Russell v. Canadian General Insurance Co.

In Marine Insurance on (Updated )

In this matter the Plaintiff claimed under an all risks marine policy for damage caused to a sailboat by the accumulation of water in the interior of the vessel. The damage to the sailboat occurred during the period from 1990 to 1993. The assured put the vessel into storage at the end of the summer in 1990 and left it in storage until October 1993 when it was discovered to be full of water. The accumulation of water had rendered the vessel a constructive total loss. The insurer denied coverage on the basis that there was wilful misconduct on the part of the assured, that the Plaintiff "courted the risk" and that the damage was caused by wear and tear, an excepted peril under the policy. There was conflicting evidence as to whether the assured periodically inspected the vessel while it was in storage. The assured testified that he did periodically inspect the vessel. The insurer led expert evidence to the effect that the assured could not have possibly inspected the vessel given the amount of water that had accumulated. The court, however, held that there was no requirement that the assured inspect the vessel. The court also held that there was no "wilful misconduct" on the part of the assured as he did not intend to damage the vessel and there was no deliberate courting of the risk as the damage was not foreseen. Additionally, the court found the damage was not caused by wear and tear as the damage was highly unusual and not the result of an occurrence ordinarily to be expected.