This case was heard in the Nova Scotia Court of Appeal.
After an oil spill on a neighbouring property contaminated the soil under their house, the Snows contacted their insurer, Royal & Sun Alliance Insurance Company of Canada ("RSA"), to seek compensation for their losses. Subsequent fires that were unrelated to the oil spill had destroyed the Snows’ home, and the Cape Breton Regional Municipality had informed them that they would not receive a permit to rebuild until the oil contamination had been remediated. When the Snows made their claim to RSA, however, the insurance company stated that their policy only granted coverage to the dwelling on their property, not to the soil beneath the house.
The Snows initiated legal proceedings in the Supreme Court of Nova Scotia. There, the Court held that the insurance policy did extend to the soil beneath the house, as the land underneath the house was included in the policy’s use of the word “premises.” The Court also held that if its interpretation of that aspect of the policy was incorrect, the soil would be covered in any case, as the terms of the policy were ambiguous and should therefore be interpreted in the plaintiffs’ favour.
When RSA appealed to the Nova Scotia Court of Appeal, the Court set aside the lower court’s decision. After examining the insurance policy and the relevant legal authorities, the Court held that the terms of the policy were clear and unambiguous, and that the coverage applied to the dwelling alone, not to the soil underneath it.
To read about this case in the Supreme Court of Nova Scotia, go to Snow v. Royal & Sun Alliance Insurance Company, 2015 NSSC 44 (CanLII).