Northbridge General Insurance Corp. v. 943240 Alberta Ltd., (2013) 581 A.R. 248 (QB)

• Judge: McCarthy, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 02, 2013
• Citations: (2013), 581 A.R. 248 (QB);2013 ABQB 760

Northbridge General Ins. v. 943240 Alta. (2013), 581 A.R. 248 (QB)

MLB headnote and full text

Temp. Cite: [2013] A.R. TBEd. JA.065

Northbridge General Insurance Corporation formerly known as Lombard General Insurance Company of Canada (applicant) v. 943240 Alberta Ltd. operating as K.E.W. Oilfield Services (respondent)

Jesse Cole Webster and 943240 Alberta Ltd. operating as K.E.W. Oilfield Services (cross-applicant) and Northbridge General Insurance Corporation formerly known as Lombard General Insurance Company of Canada (cross-respondent)

(1301 02431; 2013 ABQB 760)

Indexed As: Northbridge General Insurance Corp. v. 943240 Alberta Ltd.

Alberta Court of Queen's Bench

Judicial District of Calgary

McCarthy, J.

December 31, 2013.

Summary:

In June 2009, an employee of the insured was driving a truck registered to the insured. The employee was involved in an accident. A tort action was commenced against the insured. The insurer denied insurance coverage on the basis that the insured did not include the truck in the list of vehicles prior to the start of the insurance policy. While there was no dispute about the validity of the policy, the parties disagreed as to whether the insurer's policy provided coverage for the truck. There was an application and cross-application seeking opposing declarations as to whether there was insurance coverage.

The Alberta Court of Queen's Bench granted an order declaring that the insurer was not obligated to defend or indemnify the insured under the policy in respect to any matters in relation to the tort action or the accident involving the truck.

Insurance - Topic 725

Insurers - Duties - Duty to defend - In June 2009, an employee of the insured was driving a truck registered to the insured - The employee was involved in an accident - A tort action was commenced against the insured - The insurer denied insurance coverage on the basis that the insured did not include the truck in the list of vehicles prior to the start of the insurance policy - While there was no dispute about the validity of the policy, the parties disagreed as to whether the insurer's policy provided coverage for the truck - There was an application and cross-application seeking opposing declarations as to whether there was insurance coverage - At issue was, inter alia, whether the insured had a duty to defend the tort claim - The Alberta Court of Queen's Bench held that while the policy was broad and provided coverage for all insured automobiles, the significant distinction was that the truck was not insured under the policy - The truck was never listed on the "Schedule of Automobiles" that the insured was required to submit - Consequently, the exclusion under the Blanket Fleet Endorsement meant that the truck was not an insured automobile, and no duty to defend was triggered, regardless of whether the allegations about the truck in the pleadings in the tort claim were assumed to be true - The insurer did not have a duty to defend the insured - See paragraphs 45 to 50.

Insurance - Topic 1112

The insurance contract - Formation of the contract - Special endorsements - In June 2009, an employee of the insured was driving a truck registered to the insured - The employee was involved in an accident - A tort action was commenced against the insured - The insurer denied insurance coverage on the basis that the insured did not include the truck in the list of vehicles prior to the start of the insurance policy - While there was no dispute about the validity of the policy, the parties disagreed as to whether the insurer's policy provided coverage for the truck - There was an application and cross-application seeking opposing declarations as to whether there was insurance coverage - At issue was, inter alia, whether the lists of vehicles that the insured submitted to the insurer was considered an "amendment" to the insurance contract in relation to s. 612(3) of the Insurance Act such that the insurer was in breach of its obligations under the Insurance Act or the policy - The Alberta Court of Queen's Bench held that the obligation was on the insured to provide a list of vehicles owned or leased by KEW prior to the effective date of the policy - This information was used to establish the premium - This list was not an amendment to the insurance contract - Therefore, the insurer was not in breach of its obligations under s. 612(3) of the Insurance Act - See paragraphs 10 to 28.

Insurance - Topic 3137

Payment of insurance proceeds - Actions - Relief against forfeiture - When available - In June 2009, an employee of the insured was driving a truck registered to the insured - The employee was involved in an accident - A tort action was commenced against the insured - The insurer denied insurance coverage on the basis that the insured did not include the truck in the list of vehicles prior to the start of the insurance policy - While there was no dispute about the validity of the policy, the parties disagreed as to whether the insurer's policy provided coverage for the truck - There was an application and cross-application seeking opposing declarations as to whether there was insurance coverage - At issue was, inter alia, whether relief from forfeiture under s. 521 of the Insurance Act was available to the insured - The Alberta Court of Queen's Bench held that relief from forfeiture was not available to the insured - Section 521 of the Insurance Act provided the court with a broad discretion to relieve a party against forfeiture or avoidance of insurance where it considered denial of coverage for imperfect compliance with the insurance contract inequitable - A plain reading of the Insurance Act highlighted that relief from forfeiture could be granted but that imperfect compliance had to be in relation to the proof of loss - In the case at bar, the issue concerned proof of coverage and thus s. 521 did not apply - See paragraphs 35 to 39.

Insurance - Topic 3137

Payment of insurance proceeds - Actions - Relief against forfeiture - When available - In June 2009, an employee of the insured was driving a truck registered to the insured - The employee was involved in an accident - A tort action was commenced against the insured - The insurer denied insurance coverage on the basis that the insured did not include the truck in the list of vehicles prior to the start of the insurance policy - While there was no dispute about the validity of the policy, the parties disagreed as to whether the insurer's policy provided coverage for the truck - There was an application and cross-application seeking opposing declarations as to whether there was insurance coverage - At issue was, inter alia, whether relief from forfeiture as an equitable remedy was available to the insured - The Alberta Court of Queen's Bench held that relief from forfeiture was not available to the insured - This remedy was only available when coverage was first established - In the case at bar, the truck was never covered by the policy and therefore no coverage was being forfeited - There could be no loss of insurability when there was no insurability in the first place - Consequently, as an equitable remedy, relief from forfeiture did not apply in this case - See paragraphs 40 to 44.

Insurance - Topic 3961

Automobile insurance - Liability policy - Scope of coverage - General - In June 2009, an employee of the insured was driving a truck registered to the insured - The employee was involved in an accident - A tort action was commenced against the insured - The insurer denied insurance coverage on the basis that the insured did not include the truck in the list of vehicles prior to the start of the insurance policy - While there was no dispute about the validity of the policy, the parties disagreed as to whether the insurer's policy provided coverage for the truck - There was an application and cross-application seeking opposing declarations as to whether there was insurance coverage - At issue was, inter alia, whether the truck was covered by the policy even though it was not included in the list of vehicles prior to the start of the policy period - The Alberta Court of Queen's Bench held that the truck was not covered - A plain reading of clause 3 in Blanket Fleet Endorsement established that the fleet endorsement did not cover any vehicles that KEW owned prior to the start of the policy which were not included on a "Schedule of Automobiles" filed with the insurer - The truck fell into this category and should have been included on the initial list - Therefore, there was no coverage for the truck under the policy - See paragraphs 29 to 33.

Cases Noticed:

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 22].

Lombard Canada Ltd. v. Zurich Insurance Co. (2010), 268 O.A.C. 317; 2010 ONCA 292, refd to. [para. 22].

Blue Range Resources Corp., Re (2000), 271 A.R. 138; 234 W.A.C. 138; 2000 ABCA 285, refd to. [para. 38].

Coulter v. Co-operators Life Insurance Co. (2013), 556 A.R. 290; 584 W.A.C. 290; 2013 ABCA 295, refd to. [para. 40].

Saskatchewan River Bungalows Ltd. and Fikowski v. Maritime Life Insurance Co., [1994] 2 S.C.R. 490; 168 N.R. 381; 155 A.R. 321; 73 W.A.C. 321, refd to. [para. 41].

Nichols v. American Home Assurance Co. et al., [1990] 1 S.C.R. 801; 107 N.R. 321; 39 O.A.C. 63, refd to. [para. 46].

Tarrabain v. Wawanesa Mutual Insurance Co. (2010), 474 A.R. 154; 479 W.A.C. 154; 2010 ABCA 25, refd to. [para. 49].

GMAC Leasco Corp. v. Lombard Insurance (2007), 229 O.A.C. 190; 2007 ONCA 665, dist. [para. 56].

Patterson and Perry v. Gallant, [1994] 3 S.C.R. 1080; 174 N.R. 380; 125 Nfld. & P.E.I.R. 1; 389 A.P.R. 1, refd to. [para. 63].

Authors and Works Noticed:

Russ, Lee R., Couch on Insurance (3rd Ed. 2006), § 117-90 [para. 26].

Counsel:

J.H. MacMaster (Branch MacMaster LLP), for the applicant, Northbridge General Insurance Corporation formerly known as Lombard General Insurance Company of Canada;

Murray Harris (McLennan Ross LLP), for the respondents, Jesse Cole Webster and 943240 Alberta Ltd. operating as KEW Oilfield Services.

This application and cross-application were heard on October 2, 2013, by McCarthy, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on December 31, 2013.