Tux and Tails Ltd. v. Saskatchewan Government Insurance et al., 2003 SKQB 287

• Judge: Baynton, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: June 20, 2003
• Jurisdiction: Saskatchewan
• Citations: 2003 SKQB 287;(2003), 237 Sask.R. 76 (QB)

Tux & Tails Ltd. v. SGI (2003), 237 Sask.R. 76 (QB)

MLB headnote and full text

Temp. Cite: [2003] Sask.R. TBEd. JL.010

Tux and Tails Ltd. (plaintiff/applicant) v. Saskatchewan Government Insurance carrying on business as SGI Canada (defendant/respondent) and All-Can Express Ltd., carrying on business as ACE Courier Service, TCT Canada Logistics Inc., and Nuclean Restoral Services Inc. (defendants)

(2002 Q.B.G. No. 705; 2003 SKQB 287)

Indexed As: Tux and Tails Ltd. v. Saskatchewan Government Insurance et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Baynton, J.

June 20, 2003.

Summary:

Ten boxes of the plaintiff's clothing were transported along with other freight by truck and trailer from Red Deer to Saskatoon. A container of RP Captan (V) was punctured by a piece of freight that was knocked over by a falling piece of wood cargo. The escaping RP Captan (V) contaminated the plaintiff's clothing, which was unsalvageable. The plaintiff applied for a determination of a point of law with respect to the interpretation of an insurance policy issued to the plaintiff by SGI, which covered property in transit. At issue was the cause of the loss of the clothing and whether the pollution exclusion clauses in the policy applied.

The Saskatchewan Court of Queen's Bench held that the clothing loss was caused by the accidental falling of the piece of wood cargo and that the exclusions did not preclude coverage under the policy.

Insurance - Topic 1861

The insurance contract - Interpretation of contract - Contra proferentem rule - Ambiguity construed against insurer - Ten boxes of the plaintiff's clothing were transported along with other freight by truck and trailer from Red Deer to Saskatoon - A container of RP Captan (V) was punctured by a piece of freight that was knocked over by a falling piece of wood cargo - The escaping RP Captan (V) contaminated the plaintiff's clothing, which was unsalvageable - The plaintiff's multi-peril commercial insurance policy included a rider which covered property in transit - The Saskatchewan Court of Queen's Bench held that the pollution exclusion clauses in the policy did not apply to preclude coverage - The clothing loss was caused by the accidental falling of the piece of wood cargo - But for the falling cargo there would have been no contamination - The contra proferentum principle applied and the word "contaminated" in an exclusion clause was narrowly construed against the insurer as meaning the inherent contamination of the insured goods, such as by rust, rot, etc. - The phrase "accident to transporting conveyance" in the exception to the exclusion was broadly construed against the insurer as meaning a loss arising from an accident associated with the transporting conveyance.

Insurance - Topic 2081

The risk - Causation - General - [See Insurance - Topic 1861 ].

Insurance - Topic 6577

Multi-peril property insurance - Business policies - Transportation rider - [See Insurance - Topic 1861 ].

Insurance - Topic 6610.2

Multi-peril property insurance - Exclusions - Contamination or pollution - [See Insurance - Topic 1861 ].

Words and Phrases

Contaminated - The Saskatchewan Court of Queen's Bench held that the word "contaminated" in an exclusion clause of an insurance policy should be construed narrowly as meaning the inherent contamination of the insured goods, such as by rust, rot, etc. - See paragraph 26.

Words and Phrases

Accident to transporting conveyance - The Saskatchewan Court of Queen's Bench held that the phrase "accident to transporting conveyance" in an insurance policy should be broadly construed as meaning a loss arising from an accident associated with the transporting conveyance - See paragraph 16.

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; [1993] 2 W.W.R. 433, refd to. [para. 6].

University of Saskatchewan v. Fireman's Fund Insurance Co. of Canada et al., [1998] 5 W.W.R. 276; 158 Sask.R. 223; 153 W.A.C. 223 (C.A.), refd to. [para. 7].

Derksen et al. v. 539938 Ontario Ltd. et al., [2001] 3 S.C.R. 398; 277 N.R. 82; 153 O.A.C. 310, refd to. [para. 7].

Wawanesa Mutual Insurance Co. v. Hewson (2003), 231 Sask.R. 83 (Q.B.), refd to. [para. 8].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 9].

Indemnity Insurance Company of North America v. Excel Cleaning Service, [1954] S.C.R. 169, refd to. [para. 10].

Krane Service Ltd. v. American Home Assurance Co., [1984] I.L.R. 1-1833; 33 Sask.R. 247 (Q.B.), refd to. [para. 11].

Krane Service Ltd. v. American Home Assurance Co. (1986), 50 Sask.R. 317 (C.A.), refd to. [para. 12].

Authors and Works Noticed:

Brown, C., and Menezes, J., Insurance Law in Canada (2nd Ed. 1991), paras. 6:4:13, 6:4:15, 6:4:16, 6:4:18, 7:2:1 [para. 5].

Counsel:

T.J. Zakreski, for Tux and Tails Ltd.;

G.N. Bains, for Saskatchewan Government Insurance;

No one for ACE Courier Service or the other defendants.

This application was heard before Baynton, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on June 20, 2003.