Guarantee Co. of North America et al. v. Acqua-Land Exploration Ltd.

Guarantee Co. of North America et al. v. Acqua-Land Exploration Ltd.

Majority held Aqua-Land did not establish an insurable interest in the tower at the time of policy or loss: the agreement contemplated delivery and payment by Marine Drilling (a separate legal entity), the $30,000 was an advance on a share subscription or an unsecured payment and did not create a legal or equitable interest in the tower enforceable against the builder, and even if some interest existed it was not the kind of property interest insured under the policy; therefore insurers were not liable.

Citation
[1966] SCR 133
Parties
Defendant Appellant: Guarantee Co. of North America; Defendant Appellant: Providence Washington Insurance Company; Defendant Appellant: Canada Security Assurance Company; Defendant Appellant: Federal Insurance Company; Defendant Appellant: Western Assurance Company; Defendant Appellant: Home Insurance Company; Plaintiff Respondent: Aqua-Land Exploration Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
9 November 1965
Procedural Posture
Insurance Dispute / Appeal to Supreme Court of Canada (on Appeal From Court of Appeal for Ontario)
Outcome
Appeal allowed
Legal Topics
Insurable Interest, Specific Performance, Part Performance, Contract Construction, Corporate Separate Legal Personality
Source Language
English
Insurance Law Contract Equity Corporate Law Insurable Interest Specific Performance Part Performance Contract Construction +1 more

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Parties

Guarantee Co. of North America

Defendant Appellant

Providence Washington Insurance Company

Defendant Appellant

Canada Security Assurance Company

Defendant Appellant

Federal Insurance Company

Defendant Appellant

Western Assurance Company

Defendant Appellant

Home Insurance Company

Defendant Appellant

Aqua-Land Exploration Limited

Plaintiff Respondent

Procedural Posture

Insurance Dispute / Appeal to Supreme Court of Canada (on Appeal From Court of Appeal for Ontario)

Legal Issues

  1. 1 Whether Aqua-Land had an insurable interest in the drilling tower at the time the policy was effected and at the time of loss
  2. 2 Whether the $30,000 advance created a purchaser’s or equitable interest enforceable in equity or was merely an unsecured loan/advance on subscription
  3. 3 Whether any interest claimed was the kind insured by the policy as written

Ratio Decidendi

Majority held Aqua-Land did not establish an insurable interest in the tower at the time of policy or loss: the agreement contemplated delivery and payment by Marine Drilling (a separate legal entity), the $30,000 was an advance on a share subscription or an unsecured payment and did not create a legal or equitable interest in the tower enforceable against the builder, and even if some interest existed it was not the kind of property interest insured under the policy; therefore insurers were not liable.

Court Disposition

Appeal allowed

Orders

  • Judgments of the Court of Appeal and the trial judge set aside
  • Action dismissed