Acciona Infrastructure Canada Inc. et al. v. Allianz Global Risks US Insurance Co. et al.,

Acciona Infrastructure v. Allianz Global (2015), 376 B.C.A.C. 80 (CA);

    646 W.A.C. 80

MLB headnote and full text

Temp. Cite: [2015] B.C.A.C. TBEd. AU.006

Acciona Infrastructure Canada Inc. and Lark Projects (2004) Ltd., collectively doing business as Acciona Lark Joint Venture (respondents/appellants on cross-appeal/plaintiffs) v. Allianz Global Risks US Insurance Company / Compagnie D'Assurance Allianz Risques Mondiaux E.-U., Zurich Insurance Company Ltd. / Zurich Compagnie D'Assurances SA, Temple Insurance Company / La Compagnie D'Assurance Temple, GCAN Insurance Company (appellants/respondents on cross-appeal/defendants)

(CA42166; 2015 BCCA 347)

Indexed As: Acciona Infrastructure Canada Inc. et al. v. Allianz Global Risks US Insurance Co. et al.

British Columbia Court of Appeal

Neilson, Garson and Willcock, JJ.A.

August 5, 2015.

Summary:

The plaintiffs, Acciona Infrastructure Canada Inc. and Lark Projects (2004) Ltd., collectively doing business as Acciona Lark Joint Venture, were the design-build contractors for construction of a new 500 bed patient care facility at the Royal Jubilee Hospital in Victoria, British Columbia. The plaintiffs commenced an action against the defendant insurers for recovery under a Course of Construction Insurance Policy for losses alleged to have occurred during the construction of the project. Those losses arose from costs incurred by the plaintiffs to repair concrete slabs installed in the facility by a subcontractor, which were unsatisfactory.

The British Columbia Supreme Court, in a decision reported [2014] B.C.T.C. Uned. 1568, allowed the action, finding that the policy covered a portion of the losses suffered by the plaintiffs and their losses were not excluded by the operation of an exclusion clause. The defendant insurers appealed arguing that none of the claim was covered. They argued that the trial judge erred in finding that the damage to the concrete slabs constituted "direct physical loss of or damage to the property insured" within the meaning of the policy, and that the damage was not excluded by a defects exclusion clause in the policy. The plaintiffs cross-appealed, arguing that the entire claim was covered. The plaintiffs claimed that the trial judge erred in holding that the portion of the claim for additional subcontractor costs was not covered by the policy. The defendant insurers applied for a stay of execution of the trial judgment pending appeal.

The British Columbia Court of Appeal, in a decision reported 365 B.C.A.C. 301; 627 W.A.C. 301, per Harris, J.A., dismissed the application for a stay of execution pending appeal.

The British Columbia Court of Appeal dismissed the appeal and the cross-appeal and affirmed the trial judge's order.

Insurance - Topic 1851

The insurance contract - Interpretation of contract - General - See paragraphs 29 to 35.

Insurance - Topic 6583.1

Multi-peril property insurance - Contractor's or builder's policies - Extent of coverage - Extra expenses (incl. increased subcontractor costs) - See paragraphs 22 to 25 and 78 to 95.

Insurance - Topic 6583.2

Multi-peril property insurance - Contractor's or builder's policies - Extent of coverage - All risks of direct physical loss of or damage to the property insured - See paragraphs 12 to 16 and 26 to 56.

Insurance - Topic 6592

Multi-peril property insurance - Contractor's or builder's policies - Exclusions - Faulty work, materials or design - See paragraphs 17 to 21 and 57 to 77.

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge (incl. contractual interpretation) - See paragraphs 29 to 35.

Cases Noticed:

Creston Moly Corp. v. Sattva Capital Corp. (2014), 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 30].

BDO Dunwoody Ltd. v. Bell Canada, [2015] O.A.C. Uned. 16; 2015 ONCA 33, refd to. [para. 30].

Wesbell Networks Inc. v. Bell Canada - see BDO Dunwoody Ltd. v. Bell Canada.

Kassburg v. Sun Life Assurance Co. of Canada (2014), 328 O.A.C. 244; 2014 ONCA 922, refd to. [para. 30].

De Beers Canada Inc. v. Ootahpan Co. et al., [2014] O.A.C. Uned. 636; 2014 ONCA 723, refd to. [para. 30].

Precision Plating Ltd. et al. v. AXA Pacific Insurance Co. et al. (2015), 374 B.C.A.C. 37; 642 W.A.C. 37; 2015 BCCA 277, refd to. [para. 31].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 32].

Brissette v. Westbury Life Insurance Co., [1992] 3 S.C.R. 87; 142 N.R. 104; 58 O.A.C. 10, refd to. [para. 32].

Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252; 147 N.R. 44; 83 Man.R.(2d) 81; 36 W.A.C. 81, refd to. [para. 32].

Scalera v. Lloyd's of London, [2000] 1 S.C.R. 551; 253 N.R. 1; 135 B.C.A.C. 161; 221 W.A.C. 161; 2000 SCC 24, refd to. [para. 32].

Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, [2010] 2 S.C.R. 245; 406 N.R. 182; 293 B.C.A.C. 1; 496 W.A.C. 1; 2010 SCC 33, refd to. [para. 32].

Pilkington United Kingdom Ltd. v. CGU Insurance plc, [2004] EWCA Civ. 23, dist. [para. 36].

Skanska Construction U.K. Ltd. v. Egger (Barony) Ltd., [2002] EWCA Civ. 310, dist. [para. 36].

Transfield Constructions v. GIO Australia, [1996] NSWCA 538, dist. [para. 36].

Eljer Manufacturing Inc. v. Liberty Mutual Insurance Co. (1992), 972 F.2d 805 (7th Cir.), refd to. [para. 47].

Promet Engineering (Singapore) Pty. Ltd. v. Sturge et al., [1997] 2 Lloyd's Rep. 146 (C.A.), refd to. [para. 49].

Bulldog Bag Ltd. v. AXA Pacific Insurance Co. (2011), 303 B.C.A.C. 220; 512 W.A.C. 220; 2011 BCCA 178, refd to. [para. 53].

Trinity Industries Inc. v. Insurance Company of North America (1990), 916 F.2d 267 (5th Cir.), refd to. [para. 54].

North American Shipbuilding Inc. v. Southern Marine and Aviation Underwriting (1996), 930 S.W.2d 829 (Tex. Ct. App.), refd to. [para. 54].

Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. et al. (2015), 599 A.R. 363; 643 W.A.C. 363; 2015 ABCA 121, refd to. [para. 58].

PCL Constructors Canada Inc. v. Allianz Global Risks US Insurance Co., 2014 ONSC 7480, refd to. [para. 63].

Cementation Piling Ltd. v. Commercial Union Assurance Co., [1995] 1 Lloyd's Rep. 97, refd to. [para. 68].

Vanguard Realty Ltd. v. Royal and SunAlliance Insurance Co. of Canada, [2002] B.C.T.C. 1426; 2002 BCSC 1426, refd to. [para. 83].

Filkow v. Gore Mutual Insurance Co. (1965), 55 D.L.R.(2d) 258 (Man. C.A.), refd to. [para. 83].

Ford Motor Co. of Canada Ltd. v. Prudential Assurance Co. et al., [1958] O.W.N. 295; 14 D.L.R.(2d) 7 (C.A.), affd. [1959] S.C.R. 539, refd to. [para. 83].

Zurich American Insurance Co. v. Keating Building Corp. (2007), 513 F. Supp.2d 55 (N.J.), refd to. [para. 83].

J.K. Expressions Jewellery Inc. v. Gerling Global General Insurance Co. et al. (2002), 164 B.C.A.C. 135; 268 W.A.C. 135; 2002 BCCA 86, refd to. [para. 93].

Authors and Works Noticed:

Tucker, Gregory J., Not My Fault; Current Issues Under the Design and Workmanship Exclusion (2014), pp. 26 to 27 [para. 75]; 27 to 28 [para. 72].

Counsel:

R.B. Lindsay, Q.C., and S.W.K. Urquhart, for the appellants;

P.G. Foy, Q.C., and D.L. Miachika, for the respondents.

This appeal was heard on May 7, 2015, in Vancouver, B.C., before Neilson, Garson and Willcock, JJ.A., of the British Columbia Court of Appeal. The following decision was delivered for the court by Willcock, J.A., on August 5, 2015.