Paul First Nation v. Zurich Insurance Co. et al., 2010 ABQB 473

• Judge: Burrows, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 18, 2010
• Citations: 2010 ABQB 473;(2010), 496 A.R. 382 (QB)

Paul First Nation v. Zurich Ins. (2010), 496 A.R. 382 (QB)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. JL.092

Chief and Council of Paul First Nation (plaintiff) v. Zurich Insurance Company, Westar Pipelines Ltd. and Jane Doe Insurance Company (defendants) and Westar Pipelines Ltd. (third party)

(0103 09624; 2010 ABQB 473)

Indexed As: Paul First Nation v. Zurich Insurance Co. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Burrows, J.

July 13, 2010.

Summary:

The Paul First Nation (the Paul Band) entered into an arrangement with Westar Pipelines Ltd. pursuant to which the Band provided a Caterpillar D6R and a Caterpillar 320 Excavator for use on two Westar projects. The Band also arranged for one of its members (Rain) to operate the equipment while it was being used on the Westar projects. The Paul Band issued invoices to Westar in relation to the use of the equipment. The D6R was stolen from a Westar job site. Rain had kept custody of the key for the D6R when it was being used on the Westar projects. At the end of the day of its last use before being stolen he parked it near the project site, locked it and kept the key on his person. The Paul Band equipment was insured pursuant to a rider to a policy issued by Zurich. The rider contained a clause which excluded coverage for "loss of or damage to property on rental from the time of leaving your custody". At issue on a summary trial was whether the loss suffered by the Paul Band was excluded from coverage.

The Alberta Court of Queen's Bench held that the D6R had not left the custody of the Paul Band and the exclusion clause did not apply.

Insurance - Topic 6598

Multi-peril property insurance - Contractor's or builder's policies - Exclusions - Property on rental from the time of leaving insured's custody - The Paul First Nation (the Paul Band) entered into an arrangement with Westar Pipelines Ltd. pursuant to which the Band provided a Caterpillar D6R and a Caterpillar 320 Excavator for use on two Westar projects - The Band also arranged for one of its members (Rain) to operate the equipment while it was used on the Westar projects - The idea was that the Band member would gain experience through the work - The Paul Band issued invoices to Westar in relation to the use of the equipment - The D6R was stolen from a Westar job site - Rain had kept custody of the key for the D6R when it was being used on the Westar projects - At the end of the day of its last use before being stolen he parked it near the project site, locked it and kept the key on his person - The Paul Band equipment was insured pursuant to a rider to a policy issued by Zurich which covered "Contractor's Equipment" - However, the rider excluded coverage for "loss of or damage to property on rental from the time of leaving your custody" - The Alberta Court of Queen's Bench held that it was not necessary to determine whether the D6R had been rented to Westar, because even if it had been, it had not left the custody of the Paul Band - On behalf of the Paul Band, as one of its members, Rain had a degree of possession of the D6R, a measure of authority over it and some responsibility for it - The D6R had not left the custody of the Paul Band and the exclusion did not apply.

Cases Noticed:

Indemnity Insurance Co. v. Excel Cleaning Service, [1954] S.C.R. 169, refd to. [para. 16].

Neil's Trailer & Equipment Ltd. v. Butler, Maveety & Meldrum Ltd. et al. (1977), 5 A.R. 91; 75 D.L.R.(3d) 151 (T.D.), refd to. [para. 17].

Counsel:

Penny Frederiksen (Ackroyd LLP), for the plaintiff;

R.W. (Dick) Wilson, Q.C. (Parlee McLaws LLP), for the defendant.

This case was heard on May 18, 2010, by Burrows, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on July 13, 2010.