Grammar and Punctuation Relied Upon to Find Coverage Provision Unambiguous

The court relied on grammar and punctuation to conclude a coverage provision was not ambiguous and the plain meaning was that coverage did not apply.

1088437 Ontario Inc. (c.o.b. Northmore Fuels) v. GCAN Insurance Co., [2013] O.J. No. 5407, November 28, 2013, Ontario Superior Court of Justice, J.R. MacKinnon J.

The insured sought coverage under a contractor’s pollution liability policy for an action alleging work the insured performed in July 2009 resulted in a fuel leak that was not discovered until December 2009. The policy period was from November 2009 to November 2010. The coverage grant in the policy provided coverage for loss “as a result of a claim resulting from pollution conditions caused by covered operations that commence on or after the [November 2009], provided such claim is first made … during the policy period…”

The insured argued the policy provided coverage for claims arising from pollution that occurred during the policy period. The insurer took the position the policy only provided coverage for the insureds covered operations that occurred during the policy period. The insurer denied coverage as the pollution arose from operations that occurred prior to November 2009.

The court dismissed the insured’s application and found no ambiguity in the wording of the clause. A plain reading of the coverage provision could only mean that it is the covered operations that must commence after November 2009 to trigger coverage. The court placed a heavy emphasis on the word “that” as opposed to “which” and the lack of any commas. It stated if the policy was meant to provide coverage that was tied to the timing of the pollution, rather than the operations, then the sentence could have read “resulting from pollution conditions, caused by covered operations, which commence on or after the retroactive date”. The court also supported its decision on the basis that this was a liability policy tied to the operations of the contractor rather than a premises policy or a pollution liability policy.

This case was digested by Djuna M. Field and edited by David W. Pilley of Harper Grey LLP.

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