Feuiltault Solution Systems Inc. v. Zurich Canada

Feuiltault Solution Systems Inc. v. Zurich Canada

Where a policy expressly excludes non-fortuitous losses (eg. inherent vice, insufficient/unsuitable packing), the insurer bears the burden of proving the exclusion; the insured need only show the goods were sound when the insurance attached and were damaged while insurance was in force. Applying that rule, Zurich proved Clause 4.3 (insufficiency/unsuitability of packing) caused the loss (moisture‑laden pressure treated wood and lack of protective wrapping), so exclusion applied and there was no coverage.

Citation
2012 FCA 215
Parties
Appellant: Feuiltault Solution Systems Inc.; Respondent: Zurich Canada
Court
Federal Court of Appeal
Jurisdiction
Canada
Judgment Date
30 July 2012
Procedural Posture
Appeal From Federal Court (civil) Marine Insurance / Judgment on Appeal
Outcome
Appeal dismissed with costs.
Legal Topics
All Risks Policy, Fortuity, Inherent Vice, Exclusion Insufficiency or Unsuitability of Packing, Burden of Proof/onus, Standard of Review
Source Language
English
Marine Insurance Insurance Law Contract Law Admiralty and Maritime Law All Risks Policy Fortuity Inherent Vice Exclusion Insufficiency or Unsuitability of Packing +2 more

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Parties

Feuiltault Solution Systems Inc.

Appellant

Zurich Canada

Respondent

Procedural Posture

Appeal From Federal Court (civil) Marine Insurance / Judgment on Appeal

Legal Issues

  1. 1 Whether the insured bears the onus of proving the loss was fortuitous under an all-risks policy
  2. 2 Whether the Clause 4.3 exclusion for insufficiency or unsuitability of packing applies to deny coverage
  3. 3 Proper interpretation of 'inherent vice' and the allocation of burden to prove exclusions

Ratio Decidendi

Where a policy expressly excludes non-fortuitous losses (eg. inherent vice, insufficient/unsuitable packing), the insurer bears the burden of proving the exclusion; the insured need only show the goods were sound when the insurance attached and were damaged while insurance was in force. Applying that rule, Zurich proved Clause 4.3 (insufficiency/unsuitability of packing) caused the loss (moisture‑laden pressure treated wood and lack of protective wrapping), so exclusion applied and there was no coverage.

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs to the respondent (Zurich Canada).