Edited by Amanda Kostek and Kristen Hansen
Last week’s Court Rulings from the Alberta Court of King’s Bench, Court of Appeal and SCC.
Graham Infrastructure Ltd v Epcor Utilities Inc, 2024 ABKB 453
Course of Construction Policy | Who is an insured | Potential Bars to Subrogation
Ismail v Hammad, 2024 ABKB 482
Personal Injury | General Damages for Assault and Battery
Prather v Tower Engineering Group, 2024 ABKB 466
Costs and whether a multiplier to the costs tariff is appropriate
Graham Infrastructure Ltd v Epcor Utilities Inc, 2024 ABKB 453
During construction of a water reservoir pump station in the Town of Strathmore, a tee fitting failed resulting in a large water loss exceeding $2.8 Million. At all material times Graham and the Town of Strathmore were covered by a Course of Construction Policy. Graham’s insurer paid for the cost of repairs, and initiated a subrogated claim against EPCOR for alleged negligence in failing to promptly shut off the water resulting in larger damages than would have otherwise occured. EPCOR sought summary Dismissal of the claim on the basis that the losses were suffered by the Town, not Graham, and EPCOR is an insured under the Course of Construction Policy. The application was dismissed, and EPCOR appealed.
On appeal Epcor argued that Graham did not own the project and was not obliged to remediate the damage. In contrast, Graham pointed to the General Conditions of the contract, which made Graham contractually responsible for any loss or damage. The Court agreed with Graham that the contract suggested that the property under construction was at the risk of Graham.
On the second issue, weather EPCOR was insured under the Course of Construction Policy, the issue was whether EPCOR, in attending to stop the water leak, fell into one of the categories of Insureds under the policy. Specifically, EPCOR relied on the definition of an insured as including “Persons, firms or Corporations supplying services to the Project, at the project site”
The Court did not agree that EPCOR met the requirement of supplying services by supplying water infrastructure. Water was supplied regardless of the project:
[87] However, I do not agree that Epcor meets the requirement of supplying services merely because the services were provided by Epcor to the Town and public stakeholders pursuant to its duties as manager or operator of the Town’s water infrastructure and actually did benefit the project.
[88] Epcor had to coordinate the operation of the ECRW with the construction project and operate the ECRW regardless of the project. This does not necessarily mean it was supplying services to the project whenever its personnel attended the site for any purpose, or whenever it did anything in the course of its role as manager or operator of the Town’s water infrastructure that benefitted Graham or the project.
The Court concluded that it was unreasonable for any supplier to be included in the Policy no mater how tenuous or incidental the connection between services and the project. Services had to be integral to construction activities:
[89] It is unreasonable to conclude that the objective intention of the parties to the insurance contract was that any supplier becomes an insured under the COC Policy no matter how tenuous or coincidental the connection between the services and the project. In my opinion, the requirements that the services be to the project, and at the project site, in the context of the purposes of course of construction policies, demonstrate the parties’ intention that the services be an integral and necessary part of the construction process or construction activities. A collateral benefit arising from, or a function relating to, the maintenance, management or control of nearby Town infrastructure, such as an emergency response to a watermain rupture, is not necessarily a service to the construction project.
The Court concluded that the record was not sufficient to determine that EPCOR was supplying services to the project at the project site during the response to the rupture. Another interpretation of their work was that “that Epcor provided emergency utility services to the Town under the Utility Services Agreement that benefitted public stakeholders such as water consumers, property owners, and property constructors.”
Ultimately the Court determined that a fair and just determination could not be assessed on the facts and evidence before it, and declined to interfere with the lower court finding.
Ismail v Hammad, 2024 ABKB 482
This matter involved an alleged assault. On the day of the assault, the Defendant reached out to the Plaintiff to meet at the Tim Hortons in order for him to serve a restraining order. The Court concluded that neither party was credible but had independent surveillance video to review. The Court noted that provocation is not a defence to the tort of assault and battery, but that it can reduce damages. The court reduced damages by 30% taking into account the history between the parties and resulting minor injuries. Although the Plaintiff sought $100,000 in general damages, he failed to call experts. The Court accepted that the Plaintiff suffered a black eye, which was almost swollen shut, as well as contusions, and awarded general damages of $2,500.
The Plaintiff also sought $91,000 in lost income but failed to provide tax evidence or other evidence concerning his wages. Instead, the Plaintiff put into evidence doctor’s notes, but the doctor was not tendered as a witness. Although a contractor agreement was put into evidence, but it simply outlined a 12-month terms with no guarantee of hours. As a result, the loss of income claim was dismissed:
[85] The Court has no way of determining what income the Plaintiff earned prior to the Incident and what, if any, income the Plaintiff lost because of the Incident. There is also no medical information supporting that the Plaintiff was unable to work or for what period.
Prather v Tower Engineering Group, 2024 ABKB 466
The Defendants were unsuccessful in an application to compel undertakings involving a large loss claim. The Plaintiff’s sought a multiplier of 1.5-2 times the Column 5 costs tariff on the basis that the amount at stake in the litigation was high, the application was unnecessary, and preparation and argument was time intensive. The Court rejected this argument noting that there was nothing in the nature or complexity of the application warranting a multiplier, and awarded Column 5 costs payable forthwith:
[6] I agree with the Tower Defendants that there is nothing in the nature or complexity of the application that would warrant an award of costs greater than what is contemplated under Column 5 of Schedule C. The Plaintiffs appear to argue that because the Tower Defendants brought an unsuccessful application, increased costs are warranted. The success of one party over another is the presumptive foundation of the costs regime. While the efforts of counsel and the parties to prepare and respond to the application may have been significant, that effort is reflected in the tariff. The Plaintiffs are to calculate their costs under Column 5 of Schedule C.
[7] Under Rule 10.29(1) of the Rules, where the Court is otherwise silent, costs are payable forthwith. The underlying policy reason for an award of costs being payable forthwith is to discourage ill-considered proceedings and to ensure the Justice most familiar with the application addresses the issue of costs. In addition, the cost consequence is immediate and relates directly to the step in issue. The Tower Defendants have not offered any compelling reason to depart from this presumption in the Rules. Costs to the Plaintiffs are payable forthwith.