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COVID-19, class actions and business interruption: 9306-6876 Québec inc.

Monday, September 27, 2021 @ 1:46 PM | By Nicolas Sacha Nesviginsky


Nicolas Sacha Nesviginsky %>
Nicolas Sacha Nesviginsky
In the context of authorizations to institute class actions, the Superior Court of Quebec rendered a trilogy of decisions regarding the coverage provided for business interruptions: Centre dentaire Boulevard Galeries d’Anjou inc. c. L’Unique assurances générales inc. 2021 QCCS 3461; 9306-6876 Québec inc. c. Intact compagnie d’assurance 2021 QCCS 3462; Centre de santé dentaire Gendron Delisle inc. c. La Personnelle, assurances générales inc. 2021 QCCS 3463. Part one analyzed Centre de santé Gendron Delisle inc. Part two will analyze 9306-6876 Québec inc. c. Intact compagnie d’assurance 2021 QCCS 3462.

In this case, the Superior Court of Quebec was also seized of a class action against Intact, compagnie d’assurance (Intact). Similar to Centre de santé dentaire Gendron Delisle inc., 9306-6876 Québec inc. (9306) operated a dental clinic and obtained insurance with Intact. Given the COVID-19 pandemic, it was forced to cease its activities with the exception of urgent treatments. The Superior Court of Quebec concluded that there were no significant differences between Intact and Promutuel’s policies, thereby dismissing the application to authorize a class action against Intact.

Facts

While the policy contained an operating loss provision, 9306 submitted that there was a distinction between the French and English versions regarding coverage:

OBJET DE L’ASSURANCE

La présente assurance couvre dans la mesure indiquée ci-dessous les pertes résultant directement de l’interruption des activités de l’entreprise de l’Assuré, devenue inévitable du fait d’un sinistre couvert survenu durant la période de la police etayant directement atteint les bâtiments, le matériel ou les marchandises se trouvant sur les lieux. …

INDEMNITY AGREEMENT

This Form insures against loss directly resulting from necessary interruption of the Insured’s business caused by direct physical loss or direct physical damage by the perils insured against, to building(s), equipment or stock on the premises, occurring during the term of the policy.

With regards to property insurance, the policy stipulated:

NATURE ET ÉTENDUE DE L’ASSURANCE

1. En cas de sinistre atteignant en cours de contrat les biens assurés directement du fait d’un risque assuré, l’Assureur garantit l’Assuré, à concurrence du moindre des montants suivants:

3. RISQUES ASSURÉS

Sous réserve des exceptions ci-après, la présente assurance couvre tous les risques pouvant directement atteindre les biens assurés. …

1. In the event that any of the insured property is lost or damaged during the policy period by an insured peril, the Insurer will indemnify the Insured against the direct loss or damage so caused to an amount not exceeding whichever is the least of:

[…]

3. This Form, except as otherwise provided, insures against all risks of direct physical loss of or damage to the insured property.

With regards to the insured property, there were no distinctions between the English and French versions. The policy provided coverage to goods which were located in the premises.

Analysis

In this instance, the Superior Court of Quebec concluded that there was no significant difference between Intact and Promutuel’s policy (see Centre de santé dentaire Gendron Delisle inc.). The policy stipulated that it provided coverage regarding operating losses suffered during the indemnity period due to a covered loss affecting the insured’s property in the premises. As such, the loss needed to affect the property located in the premises.

Moreover, Justice Thomas M. Davis noted that the amended application contained no allegations to this effect. On the contrary, the application sought to respond to the following question: “Does COVID-19 contamination, or the inherent risk of COVID-19 contamination, constitute a physical harm or damage to property?” demonstrating that it was inaccurate.

Conclusion

In light of the above, as in the previous case, the Superior Court of Quebec dismissed the application to authorize a class action against Intact.

This is part two of a three-part series. Part one: COVID-19, class actions and business interruption: Quebec court renders trilogy of decisions; part three: COVID-19, class actions and business interruption: Centre dentaire Boulevard Galeries d’Anjou.

Nicolas Sacha Nesviginsky is a qualified lawyer in civil and common law member of the Ontario, Quebec and Paris bars. He also completed a postgraduate certificate in international dispute resolution at the Queen Mary University of London. He is fluent in English, French and Spanish.

Photo credit / Maridav ISTOCKPHOTO.COM

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