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Royal & Sun Alliance Insurance Co. of Canada v. Fiberglas Canada Inc., [1999] O.J. No. 1275 (Gen. Div.)

Fasken
Reading Time 2 minute read Subscribe
Acted for insured in obtaining order that insurer pay portion of defence costs of an action brought against it. Fiberglas moved for an Order requiring Royal & Sun Alliance and two other insurers to pay the costs of defending an action commenced against Fiberglass in 1994 in New Brunswick. The action had been tried, Fiberglas was successful in its defence but the case was under appeal. The factual allegations in the New Brunswick action indicated an exposure to allegedly dangerous products from 1981 to 1991 with health problems manifesting in 1985 and diagnosis made in 1992. Royal & Sun Alliance argued that its policy was not triggered and the other two insurers took the same position but also argued that there was a breach of condition. Fiberglas argued that the insurers would pay their defence costs but if any one or more of the insurers succeeded at trial Fiberglas would repay the defence costs. The Court upheld a long line of cases that where it is alleged that the insured had breached a condition of the policy the insurer will not be ordered to defend or fund the defence prior to adjudication of that issue. Royal had insured Fiberglas for four years out of the ten and it was ordered to pay 40% of Fiberglas' defence costs to date and on an ongoing basis on a solicitor and client scale.

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