Précis: The Ontario Court of Appeal confirmed a judgment of the Superior Court holding that a cargo underwriter was not liable under a cargo policy for damage caused during transit when the insured/vendor had been paid in full by the buyer of the cargo.
Facts: The plaintiff sold 26 containers of sesame seeds to be transported from Nigeria to Xingang, China. The sale was on terms “CIF Xingang” meaning the plaintiff was to obtain insurance but the risk of loss or damage passed to the buyer upon shipment. The goods were insured under an open cargo policy with the defendant and were declared under the open policy. During the course of carriage from Nigeria to China, the goods were damaged. All 26 containers were declared unfit for human consumption and were sold for salvage. Even though the plaintiff had been paid in full by its buyer, it filed a claim with the defendant insurer. The insurer denied the claim on 24 of 26 containers on the basis that the cause of the damage was condensation or sweat, a non-transit related fortuity. The plaintiff commenced proceedings against the insurer. The insurer then brought this motion for summary judgment on the grounds that the plaintiff had no insurable interest and that the plaintiff had been paid in full by its buyer.
At first instance (2017 ONSC 4721), notwithstanding the transfer of the risk of loss to the buyer, the motion Judge held the plaintiff had an insurable interest; a term that was broadly defined in the Marine Insurance Act, S.C. 1993, c. 22, and required an expansive interpretation. However, the motion was dismissed because the plaintiff had been paid in full by its buyer and therefore suffered no loss. In reaching this conclusion the motion Judge refused to accept a bald statement in one of the plaintiff’s affidavits that it had suffered a loss because the buyer had short-paid on subsequent shipments.
The plaintiff appealed the dismissal of the motion and also sought to introduce new evidence on appeal. The defendant cross-appealed the finding that the plaintiff had an insurable interest.
Decision: The plaintiff’s appeal and motion to introduce new evidence are both dismissed. The cross-appeal is dismissed as being moot.
Held: There was no palpable and overriding error by the motion Judge in concluding that the plaintiff was paid in full. The plaintiff filed no evidence of any kind in support of the purported short-payments by the buyer nor was any explanation given for the absence of any supporting details or documents. This is sufficient to dispose of the appeal. The motion to introduce fresh evidence must also fail since the evidence was available at the time of the original motion. Additionally, the fresh evidence would not have affected the outcome.