James H. MacMaster

The appellant mining company sued its insurers in the U.S. for coverage relating to environmental damage alleged to have occurred in Washington State.

The insurers commenced parallel proceedings in British Columbia seeking declarations that they were not obligated to defend or indemnify the appellant.

The appellant sought to stay the British Columbia proceedings on the basis that the U.S. District Court had already asserted jurisdiction.

The Supreme Court of Canada dismissed the appeal, holding that under s. 11 of British Columbia's Court Jurisdiction and Proceedings Transfer Act, a foreign court's prior assertion of jurisdiction is only one factor to consider in the forum non conveniens analysis, and the chambers judge did not err in refusing the stay.

The insured was covered by two insurance policies, one from Family Insurance and one from Lombard Canada, both containing 'other insurance' clauses declaring their coverage to be excess to any other insurance.

The trial judge found the clauses mutually repugnant and apportioned liability equally.

The Court of Appeal reversed, finding Family's policy primary based on surrounding circumstances.

The Supreme Court of Canada allowed the appeal, holding that where competing policies cannot be read in harmony, the conflicting clauses should be treated as mutually repugnant and inoperative.

Both policies provide primary coverage, and the loss is borne equally by each insurer until the lower policy limit is exhausted.