This was upheld by the Quebec Superior Court in 3457265 Canada inc. c. 9124-8948 Québec inc., 2016 QCCS 2462.
In this case, the activities of the insured were the repair and maintenance of aircraft in its workshops located at the airports of Saint-Mathieu-de-Belœil and Mirabel. The liability insurance policy issued by the insurer provided the following relevant provisions:
| Coverage H Premises Section | ||
| […], we will pay on your behalf all amounts which you are legally obligated to pay as damages, […] for: | ||
| bodily injury or destruction of property, […] that arose: | ||
| a. in or about the location stated on the Declaration Page [9], as a direct result of services granted by you. | ||
| b. elsewhere in the course of any work carried out by you or your employees in connection of your business only. | ||
| Exclusions | ||
| We will not pay for loss of or damage to property owned, rented, leased or occupied by; while in the care custody or control of; or while being handled, serviced or maintained by you or your employees, (…). | ||
The facts were as follows: the plaintiff had entrusted its helicopter, located in Murdochville, to the insured for repair. The employee of the insured, who was a mechanic and pilot by training, decided to bring the helicopter to the Belœil workshop in order to complete the work. While in transit, the helicopter crashed and was completely destroyed.
Therefore, the plaintiff sued, among others, the insured who brought an action in warranty against its insurer, asking that it take its defense and indemnify it of any condemnation.
The insurer presented a motion to dismiss this action in warranty, among others for the reason that the claim was excluded by the “care, custody or control” clause.
The Superior Court first concluded that, although the helicopter crash had occurred in Murdochville, paragraph b) of warranty H applied since damages occurred “elsewhere” than at the workshop of the insured.
As for the exclusion clause, the insured claimed that its first two parts, which were separated with semicolons, were cumulative and therefore, the exclusion could not apply because the helicopter was not “occupied by” the insured.
The Court found that the three parts of the exclusion were alternatives. Accordingly, the exclusion applies only when the property is owned or rented by the insured or under its control or held by the insured.
The Court did not rule on the application of the first part of the exception to this claim. However, it concluded that the second part of the exclusion, to the effect that the helicopter was under the care or control of the insured, could apply.
However, based on the judgment rendered by the Court of Appeal in Groupe commerce compagnie d’assurances c. Services d’entretien Ribo inc., 1992 CanLII 3407 (QC CA), the Court concluded that such exclusion had the effect of “sterilizing” the guarantee offered to the insured for its liability, who mainly performed maintenance and repair works on aircrafts entrusted to it. Therefore, the exclusion could not apply and the motion to dismiss the action in warranty against the insurer was rejected.