What Does A CGL Policy Cover After Progressive Homes?

A:        OVERVIEW

The decision of the Supreme Court of Canada in Progressive Homes Ltd. v. Lombard General Insurance Co of Canada[1]  is a seminal decision with respect to the application of CGL policies to the construction industry.  While the immediate effect of the decision was with respect to the insurer’s duty to defend the insured, in the course of its decision the Supreme Court implicitly rejected some of the long-standing positions of insurers about the ambit of the a commercial general insurance policy, particularly as the policy applies to construction projects.

In an article in the recent edition of Skylines, the CBA National Construction Section’s publication, the Progressive Homes decision has been well reviewed by Andrew Heal, particularly from the aspect of the insurer’s duty to defend the insured.  In this article, I will dig deeper into three indemnity coverage issues with which the Supreme Court was dealing in Progressive Homes. Those issues are:

  1. Whether the events in question gave rise to an “accident” under the CGL policy;
  2. Whether damage to property arising from damage to other parts of the property amounted to “property damage” under a CGL policy;
  3. Whether the damage was excluded because it related to work performed by the insured.

I will then consider the decision of the British Columbia Court of Appeal in Bulldog Bag Ltd. v. AXA Pacific Insurance Company, 2011 BCCA 178 (CanLII).  That decision appears to be the first by a Canadian court which analyzes and applies the Progressive Homes decision to the substantive indemnity coverage of a CGL policy.

A CGL provides coverage for liability arising from “bodily injury” or “property damage”, but the discussion in this paper only relates to property damage coverage. Coverage for property damage arises if two conditions are satisfied.

First there must be property damage. Property damage is usually defined to include three elements: physical injury to tangible property, including resulting loss of use of that property, or loss of use of tangible property that is not physically injured.

Second, there must be an event giving rise to coverage.  That event is usually described in the policy as an “occurrence” or an “accident”.

B: ELEMENTS OF THE DECISION IN PROGRESSIVE HOMES

1.      Accident or Occurrence

Canadian case law has debated the meaning and scope of these words.  The debate has circulated around whether negligence or a result of negligence is included within the word “accident”.  The modern origins of this debate in Canada are found in the 1952 decision of the Supreme Court of Canada in Andrews & George Co. v. Canadian Indemnity Co.[2]  In that decision, Justice Rand wrote one of the judgments, and he expressly excluded the results of negligence from the concept of “accident”:

“To treat mistaken action of that nature as an “accident” would render the word superfluous.  What is meant is something out of the ordinary or the likely, something fortuitous, unusual an unexpected, not in the ordinary course, guarded against….what [the parties] did not aim at were direct and unexpected damages from the daily risks which it was part of their business of production and sale to face and eliminate.”

Justices Kerwin and Estey did not agree and stated the matter this way:

“..the defective condition was unsuspected and undesired and, therefore, there was an accident which caused the damage to “property to others.”

     In 1975, the Supreme Court of Canada returned to the subject in Strait Towing Ltd v. Washington Iron Works (sub nom. Canadian Indemnity Co v. Walkem Machinery & Equipment Ltd. [3] In his judgment for the court, Justice Pigeon specifically stated that Justice Rand’s statement about “the meaning of the word “accident” clearly does not form part of the ratio decidendi”. He dismissed the same conclusion of the Manitoba Court of Appeal, from which the appeal was taken. He said:

“With respect, this is a wholly erroneous view of the meaning of the word “accident” in a comprehensive business liability policy. On that basis, the insured would be denied recovery if the occurrence is the result of a calculated risk or of a dangerous operation. Such a construction of the word “accident” is contrary to the very principle of insurance which is protection against mishaps, risks and dangers….in everyday use, the word [accident] is applied as Halsbury says in the passage quoted, to any un-looked for mishap or occurrence….in construing the word “accident” in this policy, one should bear in mind that negligence is by far the most frequent source of exceptional liability which a businessman has to contend with. Therefore, a policy which wouldn’t cover liability due to negligence could not properly be called comprehensive.” (emphasis added)

            In 1976, in Pickford & Black Ltd. v Canadian General Insurance Co.[4] the Supreme Court quoted with approval from the judgment Justice Pigeon In Walkem Machinery, saying that “any unlooked for mishap or occurrence.. is the proper test” and that the damage due to shifting of cargo during shipment was due to an accident even if the shifting of the cargo arose in turn from the negligent storage by the stevedores at the time of loading.

In 1978 in Mutual of Omaha Insurance Co. v. Stats,[5] the Supreme Court of Canada expressly held that the word “accident” included “the negligence of the actor whose activities are being considered” because to “exclude from the word “accident” any act which involved negligence would be to exclude the very largest portion of the risks insured against.”

In 2003, in Martin v. American International Assurance Life Co.,[6] the Supreme Court of Canada considered the meaning of the word “accident” in the context of an insurance policy covering death through “accidental” means. It adopted its decisions in Stats and Justice Pigeon’s judgment in Walkem Machinery, holding that:

 “death is not non-accidental merely because the insured could have prevented death by taking greater care, or that a mishap was reasonably foreseeable in the sense used in tort law. Nor does a death that is unintended become “non-accidental merely because that person was engaged in a dangerous or risky activity….the jurisprudence assigns a generous meaning to “accidental” in the absence of language to the contrary in the insurance policy.”

In Progressive Homes, Lombard argued that, in the context of a building, the damage was not accidental. It asserted as follows:

“Lombard argues that when a building is constructed in a defective manner, the end result is a defective building, not an accident. It relies on case law that, in its view, supports its argument that faulty workmanship is not an accident … It relies on Ryan J.A.’s conclusion, in the court below, that this interpretation would offend the assumption that insurance provides for fortuitous contingent risk. Lombard argues that interpreting accident to include defective workmanship would convert CGL policies into performance bonds. In my opinion, these general propositions advanced by Lombard do not hold upon closer examination.”

      Speaking for the court, Justice Rothstein held that whether the workmanship in question led to an accident depended on the specific facts of the case. But there was nothing to prevent faulty workmanship from falling within that word.  He said:

 “I, therefore, cannot agree with Lombard’s view that faulty workmanship is never an accident. This Court’s jurisprudence shows that there is no categorical bar to concluding in any particular case that defective workmanship is an accident. In Canadian Indemnity Co. v. Walkem Machinery& Equipment Ltd., 1975 CanLII 141 (SCC), [1976] 1 S.C.R. 309, at pp. 315-17, the Court found that the negligent repair of a crane constituted an accident. Therefore, I see no impediment to concluding the same in the present case, unless of course it is not supported by the specific language of the policy.”  (emphasis added)

 Justice Rothstein also rejected Lombard’s submission that so interpreting the word “accident” would eliminate the concept of fortuity in the CGL policy.  He said:

 “I cannot agree with Justice Ryan’s conclusion that such an interpretation offends the assumption that insurance provides for fortuitous contingent risk. Fortuity is built into the definition of “accident” itself as the insured is required to show that the damage was “neither expected nor intended from the standpoint of the Insured”. This definition is consistent with this Court’s core understanding of “accident”: “an unlooked-for mishap or an untoward event which is not expected or designed” …When an event is unlooked for, unexpected or not intended by the insured, it is fortuitous. This is a requirement of coverage; therefore, it cannot be said that this offends any basic assumption of insurance law.”

 Finally, Justice Rothstein rejected Lombard’s submission that so interpreting the word “accident” would convert the CGL policy into a performance bond:

 “I am not persuaded by Lombard’s argument that equating faulty workmanship to an accident will convert CGL policies into performance bonds. There seems to be a fairly significant difference between a performance bond and the CGL policies at issue in this case: a performance bond ensures that a work is brought to completion ….whereas the CGL policies in this case only cover damage to the insured’s own work once completed. In other words, the CGL policy picks up where the performance bond leaves off and provides coverage once the work is completed.”

 Justice Rothstein accordingly concluded that:

 “Accident” should be given the plain meaning prescribed to it in the policies and should apply when an event causes property damage neither expected nor intended by the insured. According to the definition, the accident need not be a sudden event. An accident can result from continuous or repeated exposure to conditions.”

 Since the pleading against Progressive Homes did not allege intentional conduct but rather negligence, then the claim fell within the coverage provided by the policy.  Accordingly a duty to defend arose.

While the decision in Progressive Homes resulted in the duty to defend being found, it was an essential part of the logic in arriving at that decision, and therefore part of the ratio decidendi of the decision, that the word “accident” includes the result of negligent conduct.  Accordingly, it appears that this issue is settled for similarly worded CGL policies under the law of Canada.

2.      Damage to Property arising from another part of the Property

             Lombard argued that the damage to one part of a building from another part of the same building did not amount to “property damage” but only to economic loss.  This submission was based on the distinction in tort law between property damage and economic loss.  Lombard asserted that the consequential property damage in this case was economic, not property, damage. The Supreme Court did not accept this submission and declined to bring principles of tort law into insurance contract law.  Justice Rothstein said:

 “I cannot agree with Lombard’s interpretation of “property damage”. The focus of insurance policy interpretation should first and foremost be on the language of the policy at issue. General principles of tort law are no substitute for the language of the policy. I see no limitation to third-party property in the definition of “property damage”. Nor is the plain and ordinary meaning of the phrase “property damage” limited to damage to another person’s property….I would construe the definition of “property damage”, according to the plain language of the definition, to include damage to any tangible property. I do not agree with Lombard that the damage must be to third-party property. There is no such restriction in the definition.” (emphasis added)

  Interestingly, Justice Rothstein also relied upon the exclusion for “work performed” in arriving at this conclusion:

 “The plain meaning of “property damage” is consistent with reading the policy as a whole. Qualifying the meaning of “property damage” to mean third-party property would leave little or no work for the “work performed” exclusion (discussed in more detail below). Lombard argues that the exclusion clauses do not create coverage. This is true. But reading the insurance policy as a whole is not the same as conjuring up coverage when there was none in the first place. Consistency with the exclusion clauses is a further indicator that the plain meaning of “property damage” is the definition intended by the parties.”

     Finally, and even though it was not argued in the appeal, Justice Rothstein held that “defective property” could constitute “property damage”. Again, he reached this conclusion based not only on the plain meaning of those words but also by reference to an exclusion:

       “While this point was not contested and nothing turns on it in this appeal, it is not obvious to me that defective property cannot also be “property damage”. In particular, it may be open to argument that a defect could not amount to a “physical injury”, especially where the harm to the property is “physical” in the sense that it is visible or apparent…Moreover, where a defect renders the property entirely useless it may be arguable that defective property may be covered under “loss of use”, the second portion of the definition of “property damage”….. not barring defective property from the definition of “property damage” at the outset gives meaning to the exclusion clauses discussed below. Specifically, the second version of the policies expressly excludes coverage for defects. This would be redundant if defects were excluded from “property damage” at the outset. While perfect mutual exclusivity in an insurance contract is not required, this redundancy supports the view that the definition of “property damage” may not categorically exclude defective property.” (emphasis added)

      Again, while the final decision was that Lombard had a duty to defend, it was a necessary step in the court’s reasoning that damage to other property on or in the same site or building due to other property on the same site or building fell within the policy.  Accordingly, this matter should now be settled under Canadian law for CGL policies with the same wording.

3.    The “Work Performed” Exclusions

(a)   Work performed by the Contractor or Subcontractor

Exclusions with respect to “work performed” are common in CGL policies. They are also expressed in different ways in different policies, and in the Progressive Homes case, there were two different forms of “work performed” exclusions.

In the first version of the policy the original “work performed” exclusion was modified by what was called a General Liability Broad Form Extension Endorsement.  The original policy excluded “property damage to work performed by or on behalf of the Named Insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith”.  That clause was replaced by clause (Z) in the Broad Form Extension Endorsement, which excluded “property damage to work performed by the Named Insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith.”

Justice Rothstein found that the clause (Z) exclusion did not apply to property damage caused by a subcontractor, or to the subcontractors work, whether caused by the subcontractor, another subcontractor or the insured contractor.  He reasoned as follows:

 “The clause (Z) exclusion is limited to work performed by the insured. Unlike the clause that it replaced, it does not apply to work performed on behalf of the insured. The plain language is unambiguous and only excludes damage caused by Progressive to its own completed work.

     Justice Rothstein said that he would have arrived at the same result by the application of the contra proferentem principle, especially since the insured would have expected different coverage from different wording.

(b)   The Particular Part of the Work exclusion

The “work performed” exclusion relied upon by Lombard in another policy excluded:

 Property damage’ to ‘that particular part of your work’ arising out of it or any part of it and included in the ‘products – completed operations hazard. (emphasis added)

 Justice Rothstein noted the words “particular part of your work” and said:

 “Unlike the standard form version of the “work performed” exclusion (clause (i)) reproduced above, this version expressly contemplates the division of the insured’s work into its component parts by the use of the phrase “that particular part of your work”…This means that coverage for repairing defective components would be excluded, while coverage for resulting damage would not… Again, I find there is a possibility of coverage under the second version of the policy. It will have to be determined at trial which “particular parts” of the work caused the damage. Repairs to those defective parts will be excluded from coverage under this version, regardless of whether they were the result of Progressive’s own work or the work of subcontractors. If, as Lombard alleges, the buildings are wholly defective, then the exclusion will apply and Lombard will not have to indemnify Progressive.” (emphasis added)

      Once again, this logic was a necessary step in the court’s finding that there was a duty to defend.  Accordingly, under similar language in CGL policies, a“work performed” exclusion should not exclude property damage arising from damage caused to one part of the work by defective components in another part.

C;        APPLICATION OF PROGRESSIVE HOMES IN BULLDOG BAG

              (a)   What is the binding effect of the Progressive Homes decision?

       The broad scope of an insurer’s duty to defend adopted by the Supreme Court of Canada in Progressive Homes has been picked up and applied in numerous lower court decisions in Canada.  Important as that duty is, the fundamental importance of Progressive Homes relates to the indemnity coverage provided by a CGL policy.  After that decision was released, the question remained: would lower courts consider that Progressive Homes was only a decision about the duty to defend, and everything else was obiter?

As stated above, in my view the Supreme Court’s decision about the duty to defend was necessarily based upon its decision regarding indemnity coverage.  So, its decision regarding the coverage in a CGL policy should be considered as part of the ratio decidendi of the decision, and therefore binding on lower courts.  Would lower courts see it this way?

The decision of the British Columbia Court of Appeal in Bulldog Bag Ltd. v. AXA Pacific Insurance Company, 2011 BCCA 178 (CanLII) appears to be the only decision so far which has directly considered and applied the Progressive Homes decision to the substantive coverage of a CGL policy. In doing so, the B.C. Court of appeal resoundingly recognized that the Supreme Court’s decision in Progressive Homes had fundamentally changed the law relating to the coverage in a CGL policy.  In the very first paragraph of the Court of Appeal’s decision, it said:

 “In its recent decision in Progressive … the Supreme Court of Canada reversed a line of insurance cases that had taken a narrow view of the scope of coverage under commercial and general liability (“CGL”) policies commonly used in Canada and the U.S…..the Court determined that “property damage” in such policies is not limited to damage to “third-party property” and can include damage from part of a building to another part, previously regarded as irrecoverable “pure economic loss” (para. 36); that the term “accident” may, depending on the facts of each case, include the consequences of defective workmanship (paras. 39, 46); and that, again depending on context, the “own product/work” exclusion is to be construed narrowly or contra proferentem, such that it may be limited to damage caused by the insured to its own work and not extend to “resulting damage”. (emphasis added)

           (b)   Background facts of  Bulldog Bag

Bulldog manufactured plastic packaging and sold it to Sure-Gro, with emblem and other printing on it in accordance with Sure-Gro’s instructions. Sure-Gro used the packaging for manure and soil products which it sold to Canadian Tire. The ink later came off the packaging, so Bulldog had to supply new packaging and Sure-Gro had to retrieve, re-package re-deliver the manure and soil products to Canadian Tire.  Bulldog paid Sure-Gro’s claim against it for about $824,000 and sought recovery from its CGL insurer. Bulldog conceded that about $86,000 was the cost of the initially defective bags and did not seek coverage for that amount. So its net insurance claim was about $732,000. Reversing the trial judge’s decision, which was based on the case law prior to Progressive Homes, the Court of Appeal held that Bulldog’s claim was covered under its CGL policy.

Because of the decision in Progressive Homes, AXA reversed its position at trial and now conceded that Bulldog’s claim fell within the initial coverage in the policy.  AXA conceded that so far as the scope of “property damage” it was no longer necessary to show damage to third party property, that the faulty workmanship that resulted in the defective bags qualifies as an “accident” or “occurrence” under the CGL policy, and that the failure of the ink was neither expected nor intended and resulted in “property damage”.

          (c)    The reasons and effect of the Bulldog Bag decision

As a result, the major impact of the decision in Progressive Homes was conceded by the insurer and did not form part of the reasoning of the B.C. Court of Appeal.  For this reason, I suppose, it is possible for another insurer to contest these implications of the Progressive Homes decision. But since those concessions formed a central basis for the reasoning in the Bulldog Bag case, and since the B.C. Court of Appeal clearly announced in the opening paragraph of its decision that Progressive Homes had change the law, it would seem very difficult for another CGL insurer to argue to the contrary.

Instead, AXA argued that the exclusion clause in the policy applied.  That clause read as follows:

This insurance does not apply under Insuring Agreement 1(c) to claims for property damage to:

(a) goods or products manufactured or sold by the Insured; or

(b) work done by or on behalf of the Insured where the cause of the occurrence is a defect in such work, but this exclusion shall only apply to that part of such work that is defective. (emphasis added)

     AXA acknowledged that para. (b) did not apply, since it dealt with “work done” and not “goods or products”. However, it argued that the proviso in para. (b) did not appear in clause (a) and was not an apt proviso for para. (a) since that paragraph did not refer to “work”, but rather to “goods or products”.)

AXA also argued that while the Progressive Homes had changed the law regarding the interpretation of CGL policies, it had not changed the basic principle in the earlier cases to the effect that those policies “are not intended to pay the costs associated with repairing or replacing the insured’s defective work and products.”

The Court of Appeal disagreed.  It said:

“Bearing in mind that exclusion clauses are to be read narrowly and in a manner consistent with the parties’ reasonable expectations, I find that the clause operates to exclude claims for damage to Bulldog’s bags, including loss of use thereof, but cannot be extended to compensation for Sure-Gro’s costs separating those bags from its products, repackaging in different bags, and salvaging the “old” product some months later. To deny coverage would, as Mr. Ward suggested, be a ‘perversion’ of Progressive Homes.”

     The Court of Appeal also pointed out that, even prior to Progressive Homes, the “own product” exclusion had been held not to apply to “loss incurred by the insured’s customer as a result of defects in the insured’s own product.”

Finally, the Court of Appeal held that its conclusion was supported by the reference in Progressive Homes to one of the “work performed” exclusions in that case.  Referring to paragraph 68 of the decision in Progressive Homes, the Court of Appeal said:

“At para. 68, the Court ruled that this clause excluded only “coverage for defective property” and that “Coverage would remain for resulting damage.” As Bulldog notes, the language of clause 6(a) in the case at bar is even more favourable to the insured than the foregoing version of the exclusion in Progressive Homes –here, the clause does not purport to exclude coverage for “claims that flow from” the plaintiff’s defective work or work product, and excludes only coverage for property damage to goods supplied by the insured.” (emphasis added)

       Finally, AXA argued that Bulldog’s claim was not covered due to a clause which excluded “claims arising from loss of use of tangible property that has not been physically injured or destroyed.”   The Court of Appeal held that the product that “remained stuck to the plastic of the defective bags was “physically injured or destroyed”, at least in the sense that it had ceased to be useable for its intended purpose.”

D:        CONCLUSION

            Now that one Canadian Court of Appeal has considered and applied the Progressive Homes decision to the indemnity coverage under a CGL policy, it is safe to predict that other courts will do so as well.  In the result, a fundamental change in the scope of CGL policies has occurred.  The change is at two levels.

First, at the conceptual level:

  1. The policy will be interpreted in accordance with the plain meaning of the words in the policy, and contra proferentem in the event of ambiguity.
  2. No longer will pre-conceptions or in terrorem arguments be applied.  Such arguments, that by so interpreting the policy it will be turned into a performance bond or another type of insurance, will not be given weight.   Rather, the court will apply the plain words of the policy.
  3. If the common meaning of those words provides coverage, then the policy will apply unless the insurer demonstrates that an exclusion applies.

Second, at the level of the particular coverage:

  1.   If the policy covers damage arising from an “accident” or “occurrence” then the policy will cover damage arising from the insured’s negligence unless that coverage is specifically excluded.
  2. If the policy excludes damage to the insured’s own work, the policy will cover damage to other property, even if arising from the insured’s own work, again unless coverage for that damage is specifically excluded.
  3. If the policy excludes damage arising from damage performed by the insured contractor, it will not exclude damage arising from work performed by a subcontractor or others.
  4. If the policy excludes damage to a particular part of the work, it will not exclude damage to other parts of the work, even if caused by the damage to the excluded portion of the work.
  5.  The coverage in the policy for “damage” will be read widely and will apply to damage arising from a defective product or to a product if it is rendered unfit for its intended use.

Each of these latter conclusions are sensible since, as Justice Rothstein effectively held in Progressive Homes, the plain meaning of the words in question (“accident”, “damage”, “by”, “part” etc.) may include the event or loss in question.  If the insurer wished to unambiguously provide otherwise, it should do so expressly.

Thomas G. Heintzman O.C., Q.C., FCIArb                                                                                        September 26, 2012

2012 CBA National Construction Law Conference:  September 28-29 St. John’s Newfound

www.heintzmanadr.com

www.constructionlawcanada.com

          


[1]  [2010] 2 SCR 245; [2] [1953] SCR 19; [3] [1976] 1 SCR 309;[4] [1977] 1 SCR 261;[5] [1978] 2 SCR 1113; [6] [2003] 1 SCR 158;

Can A Service Contract Create A Duty To Defend?

A clause obliging the insurer to defend an insured, or pay for the insured’s defence, is a well know feature of liability insurance policies. Recently, some Canadian courts have held that the duty of one party to defend or pay for defence of another party to the contract may arise in contracts outside the field of insurance, for instance in building contracts.  This obligation has been found to arise from an indemnity clause or insurance clause in the contract. Such a duty has been held to exist in a service or building contract even though that contract contained no express duty to defend or pay for a defence.

However, a duty to defend or pay for a defence before a finding of liability seems to be an obligation of a different kind than a duty to indemnify or to obtain insurance.  Recently, the Ontario Court of Appeal has clarified this issue in Papapetrou v. 1054422 Ontario Limited. The court held that an insurance clause may create an obligation to pay damages equal to defence costs, but it does not create a duty to defend.

Background

Ms Papapetrou brought a slip and fall claim after she fell on ice on the stairs of The Galleria.  That building was owned by the numbered company and managed by the Cora Group. The Cora Group hired Collingwood to provide winter maintenance and snow removal.

The service contract between Collingwood and the Cora Group contained the following indemnity clause:

The Contractor assumes sole responsibility for all persons engaged or employed in respect of the Work and shall take all reasonable and necessary precautions to protect persons and property from injury or damage. The Owner shall not be responsible in any way … resulting from any act or omission of the Contractor…The Contractor shall indemnify and save harmless the Owner …against all claims, losses, liabilities, demands, suits and expenses from whatever source, nature and kind in any manner based upon, incidental to or arising out of the performance or non-performance of the contract by the Contractor….[Emphasis added.]

The contract also contained an insurance clause. Collingwood agreed to obtain CGL insurance covering the liability of Collingwood and its employees and agents for bodily injury up to a minimum of $2,000,000 and to include the Owners as additional insureds on the policy. Instead, Collingwood obtained an insurance policy covering a maximum of $1,000,000 and the policy did not name The Cora Group as an additional insured.

The Cora Group brought a motion to compel Collingwood to indemnify, and assume the defence of the action on behalf of, The Cora Group. The motion judge granted the motion, finding that “the true nature of [Ms. Papapetrou’s] claim is that [Collingwood and The Cora Group] were negligent in failing to maintain an ice free pedestrian stairway” and that based on the service contract, a duty to defend and indemnify therefore arose. The motion judge stated that Collingwood “should not escape responsibility to defend/indemnify merely because [it] failed to meet [its] contractual responsibility” to name The Cora Group as an additional insured in its CGL policy.  She ordered that Collingwood indemnify The Cora Group and undertake the defence of the action against The Cora Group.

The Court of Appeal’s decision

In the Court of Appeal, The Cora Group acknowledged that an order that Collingwood indemnify it was premature.  No evidence about liability or damages had been led on the motion. The service contract did not require that Collingwood assume sole responsibility for damage to persons and property. Rather, it required Collingwood to assume “sole responsibility for all persons engaged or employed in respect of the Work” and “take all reasonable and necessary precautions to protect persons and property from injury and damage.”  Moreover, Collingwood’s contractual obligation to indemnify The Cora Group was limited to claims “based upon, incidental to or arising out of [Collingwood’s] performance or non-performance of the [service] contract”.

In these circumstances and at this juncture, the Court of Appeal held that there could be no finding that Collingwood’s duty to indemnify had been triggered. Accordingly, the motion judge’s order to indemnify was set aside.

The Court of Appeal also held that the order requiring Collingwood to assume the defence of The Cora Group must be set aside, for two reasons:

First, the service contract contained no duty to defend.

Second, any duty to defend could be no wider than claims arising from Collingwood’s performance or non-performance of its contract.

The Cora Group argued that Collingwood’s obligation to defend arose, not out of the indemnity clause, but rather out of the insurance clause.  It argued that Collingwood’s failure to name The Cora Group as an additional insured in its CGL policy was a breach of contract and that the appropriate remedy was an order requiring Collingwood to defend it. However, the court held that “Collingwood’s breach of this contractual obligation does not create a duty to defend; rather, it gives rise to a remedy in damages.” The court also held that the failure of The Cora Group to object to the form of the insurance was irrelevant.

The court held that the amount of damages suffered by The Cora Group was the amount the CGL insurer would have paid on behalf of The Cora Group.  That amount had to be determined from the service contract, not the CGL insurance policy that Collingwood obtained, since that policy did not contain the additional insured coverage for The Cora Group that it was supposed to contain. The scope of Collingwood’s contractual obligation to indemnify was limited to “claims … based upon, incidental to or arising out of the performance or non-performance of the contract by the Contractor”. Accordingly, the amount of damages was “the amount The Cora Group must pay to defend claims for bodily injury arising out of the manner in which Collingwood performed or failed to perform the service contract.”

The court held that “these costs will include all costs of The Cora Group’s defence of the Papapetrou action, save for any costs incurred exclusively to defend claims that do not arise from Collingwood’s performance or non-performance of the service contract.” The court arrived at this conclusion by analogy to the payment of defence costs under an insurance policy.

First, it applied the principle that an insurer’s obligation to defend is limited to claims that, if proven, would fall within the policy.

Second, it applied the apportionment principle applicable to defence costs under an insurance policy that “where an action includes both covered and uncovered claims, an insurer may nonetheless be obliged by the terms of the policy to pay all costs of defending the action save for those costs incurred exclusively to defend uncovered claims.”

In view of the allegations of Ms. Papapetrou, there was a conflict of interest between Collingwood and The Cora Group, and The Cora Group was entitled to retain separate counsel.

The Court of Appeal set aside the motion judge’s order and substituted an order requiring that Collingwood pay for The Cora Group’s defence of the action, save for any costs incurred exclusively to defend claims that did not arise from Collingwood’s performance or non-performance of the service contract.

Discussion

There are a number of interesting aspects of this decision from the aspect of construction law and insurance law.

First, this decision has to some extent clarified the law with respect to whether a duty to defend can arise from an indemnity or insurance clause in a non-insurance contract, such as a building contract.  The Court of Appeal has certainly held that such a duty does not arise from the breach of an insurance clause, and that the proper remedy is damages. If this is so, it seems hard to imagine that another court could conclude that an indemnity clause gives rise to a duty to defend and not damages. As well, it appears that a number of recent lower court decisions, holding that a duty to defend may arise from an indemnity clause in a non-insurance contract, are no longer good law.

Second, if a future action arises from the breach of an indemnity clause, we cannot be certain what principles the court will apply to the calculation of damages.  In the present case, since the breach was of the insurance clause, the court had a convenient proxy or reference point in the cases dealing with the determination and apportionment of defence costs under a liability insurance policy.  No policy reasons come to mind for applying different principles to breach of an indemnity clause, but we will have to await such a case for a clear answer.

Third, it may be a little surprising that, on an interlocutory motion, the court made what appears to be a final order determining the principles upon which damages were to be paid. There may be an argument on a duty to defend motion under an insurance policy as to whether, and to what degree, the court should finally determine the principles upon which the defence costs are to be paid, and the degree to which the trial judge should be left with some discretion on that matter.  In the present case, the Court of Appeal appears to have finally decided the matter.

Fourth, the court appears to have finessed the issue of whether the claim by Ms. Papapetrou was entirely covered under Collingwood’s CGL policy.  There is no mention in the decision of any coverage dispute under that policy, so perhaps coverage was not an issue. In addition, the Court of Appeal may be saying that, because Collingwood did not obtain the coverage for The Cora Group, it could not argue anything about the scope of coverage under the policy. But in another case, if coverage is an issue under the “policy that wasn’t obtained” then this may be raised as an issue by the defaulting party.  That party may argue that there should be an additional exception to its liability, namely, “to the extent that coverage was not available under the policy not obtained.”

Fifth, this decision shows how a breach of an insurance clause can be expensive. By failing to obtain the right insurance, Collingwood turned what would have been a claim for payment of costs against the insurer under the CGL policy into a claim for costs against it personally.

Finally, the insurance law junkies will take note that the Court of Appeal has once again applied the apportionment principle that requires the insurer (and by analogy in this case, the party in breach of contract) to pay defence costs except to the extent that those costs are due exclusively to uncovered claims.  This rule is favourable to the insured and is generally applied by Anglo-Canadian courts to apportionment disputes, but other rules less favourable to the insured may be applied in other jurisdictions and are advocated for by many insurers.

See Heintzman and Goldsmith on Canadian Building Contracts, 4th ed. Chapter 5, part 3

Papapetrou v. 1054422 Ontario Limited, 2012 ONCA 506

Building Contracts –  Insurance –  Indemnity and Insurance Clauses  –  Duty to Defend    –   Damages

 Thomas G. Heintzman O.C., Q.C., FCIArb                                                                                  September 23, 2012

www.heintzmanadr.com
www.constructionlawcanada.com

 

Does An Insurer’s Duty To Defend Apply If The Insured Complies With An Environmental Investigation?

The scope of an insurer’s duty to defend is a crucial issue in relating to any liability insurance policy, particularly those applying to building projects.   One of the questions which may arise is:  what is the nature of a “claim” for the purpose of the duty to defend?  That question will almost always be determined by the particular wording in the policy.  In General Electric Canada Company v. Aviva Canada, Inc., the Ontario Court of Appeal has just held that the wording of the policy did not apply when the insured complied with a request by the Ontario Ministry of Environment for an environmental investigation.

The Background

GE owned the subject property from 1903 to 1980, during which time it manufactured a variety of products on the site. During some period of that time, it used trichloroethylene (“TCE”) as a degreasing agent. In February 2004, the Ontario Ministry of the Environment (MOE) wrote to GE and other former owners of the property advising that it was reviewing potential TCE contamination and requested the assistance and co-operation of GE and the other recipients of the letter, asking them to provide any environmental assessments that they had in their possession.

In April, 2004, the MOE sent a second letter to GE, requesting further information concerning about potential TCE contamination.  The letter said that:

 “the data appears to support a TCE plume migrating from/ through the former GE property…As discussed you will be required to take action in delineating the source area on your former property. The delineation investigations are to determine the current levels and the full vertical and horizontal extent of all contamination within the soil and groundwater which are on site location. The delineation report shall include at minimum the following….At this time the ministry is willing to enter into an agreement with GE to pursue the required action items voluntarily. If at any time the ministry determines there is unsatisfactory progress a Director’s Order will be issued to resolve the matter.”

GE agreed to cooperate with the MOE request. It asserted that, in responding to that MOE request, it had incurred out-of-pocket expenses of $2.1 million for investigation costs, $1.86 million for remedial costs and $750,000 for legal costs. GE made a clam against its CGL insurers for payment of those costs.

The Policies

The two CGL policies contained language which required the insurer:

“to pay on behalf of the Insured all sums which the Insured shall become obligated to pay [by] reason of the liability imposed upon the Insured by law… for damages because of damage to or destruction of property caused by an occurrence within the Policy Period…

To serve the Insured by the investigation of claims on account of such damage to or destruction of property and occurrence alleged as the cause thereof,

To defend in the name and on behalf of the Insured any suit against the Insured alleging such damage to or destruction of property and seeking damages on account thereof, even if such suit is groundless, false or fraudulent.”

The Decision

The trial judge held that GE’s claim did not fall within the policy because GE had complied with the MOE’s request, and had not defended against it.  He said:

“What GE calls “defence costs” were not costs of defending against the MOE’s claim but, in fact, the costs of complying with the MOE’s claim. GE complied with the MOE’s request and performed the work on the basis that it was thought to be in GE’s best interests to do so.

In coming to this conclusion, I make no finding on whether the matters alleged and requested in the MOE’s letter fall within the coverage language of the Aviva and Dominion policies from an indemnity perspective. I base my conclusion rejecting GE’s request for a declaration that Aviva and Dominion have a duty to investigate and to defend the MOE’s request solely on the fact that there was no investigation or defence of the MOE’s claim at all. What GE is seeking, in my view, is indemnification for its costs of complying with the MOE’s claim. This is not the time to make findings on the merits of GE’s indemnity claim in this regard. As the Ontario Court of Appeal said in Halifax Insurance, supra, the time to determine the insurer’s duty to indemnify is at the conclusion of the underlying litigation, not during the abbreviated application for defence costs. My conclusion, therefore, is without prejudice to the parties’ positions on whether the MOE letter is a “claim” or to GE’s right to seek these costs by way of an indemnity claim against Aviva, Dominion, or both, as well as the right of those insurers to argue against the existence of that obligation.” (emphasis added)

The Court of Appeal agreed with this conclusion.  It said:

[T]the only evidence of a “claim” by the MOE in the April letter is the request, or requirement if you will, that GE take action in delineating the source of the TCE contamination. GE did not oppose, defend or investigate that request. GE, as it was invited to do in the letter, voluntarily complied with the request of the MOE. It cannot be said that it has suffered any defence or investigation costs recoverable under its insurance policies. As the application judge concluded, the costs incurred were compliance costs – not defence costs. The fact that GE provided a list of costs, which it has characterized as potential defence costs does not, in my view, change the analysis of whether the April letter triggers a duty to defend.

In the result, these decisions undertook no analysis of the indemnity coverage under the policy.  The courts did not consider whether there was indemnity coverage for the damage to the land, or whether there was an environmental exclusion.  Nor did they consider whether the MOE’s request was a “suit” against GE.  All that the courts decided was that GE’s cost of cooperation did not amount to defence costs.  The Court of Appeal declined to consider American case law on the issue.

This is an interesting decision from a number of aspects:

First, while the court’s reading of the word “defend” as excluding cooperation may be based on sound grammar and literal meaning, there could be a debate about whether it is based upon sound policy. If cooperation is the best defence, should the costs of that cooperation be excluded from coverage for defence costs?  Is fighting better or different than cooperating so far as a defence is concerned?

Second, if the cost of “cooperating” doesn’t amount to defence, does the cost of settling an action or regulatory proceeding amount to defence? Normally, the costs of settling an action, and obtaining the best evidence and expert reports to do so advantageously, would be included within defence costs under a liability policy.

Third, if the cost of cooperating is not defence costs, then that cost may fall within the indemnity coverage arising from damage to the property.  The trial judge’s decision appears to allow GE to argue that it does.  If so, then this proceeding was much to do about nothing.  Except that, by cooperating, GE may have materially reduced the insurer’s potential exposure.

See Heintzman and Goldsmith on Canadian Building Contracts, 4th ed. Chapter 5, Part 3

General Electric Canada Company v. Aviva Canada, Inc., 2012 ONCA 525

Building Contracts   –   Insurance   –   Duty to Defend

Thomas G. Heintzman O.C., Q.C., FCIArb                                         August 14, 2012

www.heintzmanadr.com

www.constructionlawcanada.com

A Contractor’s Construction Errors May Be Covered By A General Liability Policy

In two recent decisions, courts in Ontario and British Columbia have held that negligence during construction (or manufacturing) may be covered by general liability policies even though the damage is part of the construction (or the product sold):
California Kitchens & Bath Ltd. v. AXA Canada Inc. and Bulldog Bag Ltd. v. AXA Pacific Insurance Company

In these decisions, the courts have followed and applied the landmark decision of the Supreme Court of Canada in Progressive Homes Ltd. v Lombard General Insurance Company of Canada, [2010] 2 S.C.R. 245.  The Progressive Homes decision was discussed in my blog of January 16, 2011.

In Progressive Homes, the Supreme Court of Canada rejected the long-standing position of insurers that the claims by owners arising from the negligence in construction by contractors may not be covered by CGL insurance.

The insurance industry asserted that general liability insurance is not designed to be a performance bond and that if contractors wished to be insured against claims by owners for their own negligence during construction, then that would convert the insurance into a performance bond.

‘Plain Meaning’ In a CGL Policy Defined by Supreme Court

The Supreme Court looked at the plain meaning of the words in a CGL policy and held that, as long as the damages arose from an accident or other non-intended event, then the plain meaning of the policy applied, whether or not the damages arose from the contractor’s negligence and even though the damage was to part of the building constructed by the contractor.  The Supreme Court held that the insured was arguably covered by the policy, and therefore, Lombard had a duty to defend the contractor.

These principles have now been applied by the Ontario Superior Court in California Kitchens with respect to the duty to defend, and by the British Columbia Court of Appeal in Bulldog Bag with respect to the duty to indemnify.  In both cases, the courts were dealing with general liability policies issued by the AXA group of insurers.

In California Kitchens, the contractor was sued by a homeowner in respect of the mis-design and installation by the contractor of a kitchen in the plaintiff’s home.  The contractor asserted that AXA was obliged to defend it under a general liability policy.  The policy provided insurance for bodily injury and property damage.  ‘Occurrence” was defined to mean an “accident”.  The policy contained exclusions for the Named Insured’s work and for loss incurred by the Named Insured for the repair, replacement etc. of the Named Insured’s work because of known or suspected defects or deficiencies.

AXA argued that the policy did not include the defective design of the kitchen by the contractor, or otherwise the policy would become a performance bond.  This was the standard argument of CGL insurers before the Lombard decision.

The court held that the plaintiff’s claim for loss of use of the plaintiff’s home while the kitchen was being repaired was property damage under the policy.  The court rejected AXA’s argument that the claim was really a contract claim and was therefore not covered by the policy.

The Court said:

“If this argument prevailed, it would eliminate virtually all coverage.  What work is not performed pursuant to a contract?  It is the negligence in the performance of the work by California Kitchens that is the true nature of the claim.  There is no claim in contract in the pleading and no basis for questioning the true nature of the claim.”

The court also held that the “Named Insured’s work” exclusion did not apply because the claim asserted that the deficient work was performed by sub-contractors, not the Named Insured, the contractor.

In Bulldog Bag, Bulldog Bag sold bags to its customer Sure-Gro.  Sure-Gro used the bags to supply bagged soil to Canadian Tire.  The bags were printed by a printer for Bulldog.  Because of the defective printing, the printing became illegible.  Bulldog Bag compensated Sur-Gro for the cost of retrieving and re-bagging the soil being sold to Canadian Tire, and made a claim on its CGL policy for this loss.  Bulldog Bag did not make a claim for the cost of replacing its own bags.

The policy defined “Occurrence” as meaning “… property damage neither expected nor intended by the Insured”, which is a similar definition to “accidental” in the California Kitchens case.

The exclusions included property damage to “goods or products manufactured or sold by the Insured”; or “work done by or on behalf of the Insured where the cause of the occurrence is a defect in such work, but this exclusion shall only apply to that part of such work that is defective”:   or loss of use of property that had not been physically injured or destroyed resulting from “a delay in or lack of performance by or on behalf of the Insured of any contract or agreement.”

The reasoning in the Progressive Homes case

The B.C. Court of Appeal applied the reasoning in Progressive Homes and held that there was coverage for Bulldog Bag’s claim and that the exclusions did not apply.  The court started with AXA’s concession that Bulldog Bag’s claim arose from “property damage” because Bulldog’s bags had been ‘injured’ by the faulty printing and Sure-Gro lost the use of them.  AXA also conceded that the faulty workmanship that resulted in the defective bags qualified as an “accident” or “occurrence” within the meaning of the policy.

However, AXA asserted that the costs of removing the soil from the defective packaging and disposing of that packaging fell within the exclusions in the policy.  It further asserted that the decision in Progressive Homes had not altered the basic nature of CGL policies, which did not include the costs arising from repairing or replacing the insured’s defective work and products.

The Appeal Court’s Decision

The Court of Appeal rejected AXA’s submissions. The Court held that the exceptions in the policy barred a claim for damage to Bulldog Bag’s own bags.  (In light of the California Kitchen case, one may question this conclusion since the damage was caused by Bulldog Bag’s sub-contractor, the printer, and not by Bulldog Bag itself).  However, the court held that the exclusions  did not bar a claim for compensation for the costs which Sure-Gro incurred in separating those bags from its products, repackaging the product in different bags, and salvaging the “old” product some months later.

The Court further held that, in any event, and even before Progressive Homes, the “own product” exclusion did not apply to loss incurred by the insured’s customer as a result of defects in the insured’s own product.  In addition, the Court held that the “own work and product” exception in this policy did not apply to resulting damage, but only to property damage to the goods supplied by the insured.

Progressive Homes Has Had a Profound Impact on General Liability Policies

These two decisions are the first evidence of the profound impact on general liability policies of the Progressive Homes decision of the Supreme Court of Canada.  The Supreme court’s decision has meant that the initial coverage of those policies will be read broadly, and may  possibly include damage from one part of a building or product to another, and damage arising from the insured’s fault.  As the decision in California Kitchens shows, those possibilities are very significant, and almost determinative, when it comes to the duty to defend since all the insured must show is the possibility that the claim falls within the policy.

The impact of the decision in Progressive Homes on the coverage for indemnity may be even more significant, as the Bullfrog Bag decision demonstrates.  By widening the potential interpretation of coverage, and narrowing the potential interpretation of the exceptions, the burden on the insurer is substantially increased.  As the drafter of the policy, the insurer will face the contra proferentem rule so far as initial coverage is concerned.  And if it relies on the exceptions, then the rule that exceptions must be narrowly construed will apply.

Once the Supreme Court held that CGL policies could apply to a contractor’s own negligence and could apply to damage from one part of a building or product to another, the whole ambit of a CGL policy was substantially clarified to the benefit of the insured.

Insurance policy – Contracts – Duty to Defend – Duty to Indemnify – Construction Law

California Kitchens & Bath Ltd. v. AXA Canada Inc., 2010 ONSC 6125;
Bulldog Bag Ltd. v. AXA Pacific Insurance Company, 2011 BCCA 178

Thomas G. Heintzman O.C., Q.C.                                                                                              October 6, 2011

www.heintzmanadr.com
www.constructionlawcanada.com

The Duty To Defend: What Are The Indemnity Obligations In Construction Contracts?

Construction Law –  Insurance – Duty to Defend

A recent Ontario decision regarding the duty to defend against claims may have wide reaching implications for construction law even though the action did not involve a building contract.

In Cadillac Fairview v. Jamesway Construction, 2011, the Ontario Superior Court recently held that an indemnity obligation in a maintenance contract gave rise to a duty to defend the landlord.  This conclusion may apply to indemnity obligations in a building contract.

Jamesway entered into a contract with Cadillac Fairview to shovel the sidewalks and parking lot of a shopping centre owned by Cadillac Fairview, and to keep those premises free of ice and snow.  The contract contained an indemnity by Jamesway in favour of Cadillac Fairview, and an agreement by Jamesway to maintain CGL insurance in which Cadillac Fairview would be an unnamed insured.  Jamesway did take out such a policy.  So far as the reasons of the court disclose, the contract did not contain an agreement by Jamesway to defend Cadillac Fairview from any claim.

When Cadillac Fairview was sued arising from a slip and fall on the ice on the shopping centre, it brought an application against Jamesway and the CGL insurer to require those parties to defend Cadillac Fairview in the slip and fall action.  The Superior Court granted the application against Jamesway.

In arriving at its conclusion, the court referred to a number of cases involving insurers and an insurer’s duty to defend.  Relying on the reasoning in those cases, the court held that Jamesway had a duty to defend Cadillac Fairview.  The court held that the indemnity and the obligation to insure combined to create an obligation to defend.

The court referred to no cases in which an obligation to defend had been ordered against a non-insurer, nor any case in which such an order had been made against a non-insurer when the contract contained no express obligation to defend.  Rather, the court reasoned from the cases against insurers, and then concluded that the indemnity plus the duty to obtain insurance amounted to an agreement to defend.

The court dismissed the application against the CGL insurer, holding that there was no privity of contract between Cadillac Fairview and that insurer.

The implications of this decision for the construction industry are obvious.  Many construction contracts contain indemnities.  For example, Article 12.1 of the standard CCDC 2 Stipulated Price Contract contains indemnities between the owner and the contractor.  However, construction contracts do not usually contain an express obligation on either party to defend the other party in the event of litigation by a third party.  Even in an insurance setting, an obligation to defend will not necessarily be inferred if it is not expressly contained in the insurance contract.  Implying such a duty to defend into a maintenance or construction contract may well exceed the intentions of the parties.

Construction Law- Insurance- Duty to Defend: 

Cadillac Fairview v. Jamesway Construction, 2011 ONSC 2633 (CanLII)  https://bit.ly/kMm9gm

Thomas G. Heintzman O.C.,Q.C.                                                                                                                July 3, 2011

www.constructionlawcanada.com

A Contentious Insurance Issue – The Scope of the Duty to Defend Under a CGL Policy

Today we will examine a recent decision of the Supreme Court of Canada relating to Insurance Law and the insurer’s Duty to Defend in the context of construction projects:  Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada.

This case provided the Supreme Court with an opportunity to consider a contentious issue in Canadian insurance law, namely, an insurer’s duty to defend under a Commercial General Liability (CGL) policy issued to a building contractor.

In the construction industry,  insurers have denied coverage to owners and contractors under CGL policies on two grounds.  First, insurers have insisted that the damage must be to the property of a third party, not the property installed by the contractor.  Second, insurers have asserted that the defective property installed by the contractor cannot be covered since that would allegedly convert a CGL policy into a performance bond.  Both of these contentions by the insurer were rejected by the Supreme Court.

The CGL policies in question covered “property damage” caused by an “accident”.  The Supreme Court held that the ordinary meaning of “property damage” includes damage to any property and is not limited to damage to third-party property.  Therefore, damage to one part of a building arising from another part of the same building could be included in the definition.  An “accident” could arise if an event causes property damage and is not expected nor intended by the insured.  An “accident” need not be a sudden event and arise from continuous or repeated exposure to conditions.

The Supreme Court concluded that whether defective workmanship is an accident will depend on the ultimate facts proven at trial.  At the pleadings stage, however, if the allegations of defective workmanship arguably involve “property damage” and bring the circumstances with the definition of “accident” in the policy, then a duty to defend will arise.

The Court rejected the insurer’s argument that “property damage” must be limited to property of a third party and therefore could not include damage caused by other parts of the same building.  That argument, it said, would leave little or no meaning for the “work performed” exclusion.  The Supreme Court rejected lower court authority to the contrary in some provinces.  It held that the plain and ordinary meaning of “property damage” did not limit that damage to third party property, noting that other provincial courts had arrived at that conclusion.

The Supreme Court was prepared to find that it was open to argument that the definition of “property damage” could include defective property.  The Court also said that it may be arguable that defective property could be covered under “loss of use”, another category of “property damage.”  The Court noted that under a second version of the policies, coverage for defects was specifically excluded and that such an exclusion would be redundant if the insurer’s argument was correct.

Finally, the Supreme Court rejected the argument that interpreting “accident” to include defective workmanship would convert a CGL policy into a performance bond.  It disagreed with the insurer’s argument that “faulty workmanship is never an accident” and also disagreed with the B.C. Court of Appeal’s holding that interpreting the policy in this fashion “offends the assumption that insurance provides for fortuitous contingent risk.”  Fortuity, it said, “is built into the definition of ‘accident’ itself as the insured is required to show that the damage was neither expected nor intended from the standpoint of the Insured…… When the event is unlooked for, unexpected or not intended by the insured, it is fortuitous.  This is a requirement of coverage; therefore, it cannot be said that this offends any basic assumption of insurance law.”

As in any duty to defend case, this decision is not a definite determination of coverage, as the facts proven at trial may well fall within or outside the coverage.  In particular, the “work performed” exclusion might apply, depending on which policy applied.  However, the Supreme Court did hold that the claim against the contractor was not unambiguously outside the basic coverage nor was it unambiguously inside the “work performed” exclusion.

This decision is significant because the Supreme Court swept away several of the arguments of CGL insurers that have met with success in lower courts.  It demonstrated a willingness to give full effect to the insurer’s duty to defend under a CGL policy in the construction field.

Insurance Law Duty to Defend:

Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, [2010] 2 S.C.R.245.

Thomas G. Heintzman O.C., Q.C.                                                                                                                  January 2011

www.constructionlawcanada.com
www.heintzmanadr.com