Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd.
, 3 S.C.R. 108 is a leading Supreme Court of Canada
decision where the Court re-affirmed and expanded the on the exception to the doctrine of privity
first established in London Drugs v. Kuehne & Nagel International Ltd.
, S.C.R. 299.
Fraser River Pile & Dredge Ltd. owned a derrick barge
"Sceptre Squamish", that it chartered to Can-Dive Services Ltd. Can-Dive accidentally sank the barge while it was chartered. Fraser River collected on a $1.1 million insurance policy for the barge. The original policy between Fraser River and their insurer contained a subrogation
clause which waived the insurer's right of subrogation against any third-parties. Fraser River and their insurer entered an agreement which waived the original subrogation waiver, intending to allow the insurance company and Fraser River to sue Can-Dive.
In their defence, Can-Dive claimed that the insurer already waived their subrogation rights and so could not unwaive them.
The question before the Supreme Court is whether Can-Dive could rely on the waiver of subrogation in the original insurance policy.
Reasons of the court
Justice Iacobucci, writing for a unanimous Court, held in favour of Can-Dive on the basis that they were able to rely on the subrogation clause. The case turned on the existence of any exceptions to privity. Iacobucci first affirmed the existence of an agency exception to privity, and then expanded on... Read More