Elance Steel Fabricating Co. v. Falk Bros. Industries Ltd. and Canadian Surety Co., (1989) 99 N.R. 228 (SCC)

• Judge: Dickson, C.J.C., Lamer, Wilson, La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory and McLachlin, JJ.
• Court: Supreme Court (Canada)
• Case Date: May 25, 1989
• Jurisdiction: Canada (Federal)
• Citations: (1989), 99 N.R. 228 (SCC);JE 89-1362;[1989] SCJ No 97 (QL);99 NR 228;35 CLR 225;1989 CanLII 38 (SCC);[1990] 1 WWR 29;62 DLR (4th) 236;39 CCLI 161;[1989] 2 SCR 778;80 Sask R 22

Elance Steel v. Falk Bros. Ind. Ltd. (1989), 99 N.R. 228 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Falk Bros. Industries Ltd. and Canadian Surety Company v. Elance Steel Fabricating Co. Ltd.

(20679)

Indexed As: Elance Steel Fabricating Co. v. Falk Bros. Industries Ltd. and Canadian Surety Co.

Supreme Court of Canada

Dickson, C.J.C., Lamer, Wilson, La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory and McLachlin, JJ.

September 28, 1989.

Summary:

The plaintiff supplier of building materials sued to recover payment of its account. The action was brought under a surety bond against Falk as the debtor and principal under the bond and against Canadian Surety as the surety under the bond. The issue in this case was whether the supplier was entitled to relief from forfeiture respecting a breach of a time limit contained in the bond.

The Saskatchewan Court of Queen's Bench, in a decision reported in [1987] 1 I.L.R. 1-2143; 52 Sask.R. 283; 31 D.L.R.(4th) 76; 22 C.C.L.I. 268, granted the supplier relief from forfeiture. Canadian Surety appealed.

The Saskatchewan Court of Appeal, in a decision reported in [1988] I.L.R. 1-2266; [1987] 6 W.W.R. 679; 62 Sask.R. 304; 42 D.L.R.(4th) 181; 27 C.C.L.I. 20, allowed the appeal in part. The court held that the lower court had jurisdiction to grant relief from forfeiture, but struck out the actual order granting such relief, leaving such decision for the trial judge. Falk and Canadian Surety appealed.

The Supreme Court of Canada dismissed the appeal.

Building Contracts - Topic 7626

Performance bonds - Rights of claimant - Relief from forfeiture - [See Building Contracts - Topic 7926 below].

Building Contracts - Topic 7926

Labour and material payment bonds - Rights of claimant - Relief from forfeiture - A supplier of building materials sued to recover payment of its account - No notice of the claim was given to the surety named in the payment bond within the time limit provided in the bond, but notice was given 28 days later - There was no evidence that the surety was prejudiced by the delay - The Supreme Court of Canada affirmed that the court had jurisdiction to grant relief from forfeiture pursuant to s. 109 of the Saskatchewan Insurance Act.

Insurance - Topic 3135

Payment of insurance proceeds - Actions - Relief against forfeiture - General - Section 109 of the Saskatchewan Insurance Act empowered a court to grant relief from forfeiture for "imperfect compliance with a statutory condition ... or other matter or thing required to be done or omitted by the insured ..." - The Supreme Court of Canada held that s. 109 was a remedial section and as such should be given an appropriately broad interpretation - See paragraph 13.

Insurance - Topic 3135

Payment of insurance proceeds - Actions - Relief against forfeiture - General - The Supreme Court of Canada referred to the purpose of allowing relief from forfeiture in insurance cases - See paragraph 13.

Insurance - Topic 3136

Payment of insurance proceeds - Actions - Relief against forfeiture - Extent of power to grant relief - Section 109 of the Saskatchewan Insurance Act, similar to provisions found in other Insurance Acts throughout Canada, empowered a court to grant relief from forfeiture for "imperfect compliance with a statutory condition ... or other matter or thing required to be done or omitted by the insured ..." - The Supreme Court of Canada held that s. 109 empowered the court to grant relief from forfeiture for breaches of terms of insurance contracts other than statutory conditions - The rules of statutory construction and precedent favoured interpreting s. 109 as extending to nonstatutory terms of insurance policies - See paragraphs 9 to 16.

Insurance - Topic 3138

Payment of insurance proceeds - Actions - Relief against forfeiture - Imperfect compliance with statutory conditions - General [See Insurance - Topic 3136 above].

Insurance - Topic 3138

Payment of insurance proceeds - Actions - Relief against forfeiture - Imperfect compliance with statutory conditions - General - Section 109 of the Saskatchewan Insurance Act empowered a court to grant relief from forfeiture for "imperfect compliance with a statutory condition ... or other matter or thing required to be done or omitted by the insured ..." - The Supreme Court of Canada held that failure to give a notice of claim within the prescribed time period constituted "imperfect compliance" within the meaning of s. 109, rather than noncompliance - Thus a court was empowered to grant relief from forfeiture for such breaches - See paragraphs 17 to 23.

Insurance - Topic 3139

Payment of insurance proceeds - Actions - Relief against forfeiture - Imperfect compliance with statutory conditions - Claims - Notice and proof of loss - [See second Insurance - Topic 3138 above].

Words and Phrases

Imperfect compliance - The Supreme Court of Canada held the words "imperfect compliance" as found in s. 109 of the Saskatchewan Insurance Act, R.S.S. 1978, c. S-26, included failure to give a notice of claim within the prescribed time period - See paragraphs 17 to 23.

Cases Noticed:

Minto Construction Ltd. v. Gerling Global Insurance Co., [1978] I.L.R. 1-989; 86 D.L.R.(3d) 147 (Ont. C.A.), refd to. [para. 13].

Canadian Equipment Sales & Service Co. Ltd. v. Continental Insurance Co. (1975), 59 D.L.R.(3d) 333 (Ont. C.A.), refd to. [para. 13].

Fitzgerald v. Casualty Co. of Canada (1981), 31 Nfld. & P.E.I.R. 521; 87 A.P.R. 521 (Nfld. S.C.T.D.), refd to. [para. 14].

Kallos and Kallos v. Saskatchewan Government Insurance, [1984] 2 W.W.R. 183; 4 D.L.R.(4th) 34; 30 Sask.R. 185; 3 C.C.L.I. 65 (Q.B.), refd to. [para. 14].

V & G Polled Herefords v. Lloyd's Non-Marine Underwriters et al. (1986), 51 Sask.R. 81; 22 C.C.L.I. 136 (Q.B.), refd to. [para. 14].

Dashchuk Lumber Ltd. v. Proman Projects Ltd. and Continental Insurance Companies (1987), 59 Sask.R. 193 (C.A.), refd to. [para. 14].

Moxness v. Saskatchewan Government Insurance Office, [1977] 3 W.W.R. 393 (Sask. D.C.), refd to. [para. 18].

North Lethbridge Garage Limited v. Continental Casualty Company, [1930] 1 W.W.R. 491 (Alta. S.C., App. Div.), refd to. [para. 18].

D.S. Ashe Trucking Ltd. v. Dominion Insurance Corporation (1966), 55 W.W.R.(N.S.) 321 (B.C.C.A.), dist. [para. 19].

National Juice Co. Ltd. v. Dominion Insurance Co., [1978] I.L.R. 1-935; 81 D.L.R.(3d) 606; 18 O.R.(2d) 10 (C.A.), dist. [para. 19].

Presco Industrial Ltd. v. Saskatchewan Government Insurance Office (1967), 61 W.W.R.(N.S.) 637 (Sask. C.A.), refd to. [para. 20].

Hogan v. Kolisnyk and Security Mutual Casualty Company, [1983] 3 W.W.R. 481; 43 A.R. 17 (Q.B.), refd to. [para. 21].

Statutes Noticed:

Insurance Act (Sask.) - see Saskatchewan Insurance Act.

Saskatchewan Insurance Act, R.S.S. 1978, c. S-26, sect. 109 [paras. 1, 3-5, 7, 9-17, 20, 24].

Counsel:

R.P. Rendek, Q.C., for the appellants;

Q.D. Agnew, for the respondent.

Solicitors of Record:

Rendek Kaufman Embury, Regina, Saskatchewan, for the appellants;

Agnew & Company, Saskatoon, Saskatchewan, for the respondent.

This appeal was heard before Dickson, C.J.C, Lamer, Wilson, La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory and McLachlin, JJ., of the Supreme Court of Canada, on May 25, 1989. The decision of the Supreme Court of Canada was delivered in both official languages by McLachlin, J., on September 28, 1989.