Global Aerospace Inc. v. Insurance Co. of the State of Pennsylvania et al., (2010) 359 Sask.R. 209 (CA)

• Judge: Cameron, Lane and Smith, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: August 31, 2010
• Jurisdiction: Saskatchewan
• Citations: (2010), 359 Sask.R. 209 (CA);2010 SKCA 96

Global Aerospace v. Pennsylvania Ins. (2010), 359 Sask.R. 209 (CA);

    494 W.A.C. 209

MLB headnote and full text

Temp. Cite: [2010] Sask.R. TBEd. AU.019

The Insurance Company of the State of Pennsylvania and American Home Assurance Company (appellants) v. Global Aerospace, Inc. (respondent)

(Nos. 1747; 1779; 2010 SKCA 96)

Indexed As: Global Aerospace Inc. 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 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.

Global commenced a separate action for contribution against ICSOP and American Home. ICSOP and American Home applied pursuant to Queen's Bench Rules 247 and 173(e) to dismiss the separate action brought by Global. They argued estoppel and abuse of process by reason of the finding in the earlier proceedings that the limitation period had expired.

The Saskatchewan Court of Queen's Bench, in a decision reported at (2009), 330 Sask.R. 150, dismissed the application. ICSOP and American Home appealed.

The Saskatchewan Court of Appeal, Smith, J.A., dissenting, allowed the appeals and granted the application by ICSOP and American Home to dismiss Global's action.

Editor's Note: ICSOP and American Home had applied for an order dismissing the Cameco action pursuant to Queen's Bench Rules 247 and 173(c) and (e). While those applications were pending, Global launched an application to amend the statement of claim in the Cameco action to assert its claim for contribution in that action. The Saskatchewan Court of Queen's Bench, in a decision reported at (2008), 321 Sask.R. 120, allowed the amendments sought by Global in the Cameco action and dismissed the applications by ICSOP and American Home to summarily dismiss that action. ICSOP and American Home appealed from that decision. The Saskatchewan Court of Appeal allowed those appeals in a companion judgment reported at (2010) 359 Sask.R. 174; 494 W.A.C. 174.

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 4 to 5.

Courts - Topic 2015

Jurisdiction - General principles - Controlling abuse of its process (incl. abuse of process by relitigation) - [See Estoppel - Topic 386 ].

Estoppel - Topic 377

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - When applicable - [See Estoppel - Topic 386 ].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings (incl. validity of statutes) - 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 - 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 - 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 - The Court of Appeal allowed an appeal holding that s. 20 of the Limitations Act did not permit the amendments - Global commenced a separate action for contribution against ICSOP and American Home - ICSOP and American Home applied pursuant to Queen's Bench Rules 247 and 173(e) to dismiss the action - They argued estoppel and abuse of process by reason of the finding in the earlier proceedings that the limitation period had expired - McMurtry, J., dismissed the application - McMurtry, J., held that the question of whether the limitation period had expired had not been determined in the earlier proceedings and if she was wrong, she would decline to apply issue estoppel in the exercise of her discretion not to do so - She also found that the new action did not involve an abuse of process - ICSOP and American Home appealed - The Saskatchewan Court of Appeal allowed the appeal and granted the application to dismiss Global's action - With respect to issue estoppel, the court (Cameron, J.A.) stated, inter alia, "(i) that the issue regarding the limitation period did not arise 'collaterally or incidentally' in the earlier proceedings, except in the narrowest sense; (ii) that the finding that the limitation period had expired amounted in the circumstances to the functional equivalent of a determination of the matter; and (iii) that this finding or determination may be seen, on a plausible view of the intended operation of section 20, to have formed an essential part of the foundation for the decisions arrived at by the two courts in the earlier proceedings" - With respect to the discretionary power to decline to apply estoppel if it would work an injustice, the court stated that McMurtry, J., was "on tenuous ground" in thinking there was a proper basis for the exercise of that discretion - The court also held that Global's commencement of the separate action, given all that had gone before, amounted to an abuse of process - See paragraphs 65 to 104.

Estoppel - Topic 398

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Exceptions - Special circumstances - [See Estoppel - Topic 386 ].

Practice - Topic 5361

Dismissal of action - Grounds - General and want of prosecution - Abuse of process - [See Estoppel - Topic 386 ].

Cases Noticed:

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397, refd to. [paras. 8, 127].

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. 10].

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. [paras. 11, 149].

Weldon v. Neal (1887), 19 Q.B.D. 394, refd to. [paras. 29, 130].

Tannas v. Moser, [1930] 1 W.W.R. 738 (Sask. C.A.), refd to. [paras. 29, 135].

Basarsky v. Quinlan, [1972] S.C.R. 380, refd to. [para. 29].

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

Agil Holdings Ltd., Re, [1985] O.J. No. 881 (H.C.), refd to. [para. 53].

Leier v. Shumiatcher (1962), 37 W.W.R.(N.S.) 605 (Sask. C.A.), refd to. [para. 54].

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. 55].

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. 55].

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. 61].

Bomac Construction Ltd. et al. v. Stevenson et al., [1986] 5 W.W.R. 21; 48 Sask.R. 62 (C.A.), refd to. [para. 63].

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. 63].

Hoystead v. Commissioner of Taxation, [1926] A.C. 155 (P.C.), refd to. [para. 78].

Naken et al. v. General Motors of Canada Ltd., [1983] 1 S.C.R. 72; 46 N.R. 139, refd to. [para. 83].

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. 89].

Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] A.C. 853 (H.L.), refd to. [para. 127].

Walbaum and Walbaum v. G & R Trucking Ltd. (1983), 22 Sask.R. 22; 144 D.L.R.(3d) 636 (C.A.), refd to. [para. 129].

Stockbrugger Estate v. Wolfe Estate, Rachul and Sandstra Bros. Transport Ltd., [1987] 4 W.W.R. 759; 59 Sask.R. 96 (C.A.), refd to. [para. 139].

Counsel:

James 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 Laprairie, Q.C., J. Hardy and Holli Kuski, for the respondent.

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:

Cameron, J.A. - see paragraphs 1 to 104;

Lane, J.A., concurring - see paragraph 105;

Smith, J.A., dissenting - see paragraphs 106 to 151.

An addendum on costs by Cameron, J.A., was filed on August 31, 2010 - see paragraphs 152 to 153.