St. Paul Fire and Marine Insurance v. Guardian Insurance Co. of Canada, (1983) 2 O.A.C. 109 (CA)

• Judge: Houlden, Thorson and Goodman, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 20, 1983
• Jurisdiction: Ontario
• Citations: (1983), 2 O.A.C. 109 (CA)

St. Paul Fire v. Guardian Ins. Co. (1983), 2 O.A.C. 109 (CA)

MLB headnote and full text

St. Paul Fire and Marine Insurance v. Guardian Insurance Company of Canada

Indexed As: St. Paul Fire and Marine Insurance v. Guardian Insurance Co. of Canada

Ontario Court of Appeal

Houlden, Thorson and Goodman, JJ.A.

October 20, 1983.

Summary:

Between April 1964 and March 1965 solicitors did negligent work. In July 1969 St. Paul Fire and Marine Insurance Company issued to the solicitors a professional liability insurance policy, which in July 1970 was renewed to July 1971. In September 1970 the clients for whom the negligent work was done issued a writ against the solicitors for damages, but did not serve it or inform the solicitors of it. In January 1971 Guardian Insurance Company issued another professional liability policy to the solicitors. The solicitors learned of the action against them in April 1971 and a claim was made against them during the term of both policies. The claim was settled and the issue arose whether the loss was covered by the Guardian policy and, if so, which of the two policies was primary insurance and which was excess insurance. Under the St. Paul policy the insurance was excess insurance to any other valid and collectable insurance. Under the Guardian policy the insurance was excess insurance if the other valid and collectible insurance was not excess insurance.

The Ontario High Court ruled that St. Paul was the primary insurer and Guardian was the excess insurer. St. Paul appealed.

The Ontario Court of Appeal per Thorson, J.A., Houlden, J.A., concurring, dismissed the appeal. The court held that the loss was covered by both policies, because the claim was made only when the solicitors became aware of the claim and not when the writ was issued. See paragraphs 21 to 34. On the issue of excess insurance the court held that the date of the issue of the writs was the time of the loss, at which time there was no "other valid and collectible insurance" under the terms of the St. Paul policy, because the Guardian policy had not been issued. St. Paul was therefore held to be the primary insurance and Guardian the excess insurance. See paragraphs 34 to 42.

Insurance - Topic 2944

Contribution among insurers - Excess coverage clauses - St. Paul and Guardian both issued professional liability policies to a firm of solicitors - Under the Guardian policy the insurance was only excess insurance if the other valid and collectible insurance was not excess insurance - Under the St. Paul policy the insurance was excess insurance to any other valid and collectible insurance - The Ontario Court of Appeal held that, although both policies covered a loss, the date of the loss preceded issuance of the Guardian policy, so that at that time there was not "any other valid and collectible insurance" in effect under the terms of the St. Paul policy - The court held accordingly that the St. Paul policy was the primary insurance and the Guardian policy was the excess insurance - See paragraphs 34 to 42.

Insurance - Topic 7628

Professional liability insurance - Scope of coverage - Policy period - "Claims made" - Meaning of - Two professional liability insurance policies covered claims made within the policy period - One policy was in effect, when a writ was issued for professional negligence against the insured, but the writ was neither served nor brought to the attention of the insured - The insured learned of the claim only after the second policy was issued - The Ontario Court of Appeal held that both policies covered the claim, because the claim was not made until the insurer learned of it and not when the writ was issued - See paragraphs 21 to 34.

Practice - Topic 2343

Writ of summons - Issuance of - Writ of summons - As notice of claim - The Ontario Court of Appeal held that a writ of summons, which is issued but not served or brought to the attention of the defendant, does not constitute notice of the claim - See paragraphs 21 to 34.

Cases Noticed:

Clarke v. Bradlaugh (1881), 8 Q.B.D. 63, consd. [para. 12].

Worsley v. Earl of Scarborough (1746), 3 Atl. 302; 26 E.R. 1025, dist. [paras. 13, 21].

Watts v. Vickers (1916), 86 L.J.K.B. 181, consd. [para. 15].

Allan v. Place (1908), 15 O.L.R. 476, consd. [para. 26].

West Wake Price & Co. v. Ching, [1956] 3 All E.R. 821, dist. [para. 36].

Great West Steel Industries Ltd. v. Simcoe & Erie General Insurance Co. et al. (1979), 106 D.L.R.(3d) 347, dist. [para. 38].

Authors and Works Noticed:

MacGillivray and Parkington on Insurance Law (7th Ed.), p. 824 [para. 40].

Williston and Rolls, The Law of Civil Procedure (1970), vol. 2, pp. 599, 601 [para. 25].

Counsel:

Pierre Genest, Q.C., and J. DePencier, for the appellant;

Alastair R. Paterson, Q.C., for the respondent.

This case was heard on May 16, 1983, at Toronto, Ontario, before Houlden, Thorson and Goodman, JJ.A., of the Ontario Court of Appeal.

On October 20, 1983, the judgment of the Court of Appeal was delivered and the following opinions were filed:

Goodman, J.A. - see paragraphs 1 to 18;

Thorson, J.A. - see paragraphs 19 to 44;

Houlden, J.A. - see paragraph 45.