Conohan et al. v. Cooperators, (2002) 286 N.R. 364 (FCA)

• Judge: Stone, Evans and Malone, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: January 23, 2002
• Jurisdiction: Canada (Federal)
• Citations: (2002), 286 N.R. 364 (FCA);2002 FCA 60

Conohan v. Co-op (2002), 286 N.R. 364 (FCA)

MLB headnote and full text

Temp. Cite: [2002] N.R. TBEd. FE.063

Walter A. Conohan and Eastern Marine Underwriters Inc. (plaintiffs/appellants) v. The Cooperators (defendant/respondent)

(A-779-00; 2002 FCA 60)

Indexed As: Conohan et al. v. Cooperators

Federal Court of Appeal

Stone, Evans and Malone, JJ.A.

February 11, 2002.

Summary:

A fishing vessel operated by Gaudet and insured by Cooperators collided with a fishing vessel operated by the plaintiff, Conohan, and insured by Eastern Marine Underwriters Inc. Conohan sued Gaudet for his losses. Cooperators refused to defend on the ground that Gaudet breached the insur­ance policy by being impaired. Gaudet admitted liability, confessed to judgment and assigned his rights of claim against Cooperators to Conohan and his insurer. Conohan and his insurer brought an action against Cooperators.

The Federal Court of Canada, Trial Divi­sion, in a decision reported at 197 F.T.R. 239, dismissed the action. Under s. 16 of the policy, Cooperators was only required to pay the plaintiffs' claims after Gaudet first paid Conohan's claim. Conohan and his insurer appealed.

The Federal Court of Appeal dismissed the appeal.

Insurance - Topic 3080

Payment of insurance proceeds - Actions - General - Third party action against insurer - Insured's recovery rights assigned to third party - A fishing vessel operated by Gaudet and insured by Cooperators col­lided with a fishing vessel operated by the plaintiff, Conohan, and insured by Eastern Marine Underwriters Inc - Conohan sued Gaudet for his losses - Cooperators refused to defend on the ground that Gaudet breached the insurance policy by being impaired - Gaudet admitted liability, con­fessed to judgment and assigned his rights of claim against Cooperators to Conohan and his insurer - Conohan and his insurer brought an action against Cooperators - The Federal Court of Appeal dismissed the action - Section 16 of the policy was a "pay to be paid" clause and Cooperators was only required to pay after Gaudet first paid Conohan's claim.

Insurance - Topic 8345

Marine insurance - Duties of insurer - To reimburse insured - General - [See Insur­ance - Topic 3080 ].

Cases Noticed:

Firma C-Trade S.A. v. Newcastle Protec­tion and Indemnity Association, [1991] 2 A.C. 1 (H.L.), refd to. [para. 8].

Wood v. Grand Valley Railway Co. et al. (1915), 51 S.C.R. 283, refd to. [para. 9].

Penvidic Contracting Co. v. International Nickel Co. of Canada Ltd., [1976] 1 S.C.R. 267; 4 N.R. 1; 53 D.L.R.(3d) 748, refd to. [para. 9].

CAE Industries Ltd. and CAE Aircraft Ltd. v. Canada, [1986] 1 F.C. 129; 61 N.R. 19 (F.C.A.), refd to. [para. 9].

Harbour Inn Seafoods Ltd. v. Switzerland and General Insurance Co., [1990] 2 N.Z.L.R. 381, refd to. [para. 10].

Vandervell Trust's (No. 2), Re; White v. Vandervell Trustees, [1974] Ch. 269 (C.A.), refd to. [para. 15].

Maple Leaf Lumber Co. and 384238 Ontario Ltd. v. Canada, [1984] 1 F.C. 661; 52 N.R. 206; 8 D.L.R.(4th) 676 (F.C.A.), refd to. [para. 15].

Minister of National Revenue v. Imperial General Properties Ltd., [1985] 1 F.C. 344; 56 N.R. 358 (F.C.A.), refd to. [para. 15].

Scotsburn Co-operative Services Ltd. v. Goodwin (W.T.) Ltd., [1985] 1 S.C.R. 54; 57 N.R. 811; 67 N.S.R.(2d) 163; 155 A.P.R. 163, refd to. [para. 15].

Goole & Hull Steam Towing Co. v. Ocean Marine Insurance Co. (1927), 29 Ll. L.R. 242 (K.B.), refd to. [para. 16].

Mercantile Mutual Insurance (Australia) Ltd. v. Gibbs & Anor, [2001] W.A.S.C.A. 271 (S.C.W. Aust.), refd to. [para. 17].

Collinge v. Heywood (1839), 9 Ad. & E 633 (Q.B.), refd to. [para. 18].

Richardson, Re, [1911] 2 K.B. 705 (C.A.), refd to. [para. 18].

County & District Properties Ltd. v. Jenner (C.) & Son Ltd., [1976] 2 Lloyd's Rep. 728 (Q.B.), refd to. [para. 18].

Total Liban SA v. Vitol Energy SA, [1999] 2 Lloyd's Rep. 700 (Q.B.), refd to. [para. 21].

Ship Italia Express (No. 2), Re, [1992] 2 Lloyd's Rep. 281 (Q.B.), refd to. [para. 23].

Charter Reinsurance Co. v. Fagan et al., [1997] A.C. 313; 199 N.R. 132 (H.L.), refd to. [para. 24].

Raiffeisen Zentralbank Osterreich AG v. Five Star Trading L.L.C. (Ship Mount I), [2001] 1 Lloyd's Rep. 597 (C.A.), refd to. [para. 24].

MacMillan Bloedel Ltd. et al. v. Youell et al. (1993), 33 B.C.A.C. 305; 54 W.A.C. 305 (C.A.), refd to. [para. 25].

Hooley (Thomas W.) & Sons v. Zurich General Accident & Liability Insurance Co. (1958), 103 So.2d 449 (La.), refd to. [para. 28].

Babst (Emile M.) Co. v. Nichols Construc­tion Corp. et al. (1986), 488 So.2d 699 (La. Ct. App.), refd to. [para. 28].

Ship Mercandian Continent, Re, [2000] 2 Lloyd's Rep. 357 (Q.B.), refd to. [para. 30].

Authors and Works Noticed:

Gilman, J., Arnould's Law of Marine Insurance and Average (16th Ed. 1997), vol. 3, p. 69 [para. 25].

Hazelwood, S., P & I Clubs: Law and Practice (3rd Ed. 2000), pp. 351 to 355 [para. 18].

Hurd, H., The Law and Practice of Marine Insurance (2nd Ed. 1952), p. 107 [para. 25].

Mustill, M., and Gilman, J., Arnould's Law of Marine Insurance Average (16th Ed. 1981), vol. 11, p. 664ff [para. 17].

Parks, A., The Law and Practice of Marine Insurance and Average (1987), vol. 2, pp. 832, 833 [para. 17].

Waddams, S., The Law of Damages (Looseleaf Ed.) (2000), pp. 5-40, 5-43, 13-2, 13-4 [para. 9].

Counsel:

David F.H. Marler, for the appellant;

D. Spencer Campbell, for the respondent.

Solicitors of Record:

Marler & Associates, Montreal, Quebec, for the appellant;

Stewart McKelvey Stirling Scales, Char­lottetown, Prince Edward Island, for the respondent.

This appeal was heard at Montreal, Que­bec, on January 23, 2002, before Stone, Evans and Malone, JJ.A., of the Federal Court of Appeal. On February 11, 2002, Stone, J.A., delivered the following judg­ment for the court.