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The Last Word on Teck Cominco
Published in the February 2009 issue of Litigation Notes - View Article
Teck Cominco and its underwriters disagreed on the appropriate forum for the resolution of a coverage dispute. The underwriters commenced proceedings in British Columbia. Teck Cominco applied to have those proceedings stayed, in favour of proceedings commenced by Teck in Washington State. The Supreme Court of Canada has upheld the lower courts which refused the stay
The Supreme Court of Canada has had the last word with respect to a dispute between Teck Cominco Metals Ltd. (“Teck”) and several of its liability insurers. We reported on the British Columbia Supreme Court decision in the September 2006 edition of Litigation Notes and on the decision of the British Columbia Court of Appeal in the April 2007 Litigation Notes.
Teck operated a lead and zinc smelter in Trail, British Columbia commencing in 1906 and dumped a by-product known as barren slag into the Columbia River from the 1920’s until the mid 1990’s. This by-product accumulated in Lake Roosevelt, an artificial lake in Washington State created by the construction of the Grand Coulee Dam. This resulted in various actions being commenced against Teck pursuant to the provisions of the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) of the United States.
Teck had insurance policies issued by Lombard General Insurance Company, Lloyd’s Underwriters and Seaton Insurance Company which Teck claims should respond to the CERCLA actions. The underwriters denied coverage for a variety of reasons.
On November 23, 2005 Tech commenced an action in the Washington State Superior Court seeking a declaration that it was entitled to insurance coverage. Lloyd’s Underwriters commenced an action on the same day in the Supreme Court of British Columbia, seeking declaratory orders with respect to its obligation to defend or indemnify Teck in respect of the claims. Teck brought an application in the British Columbia Supreme Court, seeking a stay of the British Columbia action.
In the Supreme Court of British Columbia, the Motions Judge denied Teck’s application and his decision was upheld by the British Columbia Court of Appeal. That decision has now been upheld by the Supreme Court of Canada.
The Supreme Court of Canada analyzed the provisions of B.C.’s Court Jurisdiction and Proceedings Transfer Act (“CJPTA”). That statute sets out the criteria which a court must consider when deciding which forum is the most appropriate one for the conduct of a proceeding. Those criteria are:
a) The comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum,
b) The law to be applied to issues in the proceeding,
c) The desirability of avoiding multiplicity of legal proceedings,
d) The desirability of avoiding conflicting decisions in different courts,
e) The enforcement of an eventual judgment, and
f) The fair and efficient working of the Canadian legal system as a whole.
Teck’s principal argument before the Supreme Court of Canada was that the multi-factored test in the CJPTA should give way to a “comity-based” test in circumstances where a foreign court has asserted jurisdiction. If a foreign court has accepted jurisdiction on the basis of factors similar to those found in the CJPTA, then a court to whom a subsequent application is made should give way to the prior assertion of jurisdiction.
The Supreme Court of Canada did not accept that argument. The Supreme Court held that Section 11 of the CJPTA “...creates a comprehensive regime that applies to all cases where a stay of proceedings is sought on the ground that the action should be pursued in a different jurisdiction (forum non-conveniens). It requires that in every case, including cases where a foreign judge has asserted jurisdiction in parallel proceedings, all the relevant factors listed in s.11 be considered in order to determine if a stay of proceedings is warranted…. ”.
The Court goes on to say that the CJPTA was intended to codify the forum non-conveniens test, not to supplement it.
If the legislature had intended the assertion of jurisdiction by a foreign court to be an overriding and determinative factor, it would have said so expressly. Rather, the avoidance of a multiplicity of proceedings is listed along with various other factors. Furthermore, the Court concluded that “…policy considerations do not support making a foreign court’s prior assertion of jurisdiction an overriding and determinative factor in the forum non-conveniens analysis. To adopt this approach would be to encourage a first-to-file system, where each party would rush to commence proceedings in a jurisdiction which it thinks will be most favourable to it and try to delay the proceedings in the other jurisdiction in order to secure a prior assertion in their preferred jurisdiction. Technicalities, such as how long it takes a particular judge to assert jurisdiction, might be determinative of the outcome. In short, considerations that have little or nothing to do with where an action is most conveniently or appropriately heard would carry the day…”
This last statement is particularly pithy in light of what actually happened in this case. Although the Supreme Court of Canada did not set out the details, the fact is that Teck’s action was commenced at one minute past midnight on November 23 by delivery of the originating process to a Judge at his home. The British Columbia action was commenced when the Court opened at 9 a.m. the same day.
Teck Cominco Metals Ltd. v. Lloyd’s
Underwriters, 2009 SCC 11 (CanLII)