This decision involved an Application for Summary Judgment.

Graham, the Respondent, was the general contractor under a Construction Contract with the Town of Strathmore (the “Town”) for the construction of a water reservoir and pump station project on lands owned by the Town. The project site was adjacent to the East Calgary Regional Waterline (“ECRW”), which was operated by Epcor, the Applicant, under a Utility Services Agreement between it and Strathmore. In January 2013, while the project was under construction, a “tee fitting” on the ECRW failed, resulting in a large water leak from the ECRW and flooding of nearby areas including the project. By the time Epcor shut off the water, flood waters had accumulated on the project site causing damage allegedly exceeding $2,800,000. Graham remediated the site and repaired the flood damage.

Graham was insured under a course of construction policy for the project (“COC Policy”). In January 2015, Graham’s insurer commenced a subrogated Action in Graham’s name against Epcor for its alleged negligence in responding to the leak, including by failing to promptly turn off the water flow, increasing the flow of water, and representing to Graham that it had shut off the water when in fact it had increased the flow of water.

In November 2022, Epcor applied for Summary Dismissal of the Action, asserting that: (i) any losses were suffered by the Town, not Graham; and (ii) Epcor was an insured under the COC Policy and subrogated claims by the insurers against its insureds including Epcor were barred.

Applications Judge Mattis dismissed Epcor’s Summary Judgment Application, finding that the issues could not be summarily decided on the record before her. Epcor appealed.

On Appeal, Justice Eamon found that, notwithstanding the fact that the Action had been in existence for some years, there was no evidence of any discussions or communications with the Town to the effect that the Town bore financial responsibility. Rather, the evidence from Graham’s corporate representative was contrary to that assertion. It was made clear to Graham that the Town would not be reimbursing Graham for the costs, so it looked to its insurers. Utilizing the principles of contract interpretation, Eamon J. found that the construction Contract between the Town and Graham made clear that “Graham [was] responsible for damage to the project while under construction”. As such, Justice Eamon agreed with Applications Judge Mattis that the matter could not be fairly resolved in favour of Epcor on a Summary Judgment Application.

Turning to whether Epcor was an insured under the COC Policy, Article 1 provided a lengthy list of persons who were deemed to be named insureds. Epcor asserted it was an insured by supplying “services to the Project, at the project site”, as outlined in the policy. The parties proceeded in the Summary Judgment Application on the basis that the relevant time to assess whether Epcor was an insured was during Epcor’s response to the rupture in the ECRW. However, given the ambiguities of the evidence as to when Epcor provided services, the purposes for which the services were provided, and where the services were provided, Justice Eamon was not satisfied that a fair and just determination could be made on the present record. Therefore, Epcor failed on its second ground of appeal, and the Appeal was dismissed.