Boiler Inspection & Insurance Co. v. Abasand Oils Ltd.

Boiler Inspection & Insurance Co. v. Abasand Oils Ltd.

The parenthetical limitation in clause G ('nor for any prevention of business resulting from fire outside of the object, following an accident') must be read as qualifying the scope of 'accident' in clause A, so that 'caused solely by an accident' is limited to the purely explosive effects on the insured object; consequential fire resulting from that explosion is severed for purposes of clause A and falls within the exclusion — therefore no liability arises where prevention of business resulted concurrently from explosion and the resulting fire; accordingly the appeal is allowed and the judgment for the plaintiff is reversed.

Citation
[1948] SCR 315
Parties
Appellant / Defendant: Boiler Inspection And Insurance Company Of Canada; Respondent / Plaintiff: Abasand Oils Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
13 April 1948
Procedural Posture
Insurance Appeal / Appeal to the Supreme Court of Canada From the Supreme Court of Alberta Appellate Division
Outcome
Appeal allowed; action dismissed with costs.
Legal Topics
Policy Interpretation, Use and Occupancy Endorsement, Causation, Exclusions and Limitations, Waiver and Notice
Source Language
English
Insurance Law Contract Law Policy Interpretation Use and Occupancy Endorsement Causation Exclusions and Limitations Waiver and Notice

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Parties

Boiler Inspection And Insurance Company Of Canada

Appellant / Defendant

Abasand Oils Limited

Respondent / Plaintiff

Procedural Posture

Insurance Appeal / Appeal to the Supreme Court of Canada From the Supreme Court of Alberta Appellate Division

Legal Issues

  1. 1 Whether the phrase 'caused solely by an accident' excludes liability where an explosion to an insured boiler concurrently causes a fire that prevents business
  2. 2 Whether the parenthetical limitation in clause G ('fire outside of the object, following an accident') operates to sever fire consequences from the insured 'accident' for purposes of coverage
  3. 3 Whether the binder issued and subsequent conduct created or varied the contract and whether notice requirements were waived

Ratio Decidendi

The parenthetical limitation in clause G ('nor for any prevention of business resulting from fire outside of the object, following an accident') must be read as qualifying the scope of 'accident' in clause A, so that 'caused solely by an accident' is limited to the purely explosive effects on the insured object; consequential fire resulting from that explosion is severed for purposes of clause A and falls within the exclusion — therefore no liability arises where prevention of business resulted concurrently from explosion and the resulting fire; accordingly the appeal is allowed and the judgment for the plaintiff is reversed.

Court Disposition

Appeal allowed; action dismissed with costs.

Orders

  • Appeal allowed with costs
  • Action dismissed