Monenco Ltd. et al. v. Commonwealth Insurance Co. et al., (2001) 155 B.C.A.C. 161 (SCC)
Judge | McLachlin, C.J.C., Gonthier, Iacobucci, Bastarache, Binnie, Arbour and LeBel, JJ. |
Court | Supreme Court (Canada) |
Case Date | March 13, 2001 |
Jurisdiction | Canada (Federal) |
Citations | (2001), 155 B.C.A.C. 161 (SCC);2001 SCC 49;[2000] OJ No 3828 (QL);EYB 2001-256455;[2001] ACS no 50;32 CCLI (3d) 165;[2001] ILR 1;[2001] 2 SCR 699;[2002] 2 WWR 438;155 BCAC 161;[2001] SCJ No 50 (QL);204 DLR (4th) 14;JE 2001-1712;[2001] CarswellBC 1871;108 ACWS (3d) 159;274 NR 84;254 WAC 161;97 BCLR (3d) 191 |
Monenco v. Commonwealth Ins. (2001), 155 B.C.A.C. 161 (SCC);
254 W.A.C. 161
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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Temp. Cite: [2001] B.C.A.C. TBEd. SE.021
Monenco Limited and 67669 Alberta Inc. (appellants) v. Commonwealth Insurance Company (respondent)
(27258; 2001 SCC 49)
Indexed As: Monenco Ltd. et al. v. Commonwealth Insurance Co. et al.
Supreme Court of Canada
McLachlin, C.J.C., Gonthier, Iacobucci, Bastarache, Binnie, Arbour and LeBel, JJ.
September 13, 2001.
Summary:
Monenco Ltd., through its subsidiary, 67669 Alberta Inc., participated in an expansion project of a tar sands plant owned by Suncor Inc. Following a fire at the plant, Suncor brought an action against Monenco, 67669 and others. Monenco and 67669 were covered under a comprehensive general liability policy issued by Commonwealth Insurance Company. Commonwealth claimed that it was exonerated from its duty to defend the Suncor action because of a "turnkey exclusion" and/or "professional services exclusion" in the policy. Monenco and 67669 also had a professional liability policy with another insurer, which paid the full settlement and defence costs of the Suncor action in excess of the $1,000,000 deductible. Monenco and 67669 applied for an order under British Columbia Supreme Court Rule 18A that Commonwealth pay their costs of defending the Suncor action in the amount of $1,000,000.
The British Columbia Supreme Court, in a decision reported at [1997] B.C.T.C. Uned. E66, dismissed the application, holding that the turnkey exclusion operated to relieve Commonwealth of the duty to defend Monenco and 67669 in the Suncor action. Monenco and 67669 appealed.
The British Columbia Court of Appeal, in a decision reported at 121 B.C.A.C. 99; 198 W.A.C. 99, dismissed the appeal. Monenco and 67669 appealed.
The Supreme Court of Canada dismissed the appeal.
Insurance - Topic 725
Insurers - Duties - Duty to defend - The Supreme Court of Canada reviewed the legal principles governing an insurer's duty to defend - The court stated that the proper basis for determining whether a duty to defend existed required an assessment of the pleadings to ascertain the "substance" and "true nature" of the claims - The factual allegations set out therein had to be considered in their entirety to determine whether they could possibly support the plaintiff's legal claims - Also, extrinsic evidence that had been explicitly referred to within the pleadings could be considered to determine the substance and true nature of the allegations, and thus, to appreciate the nature and scope of an insurer's duty to defend - However, the court stated that on an application to determine whether an insurer had a duty to defend, the court could not look to "premature" evidence, being evidence which, if considered, would require findings to be made before trial that would affect the underlying litigation -See paragraphs 28 to 37.
Insurance - Topic 725
Insurers - Duties - Duty to defend - Monenco Ltd., through its subsidiary, 67669 Alberta Inc., participated in an expansion of a tar sands plant owned by Suncor Inc. - 67669's involvement occurred through a joint venture involving 67669, Bechtel Canada Ltd. and Associated Engineers Services Ltd. (collectively the "ABM Engineers") - A fire occurred at the plant - Suncor alleged that a significant factor in the extensiveness of the destruction was the way in which the fire travelled along polyvinyl chloride jacketed cables (PVC cables), which had been specified and installed by the ABM engineers - Suncor sued Monenco, 67669 and others, alleging breach of contract, breach of the duty of care and breach of the duty to warn of undisclosed dangers (the dangerous nature of the PVC cables) - Monenco and 67669 were covered under a comprehensive general liability policy - The policy contained a "turnkey exclusion" which applied to claims arising out of a project for which the insured performed professional architectural and/or engineering services, as well as the actual construction or manufacturing services - The Supreme Court of Canada held that Suncor's claims against Monenco and 67669 fell within the turnkey exclusion and the insurer was not obliged to defend the action or pay defence costs.
Insurance - Topic 725
Insurers - Duties - Duty to defend - Monenco Ltd., through its subsidiary, 67669 Alberta Inc., participated in an expansion of a tar sands plant owned by Suncor Inc. - 67669's involvement occurred through a joint venture involving 67669, Bechtel Canada Ltd. and Associated Engineers Services Ltd. (collectively the "ABM Engineers") - Following a fire at the plant, Suncor sued Monenco, 67669 and others, alleging breach of contract, breach of the duty of care and breach of the duty to warn of undisclosed dangers (the dangerous nature of polyvinyl chloride jacketed cables which had been specified and installed by the ABM engineers) - Monenco and 67669 were covered under a comprehensive general liability policy - The Supreme Court of Canada held that Suncor's claims against Monenco and 67669 fell within the "turnkey exclusion" in the policy and the insurer was not obliged to defend the action - In making that determination, the court held that the contract between Suncor and the joint venture, having been referred to in Suncor's amended statement of claim, could be reviewed to determine the substance and true nature of Suncor's claims - Also, because Suncor had pleaded that the joint venture had carried on business under the name "ABM-1978", this enabled the court to review the joint venture agreement as well - See paragraph 38.
Insurance - Topic 725.1
Insurers - Duties - Duty to defend - Costs of defence - [See second Insurance - Topic 725 ].
Insurance - Topic 6878
Liability insurance - Business - Comprehensive policy - Duty to defend - [See second and third Insurance - Topic 725 ].
Insurance - Topic 6919.1
Liability insurance - Business - Comprehensive policy - Exclusions - Turnkey exclusion - [See second Insurance - Topic 725 ].
Cases Noticed:
Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252; 147 N.R. 44; 83 Man.R.(2d) 81; 36 W.A.C. 81, refd to. [para. 11].
Rivtow Marine v. Washington Iron Works and Walkem Machinery and Equipment Ltd., [1974] S.C.R. 1189, refd to. [para. 24].
Bacon v. McBride (1984), 5 C.C.L.I. 146 (B.C.S.C.), refd to. [para. 28].
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, refd to. [para. 29].
Opron Maritimes Construction Ltd. v. Canadian Indemnity Co. (1986), 73 N.B.R.(2d) 389; 184 A.P.R. 389; 19 C.C.L.I. 168 (C.A.), leave to appeal refused, [1987] 1 S.C.R. xii; 76 N.R. 399; 76 N.B.R.(2d) 360; 192 A.P.R. 360, refd to. [para. 29].
Association des hôpitaux du Québec v. Fondation pour le cancer de la prostate, Centre hospitalier de l'Université Laval, [2000] R.R.A. 78 (Que. C.A.), refd to. [para. 30].
Lloyd's of London v. Scalera, [2000] 1 S.C.R. 551; 253 N.R. 1; 135 B.C.A.C. 161; 221 W.A.C. 161, refd to. [para. 33].
Colorado Farm Bureau Mutual Insurance Co. v. Snowbarger (1997), 934 P.2d 909 (Col. C.A.), refd to. [para. 33].
Authors and Works Noticed:
Andal, R.V., and Donnelly, T., Liability Insurance, in Brown, C., Insurance Law in Canada (1999 Looseleaf), vol. 2, p. 13 [para. 32].
Hilliker, G., Liability Insurance Law in Canada (3rd Ed. 2001), p. 72 [para. 32].
Counsel:
John R. Singleton, Q.C., and Catherine L. McLean, for the appellants;
D. Barry Kirkham, Q.C., for the respondent.
Solicitors of Record:
Singleton Urquhart, Vancouver, British Columbia, for the appellants;
Owen Bird, Vancouver, British Columbia, for the respondent.
This appeal was heard on March 13, 2001, before McLachlin, C.J.C., Gonthier, Iacobucci, Bastarache, Binnie, Arbour and LeBel, JJ., of the Supreme Court of Canada. The following judgment of the Supreme Court of Canada was delivered by Iacobucci, J., in both official languages, on September 13, 2001.
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Table of cases
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