Gregory John Tucker

In a builders’ risk insurance appeal, the appellants sought coverage for replacing windows scratched during post-installation cleaning performed by a contractor.

The insurers relied on an exclusion for the cost of making good faulty workmanship.

The Court held that, in this context, the exclusion removes only the cost of redoing the faulty work itself, while resulting physical damage remains covered.

The Court also held that interpretation of this standard form contract was reviewable for correctness in the circumstances.

The appeals were allowed with costs and the trial judgment was restored.

The appellant's barge sank while chartered to the respondent.

The appellant's insurers paid out the loss and initiated a subrogated negligence action against the respondent.

The respondent sought to rely on a waiver of subrogation clause in the appellant's insurance policy, which explicitly extended coverage to charterers.

The Supreme Court of Canada held that the respondent, as a third-party beneficiary, could rely on the waiver of subrogation clause to defend against the action.

The Court applied the principled exception to the privity of contract doctrine, finding that the parties intended to extend the benefit to the charterer and that the charterer was performing the very activities contemplated in the contract.