Reid Crowther v. Simcoe & Erie (1993), 83 Man.R.(2d) 81 (SCC);
36 W.A.C. 81
MLB headnote and full text
[French language version follows English language version]
[La version française vient à la suite de la version anglaise]
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Simcoe & Erie General Insurance Company (appellant) v. Reid Crowther & Partners Limited (respondent)
(22372)
Indexed As: Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co.
Supreme Court of Canada
La Forest, Sopinka, Gonthier, Cory and McLachlin, JJ.A.
January 21, 1993.
Summary:
An engineering firm negligently supervised installation of water and sewer lines in a municipality and was held liable for remedial work. The firm claimed the damages from its insurer under a “claims-made” policy. One claim was settled, but a second claim was made for further damage discovered just before the policy expired. The insurer denied liability on the ground that the claim was not made within the policy period.
The Manitoba Court of Queen’s Bench dismissed the firm’s action in a judgment reported [1990] I.L.R. 1-2642; 66 Man.R.(2d) 142; 45 C.C.L.I. 172. The firm appealed.
The Manitoba Court of Appeal allowed the appeal in a judgment reported [1990] I.L.R. 1-2703; 70 Man.R.(2d) 36; 77 D.L.R.(4th) 243; 47 C.C.L.I. 309 (supplementary judgment on interest reported 73 Man.R.(2d) 128). The insurer appealed.
The Supreme Court of Canada dismissed the appeal.
Insurance – Topic 7628
Professional liability insurance – Scope of coverage – Policy period – Claims made – Meaning of – The Supreme Court of Canada discussed and distinguished claims-made or discovery policies and occurrence policies and their hybrids, including the origins and purpose of claims-made policies and insurers’ practices regarding them – See paragraphs 9 to 27.
Insurance – Topic 7628
Professional liability insurance – Scope of coverage – Policy period – Claims made – Meaning of – An engineering consulting firm negligently supervised installation of a municipal water and sewerage system – The firm was insured under a “claims-made” policy, providing indemnity when a claim was made against the insured within the policy period, regardless of when the loss occurred or was discovered – The insurer settled a claim during the policy period – Then, just before the policy expired the municipality showed the firm additional damage, which the firm treated as a demand for compensation and so informed the insurer just after the policy expired – The Supreme Court of Canada held that the additional damage was covered as part of the original claim – See paragraphs 1 to 40.
Insurance – Topic 7628
Professional liability insurance – Scope of coverage – Policy period – Claims made – Meaning of – An engineering consulting firm negligently supervised installation of a municipal water and sewerage system – The firm was insured under a “claims-made” policy, providing indemnity when a claim was made against the insured within the policy period, regardless of when the loss occurred or was discovered – The insurer settled a claim during the policy period – Then, just before the policy expired the municipality showed the firm additional damage, which the firm treated as a demand for compensation and so informed the insurer just after the policy expired – The Supreme Court of Canada held that the municipality’s showing of the additional damage to the firm constituted a claim within the policy period – See paragraphs 41 to 55.
Cases Noticed:
Brissette Estate v. Westbury Life Insurance Co., [1992] 3 S.C.R. 87; 142 N.R. 104; 58 O.A.C. 10, consd. [para. 32].
Wigle v. Allstate Insurance Co. of Canada (1984), 49 O.R.(2d) 101, leave to appeal refused [1985] 1 S.C.R. v; 59 N.R. 73, consd. [para. 38].
Continental Casualty Co. v. Enco Associates Inc., 238 N.W. 2d 198, consd. [para. 42].
Williamson & Vollmer Engineering Inc. v. Sequoia Insurance Co., 134 Cal. Rptr. 427, consd. [para. 42].
San Pedro Properties Inc. v. Sayre & Toso Inc., 21 Cal. Rptr. 844, consd. [para. 42].
Hoyt v. St Paul Fire and Marine Insurance Co., 607 F.2d 864, consd. [para. 42].
Phoenix Insurance Co. v. Sukut Construction Co., 186 Cal. Rptr. 513, consd. [para. 42].
Mt. Hawley Insurance Co. v. Federal Savings & Loan Insurance Corp., 695 F.Supp. 469, consd. [para. 42].
Jensen v. Snellings, 841 F.2d 600, consd. [para. 42].
Safeco Title Insurance Co. v. Gannon, 774 P.2d 30, consd. [para. 42].
Stevenson v. Simcoe & Erie General Insurance Co., [1981] I.L.R. 1-1434, dist. [paras. 42, 53].
St. Paul Fire and Marine Insurance Co. v. Guardian Insurance Co. of Canada (1983), 2 O.A.C. 109; 2 C.C.L.I. 275, dist. [paras. 42, 50, 54].
Peacock v. Roberts (1985), 15 C.C.L.I. 36, affd. (1990), 42 C.C.L.I. 196, consd. [paras. 42, 50].
McNish & McNish v. American Home Assurance Co. (1989), 39 C.C.L.I. 200, affd. 5 C.C.L.I.(2d) 222, consd. [para. 42].
Defrancesco v. Stivala, [1989] I.L.R. 1-2524, revd. [1992] O.J. No. 2116, consd. [paras. 42, 53, 54].
J.G. Link & Co. v. Continental Casualty Co. (1972), 470 F.2d 1133; 414 U.S. 829, consd. [para. 46].
Continental Casualty Co. v. Robert McLellan & Co., [1973] 5 W.W.R. 475, consd. [para. 48].
Authors and Works Noticed:
Brown, Craig and Julio Menezes, Insurance Law in Canada (2nd Ed. 1991), pp. 123-131 [para. 32].
Davis, Thomas R.M., The New IBC Standard Form Commercial General (Claims-Made) Liability Policy (1987), 5 Can. J. Ins. L. 77, 78 [para. 25].
Dumont, Jeanine, What Every Professional Should Know Before Buying Claims-Made Liability Insurance (1985), 35 Fed. Ins. Couns. Q. 363 [para. 42].
Hilliker, Gordon, Liability Insurance Law in Canada (1991), pp. 136-137 [para. 42].
Long, Rowland H., The Law of Liability Insurance (1992), vol. 2, pp. 12C-54 [para. 42].
Parker, John K., The Untimely Demise of the “Claims-Made” Insurance Form? A Critique of Stine V. Continental Casualty Company, [1983] Det. Coll. L.R. 25, 27 [para. 11].
Pierce, Lee Roy, Jr., Professional Liability Insurance: The Claims-Made and Reported Trap (1991), 19 W. St. U.L. Rev. 165, 171 [para. 24].
Counsel:
David I. Marr, for the appellant;
Leonard M. French and Dennis Ringstrom, for the respondent.
Solicitors of Record:
Campbell, Marr, Winnipeg, Manitoba, for the appellant;
Fillmore and Riley, Winnipeg, Manitoba, for the respondent.
This case was heard on October 13, 1992, at Ottawa, Ontario, before La Forest, Sopinka, Gonthier, Cory and McLachlin, JJ.A., of the Supreme Court of Canada.
On January 21, 1993, McLachlin, J., delivered the following judgment for the Court in both official languages:
