Century Insurance Co. of Canada et al. v. Case Existological Laboratories Ltd.

Century Insurance Co. of Canada et al. v. Case Existological Laboratories Ltd.

Where a crew member's negligent omission causes seawater to enter a vessel in a manner that creates a foreseeable marine risk leading to sinking, the proximate cause is a fortuitous accidencas 'peril of the seas' under the policy; negligence, unseaworthiness allegations and the particular warranty did not bar recovery and disclosure was adequate via the surveyor's report.

Citation
[1983] 2 SCR 47
Parties
Appellant Insurer: Century Insurance Company of Canada; Appellant Insurer: Commercial Union Assurance Company Ltd.; Appellant Insurer: Hartford Fire Insurance Company; Appellant Insurer: Norwich Union Fire Insurance Company Ltd.; Appellant Insurer: Phoenix Assurance Company Ltd.; Appellant Insurer: Prudential Assurance Company Ltd.; Appellant Insurer: Switzerland General Insurance Company Ltd.; Appellant Insurer: Insurance Corporation of British Columbia; Respondent Insured: Case Existological Laboratories Ltd.; Defendant Insurer: Foremost Insurance Company; Defendant Broker: R. Douglas Agencies (1971) Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
27 September 1983
Procedural Posture
Marine Insurance Appeal / Appeal to Supreme Court of Canada From British Columbia Court of Appeal After Trial Judgment Dismissing Insured's Claim
Outcome
Appeal dismissed
Legal Topics
Perils of the Sea, Proximate Cause, Negligence of Crew, Non Disclosure, Warranty Vs Condition, Seaworthiness
Source Language
English
Insurance Marine Insurance Contract Law Perils of the Sea Proximate Cause Negligence of Crew Non Disclosure Warranty Vs Condition +1 more

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Parties

Century Insurance Company of Canada

Appellant Insurer

Commercial Union Assurance Company Ltd.

Appellant Insurer

Hartford Fire Insurance Company

Appellant Insurer

Norwich Union Fire Insurance Company Ltd.

Appellant Insurer

Phoenix Assurance Company Ltd.

Appellant Insurer

Prudential Assurance Company Ltd.

Appellant Insurer

Switzerland General Insurance Company Ltd.

Appellant Insurer

Insurance Corporation of British Columbia

Appellant Insurer

Case Existological Laboratories Ltd.

Respondent Insured

Foremost Insurance Company

Defendant Insurer

R. Douglas Agencies (1971) Ltd.

Defendant Broker

Procedural Posture

Marine Insurance Appeal / Appeal to Supreme Court of Canada From British Columbia Court of Appeal After Trial Judgment Dismissing Insured's Claim

Legal Issues

  1. 1 Whether sinking caused by crew negligence constitutes a 'peril of the seas' under the policy
  2. 2 Whether negligence or unseaworthiness with privity of insured bars recovery
  3. 3 Whether clause beginning 'WARRANTED that' is a suspensive condition or true warranty

Ratio Decidendi

Where a crew member's negligent omission causes seawater to enter a vessel in a manner that creates a foreseeable marine risk leading to sinking, the proximate cause is a fortuitous accidencas 'peril of the seas' under the policy; negligence, unseaworthiness allegations and the particular warranty did not bar recovery and disclosure was adequate via the surveyor's report.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed with costs