Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Insurance - Liability insurance - Comprehensive general liability policy - Duty to defend - Contractor alleging that it sustained losses when defects in one part of condominium project built by subcontractors caused damage to other parts of building - Circumstances under which property damage to one or more components of a building resulting from defective workmanship by a subcontractor can trigger coverage under completed operations hazard endorsement - Whether the Respondent is required to defend the Appellant with respect to the allegations in the underlying actions of property damage to building components as a result of water penetration.

The Respondent issued successive commercial (or “comprehensive”) general liability insurance policies to the Appellant during the years 1987 to 2005. The policies are “occurrence policies” which provide coverage for the happening of covered occurrences within the period in question. The policies provide that the Respondent will defend the Appellant for those claims where the damage which occurred falls within coverage. In late 2004 and early 2005, four actions were brought against the Appellant by the B.C. Housing Management Commission. Each action concerned a separate condominium project that had been built by the Appellant and financed by B.C. Housing. The actions alleged significant damage due to water penetration of the buildings’ envelopes. The pleadings alleged that the Appellant was in breach of contract and had been guilty of negligence in various respects, and that the claimants had suffered damages and building defects including water leakage through exterior walls, improperly installed windows, insufficient venting and drainage, and deterioration of the building components as a result of water ingress. The Respondent initially defended each of the four actions but soon withdrew from the defence, claiming that it was under no duty to defend the actions because they were not covered under the liability insurance policies it had issued to the Appellant. Following the Respondent’s withdrawal, the Appellant brought a petition seeking a declaration that the Respondent was obliged to defend.