Insurers claimed the policy did not cover damages due to corrosion and gradual deterioration
The Saskatchewan Court of Appeal partially allowed an appeal by several insurance companies, finding that the trial judge erred in interpreting the insurance policy regarding a barn roof collapse.
In February 2016, the roof of a barn owned by Brock Stock Farm Ltd. collapsed. The company claimed damages under its insurance policy with Economical Mutual Insurance Company, Mutual Fire Insurance Company of British Columbia, The Wawanesa Mutual Insurance Company, and Peace Hills General Insurance Company. The Court of King's Bench initially granted summary judgment for Brock's losses
The insurers appealed the decision, asserting that the policy did not cover Brock's losses due to exclusions for damage caused by corrosion and gradual deterioration. The appeal court concluded that the insurers must succeed in part of their appeal.
The Court of Appeal found that the trial judge erred in her insurance policy interpretation. The policy excluded coverage for damage caused by corrosion and gradual deterioration, although it provided coverage for resultant damage. The judge had incorrectly found that all of Brock’s losses were resultant damage.
The court noted that the barn’s roof collapse was caused by a combination of wind and the gradual deterioration of the roof’s truss system due to corrosion. The policy explicitly excluded damage caused by such deterioration. The judge did not make the necessary findings to determine what portion of Brock's damages, if any, constituted resultant damage covered by the policy.
The Court of Appeal set aside the summary judgment and remitted the issue to the Court of King’s Bench for further determination. The appeal court noted that the trial court must assess which portions of Brock’s claimed losses fall within the exception for resultant damage under the policy’s deterioration exclusion. The appeal court also set aside the costs award granted to Brock in the original decision, noting that costs would be reassessed based on the final determination of the insured losses.
