North Coast Sea Products Ltd. v. NG Insurance Company of Canada

In Marine Insurance on (Updated )

The insured Plaintiffs incurred expenses in recovering trays and the oysters in them from the seabed when the lines of their oyster farm were vandalized. The Plaintiffs were insured for the loss of the trays but not for the oysters themselves. They claimed under the sue and labour provisions of their marine insurance policy for all the expenses incurred in recovering the trays and oysters. Underwriters claimed that only a portion of the expenses could be claimed and that the claim should be in rateable proportion to the value of the insured trays to the uninsured oysters. The policy wording included provisions for reducing recoverable sue and labour expenses where the property was underinsured but was silent with respect to cases where there was both insured and uninsured property. The matter was disposed of by Special Case. The underwriters relied on English case law from 1902 (Cunard Steamship Co. Ltd. v. Marten) that appeared to state that sue and labour expenses should be recoverable ratably where expenses are incurred for both insured and uninsured property. However, the trial Judge found for the insureds because the terms of the policy did not specify what would happen when expenses were incurred in respect of insured and uninsured property. On appeal, the Court of Appeal upheld the trial Judge holding that the sue and labour clause of the policy only limited the insurer’s obligation in the specific circumstances identified in that clause, none of which applied.