CANADIAN CASES on the LAW of INSURANCE Fifth Series/Cinqui`Eme S´Erie Recueil De Jurisprudence En Droit Des Assurances
Total Page:16
File Type:pdf, Size:1020Kb
CANADIAN CASES ON THE LAW OF INSURANCE Fifth Series/Cinqui`eme s´erie Recueil de jurisprudence en droit des assurances VOLUME 51 (Cited 51 C.C.L.I. (5th)) EDITOR-IN-CHIEF/REDACTEUR´ EN CHEF Won J. Kim, B.A., LL.B. Kim Orr Barristers P.C. Toronto, Ontario QUEBEC EDITOR/REDACTEUR´ POUR LE QUEBEC´ Jean-Fran¸cois Lamoureux, LL.L. Robinson Sheppard Shapiro Montr´eal, Qu´ebec EDITORIAL STAFF/REDACTION´ Cheryl L. McPherson, B.A.(HONS.) Director, Primary Content Operations Ken Murphy, B.A.(HONS), LL.B. Product Development Manager Nicole Ross, B.A., LL.B. Julia Fischer, B.A., LL.B. Supervisor, Legal Writing Supervisor, Legal Writing Mike MacInnes, B.A.(HONS.), LL.B. Stephanie Hanna, B.A.(HONS.), M.A., Lead Legal Writer LL.B. Senior Legal Writer Lisa Rao, B.SC., LL.B. Martin-Fran¸cois Parent, LL.B., LL.M., Senior Legal Writer DEA (PARIS II) Bilingual Legal Writer Heather Niziol, B.A. Content Editor CANADIAN CASES ON THE LAW OF INSURANCE, a national series of Recueil de jurisprudence canadienne en droit des assurances, une s´erie topical law reports, is published 12 times per year. Subscription rate $473.00 nationale de recueils de jurisprudence sp´ecialis´ee, est publi´e 12 fois par an- per bound volume including parts. n´ee. L’abonnement est de 473 $ par volume reli´e incluant les fascicules. Editorial Offices are also located at the following address: 430 rue St. Pierre, Le bureau de la r´edaction est situ´e a` Montr´eal — 430, rue St. Pierre, Mon- Montr´eal, Qu´ebec, H2Y 2M5. tr´eal, Qu´ebec, H2Y 2M5. ________ ________ © 2016 Thomson Reuters Canada Limited © 2016 Thomson Reuters Canada Limit´ee NOTICE AND DISCLAIMER: All rights reserved. No part of this publica- MISE EN GARDE ET AVIS D’EXONERATION´ DE RESPON- tion may be reproduced, stored in a retrieval system, or transmitted, in any SABILITE´ : Tous droits r´eserv´es. Il est interdit de reproduire, m´emoriser sur form or by any means, electronic, mechanical, photocopying, recording or un syst`eme d’extraction de donn´ees ou de transmettre, sous quelque forme ou otherwise, without the prior written consent of the publisher (Thomson par quelque moyen que ce soit, electronique´ ou m´ecanique, photocopie, enre- Reuters). gistrement ou autre, tout ou partie de la pr´esente publication, a` moins d’en avoir pr´ealablement obtenu l’autorisation ecrite´ de l’´editeur, Thomson Reuters. A licence, however, is hereby given by the publisher: Cependant, l’´editeur conc`ede, par le pr´esent document, une licence : (a) to a lawyer to make a copy of any part of this publication to give to a a) a` un avocat, pour reproduire quelque partie de cette publication pour judge or other presiding officer or to other parties in making legal submis- remettre a` un juge ou un autre officier-pr´esident ou aux autres parties dans sions in judicial proceedings; une instance judiciaire; b) a` un juge ou un autre officier-pr´esident, pour produire quelque partie de (b) to a judge or other presiding officer to produce any part of this publication cette publication dans une instance judiciaire; ou in judicial proceedings; or c) a` quiconque, pour reproduire quelque partie de cette publication dans le cadre de d´elib´erations parlementaires. (c) to anyone to reproduce any part of this publication for the purposes of « Instance judiciaire » comprend une instance devant une cour, un tribunal ou parliamentary proceedings. une personne ayant l’autorit´e de d´ecider sur toute chose affectant les droits ou les responsabiliti´es d’une personne. “Judicial proceedings” include proceedings before any court, tribunal or per- Ni Thomson Reuters ni aucune des autres personnes ayant particip´e a` la r´eal- son having authority to decide any matter affecting a person’s legal rights or isation et a` la distribution de la pr´esente publication ne fournissent quelque liabilities. garantie que ce soit relativement a` l’exactitude ou au caract`ere actuel de celle-ci. Il est entendu que la pr´esente publication est offerte sous la r´eserve Thomson Reuters and all persons involved in the preparation and sale of this expresse que ni Thomson Reuters, ni le ou les auteurs de cette publication, ni publication disclaim any warranty as to accuracy or currency of the publica- aucune des autres personnes ayant particip´e a` son elaboration´ n’assument tion. This publication is provided on the understanding and basis that none of quelque responsabilit´e que ce soit relativement a` l’exactitude ou au caract`ere Thomson Reuters, the author/s or other persons involved in the creation of actuel de son contenu ou au r´esultat de toute action prise sur la foi de this publication shall be responsible for the accuracy or currency of the con- l’information qu’elle renferme, ou ne peuvent etreˆ tenus responsables de tents, or for the results of any action taken on the basis of the information toute erreur qui pourrait s’y etreˆ gliss´ee ou de toute omission. contained in this publication, or for any errors or omissions contained herein. La participation d’une personne a` la pr´esente publication ne peut en aucun cas etreˆ consid´er´ee comme constituant la formulation, par celle-ci, d’un avis No one involved in this publication is attempting herein to render legal, ac- juridique ou comptable ou de tout autre avis professionnel. Si vous avez counting, or other professional advice. If legal advice or other expert assis- besoin d’un avis juridique ou d’un autre avis professionnel, vous devez tance is required, the services of a competent professional should be sought. retenir les services d’un avocat ou d’un autre professionnel. Les analyses The analysis contained herein should in no way be construed as being either comprises dans les pr´esentes ne doivent etreˆ interpr´et´ees d’aucune fa¸con official or unofficial policy of any governmental body. comme etant´ des politiques officielles ou non officielles de quelque organ- isme gouvernemental que ce soit. 8 The paper used in this publication meets the minimum requirements of 8 Le papier utilis´e dans cette publication satisfait aux exigences minimales American National Standard for Information Sciences — Permanence of Pa- de l’American National Standard for Information Sciences — Permanence of per for Printed Library Materials, ANSI Z39.48-1984. Paper for Printed Library Materials, ANSI Z39.48-1984. ISSN 0824-2585 ISBN 978-0-7798-4247-6 Printed in Canada by Thomson Reuters THOMSON REUTERS One Corporate Plaza Customer Relations 2075 Kennedy Road Toronto 1-416-609-3800 Toronto, Ontario Elsewhere in Canada/U.S. 1-800-387-5164 M1T 3V4 Fax 1-416-298-5082 www.carswell.com Contact www.carswell.com/email Hatch Ltd. v. Factory Mutual Insurance Co. 173 [Indexed as: Hatch Ltd. v. Factory Mutual Insurance Co.] Hatch Ltd., a body corporate, formerly known as SGE Acres Limited, Appellant v. Factory Mutual Insurance Company, a body corporate, Martin Marietta Materials Canada Limited, a body corporate, Bermingham Construction Limited, Atlantic Sub-Sea Construction and Consulting Incorporated, Beaver Marine Limited, a body corporate, and Dywidag Systems International, Canada, Ltd., a body corporate, Respondents Nova Scotia Court of Appeal Docket: C.A. 429986 2015 NSCA 60 MacDonald C.J.N.S., Beveridge, Scanlan JJ.A. Heard: January 26, 2015 Judgment: June 24, 2015 Insurance –––– Actions on policies — Practice and procedure — Discov- ery — Discovery of documents — Privilege –––– Wharf collapsed — Insurer’s owner began investigation, and litigation ensued — Documents prepared by en- gineering firm to investigate collapse were found to be covered by litigation privilege — Designer appealed — Appeal dismissed — Decision of trial judge met standard of reasonableness — Preparation for litigation started almost im- mediately after loss detected and dominant purpose for expert reports was to prepare for expected litigation. A wharf collapsed three years after it had been built. The owner’s insurer began an investigation, litigation ensued, and an expert report was commissioned re- garding the wharf. On a motion regarding privilege, it was found that documents relating to the collapse by the engineering firm were subject to litigation privi- lege. It was reasonable to contemplate subrogated litigation against third parties, and that the claim required verification as to the cause of the collapse, quantifi- cation of repair costs and mitigation of the losses. The designer of the wharf appealed. Held: The appeal was dismissed. Scanlan, J.A. (MacDonald, C.J.N.S., concurring): Whether the impugned docu- ments were for the dominant purpose of litigation was a question of fact, or at least mixed law and fact, for which the motions judge was entitled to deference and was to be reviewed on a reasonableness standard. Preparation for litigation started almost immediately after the loss was first de- tected and the dominant purpose for the expert reports was to prepare for ex- pected litigation. 174 CANADIAN CASES ON THE LAW OF INSURANCE 51 C.C.L.I. (5th) The concern that the insurer prepared an inadequate affidavit disclosing docu- ments was not warranted. An itemized document list was not necessary to re- solve the dominant purpose issue, and the issue had not been raised at trial. Per Beveridge, J.A. (dissenting): The appeal should be allowed. The trial judge erred in law in failing to properly understand and apply the test for litigation privilege. The trial judge was applying legal standard to uncontested facts, and the applica- ble standard was correctness. The fact that a subrogated claim was being contemplated immediately or practi- cally immediately was not sufficient to invoke privilege. The insurer needed to determine the cause of the collapse before they could proceed with a claim.