or eight feet up the bank. He wasn't sure about the size, it could have been smaller.
[33] At this point, Jeremy Kraiger saw how quickly the fire was spreading and tried to put it out. He said that he stomped on part of it. He could not stomp all the way up the grade. He said, "the part that I couldn't stomp on I threw dirt on." He said that he threw quite a few handfuls of dirt on the fire. He spent three to five minutes trying to put the fire out. He said, "I noticed that the flames did go down quite a lot when I did that and it started to smolder a lot more. There was more smoke and I --- I stomped on it a few times more and it looked like it was going out and then I left." The appellant testified that to his recollection he was confident that he had put the fires out and that there was no danger.
[34] On cross-examination the appellant said that when he first set the fire, "the only thing that I was concerned about were houses and residential areas or anything like that. I -- again, I'm not sure if this is what you are getting at, but I was not thinking about, you know, the forest or the animals or anything to that effect. I was more concerned about the houses or the people's property and therefore I wasn't -- it was more the houses that I was concerned about."
[35] He agreed that he understood that there was a real danger of a fire getting started in the woods in hot, dry seasons because they could spread quickly out of control. He agreed that if the fire did not reach the houses it "could still burn up a lot of countryside." He thought that the fire was far enough away from the houses that they would not be affected.
[36] If there was evidence called at trial as to how far the plaintiffs' homes were from the place where the fire was started, I have been unable to find it in the material before us. We can take it, however, from this question asked by counsel for the respondent that it was some distance:
Q But you knew, did you not, Mr. Kraiger, that there's always a risk that the fire will get out of control and last for a long time and could eventually reach the houses? It might be a small risk, but there's always that risk, isn't there?
A Yes, there is.
b. The Reasons for Judgment and the Issues Raised by the Appellant
[37] The trial judge said this about the acts of Jeremy Kraiger:
[20] Section 71 of the Evidence Act, R.S.B.C. 1996, c. 124, provides that in a subsequent proceeding, the weight to be given to a conviction is to be determined by the Court. In all the circumstances of this case, I conclude that Kraiger's guilty plea to two counts of arson and his subsequent conviction is determinative of the fact that the property damage in question was caused by Kraiger's criminal act. In any event, Kraiger's testimony in this trial clearly establishes his guilt with respect to the gravamen of the offence of arson ("intentionally or recklessly causes damage by fire ... to property that is not wholly owned by him") regardless of any failure to intend the nature and extent of the damage. The resulting property damage was the unfortunate result of his criminal act.
[21] The fact that Kraiger deliberately set the fires, thus committing the criminal offence of arson, invokes the Exclusion Clause [paragraph 5] that permits BCIC to decline coverage.
[38] The appellant submits that the trial judge erred:
1. in failing to relate the criminal act to the property which is the subject of the insurance claim — the homes that were destroyed;
2. in failing to properly identify the mens rea for the offence;
3. in failing to identify the mens rea in light of the actions of Jeremy Kraiger in putting out the fire.
[39] Taken as a whole the appellant's grounds of appeal may be reduced to this argument. The appellant cannot be said to be criminally responsible for the damage to the homes. When he started the fire he intended only to burn the surrounding area. He had no intention to burn any homes or residences. He did not foresee that the homes would be damaged. After the fire started he realized that it was burning out of control too soon. He tried to stop it. On these facts his actions cannot be said to be the factual or legal cause of the damage in question. Even if he can be said to have caused the damage, he is not criminally responsible for something he neither intended nor could be expected to foresee.
c. Discussion
[40] To examine these propositions it is necessary to first determine the mens rea and actus reus of the offence described by s. 434 of the Criminal Code.
[41] Section 434 of the Criminal Code provides:
434. Arson — Damage to Property — Every person who intentionally or recklessly causes damage by fire or explosion to property that is not wholly owned by that person is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.
[42] As the editors of 2002 Tremeear's Criminal Code have put it in their annotation to s. 434:
The external circumstances [actus reus] of this indictable offence require proof that D [the defendant], as principal, caused damage, by fire or explosion, to property which D does not wholly own. Nothing further is required.
The basic mental element [mens rea] consists of either intention or recklessness by D to cause the external circumstances. No further or ulterior state of mind need be established.
[43] The concept of causation for purposes of the criminal law has been recently examined by the Supreme Court of Canada in R. v. Nette 2001 SCC 78, [2001] S.C.J. No. 75. The issue in Nette was whether the trial judge had properly instructed the jury as to the required standard of causation for proof that the accused "caused the death of a human being" for the offence of second degree murder under s. 222(5) of the Criminal Code. Speaking for the majority, Madam Justice Arbour said this at paras. 44-46:
In determining whether a person can be held responsible for causing a particular result, in this case death, it must be determined whether the person caused that result both in fact and in law. Factual causation, as the term implies, is concerned with an inquiry about how the victim came to his or her death, in a medical, mechanical, or physical sense, and with the contribution of the accused to that result. Where factual causation is established, the remaining issue is legal causation.
Legal causation, which is also referred to as imputable causation, is concerned with the question of whether the person should be held responsible in law for the death that occurred. It is informed by legal considerations such as the wording of the section creating the offence and principles of interpretation. These legal considerations, in turn, reflect fundamental principles of criminal justice such as the principle that the morally innocent should not be punished: [citations omitted]. In determining whether legal causation is established, the inquiry is directed at the question of whether the accused person should be held criminally responsible for the consequences that occurred. The nature of the inquiry at the stage of determining legal causation is expressed by G. Williams as follows in his Textbook of Criminal Law (2nd ed. 1983), at pp. 381-82 quoted in Cribbin [(1994), 17 O.R. (3d) 548 (Ont. C.A.)] at p. 568:
When one has settled the question of but-for causation, the further test to be applied to the but-for cause in order to qualify it for legal recognition is not a test of causation but a moral reaction. The question is whether the result can fairly be said to be imputable to the defendant… If the term "cause" must be used, it can best be distinguished in this meaning as the "imputable" or "responsible" or "blamable" cause, to indicate the value-judgment involved. The word "imputable" is here chosen as best representing the idea. Whereas the but-for cause can generally be demonstrated scientifically, no experiment can be devised to show that one of a number of concurring but-for causes is more substantial than another, or that one person who is involved in the causal chain is more blameworthy than another.
In a given case, the jury does not engage in a two-part analysis of whether both factual and legal causation have been established. Rather in a charge to the jury, the trial judge seeks to convey the requisite degree of factual and legal causation that must be found before the accused can be held criminally responsible for the victim's death.
[44] Arbour J. went on to conclude that the legal standard of causation for culpable homicide could be properly described as a "significant contributing cause."
[45] In my view this standard may safely be applied to the offence of causing damage by fire or explosion under s. 434 of the Code.
[46] The actus reus of the offence of arson under s. 434 is the commission of the act which causes the damage to property. The act which started the string of events that caused the damage in question in the case at bar was the lighting of the pine cones. Without that act there would have been no damage.
[47] For the purpose of causation it does not matter that the appellant tried to undo what he had started. His attempt to put out the fire cannot be said to be an intervening or supervening act which serves to legally isolate him from the consequences of starting the fire. He simply failed at trying to undo what he had started.
[48] Madam Justice Arbour continued her analysis in Nette saying this at para. 47:
While causation is a distinct issue from mens rea, the proper standard of causation expresses an element of fault that is in law sufficient, in addition to the requisite mental element, to base criminal responsibility. The starting point in the chain of causation which seeks to attribute the prohibited consequences to an act of the accused is usually an unlawful act in itself. When that unlawful act is combined with the requisite mental element for the offence charged, causation is generally not an issue.
[Emphasis added.]
[49] This raises the next question – what is the mens rea for this offence? The appellant says that the mens rea of the offence is an intention to cause damage to the specific property identified in the information charging the offence (the property which was the subject of the insurance claim). In this case, the appellant said that when he set the fire he intended to cause damage only to the wooded area in which he set the fire. He did not mean for it to spread and burn other property. His argument is that if he did not intend the fire's result, he cannot be said to have had the requisite intent.
[50] The trial judge concluded that the gravamen of the offence was to cause damage to property, not damage to specific property. Since the appellant admitted that he set the fire intending to cause damage to property, he must be held responsible for whatever damage to property resulted from the fire. In my view the analysis of the trial judge is supported by the reasoning in R. v. Chartrand, [1994] 2 S.C.R. 864. In that case the accused was charged under s. 281 of the Criminal Code with abducting a person under 14 years of age "with intent to deprive a parent or guardian . . . of the possession of that person". The accused met a young boy, eight years of age, in a school yard and began to photograph him. He later drove the boy to a nearby beach. When they were discovered together by the father of the young boy, the accused said that he was taking the photographs as a surprise for the boy's parents. The trial judge dismissed the Crown's case on the basis that there was no evidence that the accused "intended to deprive the parents of possession of the child". The Supreme Court of Canada, L'Heureux-Dubé J. for the Court, concluded at p. 894:
To summarize, although proof of intent under s. 281 can be met by the intentional and purposeful deprivation of the parent's control over the child, the main body of jurisprudence and the academic commentaries support the view that the mens rea in offences such as s. 281 of the Code can also be proven by the mere fact of the deprivation of possession of the child from the child's parents (guardians, etc.) through a taking, as long as the trier of fact draws an inference that the consequences of that taking are foreseen by the accused as a certain or substantially certain result of the taking, independently of the purpose or motive for which such taking occurred.
[51] In such circumstances the requisite mens rea may be attributed to the appellant. In the case at bar, the appellant set a fire in a remote location during a hot, dry spell of weather, with the intention of letting the surrounding area burn until firefighters arrived to fight it. For this to occur the fire would have had to burn out of control for some time. It is a foreseeable, substantially certain consequence that an uncontrolled forest fire will reach unintended areas.
[52] There is also another approach. The mens rea may also be found in recklessness. In Sansregret v. The Queen, [1985] 1 S.C.R. 570, recklessness, as a state of mind, was said to be this at p. 582:
It is found in the attitude of one who, aware that there is danger that his conduct could bring about the result prohibited by the criminal law, nevertheless persists, despite the risk. It is, in other words, the conduct of one who sees the risk and who takes the chance. It is in this sense that the term 'recklessness' is used in the criminal law and it is clearly distinct from the concept of civil negligence.
[53] In the case at bar the appellant was aware of the hot dry conditions under which he set the fires; he set them in a place which would make it difficult for firefighters to reach; he intended that they burn the surrounding area until the firefighters arrived; he knew that there was a risk that the fires could spread out of control; and he knew it could spread to a residential area. He set the fire anyway. Therefore, in my view, the decision of the trial judge can also be supported on the basis of recklessness.
[54] A criminal offence is complete when the actus reus and the mens rea coincide. Those elements coincided in the case at bar when the appellant started a fire with the intention of letting it burn out of control until the firefighters appeared to fight it. If those elements did not coincide when the appellant started the fire in this case (for example, had the appellant built a campfire to cook some food with no criminal intent) then it would be necessary to determine whether he had been reckless when he put the fire out. In this case, that analysis is not relevant.
[55] In my view, the trial judge did not err in finding that the damage to the plaintiffs' property was caused by a criminal act.
[56] Very recently, in R. v. D.(S.) (2002), 1 C.R. (6th) 5, the Newfoundland Court of Appeal discussed the mens rea required for proof of the arson offences found in ss. 433(a) and 434 of the Code. Although the facts of the case resulted in an acquittal, the legal analysis in R. v. D.(S.) supports my analysis of the mental element required for proof of an offence under s. 434.
[57] In R. v. D.(S.), a young offender, S.D., set fire to the corner of a bag of potato chips as it hung on a rack in a corner store. S.D. testified that she had intended to steal the potato chips. She said she burned the corner of the bag so that she could squeeze the air from it to make it easier to conceal it under her coat. She left the area for a moment because she thought she had been observed by a store clerk. When she returned the bag was ablaze. She said she stomped on it, and, believing it was out, left the store. The fire had not been extinguished and the store suffered damage in the ensuing blaze. The young offender was charged with causing damage to the store by fire under ss. 433(a) and 434 of the Criminal Code. After a trial in Youth Court, S.D. was acquitted of the arson offences but convicted of mischief under s. 430(1)(a).
[58] On appeal to the Newfoundland Court of Appeal the Crown argued that S.D. ought to have been found guilty of one of the arson offences. The Crown accepted that the trial judge found that the respondent had intended only to burn the bag of chips and that it had failed to prove that she had knowledge that the probable consequence of setting the small fire was damage to the store. The Crown argued that to prove arson (i.e., damage to the store) it was sufficient to prove simple negligence. The Crown argued that it need only prove that the consequences of a fire were objectively likely. Chief Justice Wells, writing for the Court, rejected the proposition that objective likelihood was all that was required. He noted that the words of the sections in question require that the accused act intentionally or recklessly, not merely negligently. Chief Justice Wells held that the proper test for recklessness was found in the Sansregret formulation which I have reproduced above.
[59] The Court then analyzed the evidence and determined that S.D. could not be found guilty of the arson offences. On the facts of that case the Court concluded that the respondent was not reckless when she set fire to the bag of potato chips — the Court found that there was no evidence that S.D. was aware that her intended conduct could also damage the store. Having found no criminal offence in her initial actions, the Court went on to examine the respondent's conduct in leaving the store with the bag still aflame. The Court concluded that she was not reckless in leaving the store without advising the clerks of the fire. Her evidence that she thought the fire was entirely extinguished was accepted.
[60] For reasons which I need not go into, the Newfoundland Court of Appeal concluded that the appellant should not have been convicted of mischief under s. 430(1)(a). It did, however, find that S.D. was guilty of an offence under s. 430(5.1)(a) of the Code. That section provides:
[430] (5.1) Every one who wilfully does an act or wilfully omits to do an act that it is his duty to do, if that act or omission is likely to constitute mischief causing actual danger to life, or to constitute mischief in relation to property or data,
(a) is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years;
[61] The Court analyzed the evidence in this way, at para. 50:
The evidence clearly establishes that the respondent wilfully set fire to the bag of chips. The intention to do that has been proven on the evidence of the respondent herself. . . . There is little doubt, from all of the remainder of the evidence, that her wilful act of applying open flame to the bag of chips, and then walking behind the rack where she could not control what was happening, was likely "to constitute mischief in relation to property", namely [the store]. The mens rea for that offence is established on the objective standard. Whether or not the wilful act of the respondent, in applying flame to a chip bag while it is on a rack with other bags of chips, and leaving it unattended for some moments, is likely to cause damage, is not, in any manner, related to the state of mind of the respondent. Likelihood is judged on the basis of perception by a reasonable person. Any reasonable person would perceive that damage to property is a likely consequence of applying flame to a bag of chips in the circumstances in which the respondent did so. The mens rea required by the statutory provision is, therefore, established.
[62] This last part of this decision is also relevant to the issues raised on this appeal. Mr. Yule, counsel for the respondent, supported the findings of the trial judge on this more limited basis. He submitted that the act of setting fire to the piles of pine cones alone was sufficient to bring the actions of Jeremy Kraiger within the exclusion clause in paragraph 5 of the Policy. He reasoned that the appellant had caused damage to property and intended to cause such damage when the appellant set the piles of pine cones alight. He said that even if the appellant's criminal liability ended with his attempt to put out the fire, the court must still find that the property damage to the plaintiffs' property was caused by a criminal act.
[63] Counsel for the respondent relied upon the case of Kolta v. State Farm Fire & Casualty Co. (1981), 122 D.L.R. (3d) 126 (Ont. H.C.). In that case a claim was made by the insured, Kolta, for damages to his home arising from a fire. The claim arose in extraordinary circumstances. Kolta had become involved in an altercation with some young men in front of his home. Kolta obtained a shotgun, threatened the men with it, and fired one shot into the ground. Kolta retreated inside his home. The police were contacted. They tried to speak with Kolta, but he refused to answer their calls. The police surrounded the home and attempted to get the attention of Kolta with a bull horn. He remained locked in his home with the loaded shotgun. Eventually the police threw tear gas canisters into the home to drive Kolta out. The tear gas canisters started a fire which damaged the house. The insurer refused coverage for the fire damage relying on a clause in the insured's policy which stated: "This Insurer shall not be liable . . . (g) for loss or damage caused by a criminal or willful act or omission of the Insured or of any person whose property is insured hereunder." The trial judge found that Kolta was guilty of possession of a weapon dangerous to the public peace, and possession of a weapon for the purpose of committing an indictable offence (ss. 83 and 86 of the Criminal Code in force at the time.) Southey J. concluded that the criminal act of the insured was the prime cause of the fire that occurred and the resultant loss. He found accordingly that the loss was excluded from coverage as a result of the exclusion clause.
[64] The Kolta case was followed in Buttar v. Safeco Insurance Company of America (1986), 21 C.C.L.I. 135 (B.C.S.C.). In that case Mr. Buttar started a fire in his fireplace using gasoline to start the fire. Some nearby clothing caught fire. Mr. Buttar threw the clothing into the fireplace and poured more gasoline on the clothing. He left his home shortly thereafter. On his return, he found the house ablaze. Mr. Buttar was convicted of an offence under s. 390(a) of the Criminal Code (as it then stood), of "wilfully setting fire to anything that is likely to cause anything mentioned in s. 389(1) to catch fire." His homeowner's policy excluded "loss or damage caused by a criminal or wilful act or omission of the insured or of any person whose property is insured hereunder." Mr. Buttar argued that although he intended to set fire to the clothes and blankets, he had no intention of causing a fire to the house and that although he may have been negligent, or even reckless, he had no intent to bring about the loss. He argued that the criminal act exclusion found in his policy of insurance is restricted to a crime in which the insured wilfuly intended the loss to occur. In rejecting this submission MacKinnon J. said this at p. 140:
In any event there is no authority for the proposition that the exclusionary clause in the policy is to be read as if "criminal act" applies only to criminal offences carried out with the intent of causing the loss. The exclusionary clause is not so worded. It does exclude criminal acts causing the loss. There is no ambiguity or uncertainty in the language used. Criminal acts causing the loss are excluded. In addition wilful acts causing the loss are excluded.
[65] In the case at bar, counsel for the respondent submitted that if the appellant's position is correct, if paragraph 5 only serves to exclude damage specifically intended by the insured, it would mean that where an insured deliberately set fire to A's house intending to burn it down, but the fire spread and also damaged B's house next door, which the insured had not intended to damage, the insured, notwithstanding a conviction for burning down A's house would nevertheless be entitled to full indemnity for the damage to B's house. He submitted that such a result is not consistent with the plain wording of paragraph 5, nor does it make logical sense, nor meet the reasonable expectation of the parties to the insurance policy. I agree with this submission.
[66] If I am wrong in concluding that the evidence called in the court below supports Mr. Kraiger's conviction for arson, then it seems to me that the evidence at least supports, as it did in R. v. D.(S.), a conviction under s. 430(5.1) of the Code. That criminal conduct resulted in the property damage which is the subject-matter of the civil claim against him. In my view on a proper interpretation of paragraph 5 of the Policy, it follows that no indemnity is available to the appellant.
CONCLUSION
[67] In my view, the trial judge was correct in holding that BCIC was entitled to a declaration that it was not required to indemnify the appellant under the policy.
[68] I would dismiss the appeal.
“The Honourable Madam Justice Ryan”
I AGREE:
“The Honourable Madam Justice Southin”
I AGREE:
“The Honourable Madam Justice Saunders”