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Monday Morning Case Bites for April 15, 2019

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Amanda Kostek & Christie Dewar

Cancarb Limited v Ace Ina Insurance, 2019 ABQB 258
Business Interruption Loss | Indemnity | Interpretation of the Policy | Summary Dismissal

422252 Alberta Ltd v Messenger, 2019 ABQB 251
Dismissal for Inordinate Delay

Cancarb Limited v Ace Ina Insurance, 2019 ABQB 258

The Plaintiffs claimed $10,000,000 in business interruption against its insurers as a result of a 13 month interruption in business when a steam turbine went out of service. $6,000 was paid under the policy. The policy indemnified the Plaintiffs for loss of ‘net sales value of production’. The Plaintiffs argued that although the loss was not based on a loss of net sales value of production, coverage shoudl be afforded, because premiums were based on coverage for a shortfall payment and short fall amounts were meant to be factored into coverage:

[16] On the face of it, even construing this coverage provision broadly, there is no coverage for the $10 million which TransCanada paid to the City for non-delivery of guaranteed amounts of power. That payment does not represent a loss of net sales value of production.

[17] TransCanada however raises two arguments which it says favours it obtaining indemnity for the $10 million shortfall amount claim:

(i) TransCanada says the premium which it paid to the Insurers was based on coverage for claims such as the $10 million shortfall payment, and

(ii) TransCanada says that by deducting a $2.5 million ‘shortfall amount’ from TransCanada’s $8.5 million loss of sales revenues, the Insurers have demonstrated that ‘shortfall amounts’ were meant to be factored into the coverage under the policy.

Both arguments failed on the basis that the policy was not ambiguous, and the second factor was not relevant.

Even if coverage were available, the policy contained an exclusion for “any increase in loss due to … fines or damages for breach of contract or for … noncompletion of orders,” and another exclusion for “penalties of any nature.”

The claim was summarily dismissed.

422252 Alberta Ltd v Messenger, 2019 ABQB 251

The issue was whether a professional negligence claim commenced in 2000 should be dismissed for inordinate delay. The Court concluded that although the delay was inordinate, the Defendants acquiesced in that delay:

[30] I assume the existence of inordinate delay here. However, I find that the applicants continued to participate in the action (in the ways detailed below), with knowledge of the prejudice asserted by them. In doing so, they signaled their willingness to press on in the action despite such delay and prejudice.

[31] As the defendants contemplated their various moves detailed below, they had a choice: apply the brakes and pull over (i.e. apply for delay-related dismissal) or stay on the road (i.e. take various steps to move the action ahead). They chose the latter. In so doing, they acquiesced in, or waived, the delay to that point (or those points).

Specifically, between 2015 and 2018 the Defendants filed a Statement of Defence to an amended claim, questioned key witnesses, and circulated a Form 37 to set the matter for Trial. As a result, the Court concluded that the Defendants signaled a willingness to proceed with the litigation despite the delay.