The appellant manufacturer sought coverage under its comprehensive general liability insurance policy for costs incurred to remedy a defective transformer incorporated into its product.
The motions judge held the loss was caused by an 'occurrence' (defined as an accident) but applied an exclusion clause to part of the claim.
On appeal and cross-appeal, the Court of Appeal held that defective manufacture does not constitute an 'accident' or 'occurrence' under the policy.
The cross-appeal was allowed, and a declaration was issued that the policy did not apply to the claim.
