Neo J. Tuytel

The appellant sold his insurance agency and subsequently entered into a series of employment contracts with the purchaser.

The contracts contained a restrictive covenant preventing him from working in the insurance brokerage business within the 'Metropolitan City of Vancouver' for three years after leaving.

When the appellant left to work for another agency in Richmond, the respondent sued to enforce the covenant.

The Supreme Court of Canada held that the term 'Metropolitan City of Vancouver' was ambiguous and therefore prima facie unreasonable.

The Court ruled that notional severance cannot be applied to cure an ambiguous or unreasonable restrictive covenant in an employment contract.

Blue-pencil severance and rectification were also found inapplicable.

The appeal was allowed and the action dismissed.

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.