GCAN Insurance loses battle with Concord Pacific over duty to defend in leaky condo cases

Parkview Gardens, Concord Pacific, Vancouver, BC.

Parkview Tower, Concord Pacific, Vancouver, BC

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

GCAN Insurance Company v. Concord Pacific Group Inc. et al,

 

2007 BCSC 241

Date: 20070222
Docket: S063402
Registry:
Vancouver

Between:

GCAN Insurance Company

Petitioner

And

Concord Pacific Group Inc. formerly known as
Concord Pacific Developments Ltd.,
Parkview Towers (No. 1) Limited, and
Centreville Construction Ltd.

Respondents

-And –

Docket: S063274
Registry:
Vancouver

Between:

GCAN Insurance Company

Petitioner

And

Pacific Place Holdings Ltd.,
Governor’s Tower Limited, and
Centreville Construction Ltd.

Respondents

Before: The Honourable Madam Justice Nicole Garson

Reasons for Judgment

Counsel for Petitioner

G.S. Miller

Counsel for Respondents in both actions

A. De Jong and M. Lam

Date and Place of Hearing:

February 5, 6 and 7, 2007

 

Vancouver, B.C.

[1]                In these petitions, the insurer, GCAN Insurance Company (“GCAN”), applies for a declaration that it has no duty to defend the Respondents pursuant to policies of liability insurance with respect to claims against those Respondents brought in actions by two strata corporations for defective workmanship and resultant damage.

[2]                The petitions raise the issue of whether the particular wording of the policies extends coverage to the general contractor, construction manager, owner, and developer for damage caused to a building by its own faulty workmanship or that of its subcontractors.  The Petitioners contend that this court’s decision in Swagger Construction Ltd. v. ING Insurance Co. of Canada, 2005 BCSC 1269 is determinative of the issue, and is binding on me; consequently, they are entitled to a declaration that the insurer has no duty to defend the underlying actions. 

[3]                The Respondents argue that the Swagger decision is distinguishable.  They claim that although the insuring clause in the policies before me and the one in the policies before the court in Swagger are essentially the same, the exclusion clauses differ.  Based on the principle that it is the wording of the whole of the policy, and not the general principles of interpretation that govern, the Respondents argue that to find that the insuring clause does not cover damage to the building arising from the insured’s own faulty workmanship is inconsistent with the exclusion clauses.  The exclusion clauses in the policies at issue in this case would be redundant, according to the Respondents, if coverage for their own work is not covered by the insuring clause.

[4]                The Respondents also argue that the totality of the jurisprudence suggests that Swagger is an aberration that ought not to be followed since its reasoning departs from well-established lines of authority on the issue of the interpretation of the policies.  The Respondents argue that this case falls within the exceptions to the rule in  Re Hansard Spruce Mills Ltd., [1954] 4 D.L.R. 590 (B.C.S.C.), on the grounds that there was binding authority that was not considered by the chambers judge, and also on the ground that subsequent decisions have affected the validity of the judgment.

Facts

[5]                I rely on these facts for the purposes of determining the issues before me, but they are not findings of fact for any other purpose. This outline of the relevant facts is based on the pleadings as well as the affidavit evidence before me. The pleadings in the underlying actions and the affidavits provided by the Respondents are inconsistent in respect to the roles of the various Respondents in the construction of the two projects. Below, I will address the problem that arises from this inconsistency.

[6]                The claims against the Respondents in the underlying actions are brought by two strata corporations.  They are what has become known as “leaky condo” actions.  The underlying actions are styled as follows:  Owners Strata Plan LMS 990 v. Parkview Towers (No. 1) Limited et al., B.C.S.C. Action No. S035605, Vancouver Registry (the “Parkview Tower Action”), and Owners Strata Plan LMS 1725 v. Governor’s Tower Limited et al., B.C.S.C. Action No. S006008, Vancouver Registry (the “Governor’s Tower Action”) (collectively, the “underlying actions”).

[7]                The Parkview Tower Action is the subject of petition No. S063402 (the “Parkview Tower Petition”).  The Respondents in the Parkview Tower Petition, Parkview Towers (No. 1) Limited and Centreville Construction Ltd. are named as defendants in the Parkview Tower Action.

[8]                The Governor’s Tower Action is the subject of petition No. S063274 (the “Governor’s Tower Petition”).  The Respondents in the Governor’s Tower Petition, Pacific Place Holdings Ltd., Governor’s Tower Limited, and Centreville Construction Ltd., are named as defendants in the Governor’s Tower Action.

 

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