In Dave's K. & K. Sandblasting (1988) Ltd.
v. Aviva Insurance Co. of Canada (2007), the B.C. Supreme
Court considered the enforceability of an exclusion clause
relating to coverage for the costs of environmental remediation
under cost-recovery legislation such as the British Columbia
Environmental Management Act. In the proceeding, the
insured ("DKKS") sought a declaration that its
insurer ("Aviva") was obliged to defend DKKS in an
underlying action for remediation costs brought by the owner of
a contaminated site that DKKS had previously leased, and that
any resulting liability fell within the scope of the
In finding that the exclusion policy applied, that coverage
was excluded, and no duty to defend on the part of Aviva arose,
the court reviewed the history of the pollution exclusion
clause. It noted that under earlier jurisprudence, the clause
was held not to apply where the pollution in question was not
caused by an insured's business activities, on the
reasoning that in these circumstances it was in neither of the
parties' reasonable expectations that the business in
question could or would result in pollution. Conversely, the
court reasoned, where it was in the reasonable contemplation of
the parties that the business activities of the insured could
or would result in pollution of the environment, the exclusion
clause applied, and the insured was obliged to obtain specific
coverage for the risk of pollution at higher premiums.
The Court held that DKKS was involved in business
activities, namely, the operation of a sandblasting business on
the premises, which could lead to the pollution of the
environment, and that this was in the reasonable contemplation
of the parties at the time they entered into the contract of
insurance. As a result, it held that the pollution exclusion
applied, that coverage was excluded, and that no duty to defend
on the part of the insurer arose.
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
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