



COURT OF APPEAL FOR ONTARIO

CITATION: De Beers Canada Inc. v. Ootahpan Company Limited, 2014 ONCA 723

DATE: 20141021

DOCKET: C57122

Strathy C.J.O., Rouleau and Hourigan JJ.A.

BETWEEN

De Beers Canada Inc.

Plaintiff (Appellant)

and

Ootahpan Company Limited and 473464 Ontario Ltd.,
    d.b.a. Topax Export Packaging Systems and R.L.P. Machine & Steel
    Fabrication Inc. and AMEC Americas Limited

Defendants (Respondents)

and

Firstbrook, Cassie & Anderson Limited, Ace Ina Insurance
    and

Aviva
    Canada Inc.

Third Parties (Respondents)

Shawn K. Faguy, for the appellant

Christopher R. Dunn and Joanna F. Reznick, for the respondents
    Ootahpan Company Limited and R.L.P. Machine & Steel Fabrication Inc.

Heard: October 9, 2014

On appeal from the judgment of Justice J. Patrick Moore
    of the Superior Court of Justice, dated April 30, 2013.

ENDORSEMENT

[1]

The motion judge dismissed the appellants claims on summary judgment on
    alternate grounds: (a) the respondents could take advantage of the appellants
    insurance coverage as third party beneficiaries on the basis set out in
London
    Drugs Ltd. V. Kuehne & Nagel International Ltd.
,

[1992] 3 S.C.R. 299

and
Fraser River Pile & Dredge v. Can-Dive Services Ltd.
, [1999] 3 S.C.R.
    108; and (b) the contractual arrangements between the parties make it clear
    that the appellants policy of insurance was for the benefit of all those
    engaged in the appellants diamond mine project, on the principles expressed in
Commonwealth Construction Co. v. Imperial Oil Ltd. Et al.
, [1978] 1
    S.C.R. 317.

[2]

We dismiss the appeal. In so doing, we do not find it necessary to
    address the third party beneficiary issue as the appeal can be addressed as a
    matter of contract interpretation and on settled authority.

[3]

In interpreting the contractual arrangements between the parties,
    including their arrangements for insurance, we apply the principles of contract
    interpretation set out in
Bell Canada v. The Plan Group
, 2009 ONCA 548,
    96 O.R. (3d) 81 at paras. 37-38. These include: (a) interpreting the contract
    as a whole, with a view to giving meaning to all its terms; (b) determining the
    intentions of the parties in accordance with the words they have used; (c)
    having regard to the factual matrix; and (d) interpreting the contract in a
    manner that accords with sound commercial principles and good business sense.

[4]

The motion judges reasons demonstrate that he correctly applied these
    principles and his decision is entitled to deference: see
Sattva Capital
    Corp. v. Creston Moly Corp.
, 2014 SCC 53, 373 D.L.R. (4
th
) 393.

[5]

The contracts between the appellant and the respondents required the
    appellant to obtain insurance to protect it and its contractors and
    subcontractors against, among other things, risks of transportation in respect
    of property whilst being transported on land. The insurance was to include
    contractors and subcontractors as additional named insureds. It was also to
    include a waiver of subrogation against any entity connected with the project.

[6]

These provisions can only be understood as an undertaking to obtain
    insurance for the benefit of the appellants contractors and subcontractors and
    a waiver of claims in respect of losses covered by such insurance: see
St.
    Lawrence Cement Inc. v. Wakeham & Sons Ltd.
(1995), 26 O.R. (3d) 321
    (C.A.), leave to appeal to S.C.C. refused, [1995] S.C.C.A. No. 553. On their
    own, these provisions would be a defence to the claim advanced in this action,
    even if the appellant had not purchased the insurance.

[7]

To complete the circle, the policy of insurance procured by the
    appellant, which underlies the subrogated claim being pursued here, provided
    that the insurer would acquire no rights of recovery expressly waived by the
    insured prior to the loss. This gave full effect to the appellants contractual
    undertaking.

[8]

As the appellant has waived liability for losses covered by the policy
    of insurance, with the agreement of the insurer, the insurer has no right of
    subrogation.

[9]

We do not accept the submission of the appellant that other provisions
    of the contract between the appellant and the respondents show a contrary
    intention. We agree with the motion judge that those provisions do not override
    the waiver of subrogation: see
Fraser River
,

at para. 42. They are consistent with other
    responsibilities of the respondents, such as a duty of care in the performance
    of their work, a responsibility for liabilities not covered by the appellants
    insurance, and a responsibility for deductibles under the policies.

[10]

Reading
    the contract as a whole, with a view to giving effect to all its terms and
    seeking harmony between those terms, the insurance and waiver provisions can be
    read in a manner consistent with the provisions referred to by the appellant.
    We agree with the respondents that the appellants interpretation of those
    provisions is unreasonable because it would strip the insurance and waiver
    provisions of all meaning. The interpretation advanced by the respondents and
    accepted by the motion judge promotes business efficacy and certainty in an
    important commercial project involving multiple parties. It is intended to
    avoid the sort of expensive, time-consuming and commercially disruptive
    litigation that has occurred here.

[11]

For
    these reasons, the appeal is dismissed, with costs fixed at $14,000, all
    inclusive.

G.R. Strathy C.J.O.

Paul Rouleau J.A.

C.W. Hourigan J.A.


