Hamel Construction Inc. v. Lombard Canada Ltd., (2005) 232 N.S.R.(2d) 138 (CA)

• Jurisdiction: Nova Scotia
• Judge: Roscoe, Chipman and Saunders, JJ.A.
• Date: 07 April 2005
• Citation: (2005), 232 N.S.R.(2d) 138 (CA),2005 NSCA 69
• Court: Court of Appeal of Nova Scotia (Canada)

Hamel Constr. v. Lombard Can. (2005), 232 N.S.R.(2d) 138 (CA);

 737 A.P.R. 138

MLB headnote and full text

Temp. Cite: [2005] N.S.R.(2d) TBEd. AP.025

Lombard Canada Limited, a body corporate (appellant) v. Hamel Construction Inc., a body corporate (respondent)

(217951; 2005 NSCA 69)

Indexed As: Hamel Construction Inc. v. Lombard Canada Ltd.

Nova Scotia Court of Appeal

Roscoe, Chipman and Saunders, JJ.A.

April 20, 2005.

Summary:

Hamel Construction Inc. contracted with the Bedford Waterfront Development Corp. to prepare caissons for towing across the Bedford Basin. Bedford contracted with Waterworks Construction Ltd. to tow the caissons. A caisson sunk. Hamel had represented that the caisson could be towed and remain afloat. Waterworks sued Hamel, seeking recovery for all costs incidental to the refloating effort. Lombard Canada Ltd., Hamel's insurer under a commercial general liability package, refused to defend the claim on the basis that the loss was not covered by the policy. Hamel applied for a direction that Lombard defend.

The Nova Scotia Supreme Court, in a decision reported at 221 N.S.R.(2d) 191; 697 A.P.R. 191, held that a claim for Bedford's alleged loss of use fell within the policy's "business loss" exclusion. However, Lombard had a duty to defend the claim respecting property damage because an alleged obstruction of the waterway might constitute physical injury to a third party's tangible property. Lombard appealed.

The Nova Scotia Court of Appeal dismissed the appeal.

Insurance - Topic 725

Insurers - Duties - Duty to defend - The Nova Scotia Court of Appeal held that in determining whether an insurer had a duty to defend only those pleadings directed against the insured could be considered and any extrinsic evidence "explicitly referred to" in those pleadings - The court stated that "nothing in the recent jurisprudence suggests that in delving into the 'true nature of the claim' or its 'substance', it is desirable or possible for a court to look to pleadings filed by parties other than those making the claim against the insured. It just does not make sense to order an insurer to defend something that has not been alleged against the insured." - See paragraphs 24 to 61.

Insurance - Topic 6878

Liability insurance - Business - Comprehensive policy - Duty to defend - Hamel contracted with Bedford to prepare caissons for towing across the Bedford Basin - Bedford contracted with Waterworks to tow the caissons - A caisson sunk - Hamel had represented that the caisson could be towed and remain afloat - Waterworks sued Hamel, seeking recovery for all costs incidental to the refloating effort - Lombard insured Hamel's business under a commercial general liability package - Lombard refused to defend the claim - A chambers judge held that Lombard had a duty to defend the claim respecting property damage because an alleged obstruction of the waterway might constitute physical injury to a third party's tangible property - The Nova Scotia Court of Appeal dismissed Lombard's appeal - See paragraphs 62 to 88.

Cases Noticed:

Privest Properties Ltd. v. Foundation Co. of Canada, 1991 CarswellBC 142 (S.C.), refd to. [para. 13].

Neary v. Wawanesa Mutual Insurance Co. (2003), 216 N.S.R.(2d) 219; 680 A.P.R. 219 (C.A.), refd to. [para. 24].

Kerr v. Law Profession Indemnity Co. (1994), 22 C.C.L.I.(2d) 28 (Ont. Gen. Div.), refd to. [para. 27].

A.R.G. Construction Corp. et al. v. Allstate Insurance Co. of Canada et al., [2004] O.T.C. 954; 38 C.L.R.(3d) 221 (Sup. Ct.), refd to. [para. 28].

Monenco Ltd. et al. v. Commonwealth Insurance Co. et al., [2001] 2 S.C.R. 699; 274 N.R. 84; 155 B.C.A.C. 161; 254 W.A.C. 161, refd to. [para. 28].

Fermes Dionne ltée/Dionne Farms Ltd. v. Fermes Gervais ltée et al. (2002), 255 N.B.R.(2d) 6; 668 A.P.R. 6 (C.A.), refd to. [para. 29].

Nichols v. American Home Assurance Co. et al., [1990] 1 S.C.R. 801; 107 N.R. 321; 39 O.A.C. 63; 68 D.L.R.(4th) 321; [1990] I.L.R. 1-2583, refd to. [para. 29].

Kates v. Hall (1990), 47 B.C.L.R.(2d) 329 (S.C.), refd to. [para. 30].

Scalera v. Lloyd's of London, [2000] 1 S.C.R. 551; 253 N.R. 1; 135 B.C.A.C. 161; 221 W.A.C. 161, refd to. [para. 31].

Sansalone v. Wawanesa Mutual Insurance Co., [2000] 1 S.C.R. 627; 253 N.R. 95; 135 B.C.A.C. 255; 221 W.A.C. 255, refd to. [para. 33].

Bacon v. McBride (1984), 5 C.C.L.I. 146 (B.C.S.C.), refd to. [para. 45].

Shragie v. Tanemura, [1988] I.L.R. 1-2278; 22 B.C.L.R.(2d) 64 (S.C.), not folld. [para. 55].

Cansulex Ltd. v. Reed Stenhouse Ltd. (1985), 70 B.C.L.R. 273 (S.C.), not folld. [para. 57].

T.W.-V. v. K.R.J.W. et al. (1996) 5 O.T.C. 306; 29 O.R.(3d) 277 (Gen. Div.), refd to. [para. 60].

Raylo Chemicals Inc. v. AXA Pacific Insurance Co., [2000] 7 W.W.R. 71; 242 A.R. 45 (Q.B.), refd to. [para. 64].

Wood v. Esson (1884), 9 S.C.R. 239, refd to. [para. 81].

Counsel:

Robert Barnes, Q.C., and Jennifer Ross, for the appellant;

Dawna Ring, Q.C., and Graydon Lally, for the respondent.

This appeal was heard on April 7, 2005, by Roscoe, Chipman and Saunders, JJ.A., of the Nova Scotia Court of Appeal. Chipman, J.A., delivered the following decision for the court on April 20, 2005.