Morissette, Gagné, Lavallée
Appeal from a judgment of the Superior Court granting an application for an order to facilitate the enforcement of a judgment ordering the appellant to pay the respondent $65,979,396. Dismissed.
At trial, the respondent sought, inter alia, orders requiring payment of amounts of money by three of its insurers participating in insurance towers, after the Main judgment was rendered on April 6, 2020, in SNC-Lavalin (Terratech inc. et SNC-Lavalin Environnement inc.) c. Deguise (C.A., 2020-04-06), 2020 QCCA 495, SOQUIJ AZ-51681330, 2020EXP-956, the “pyrrhotite case”. The judgment upheld the Main judgment that found the respondent and its geologist liable. It also upheld the order in the Main judgment directing the insurers to “apportion among themselves the damages in connection with the liability of their insured,” in this case the respondent.
The condemnation against the appellant insurance company in respect of each of the claims for which the respondent was found liable was rendered in the direct actions brought by injured third persons. These actions were therefore brought under article 2501 of the Civil Code of Québec (S.Q. 1991, c. 64) (C.C.Q.), and to be successful the third person had to establish (i) the insurer’s liability and (ii) the insurance contract covering such liability. When a claim submitted and reported (or declared) is at issue, the insurer may set up against the injured third party the absence of claim and of notice to the insurer despite article 2502 C.C.Q., since this provision requires that the claim first be covered by the insurance policy. Nothing of this nature was set up against the injured third persons in this case.
The Court therefore has before it an argument of law or of fact that should have been raised previously, or grounds that were or could have been alleged in defence but that may not be invoked again to defeat the enforcement of the Main judgment. This is the effect of the presumption of res judicata.
In addition, the trial judge found that the insured met its obligations when it sent a claim to the claim officer, who was acting in the capacity of mandatary for the insurers. This interpretation of the reference insurance policy is both rational and consistent with its terms; in no way does it violate the letter of the policy nor, despite the appellant’s arguments, does it contain an amalgam or a “fusion” between the date a claim was presented to the insured and the date it was declared to the insurers. Certainly, these dates may have been to some degree contemporaneous, but this was due to the special management method the parties had adopted to deal with what was quickly becoming a massive and worrying wave of claims. They had to be practical and take care of the most urgent matters. Moreover, the judge found, as it was open for him to do, that this interpretation does not distort the type of policy in question.
The respondent considers that it performed its obligations within the meaning of the policy, as did the “claim officer” when reporting the claims to the insured continuously, as they were received, by sending the Claims Status Reports, as the record shows. The appellant never objected to this way of proceeding, nor did it deny coverage.
It is settled law that the insurer must express its reservations regarding the coverage of the insured in a timely manner. Its failure to act may indeed be interpreted as a renunciation, which appears to have been the trial judge’s conclusion in this case. The exacting interpretation of the policy now advanced by the appellant is tardy. It is inconsistent with the relationships of the parties. The appellant, having failed to deny coverage in a timely manner, is henceforth barred from disputing the respondent’s proposed method of distribution [translation] “based on dates of formal notices or first notice”.
Text of the decision: Http://citoyens.soquij.qc.ca