Hyperlawhypertext legal database Century Insurance Co. of Canada et al. v. Case Existological Laboratories Ltd. [1983] 2 SCR 47

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Century Insurance Co. of Canada et al. v. Case Existological Laboratories Ltd.

[1983] 2 SCR 47 Court SCC Decision date 1983-09-27 Docket 17103 English

PartiesCentury Insurance Company of Canada, Commercial Union Assurance Company Ltd., Hartford Fire Insurance Company, Norwich Union Fire Insurance Company Ltd., Phoenix Assurance Company Ltd., Prudential Assurance Company Ltd., Switzerland General Insurance Company Ltd., Insurance Corporation of British Columbia (Defendants) Appellants·Case Existological Laboratories Ltd. (Plaintiff) Respondent

Counsel (4)
David Brander Smith, for the appellants.
David Roberts, Q.C., and Peter Lowry, for the respondent.
Solicitors for the appellants: Bull, Housser & Tupper, Vancouver.
Solicitors for the respondent: Campney & Murphy, Vancouver.

Judges Ritchie, Roland Almon; Dickson, Robert George Brian; McIntyre, William Rogers; Chouinard, Julien; Wilson, Bertha

Delivered by Judgment of the Court

On appeal from British Columbia

Subjects Insurance

Contents

Judgment of the Court

The judgment of the Court was delivered by

The Plaintiff is a company of naval architects and marine engineers. In 1974 it entered into an agreement with an oceanographic institute affiliated with the University System of Georgia to construct and supply floating modules to be used in underwater studies that were to be conducted in Patricia Bay. The study was known as the CEPEX Project.
Bamcell II was launched during August 1974. The hull was constructed of steel. It consisted of two compartments forward which were watertight, and four others, two midships, the bottoms of which were not intact, and two aft, which had no bottoms. The level of the water in these four compartments was maintained by air pressure. The pressure of the air in the four compartments was controlled and regulated by a series of valves. When the air pressure in the four compartments was reduced, the stern lowered in the water. When the air pressure in the four compartments was increased, the stern raised to a level position. The level of the water in the four compartments rose and fell accordingly. This permitted Bamcell II to be used for the purpose of deploying and recovering the modules which the Plaintiff was required to supply for the CEPEX Project.
Acting as the Plaintiffs broker, R. Douglas Agencies (1971) Ltd. sought to place insurance coverage on Bamcell II and offered the risk to the defendant underwriters. Bamcell II was surveyed by Richard H. Meadows & Associates Ltd., marine surveyors, on August 30, 1974 and the attending surveyor (Mr. Meadows) prepared and issued a report. The risk was accepted by Coast on behalf of the underwriters it represented and by ICBC on September 20, 1974.
Coast issued its Policy September 30, 1974. It was subscribed to by ICBC. The coverage was effective for one year as of September 20, 1974.

[Page 50]

On March 8th, 1975, whilst Bamcell II was anchored in Patricia Bay, the Plaintiffs employee Mr. Richard Powell who was accompanied by James Halldorsen, a new employee, boarded Bamcell II. In order to lower the stern, Mr. Powell opened the valves controlling the pressure of air in the four aft compartments, allowing air to escape. He negligently permitted a valve or valves to remain open so that the air in the compartments was displaced by water in sufficient quantity that Bamcell II completely submerged.