Century Indemnity Co. v. Northwestern Utilities Ltd.

Century Indemnity Co. v. Northwestern Utilities Ltd.

The Court held that the explosion was an accident arising out of the respondent's operations in handling and distribution of natural gas and thus within the express coverage of the policy; further, the respondent's negligent use of the defective service pipe during the policy period constituted negligence sufficient to fix liability under the policy even though the original defect arose earlier.

Citation
[1935] SCR 291
Parties
Appellant (insurer): Century Indemnity Company; Respondent (gas Company/insured): Northwestern Utilities Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
15 April 1935
Procedural Posture
Civil Appeal (insurance Indemnity) / On Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta
Outcome
Appeal dismissed with costs; judgment for respondent affirmed.
Legal Topics
Policy Interpretation, Coverage of Operations, Negligent Installation Vs Operation, Duty to Prevent Escape of Dangerous Substances, Estoppel by Conduct
Source Language
English
Insurance Tort (negligence) Contract (policy Interpretation) Property Policy Interpretation Coverage of Operations Negligent Installation Vs Operation Duty to Prevent Escape of Dangerous Substances +1 more

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Parties

Century Indemnity Company

Appellant (insurer)

Northwestern Utilities Limited

Respondent (gas Company/insured)

Procedural Posture

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

Legal Issues

  1. 1 Whether liability for damage from escaped gas was covered by the policy as arising out of the assured's operations in handling and distributing natural gas
  2. 2 Whether negligent installation of the service pipe years before the policy period constituted an excluded act of construction rather than an operation covered by the policy
  3. 3 Whether negligence that predated the policy period defeats coverage when the negligent instrumentality is used negligently during the policy period

Ratio Decidendi

The Court held that the explosion was an accident arising out of the respondent's operations in handling and distribution of natural gas and thus within the express coverage of the policy; further, the respondent's negligent use of the defective service pipe during the policy period constituted negligence sufficient to fix liability under the policy even though the original defect arose earlier.

Court Disposition

Appeal dismissed with costs; judgment for respondent affirmed.

Orders

  • Judgment for respondent in the amount of $47,749.96 affirmed
  • Appeal dismissed with costs