Marsh Canada Ltd. v. Grafton Connor Property Inc.

Marsh Canada Ltd. v. Grafton Connor Property Inc.

Endorsement 10 does not excuse pre-contractual material misrepresentations in the application; the sole director's knowledge (Hurst) was attributable to the corporate insured so the insured knew the misstatements; the insured acted recklessly in providing false material information, permitting Lloyd's to void the policy; Marsh’s liability for contributory negligence was reversed because the trial judge erred in formulating the broker's standard of care and Marsh was not 50% liable; policy construed as blanket coverage with a global limit; insurer failed to establish co-insurance reduction.

Citation
2017 NSCA 54
Parties
Appellant / Respondent on Cross Appeal: Marsh Canada Limited; Respondent / Appellant on Cross Appeal: Grafton Connor Property Incorporated (and Beaufort Investments Incorporated); Respondent / Appellant on Cross Appeal: Lloyd's of London Underwriters
Court
Nova Scotia Court of Appeal
Jurisdiction
Canada
Judgment Date
15 June 2017
Procedural Posture
Civil Appeal — Insurance Coverage and Professional Negligence / Nova Scotia Court of Appeal Judgment (appeal Heard Oct 12 13, 2016; Judgment June 15, 2017)
Outcome
Marsh appeal allowed in part (setting aside 50% contributory negligence finding against Marsh); Marsh appeal against Lloyd's dismissed; Lloyd's cross-appeal dismissed; Lloyd's Notice of Contention (insurer entitlement to void for insured recklessness) allowed; Grafton Connor cross-appeal dismissed; costs awarded as...
Legal Topics
Misrepresentation, Errors and Omissions Clause, Recklessness, Attribution of Corporate Knowledge, Co Insurance, Policy Interpretation (blanket V Scheduled), Broker Duty of Care, Causation, Costs
Source Language
English
Insurance Law Contract Law Professional Negligence Commercial Law Civil Procedure Misrepresentation Errors and Omissions Clause Recklessness +6 more

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Parties

Marsh Canada Limited

Appellant / Respondent on Cross Appeal

Grafton Connor Property Incorporated (and Beaufort Investments Incorporated)

Respondent / Appellant on Cross Appeal

Lloyd's of London Underwriters

Respondent / Appellant on Cross Appeal

Procedural Posture

Civil Appeal — Insurance Coverage and Professional Negligence / Nova Scotia Court of Appeal Judgment (appeal Heard Oct 12 13, 2016; Judgment June 15, 2017)

Legal Issues

  1. 1 Whether Endorsement 10 excuses pre-contractual unintentional misrepresentations and thus preserves coverage
  2. 2 Whether the actual knowledge of the sole director (Hurst) is attributable to the corporate insured (Beaufort/Grafton Connor)
  3. 3 Whether Marsh breached its duty of care as broker and the proper standard of care

Ratio Decidendi

Endorsement 10 does not excuse pre-contractual material misrepresentations in the application; the sole director's knowledge (Hurst) was attributable to the corporate insured so the insured knew the misstatements; the insured acted recklessly in providing false material information, permitting Lloyd's to void the policy; Marsh’s liability for contributory negligence was reversed because the trial judge erred in formulating the broker's standard of care and Marsh was not 50% liable; policy construed as blanket coverage with a global limit; insurer failed to establish co-insurance reduction.

Court Disposition

Marsh appeal allowed in part (setting aside 50% contributory negligence finding against Marsh); Marsh appeal against Lloyd's dismissed; Lloyd's cross-appeal dismissed; Lloyd's Notice of Contention (insurer entitlement to void for insured recklessness) allowed; Grafton Connor cross-appeal dismissed; costs awarded as...

Orders

  • Finding that Marsh was 50% contributorily negligent set aside
  • Policy voidable by Lloyd's for material misrepresentation and insured recklessness as to construction and sprinklering of the North End Pub