On September 15, 2016, the Supreme Court of Canada (the
"SCC) released its decision in Ledcor Construction Ltd. v Northbridge
Indemnity Insurance (2016 SCC 37). In its decision, the
Court considered the appropriate standard of review for standard
form contracts, as well as the proper interpretation of an
insurance policy exclusion clause.
Writing for all but Justice Cromwell, Justice Wagner held that
– in most cases – the interpretation of standard form
contracts (such as insurance policies) is a question of law and
that such contracts thus constitute an exception to the rule in Sattva Capital Corp. v Creston Moly
Corp. (2014 SCC 53), which held that contractual
interpretation is a question of mixed fact and law. Additionally,
Justice Wagner held that an exclusion clause, when ambiguous, is to
be interpreted using the general principles of contractual
construction, including the reasonable expectations of the parties,
and the need for realistic and consistent results.
