Hamel Construction Inc. v. Lombard Canada Ltd.,

• Jurisdiction: Nova Scotia
• Judge: MacDonald
• Neutral Citation: 2004 NSSC 42
• Citation: 2004 NSSC 42,(2004), 221 N.S.R.(2d) 191 (SC),221 NSR(2d) 191,(2004), 221 NSR(2d) 191 (SC),221 N.S.R.(2d) 191
• Date: 12 February 2004
• Court: Supreme Court of Nova Scotia (Canada)

Hamel Constr. v. Lombard Can. (2004), 221 N.S.R.(2d) 191 (SC);

 697 A.P.R. 191

MLB headnote and full text

Temp. Cite: [2004] N.S.R.(2d) TBEd. MR.008

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

(SH 210115; 2004 NSSC 42)

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

Nova Scotia Supreme Court

MacDonald, A.C.J.S.C.

February 12, 2004.

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 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.

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 - The Nova Scotia Supreme Court 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.

Insurance - Topic 6912

Liability insurance - Business - Comprehensive policy - Exclusions - Withdrawal, inspection, repair, replacement or loss of use of product or work - [See Insurance - Topic 6878 ].

Words and Phrases

Physical injury to tangible property - The Nova Scotia Supreme Court discussed the meaning of this phrase as found in a commercial general liability insurance policy - See paragraphs 27 to 32.

Words and Phrases

Tangible property - The Nova Scotia Supreme Court discussed the meaning of this phrase as found in a commercial general liability insurance policy - See paragraphs 27 to 32.

Cases Noticed:

Neary v. Wawanesa Mutual Insurance Co. (2003), 216 N.S.R.(2d) 219; 680 A.P.R. 219 (C.A.), refd to. [para. 10].

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. 11].

Hope (R.W.) Ltd. v. Dominion of Canada General Insurance Co. (2001), 154 O.A.C. 7 (C.A.), refd to. [para. 16].

Trafalgar Insurance Co. of Canada v. Imperial Oil Ltd. - see Hope (R.W.) Ltd. v. Dominion of Canada General Insurance Co.

Alie et al. v. Bertrand & Frère Construction Co. et al. (2002), 167 O.A.C. 20 (C.A.), refd to. [para. 17].

Privest Properties Ltd. v. Foundation Co. of Canada Ltd. (1991), 57 B.C.L.R.(2d) 88 (S.C.), refd to. [para. 19].

Ontario v. Fatehi, [1984] 2 S.C.R. 536; 56 N.R. 62; 6 O.A.C. 270, refd to. [para. 31].

Counsel:

Dawna J. Ring, Q.C., and Graydon Lally, for the applicant;

Robert Barnes, Q.C., for the respondent.

This application was heard in chambers at Halifax, Nova Scotia, on February 12, 2004, by MacDonald, A.C.J.S.C., of the Nova Scotia Supreme Court, who delivered the following decision on February 12, 2004.