Travelers Casualty and Surety Company of Canada & Ors v Sun Life Assurance Company of Canada (UK) Ltd & Anor

Travelers Casualty and Surety Company of Canada & Ors v Sun Life Assurance Company of Canada (UK) Ltd & Anor

Sun Life breached the warranty because at least one identified individual (Mr Blackburn) had knowledge of facts which a reasonable person in his position would realise could give rise to a claim exceeding the $25 million retention, namely the risk of a costly regulatory review. The warranty was therefore broken and insurers are not liable. Even if notification was late, relief from forfeiture would have been granted, but the breach of warranty is fatal to coverage.

Parties
Claimants: Travelers Casualty and Surety Company of Canada; Oak Dedicated Limited; American Home Assurance Company; Chubb Insurance Company of Canada; Liberty Mutual Insurance Company; Defendants: Sun Life Assurance Company of Canada (UK) Limited; Sun Life Financial Inc
Jurisdiction
England and Wales
Judgment Date
01 November 2006
Procedural Posture
Commercial Insurance Dispute / Final Judgment After Trial
Outcome
Claim allowed for insurers; counterclaim dismissed; declaration of non-liability for insurers under the policy.
Legal Topics
Breach of Warranty, Notification of Claims, Choice of Law, Interpretation of Insurance Contracts, Relief From Forfeiture
Insurance Law Contract Law Conflict of Laws Breach of Warranty Notification of Claims Choice of Law Interpretation of Insurance Contracts Relief From Forfeiture

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Parties

Travelers Casualty and Surety Company of Canada; Oak Dedicated Limited; American Home Assurance Company; Chubb Insurance Company of Canada; Liberty Mutual Insurance Company

Claimants

Sun Life Assurance Company of Canada (UK) Limited; Sun Life Financial Inc

Defendants

Procedural Posture

Commercial Insurance Dispute / Final Judgment After Trial

Legal Issues

  1. 1 Whether Sun Life breached the warranty in the insurance policy by failing to disclose circumstances that could give rise to a claim exceeding the retention; Whether Sun Life failed to comply with notification requirements under the policy; What law governs the policy; Whether relief from forfeiture should be granted if notification was late; What quantum of indemnity, if any, is payable

Ratio Decidendi

Sun Life breached the warranty because at least one identified individual (Mr Blackburn) had knowledge of facts which a reasonable person in his position would realise could give rise to a claim exceeding the $25 million retention, namely the risk of a costly regulatory review. The warranty was therefore broken and insurers are not liable. Even if notification was late, relief from forfeiture would have been granted, but the breach of warranty is fatal to coverage.

Court Disposition

Claim allowed for insurers; counterclaim dismissed; declaration of non-liability for insurers under the policy.

Orders

  • Insurers are not liable to indemnify Sun Life under the policy.
  • Counterclaim by Sun Life dismissed.