The Defendant (the “Insured”) in a defamation action applied for a Declaration that it was entitled to a defence under the terms of a Directors’ & Officers’ Liability policy (the “Encon Policy”) and a Commercial General Liability policy (the “Co-Operators Policy”), and for a further Declaration that it was entitled to appoint its own counsel. The court held that Co-Operators had a duty to defend because some allegations in the pleadings fell within the realm of its duty to defend. The court further held that the Insured was entitled to appoint its own counsel at the expense of the Insurer.

04. March 2005 0
Conservation Council of New Brunswick Inc. v. Encon Group Inc., [2005] N.B.J. No. 109, New Brunswick Court of Queen’s Bench Trial Division

The Manitoba Court of Queen’s Bench considered whether, based on the terms of a standard mortgage insurance clause, the Plaintiff Mortgagee was entitled to indemnification from the Insurer. The loss was clearly excluded under the policy. However, the court held that because the insurer failed to notify the Plaintiff Mortgagee of an alteration to the policy, as required by statute and the standard mortgage insurance clause, the Insurer was obligated to indemnify the Plaintiff Mortgagee for the loss sustained.

02. March 2005 0
Assiniboine Credit Union Ltd. v. Aviva Insurance Co. of Canada, [2005] M.J. No. 61, Manitoba Court of Queen’s Bench

The Court of Appeal held that an arbitrator was correct in ruling that an insurer under a liability policy issued to the Board of School Trustees must indemnify the Board for costs it was “legally obligated to pay” for passing unconstitutional resolutions disapproving of books depicting children with same-sex parents. The definition of “wrongful act” under the policy was broad enough to cover the risk of damages for constitutional wrongs.

01. March 2005 0
British Columbia v. Surrey School District No. 36, [2005] B.C.J. No. 364, British Columbia Court of Appeal

In this decision the Supreme Court of Canada upheld a finding that a portion of settlement funds was taxable as income. At issue were funds received in settlement of a dispute over long-term disability benefits. The Minister of National Revenue initially assessed the entire settlement as income, the Tax Court of Canada set aside the Minister’s decision, and the Federal Court of Appeal held that because a portion of the settlement was attributable to benefits arrears, it replaced monies paid pursuant to a disability insurance plan, and was therefore taxable under section 6(1)(f) of the Income Tax Act.

25. February 2005 0
Tsiaprailis v. Canada, [2005] S.C.J. No. 9, Supreme Court of Canada

The Supreme Court of Canada considered the interpretation of “change material to the risk” in a New Brunswick policy for fire insurance. In a 5-2 decision, McLachlin C.J., writing for the majority, allowed the appeal and reinstated the decision of the trial judge, holding that if the insurance contract was void by reason of a statutory condition, the court should relieve against the result because a vacancy had been rectified. Bastarache and Charron JJ. dissented, holding that the statutory condition is clear and unambiguous, and the duty of disclosure was breached.

24. February 2005 0
Marche v. Halifax Insurance Co., [2005] S.C.J. No. 7, Supreme Court of Canada

This was an application by the Defendant Insurer for bifurcation of a trial for breach of contract following the denial of long-term disability benefits, and a claim of breach of good faith and fair dealing. The Plaintiff Insured claimed a breach of good faith both in considering the claim for long-term disability benefits, and the Insurer’s conduct in continuing to deny the claim after litigation was commenced. The court ordered bifurcation, and held that the post-litigation allegations necessarily raised issues about the advice taken by counsel. The Insurer would have to retain new counsel and may require the breach of privileged communications. Prejudice to the Insurer outweighed that which would be suffered by the Insured by the delay and expense of two trials.

20. February 2005 0
Stuart v. The Manufacturers Life Insurance Company et al, [2004] B.C.J. No. 729,  Supreme Court of British Columbia

A group of Siberian tigers attacked and injured a couple who were driving their car through a game park. The game park was strictly liable for their injuries. Section 267.1(7) of the Insurance Act makes all parties liable for injuries resulting directly or indirectly from use or operation of an automobile severally liable for the damages. The judge determined that section 267.1 of the Insurance Act did not apply because the injuries suffered by the insureds when they were attacked by the tigers could not be said to arise from the use and operation of an automobile.

27. January 2005 0
Cowles v. Balac, [2005] O.J. No. 229, Ontario Superior Court of Justice