Coronation Insurance Co. Ltd. v. Clearly Canadian Beverage Corp.

Coronation Insurance Co. Ltd. v. Clearly Canadian Beverage Corp.

The policy wording ('all Loss') must be construed to give effect to the clear contractual bargain; an insurer cannot compel allocation of settlement amounts based on the Knepper and Bailey 'principal benefit' factors where the policy contains no such provision; allocation is limited to the larger settlement rule...

Source-derived case information.

Citation
1999 BCCA 11
Parties
Plaintiff/appellant: Coronation Insurance Company Limited; Defendant/respondent: Clearly Canadian Beverage Corporation; Defendants/respondents: Directors and Officers (Douglas Mason, D. Bruce Horton, Glen D. Foreman, Stuart Ross, Michael Gustavson, Boyce Butler, Nigel Woodall, Elliot Ewing, Ron Kendrick)
Court
British Columbia Court of Appeal
Jurisdiction
Canada
Judgment Date
14 January 1999
Procedural Posture
Insurance – Directors' and Officers' Liability; Allocation Dispute / Appeal (court of Appeal for British Columbia) From Chambers Judge; Matter Remitted to Trial Court to Determine Extent Settlement Increased by Joinder
Outcome
Appeal dismissed; Chambers judge's approach upheld in limiting allocation to the 'larger settlement' rule; matter remitted to trial court to determine extent, if any, settlement was increased by joinder of CCB
Legal Topics
Allocation of Settlement, Directors' and Officers' Liability, Policy Construction, Larger Settlement Rule, Defense Costs Allocation, Reservation of Rights, Contribution Between Insurers, Indemnification Approval (company Act S.152)
Source Language
english
Insurance Law Contract Law Company Law Restitution/unjust Enrichment Civil Procedure Allocation of Settlement Directors' and Officers' Liability Policy Construction +5 more

Source-derived case record

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Parties

Coronation Insurance Company Limited

Plaintiff/appellant

Clearly Canadian Beverage Corporation

Defendant/respondent

Directors and Officers (Douglas Mason, D. Bruce Horton, Glen D. Foreman, Stuart Ross, Michael Gustavson, Boyce Butler, Nigel Woodall, Elliot Ewing, Ron Kendrick)

Defendants/respondents

Procedural Posture

Insurance – Directors' and Officers' Liability; Allocation Dispute / Appeal (court of Appeal for British Columbia) From Chambers Judge; Matter Remitted to Trial Court to Determine Extent Settlement Increased by Joinder

Legal Issues

  1. 1 Whether an insurer may claim reimbursement from a beneficiary (the corporation) who benefitted from indemnification of insureds
  2. 2 Whether settlement funds can be allocated on the Knepper and Bailey 'principal benefit' factors
  3. 3 Whether allocation should instead be limited to the 'larger settlement' rule (only to extent joinder increased settlement)

Ratio Decidendi

The policy wording ('all Loss') must be construed to give effect to the clear contractual bargain; an insurer cannot compel allocation of settlement amounts based on the Knepper and Bailey 'principal benefit' factors where the policy contains no such provision; allocation is limited to the larger settlement rule (only to the extent the settlement was increased by joinder of the corporation). The appeal is dismissed and the question of whether the settlement was enlarged by joinder is remitted to trial court.

Court Disposition

Appeal dismissed; Chambers judge's approach upheld in limiting allocation to the 'larger settlement' rule; matter remitted to trial court to determine extent, if any, settlement was increased by joinder of CCB

Orders

  • Appeal dismissed
  • Remit to trial court for determination of whether and to what extent the California settlement was increased by the joinder of Clearly Canadian Beverage Corporation and for allocation consistent with the 'larger settlement' rule