Max Ebrahim

This appeal addresses issues of jurisdiction simpliciter and forum non conveniens in a complex international insurance coverage dispute.

Vale and RSA initiated actions in Ontario seeking coverage for environmental liabilities, primarily in Ontario, after Travelers commenced a similar action in New York.

The motion judge largely found Ontario had jurisdiction and was not forum non conveniens, except for North River.

The Court of Appeal dismissed the insurers' appeals, affirming Ontario's jurisdiction over them, and allowed Vale's appeal, finding Ontario also had jurisdiction over North River.

The court emphasized that a comprehensive general liability insurer underwriting Ontario risks connects itself to Ontario for jurisdictional purposes, and that the "first-to-file" rule does not automatically determine the appropriate forum.

Vale Canada and its primary insurer, RSA, brought actions against numerous excess insurers for coverage of environmental remediation costs incurred primarily in Ontario.

Several foreign excess insurers brought motions challenging the jurisdiction of the Ontario court or seeking a stay based on forum non conveniens in favour of an action in New York.

The court found it had jurisdiction over all moving insurers except North River Insurance Company, concluding that the insurers were 'carrying on business' in Ontario by participating in a global insurance program for an Ontario-based company.

The court declined to stay the actions for forum non conveniens, finding Ontario to be the 'centre of gravity' for the dispute.

Claims by Vale Canada against two UK insurers were stayed pending arbitration.

Following successful applications for declarations that the respondent insurers had a duty to defend, the applicants sought costs on a full indemnity basis.

The insurers did not dispute the scale but argued the amounts claimed were disproportionate and unreasonable.

The court found the insurers' criticisms unhelpful as they did not disclose their own dockets.

The court awarded $50,000 all inclusive to each applicant.

The applicants, Distillery Parties and Rite-Air, sought declarations that their insurers, Temple Insurance Company and Aviva Insurance Company of Canada, had a duty to defend them under a Specific Project Wrap-Up Liability Insurance Policy.

The insurers denied the duty to defend, arguing that the alleged property damage was below the policy's $10,000 deductible, and thus no coverage was triggered.

The court held that the duty to defend is triggered by the mere possibility of a covered claim, regardless of whether the alleged damages exceed the deductible.

The court also rejected the insurers' request for an ex ante allocation of defence costs, stating that such allocation is premature and must be determined ex post facto based on actual legal expenses for exclusively uncovered claims.

The applicants, GFL Infrastructure Group Inc. and Ashland Construction Group Ltd., sought declarations that their insurer, Temple Insurance Company and Aviva Insurance Company of Canada, had a duty to defend them under a Specific Project Wrap-Up Liability Insurance Policy.

The underlying actions involved claims for property damage due to alleged construction defects in a condominium project.

The court granted the applications, finding that the pleadings, including extensive incorporated expert reports, revealed a "mere possibility" that the claims fell within the policy's coverage, thus triggering the duty to defend despite the insurer's arguments regarding faulty workmanship exclusions.