Cameco Corp. v. Insurance Co. of the State of Pennsylvania et al., 2010 SKCA 95

• Judge: Cameron, Lane and Smith, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: February 22, 2010
• Jurisdiction: Saskatchewan
• Citations: 2010 SKCA 95;(2010), 359 Sask.R. 174 (CA)

Cameco Corp. v. Pennsylvania Ins. (2010), 359 Sask.R. 174 (CA);

    494 W.A.C. 174

MLB headnote and full text

Temp. Cite: [2010] Sask.R. TBEd. AU.020

The Insurance Company of the State of Pennsylvania and American Home Assurance Company (appellants) v. Cameco Corporation and Global Aerospace Inc. (respondents)

(Nos. 1701; 1705; 2010 SKCA 95)

Indexed As: Cameco Corp. v. Insurance Co. of the State of Pennsylvania et al.

Saskatchewan Court of Appeal

Cameron, Lane and Smith, JJ.A.

July 30, 2010.

Summary:

Cameco Corp. was sued by the estates of 10 miners killed in a helicopter crash. Cameco had an aviation liability policy with Global Aerospace Inc., and general liability policies with the Insurance Co. of the State of Pennsylvania (ICSOP) and American Home Assurance Co. ICSOP and American Home denied coverage under their policies. Global settled the claims against Cameco and fully indemnified Cameco in relation to those claims. Cameco commenced an action (the Cameco action) against ICSOP and American Home, seeking declarations that they had a duty to defend the claims and to indemnify Cameco in relation to any liability arising out of the claims. Global applied pursuant to rule 165 of the Queen's Bench Rules to amend the statement of claim in the Cameco action to add Global as a plaintiff and to claim payment in accordance with the policies of insurance directly from ICSOP and American Home to Global by way of contribution to the costs of defence and indemnity paid by Global on behalf of Cameco. Global admitted that the limitation period had expired and invited the court to allow the amendments pursuant to s. 20 of the Limitations Act.

The Saskatchewan Court of Queen's Bench, in a decision reported at (2007), 295 Sask.R. 309, permitted the proposed amendments pursuant to s. 20 of the Limitations Act. ICSOP and American Home appealed.

The Saskatchewan Court of Appeal, Jackson, J.A., dissenting, in a decision reported at (2008), 310 Sask.R. 89; 423 W.A.C. 89, allowed the appeal holding that s. 20 of the Limitations Act did not permit the amendments sought by Global.

ICSOP and American Home applied for dismissal of the Cameco action pursuant to rules 247 and 173(c) and (e) on the basis, inter alia, that Cameco, having now been fully indemnified for its loss, ceased to have any valid claim against ICSOP and American Home. Cameco brought an application to amend the Cameco action to explicitly convert it into a subrogation action on behalf of Global. ICSOP and American Home opposed the amendment application on the grounds that: Global could not pursue what was actually a claim for equitable contribution by way of a subrogation action; the matter was res judicata as a result of the decision of the Court of Appeal in the earlier proceedings; and the application was vexatious and amounted to an abuse of process.

The Saskatchewan Court of Queen's Bench, in a decision reported at (2008), 321 Sask.R. 120, allowed the amendments sought by Cameco and dismissed the applications by ICSOP and American Home to summarily dismiss the Cameco action. ICSOP and American Home appealed.

The Saskatchewan Court of Appeal allowed the appeals. The court held that the chambers judge erred in permitting the amendments that would convert the Cameco action to a subrogated action brought on behalf of Global and in dismissing the applications by ICSOP and American Home to dismiss the Cameco action.

Editor's Note: Global had also launched a new and separate action (the Global action) directly against ICSOP and American Home claiming equitable contribution in relation to its costs of the defence and settlement of the claims against Cameco. ICSOP and American Home applied for summary dismissal of the Global action, arguing that the Court of Appeal had already determined that the limitation period applicable to Global's claim for contribution had expired, that this issue was res judicata, or governed by the principle of issue estoppel, and that the claim should be struck as an abuse of process under rule 173(e) or dismissed under rule 247. The Saskatchewan Court of Queen's Bench, in a decision reported at (2009), 330 Sask.R. 150, dismissed that application. ICSOP and American Home appealed that decision. The Saskatchewan Court of Appeal allowed those appeals in a companion judgment reported at (2010) 359 Sask.R. 209; 209 W.A.C. 494.

Courts - Topic 2015

Jurisdiction - General principles - Controlling abuse of its process (incl. abuse of process by relitigation) - The Saskatchewan Court of Appeal (Cameron, J.A.) stated that abuse of process was a doctrine "to which I think we should be increasingly attentive when it comes to interlocutory proceedings in civil actions. I say this for two reasons. First, because the doctrine of abuse of process is not encumbered by the specific requirements of issue estoppel and is therefore capable on occasion of providing a more effective remedy against abuse. Second, because civil litigation conducted along traditional lines is nowadays so laden with pre-trial procedure, and thus so prone to interlocutory proceedings, as to lend itself to abuse of process. It is also so time consuming, and so very expensive, as to verge on the prohibitive even if conducted efficiently" - See paragraphs 41 to 42.

Courts - Topic 2015

Jurisdiction - General principles - Controlling abuse of its process (incl. abuse of process by relitigation) - Cameco Corp. was sued by the estates of 10 miners killed in a helicopter crash - Cameco had an aviation liability policy with Global Aerospace Inc., and general liability policies with the Insurance Co. of the State of Pennsylvania (ICSOP) and American Home Assurance Co. - ICSOP and American Home denied coverage under their policies - Global settled the claims against Cameco and fully indemnified Cameco in relation to those claims - Cameco commenced an action (the Cameco action) against ICSOP and American Home, seeking declarations that they had a duty to defend the claims and indemnify Cameco - Global applied pursuant to rule 165 of the Queen's Bench Rules to amend the statement of claim in the Cameco action to add Global as a plaintiff and to claim payment in accordance with the policies of insurance directly from ICSOP and American Home to Global by way of contribution to the costs of defence and indemnity paid by Global on behalf of Cameco - Global admitted that the limitation period had expired and invited the court to allow the amendments pursuant to s. 20 of the Limitations Act - Wimmer, J., permitted the proposed amendments pursuant to s. 20 of the Limitations Act - The Saskatchewan Court of Appeal allowed an appeal holding that s. 20 of the Limitations Act did not permit the amendments - Cameco applied to amend the Cameco action to explicitly convert it into a subrogation action on behalf of Global - McMurtry, J., allowed the amendments - ICSOP and American Home appealed - The Saskatchewan Court of Appeal allowed the appeals - Global's second attempt to assert its claim for contribution in the Cameco action was an obvious effort to circumvent the earlier decision of the court and amounted to an abuse of process - The court (Cameron, J.A.) stated that "the second motion constituted an attempt to re-litigate a matter that had already been determined by this Court, even if collaterally, and because the effect was to twice vex the other side, squander the resources of the Courts and the litigants, strike at the integrity of the adjudicative process, and strain the notion of finality. ... the second motion ran afoul of the doctrine of abuse of process by re-litigation" - See paragraphs 83 to 100.

Insurance - Topic 2876.1

Subrogation - Between insurers - [See Insurance - Topic 2899 ].

Insurance - Topic 2887.1

Subrogation - Action by insurer - When available - [See Insurance - Topic 2899 ].

Insurance - Topic 2899

Subrogation - Action by insurer in the name of the insured - Cameco Corp. was sued by the estates of 10 miners killed in a helicopter crash - Cameco had an aviation liability policy with Global Aerospace Inc., and general liability policies with the Insurance Co. of the State of Pennsylvania (ICSOP) and American Home Assurance Co. - ICSOP and American Home denied coverage under their policies - Global settled the claims against Cameco and fully indemnified Cameco in relation to those claims - Cameco commenced an action against ICSOP and American Home, seeking declarations that they had a duty to defend the claims and to indemnify Cameco in relation to any liability arising out of the claims - Cameco subsequently applied to amend the action to convert it into a subrogation action on behalf of Global - ICSOP and American Home applied for dismissal of the Cameco action pursuant to rules 247 and 173(c) and (e) on the basis that Cameco, having now been fully indemnified for its loss, ceased to have any valid claim against ICSOP and American Home - The chambers judge allowed the amendments sought by Cameco and dismissed the applications by ICSOP and American Home - ICSOP and American Home appealed - The Saskatchewan Court of Appeal allowed the appeals - The court (Smith, J.) stated that "the primary question raised by the instant appeal is whether, where more than one insurer has issued a policy of liability insurance with respect to the same risk and one of the insurers has fully indemnified the insured, the paying insurer can maintain a subrogated action, in the name of the insured, against the non-paying insurer(s). The position of the appellants is that no such action is recognized in law and that the only relief available to the paying insurer is a contribution action, in its own name, against the non-paying insurers. Any claim by the insured against the non-paying insurers ceases to exist, it is argued, once the insured is fully indemnified by the paying insurer. Accordingly, it is their position that the chambers judge erred in allowing the application by Cameco to amend the Cameco action to reflect a subrogation claim on behalf of Global, and in declining to dismiss the Cameco action in response to the appellants' application. It is my view that the appellants must succeed on both points" - See paragraphs 14 to 16.

Subrogation - Topic 15

General - Right of subrogation - When available - [See Insurance - Topic 2899 ].

Cases Noticed:

Pacific Forest Products Ltd. v. AXA Pacific Insurance Co., [2003] 6 W.W.R. 254; 182 B.C.A.C. 12; 300 W.A.C. 12; 2003 BCCA 241 (C.A.), leave to appeal denied (2004), 327 N.R. 397; 208 B.C.A.C. 158; 344 W.A.C. 158 (S.C.C.), consd. [para. 17].

Castellain v. Preston (1883), 11 Q.B.D. 380 (C.A.), consd. [para. 21].

Family Insurance Corp. v. Lombard Canada Ltd., [2002] 2 S.C.R. 695; 288 N.R. 373; 167 B.C.A.C. 161; 274 W.A.C. 161; 2002 SCC 48, refd to. [para. 23].

Caledonia North Sea Ltd. v. London Bridge Engineering Ltd., [2000] S.L.T. (1st Div.) 1123, affd. [2002] 4 H.L.J. No. 4, refd to. [para. 23].

Canada Trustco Mortgage Co. v. Cooperators General Insurance Co. (1997), 163 N.S.R.(2d) 241; 487 A.P.R. 241 (C.A.), refd to. [para. 28].

Cogema Resources Inc. v. Guarantee Co. of North America (2006), 278 Sask.R. 116; 2006 SKQB 184, refd to. [para. 28].

Rio Algom Ltd. v. Liberty Mutual Insurance Co., [2006] O.T.C. 83; 34 C.C.L.I.(4th) 105 (Sup. Ct.), refd to. [para. 28].

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397, refd to. [para. 44].

Danyluk v. Ainsworth Technologies Inc. et al., [2001] 2 S.C.R. 460; 272 N.R. 1; 149 O.A.C. 1; 2001 SCC 44, refd to. [para. 46].

Toronto (City) v. Canadian Union of Public Employees, Local 79 et al., [2003] 3 S.C.R. 77; 311 N.R. 201; 179 O.A.C. 291; 2003 SCC 63, refd to. [para. 47].

Weldon v. Neal (1887), 19 Q.B.D. 394, refd to. [para. 65].

Tannas v. Moser, [1930] 1 W.W.R. 738 (Sask. C.A.), refd to. [para. 65].

Basarsky v. Quinlan, [1972] S.C.R. 380, refd to. [para. 65].

Onishenko Estate v. Quinlan - see Basarsky v. Quinlan.

Agil Holdings Ltd., Re, [1985] O.J. No. 881 (H.C.), refd to. [para. 89].

Leier v. Shumiatcher (1962), 37 W.W.R.(N.S.) 605 (Sask. C.A.), refd to. [para. 90].

Talbot v. Ocean Oil Corp. and Pan Ocean Oil Ltd. (1977), 5 A.R. 361; 3 Alta. L.R.(2d) 354 (C.A.), refd to. [para. 91].

410675 Alberta Ltd. v. Trail South Developments Inc. et al. (2001), 293 A.R. 181; 257 W.A.C. 181; 2001 ABCA 274, refd to. [para. 91].

Pocklington Foods Inc. v. Alberta (Provincial Treasurer) (1995), 165 A.R. 155; 89 W.A.C. 155; 28 Alta. L.R.(3d) 96 (C.A.), refd to. [para. 97].

Bomac Construction Ltd. et al. v. Stevenson et al., [1986] 5 W.W.R. 21; 48 Sask.R. 62 (C.A.), refd to. [para. 99].

Caros Investments Ltd. v. Royal Bank of Canada - see Kadziolka v. Royal Bank of Canada.

Kadziolka v. Royal Bank of Canada (1993), 111 Sask.R. 90 (Q.B.), affd. (1993), 116 Sask.R. 10; 59 W.A.C. 10 (C.A.), refd to. [para. 99].

Hoystead v. Commissioner of Taxation, [1926] A.C. 155 (P.C.), refd to. [para. 114].

Naken et al. v. General Motors of Canada Ltd., [1983] 1 S.C.R. 72; 46 N.R. 139, refd to. [para. 119].

W.R. v. Alberta (Attorney General) et al. (2006), 391 A.R. 91; 377 W.A.C. 91; 62 Alta. L.R.(4th) 6; 2006 ABCA 219, refd to. [para. 125].

Counsel:

James S. Ehmann, Q.C., and Amy Anderson, for the appellant, The Insurance Company of the State of Pennsylvania;

Alan McIntyre, for the appellant, American Home Assurance Company;

Maurice O. Laprairie, Q.C., Jordan Hardy and Holli Kuski, for the respondents, Cameco Corporation and Global Aerospace, Inc.

These appeals were heard on February 22, 2010, before Cameron, Lane and Smith, JJ.A., of the Saskatchewan Court of Appeal. The judgment of the Court of Appeal was delivered on July 30, 2010, including the following opinions:

Smith, J.A. (Lane, J.A., concurring) - see paragraphs 1 to 36;

Cameron, J.A. (Lane, J.A., concurring) - see paragraphs 37 to 140.