Commonwealth Construction Co. Ltd. v. Imperial Oil Ltd. et al.

Commonwealth Construction Co. Ltd. v. Imperial Oil Ltd. et al.

Commonwealth, as a named insured under the multi‑peril/builders' risk policy and by virtue of the contractual and practical relationships on the construction site, had an insurable interest in the entire works before the loss and the policy's trustee and subrogation clauses precluded insurers from subrogating against members of the insured group; therefore insurers had no right of subrogation against Commonwealth.

Citation
[1978] 1 SCR 317
Parties
Defendant Appellant: Commonwealth Construction Co. Ltd.; Plaintiff Respondent: Imperial Oil Limited; Plaintiff Respondent: Wellman-Lord (Alberta) Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
19 October 1976
Procedural Posture
Civil Appeal (insurance/property) / Appeal to the Supreme Court of Canada From the Supreme Court of Alberta, Appellate Division
Outcome
Appeal allowed; judgment of Alberta Appellate Division set aside; trial judgment restored.
Legal Topics
Builders' Risk Policy, Insurable Interest, Subrogation Rights, Named Insured, Trustee Clause, Renunciation of Subrogation
Source Language
English
Insurance Property Law Contract Law Construction Law Subrogation Builders' Risk Policy Insurable Interest Subrogation Rights +3 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 3 Authorities cited 17 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Commonwealth Construction Co. Ltd.

Defendant Appellant

Imperial Oil Limited

Plaintiff Respondent

Wellman-Lord (Alberta) Ltd.

Plaintiff Respondent

Procedural Posture

Civil Appeal (insurance/property) / Appeal to the Supreme Court of Canada From the Supreme Court of Alberta, Appellate Division

Legal Issues

  1. 1 Whether a subcontractor named as an insured under a builders' risk/multi‑peril policy has an insurable interest in the entire works prior to loss
  2. 2 Whether insurers were entitled to subrogation against the subcontractor given the policy wording and contractual arrangements

Ratio Decidendi

Commonwealth, as a named insured under the multi‑peril/builders' risk policy and by virtue of the contractual and practical relationships on the construction site, had an insurable interest in the entire works before the loss and the policy's trustee and subrogation clauses precluded insurers from subrogating against members of the insured group; therefore insurers had no right of subrogation against Commonwealth.

Court Disposition

Appeal allowed; judgment of Alberta Appellate Division set aside; trial judgment restored.

Orders

  • Appeal allowed
  • Judgment of the Supreme Court of Alberta, Appellate Division set aside