A coverage action can occur simultaneously in parrallel proceedings in different jurisdictions.
Teck Cominco Metals Ltd. ("Teck") sued its Insurers in the US for coverage in relation to environmental damage alleged to have occurred in the US. The Insurers commenced parallel proceedings in British Columbia seeking Declaratory Orders regarding their obligation to defend or indemnify Teck. The Supreme Court of Canada upheld the dismissal of Applications by Teck for Orders staying the BC proceedings in favour of proceedings Teck commenced in the US.
Teck Cominco Metals Ltd. v. Lloyd's Underwriters, [2009] S.C.J. No. 11, February 20, 2009, Supreme Court of Canada, McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Charron and Rothstein JJ.
Teck sued its Insurers in the US for coverage in relation to environmental damage alleged to have occurred in the US, downstream from its British Columbia smelter site. The Insurers commenced parallel proceedings in British Columbia seeking Declaratory Orders regarding their obligation (or lack thereof) to defend or indemnify Teck. The Parties each took various steps to obtain jurisdictional rulings in order to have the insurance coverage matter adjudicated in their preferred court: the Insurers filed a Motion in the US District Court seeking an Order to dismiss Teck's claims against them, and Teck filed similar Motions in British Columbia seeking Orders staying the British Columbia proceedings. The US District Court denied the Insurers' Applications to dismiss Teck's claims against them on the basis of forum non conveniens. The British Columbia Supreme Court refused to grant the stays sought by Teck, and the Court of Appeal upheld that decision. Teck brought a further appeal to the Supreme Court of Canada.
Teck's appeal was dismissed by the Supreme Court of Canada. The Court indicated that British Columbia's Court Jurisdiction and Proceedings Transfer Act created a comprehensive regime that applied to all cases where a stay of proceedings was sought on the ground that the Action should be pursued in a different jurisdiction (forum non conveniens). This Act required that in every case, including cases where a foreign judge has asserted jurisdiction in parallel proceedings, all the relevant factors listed in s. 11 of the Act must be considered in order to determine if a stay of proceedings is warranted. This included the desirability of avoiding a multiplicity of legal proceedings. The Court held that s. 11 was a complete codification of the common law test for forum non conveniens admitting no exceptions.
In this case, the Chambers Judge had carefully considered all of the factors mentioned in s. 11 and did not err in dismissing Teck's Motions to stay the British Columbia proceedings. While the Court should strive to avoid parallel proceedings, the desire to avoid them cannot overshadow the objective of the forum non conveniens analysis which is to ensure, if possible, that the Action is tried in the jurisdiction that has the closest connection with the Action and the Parties. In the result, Teck's appeal was dismissed and the coverage Action commenced by the Insurers in British Columbia was allowed to proceed.
This case was originally summarized by Jonathan D. Meadows and orginally edited by David W. Pilley.
