SUPREME COURT OF BRITISH COLL VaNeouuER Reet DEC A? 2020 82012953 VANCOUVER REGISTRY IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN SEA TO SKY GONDOLA LIMITED PARTNERSHIP PLAINTIFF AND MARSH & McLENNAN HOLDINGS (CANADA) ULC MARSH CANADA LIMITED/MARSH CANADA LIMITEE SANDY MILLAR WENDY MCNARY DEFENDANTS NOTICE OF CIVIL CLAIM This action has been started by the Plaintiff for the relief set out in Part 2 below. If you intend to respons to this action, you or your lawyer must (@) file a Response to Civil Claim in Form 2 in the above-named registry of this court within the time for Response to Civil Claim described below, and (b) serve a copy of the filed Response to Civil Claim on the Plaintiff. if you intend to make a counterclaim, you or your lawyer must (a) _ file a Response to Civil Claim in Form 2 and a Counterclaim in Form 3 in the above- named registry of this court within the time for Response to Civil Claim described below, and (b) serve a copy of the filed Response to Civil Claim and counterclaim on the Plaintiff and on any new parties named in the Counterclaim. JUDGMENT MAY BE PRONOUNCED AGAINST YOU IF YOU FAIL to file the Response to Civil Claim within the time for Response to Ci described below. 2esesars29ee8 MT DOCS 20776231 PS ocktlh ¥ ssn onrooe‘TIME FOR RESPONSE TO CIVIL CLAIM ‘A Response to Civil Claim must be filed and served on the Plaintiff, (a) _ if you reside anywhere in Canada, within 21 days after the date on which a copy of the filed Notice of Civil Claim was served on you, (b) _ifyoureside in the United States of America, within 35 days after the date on which a copy of the filed Notice of Civil Claim was served on you, (0) _ if you reside elsewhere, within 49 days after the date on which a copy of the filed Notice of Civil Claim was served on you, or (d) if the time for Response to Civil Claim has been set by order of the court, within that time. CLAIM OF THE PLAINTIFF STATEMENT OF FACTS 1. The plaintiff, Sea to Sky Gondola Limited Partnership (‘STSG"), is a British Columbia limited partnership with an-address for service in this action c/o McCarthy Tetrault LLP, ‘Suite 2400-745 Thurlow Street, Vancouver, British Columbia, V6E 0C5. STSG's general partner is Sea to Sky Gondola Corp. STSG owns and operates a year-round outdoor tourism and recreation facility at 36800 Highway 99 in Squamish, British Columbia known as the “Sea to Sky Gondola’. 2, The defendant, Marsh & McLennan Holdings (Canada) ULC ("Marsh & McLennan’), is a corporation incorporated pursuant to the laws of Alberta with a registered office at Suite 1900, 520-3" Avenue SW, Calgary, Alberta, T2P OR3. On or about January 2, 2020, Marsh amalgamated with Jardine Lloyd Thompson Canada Inc. ("JLT") and the ‘amalgamated corporation continued in Alberta as Marsh & McLennan Holdings (Canada) ULC. Atal material times, JLT (now'known as Marsh & McLennan) carried on business ‘as an insurance agent and broker in British Columbia, 2aseso1s20608 MMT DOCS 20716231-3- : 3. The defendant, Marsh Canada Limited/Marsh Canada Limitee (‘Marsh Canada’), is @ “corporation incorporated pursuant to the laws of Canada and extra provincially registered in British Columbia with an attorney at 1200 Waterfront Centre, 200 Burrard Street, PO Box 48600, Vancouver, British Columbia, V7X 172. At all material times, Marsh ‘Canada carried on business as an insurance agent and broker in British Columbia. 4, Thedefendants, Marsh & McLennan and Marsh Canada, are collectively referred to herein as “Marsh”, and a reference to Marsh includes a reference to Marsh & McLennan and/or to Marsh Canada, as applicable. Further, unless otherwise specified, every reference to Marsh is a reference to JLT (now Marsh & McLennan) where such reference involves ‘actions or omissions prior to January 2, 2020, and similarly, every reference to JLT is a reference to Marsh & McLennan, as JLT is now known, 5. The defendarit, Sandy Millar (“Mr. Millar"), is a licensed insurance broker and was, at all: ‘material times, a representative of Marsh in British Columbia. Mr, Millar's address is currently unknown to STSG. 6. The defendant, Wendy McNary ("Ms. McNary"), is @ licensed insurance broker and account manager and was, at all material times, a representative of Marsh in British Columbia. Ms. McNary's address is currently unknown to STSG. ‘The Defendants’ Relationship with STSG 7. Mr. Millar and Ms. McNary promoted to STSG the services of Marsh, and their own services as representatives of Marsh. In doing so, and at.all material times, Mr. Millar and Ms. McNary held themselves out to STSG to be knowledgeable and experienced insurance brokerage professionals. 8. Beginning in or about April 2016, and at material times thereafter, STSG provided the defendants with information about the Sea to Sky Gondola business, including financial information relevant to business interruption coverage, in order to assess STSG's insurance requirements. ‘2zaesars29ee8 j Mr D0cs 20716231 |10, "1. 12. 13, 14. 15. | -4- 1 {n or about January 2018, STSG engaged JLT, as represented by Millar and McNary, to procure comprehensive commercial insurance coverage for the Sea to Sky Gondola, including comprehensive property and business interruption coverage, for the period of January 2018 to January 2019 and for subsequent years. In or about January 2018, JLT put into place a property policy for the Sea to Sky Gondola for the period from January 13, 2018 to January 13, 2019. (On or about January 12, 2019, JLT put into place a new property policy for the Sea to Sky Gondola, known as CanSure Commercial Insurance Policy No. CS561271 (the "Policy’), for the period from January 13, 2019 to January 13, 2020 (the “Policy Period”). In or about January 2020, following the amalgamation of JLT and Marsh & McLennan, Mr. Millar and Ms. McNary each became a representative of Marsh Canada. In or about January 2020, STSG engaged Marsh Canada, as represented by Mr. Millar and Ms. McNary, to procure comprehensive commercial insurance coverage for the Sea to Sky Gondola, including comprehensive property and business interruption coverage, for the period of January 2020 to January 2021 and for subsequent years. ‘Alternatively, in or about late 2019, STSG engaged JLT, as represented by Mr. Millar and Ms. MeNary, to procure comprehensive commercial insurance coverage for the Sea to ‘Sky Gondola, including comprehensive property and business interruption coverage, for ‘the period of January 2020 to January 2021 and for subsequent years, and in or about January 2020, that contract was assigned to Marsh Canada. Prior to, and upon being engaged, and at other material times, STSG expressly instructed and advised the defendants, and Mr. Millar specifically that: (2) STSG had a low tolerance for risk and wished STSG and the Sea to Sky Gondola to be over-insured in all aspects, including for its property and business interruption coverage under the Policy; and {b) the Sea to Sky Gondola business was increasing, and becoming increasingly Profitable, year-over-year. ‘2azes2520008 ar DOCS 20716231‘The Policy 16. 17. 18. 19. ‘STSG is the named insured under the Policy. The Policy was:underwritten by CNA Canada - Continental Casualty Company, Royal & Sun Alliance Insurance Company of Canada, Can-Sure Underwriting, Aviva Insurance Company of Canada, Lloyd's Underwriters under contract B1306C500351800, Economical Mutual Insurance Company, Allianz Global Corporate & Specialty under contract 0C17226651, and Lloyd's Underwriters under contract B6006BI164117 (the “Underwriters. Pursuant to the Policy, the Underwriters agreed to insure against, among other things, all risks of direct physical loss of or damage to buildings, equipment and stock comprising the Sea to Sky Gondola (the “Property Coverage"), and, loss resulting from interruption of the Sea to Sky Gondola business as a consequence of damage to property covered by the Property Coverage (the "Business Interruption Coverage’), during the Policy Period. Pursuant to the Policy: (a) The measure of recovery for the Business Interruption Coverage was the loss of “Gross Profit” due to a "Reduiction in Turnover" and “Increase in Cost of Working” (as each is defined in the Policy), subject to each of the Business Interruption Limit and the Coinsurance Clause described below; (b) The Business Interruption Coverage was subject to a 100% coinsurance provision (the “Coinsurance Clause") which provided that if STSG did not insure 100% of the sum produced by applying the “Rate of Gross Profit’ to the “Annual Turnover" (as each is defined in the Policy), the amount payable-under the Business Interruption Coverage would be proportionately reduced; and {c) The amount insured for Business Interruption Coverage was $11,396,660 (the “Business Interruption Limit’). Each of JLT, Mr. Millar and Ms. McNary knew, or ought to have known, that the Business Interruption Limit: 28321520688 tur Docs 20716231 i(a) (b) () -6- ‘was derived with outdated financial information and outdated estimates and projections; ‘was not calculated in accordance with the terms that would be applied under the Business Interruption Coverage in the event of a loss; anid ‘was not equal or greater to the sum produced by applying the “Rate of Gross Profit” to the “Annual Turnover” (as each is defined in the Policy). 20. At alll material times, there was sufficient information and documentation available to enable the Business Interruption Limit (@) (b) (©). tobe calculated with, and to reflect, up-to-datte financial information, estimates and projections; to be calculated in accordance with the terms of the Policy that would be applied under the Business Interruption Coverage in the event of a loss; and to be equal or greater to the sum produced by applying the "Rate of Gross Profit” to the "Annual Turnover" (as each is defined in the Policy). “he Vandalism Event and the Business Interruption Loss 21. Akey feature of the Sea to Sky Gondola is a 39-cabin gondola (the “Gondola’) that takes visitors from the Sea to Sky Gondola base to its summit located 885 meters above Howe ‘Sound. 22. On or about August 10, 2019, a vandal severed the main cable of the Gondola causing ‘damage and destruction to, among other things, the Gondola and the Gondola cabins (the “Vandalism Event’). As a result of the Vandalism Event, the Sea to Sky Gondola was closed completely from on or about August 10, 2019 until February 13, 2020. The Vandalism Event caused significant loss and damage to STSG, including loss resulting ‘apeccs20e08 iar Docs 2071623123. from interruption of the Sea to Sky Gondola business as a consequence of damage to the Gondola (the “Business Interruption Loss’. Following the Vandalism Event, STSG made a claim for, and obtained, coverage under each of the Property Coverage and Business Interruption Coverage grants in the Policy. However, STSG has been, and will only be, partially indemnified under the Policy for the Business Interruption Loss. In particular, STSG has been indemnified under the Policy for only approximately 70% of the Business Interruption Loss due to the operation of the ‘Coinsurance Clause and the Business Interruption Limit. ‘The Polley Renewal 25. 28. {nor about early January 2020, shortly before the expiry of the Policy Period, Mr. Millar and Ms. MeNeary, now providing services through Marsh Canada, informed STSG that ‘the Policy may not be renewed. Ultimately, the defendants, or one or more of them, as applicable, did not procure a renewal of the Policy before the expiry of the Policy Period and as a result, STSG was Fequired to obtain two short-term extensions of the Policy: from January 13, 2020 to January 17, 2020 and from January 17, 2020 to January 23, 2020, respectively. (On or about January 22, 2020, with insurance coverage under the second Policy extension expiring at midnight that day, the defendants, or one or more of them, as applicable, advised STSG that they would be unable to renew the Policy. The second Policy extension expired without the Policy being further renewed or extended. AS a result, STSG was required to further extend the Policy on unfavourable terms while it procured a new property insurance policy for the Sea to Sky Gondola for the balance of the 2020 year. STSG reasonably expected that the defendants, or one or more of them, as applicable, ‘would obtain insurance coverage for STSG for 2020, whether by renewal of the Policy or otherwise, or advise STSG if they were unable to do so within a reasonable period of time 723832/520688 MrDocs 20716231aim 30. 31 so that an appropriate alternative plan and insurance policy could be put into place to provide sufficient coverage for the Sea to Sky Gondola. jinst the Defendants The defendants were the brokers that procured the Policy for STSG and failed to procure adequate insurance for STSG in 2020. ‘Atall material times, each of the defendants, as applicable, held themselves out as skilled insurance brokers with expertise in insuring commercial risks for sporting and recreation businesses, including ski resorts and other businesses similar to the Sea to Sky Gondola At all material'times, STSG relied on each the defendants, as applicable, for advice regarding the appropriate types and levels of coverage required for the Sea to Sky Gondola and to obtain appropriate and adequate coverage for STSG, or to advise STSG if they would be unable to obtain insurance coverage. Each of the defendants, as applicable, knew or ought to‘have known that STSG would reasonably rely on them to secure appropriate and adequate insurance coverage and that their failure to.do so could result in loss and damage being suffered by STSG. Each of the defendants, as applicable, owed a duty to STSG to exercise the care, skill, diligence and competence of a reasonable insurance broker while acting on behalf of STSG, including, without limitation: (2) a duty to advise STSG of the coverages available in the insurance market for loss and damage to the Sea to Sky Gondola, the suitability of the available coverages, and the matters that STSG should consider in determining which coverages to purchase; (b) a duty to advise STSG of the nature of the Business Interruption Coverage under the Policy, including the import of, and rélationship between, the Coinsurance Clause and thé Business Interruption Limit; 2ses21520688 tur Docs 20716201(o) (@) (e) @ @) () @ oO a duty to advise STSG of the suitability of coverage under the Policy for meeting the needs of STSG; a duty to make sufficient inquiries of STSG regarding the Sea to Sky Gondola operations and to request all information from STSG that was necessary to ensure that the Business Interruption Limit was calculated in accordance with the Policy and was at least equal to the sum produced by applying the “Rate of Gross Profit” to the "Annual Tumover’ (as each is defined in the Policy); a duty to ensure STSG was over-insured, as expressly instructed by STSG, or in absence ofthat, a duty to ensure that STSG was adequately insured and had been advised of, and properly understood, any gaps in its insurance coverage; a duty to make use of all the information in its possession regarding the Sea to Sky Gondola and STSG's business operations; a duly to ensure that the information in its possession at the time of procuring the Policy was accurate and complete, and where not, to take all necessary further steps to ensure its accuracy and completeness; a duty to periodically review and update values used to calculate the Business Interruption Limit, so as to ensure the values provided to the Underwriters were up-to-date, accurate and met STSG's insurance requirements; a duty to ensure the Business Interruption Limit was up-to-date and accurate; and a duty to secure renewal of the Policy prior to its expiry, or to promptly inform STSG that it would be unable to secure renewal of the Policy prior to its expiry. 35. By.virtue of the defendants’ relationship with STSG, each of the defendants, as applicable, also owed a fiduciary duty to STSG to act in STSG's best interest, which fiduciary duty required, among other things, the defendants: to provide appropriate advice; to inform themselves of STSG's insurance needs; to ensure that STSG's insurance coverage met its insurance needs based on the information available; not to bind STSG with insurance coverage that wa: \Sufficient or did not otherwise meet STSG's needs; not to benefit from binding insurance for STSG that was insufficient or otherwise inadequate; and to warn 'STSG of any gaps in its insurance. 2238501520688 mrDocs 2071623136. 37. -10- By a course of conduct from in or about 2018 onward, or altematively, iby an oral contract arising from discussions among STSG and one or both of Mr. Millar and Ms. McNary, as representatives of JLT, there was a contract between JLT and STSG (the “JLT Contract’), the terms of which (express or implied) included the following, among others: (a) _ JLT would put into place appropriate and adequate insurance coverage for STSG in respect of the Sea to Sky Gondola for each applicable policy period; and (b) JLT would exercise the care, skill, diigence and competence of a reasonable insurance broker while acting for and on behalf of STSG, including as particularized in paragraph 34. By a course of conduct from in or about 2020 onward, or alternatively, by an oral contract arising from discussions among STSG and one or both of Mr. Millar and Ms. McNary, as representatives of Marsh Canada, or in the further altemative, as the result of an assignment of the JLT Contract to Marsh Canada, there was a contract between Marsh Canada and STSG (the "Marsh Contract’), the terms of which (express or implied) included the following, among others: (2) Marsh Canada would put into place appropriate and adequate insurance coverage for STSG in respect of the Sea to Sky Gondola for each applicable policy period, Including the Policy Period and the period beginning in January 2020 following the expiry of the Policy Period; and (b) Marsh Canada would exercise the care, skil, diligence and competence of a reasonable insurance broker while acting for and on behalf of STSG, including as Particularized in paragraph 34. Negligently and in breach of the duty of care owed to STSG, in breach of their fiduciary duty, and/or in breach of the JLT Contract or the Marsh Contract, as applicable, the defendants, or each defendant, as applicable, failed to: (2) advise STSG of the coverages available in the insurance market for loss and ‘damage to the Sea to Sky Gondola, the suitability of the available coverages, and the matters that STSG should consider in determining which coverages to purchase; 2ases21620608 iar Docs 20716231(b) (©) (@) @ © (@) {h) w @ 11 i advise STSG of the nature of the Business interruption Coverage under the Policy, including the import of, and relationship between, the Coinsurance Clause and the Business Interruption Limit; advise STSG of the suitability of coverage under the Policy for meeting the needs of STSG; make sufficient inquities of STSG regarding the Sea to Sky Gondola operations and to request all information from STSG that was necessary to ensure that the Business Interruption Limit was calculated in accordance with the Policy and was at least equal to the sum produced by applying the "Rate of Gross Profi to the "Annual Turnover” (as each is defined in the Policy); ensure STSG was over-insured, as expressly instructed by STSG, or in absence of that, ensuring that STSG was adequately insured and had been advised of, and properly understood, any gaps in its insurance coverage; make use of all the information in its possession regarding the Sea to Sky Gondola and STSG's business operations; censure that the information in its possession at the time of procuring the Policy was accurate and complete, and where not, to take all necessary further steps to ensure its accuracy and completeness; periodically review and update values used to calculate the Business Interruption Limit, so as to ensure the values provided to the Underwriters were up-to-date, accurate and met STSG's insurance requirements; ‘ensure the Business Interruption Limit was up-to-date and accurate; and ‘secure renewal of the Policy prior to its expiry, or to promptly inform STSG that it would be unable to secure renewal of the Policy prior to its expiry. 39. The defendants, or one or more of them, as applicable, represented to STSG that they: (a) ‘2aseaz1s29688 had the required expertise and experience to act as STSG's insurance brokers; ir D0cs 20716231a1. 42, -12- (b) had procured insurance for STSG, including the Policy, with appropriate limits that ‘were calculated correctly and would provide them full and sufficient indemnity in case of a loss; and (©) would procure insurance for STSG for the period beginning in January 2020 after, expiry of the Policy Period (the “Representations”). ‘The Representations were false, inaccurate or misleading, and the defendants, or one ot more of them, as applicable, ought to have known they were false, inaccurate or misleading. The defendants, or one or more of them, @s applicable, made the representations to STSG with the purpose and intent of inducing STSG to acquire insurance coverage by engaging the services of the defendants. The defendants, or one or more of them, as applicable, knew or ought to have known that STSG would and did rely on the Representations. Coverage was available from underwriters, including the Underwriters, that would have fully indemnified STSG for the Business Interruption Loss. STSG would have purchased that coverage if STSG had been properly advised by the defendants. As a result of the breaches by Marsh & McLennan and Marsh Canada of the JLT Contract, and the Marsh Contract, as applicable, and as a result of the defendants’ negligence, breaches of fiduciary duty, and/or negligent misrepresentations, STSG has suffered damage and loss, including damage and loss arising from the shortfall in insurance ‘coverage available to STSG subsequent to the Vandalism Event. In particular, but without limitation, STSG has suffered loss and damage by not being able to recover the full ‘amount of the Business Interruption Loss under the Policy, which it would have been entitled to recover if the appropriate Business Intertuption Coverage and. Business. Interruption Limit had been in place. PART 2: RELIEF SOUGHT 1 STSG claims as follows against the defendants: 2s8s21520608 {ir Docs 20716201-13- (2) damages for negligence, breach of contract, breach of fiduciary duty, and/or negligent misrepresentation; (b) interest pursuant to the Court Order Interest Act, R.S.B.C. 1996, c. 75 (c) costs; and (4) such further and other relief as this Honourable Court deems just. PART LEGAL BASIS 1. STSG relies on the law of contract, negligence, fiduciary duty and negligent misrepresentation, 2. By operation of law, including any applicable statutes, upon the amalgamation of JLT and Marsh & McLennan, Marsh & McLennan became liable for all of JLT’s liabilities, debts and other obligations. PLAINTIFF'S ADDRESS FOR SERVICE: Address for service: ‘McCarthy Tétrault LLP Barristers & Solicitors ‘Suite 2400, 745 Thurlow Street Vancouver BC V6E 0C5 Attention: _Aidan Cameron Direct Fax number for service (if any): Nil. Email address for service (if any): cameron@mecarthy.ca Place of Trial: Vancouver The address of the Registry is: The Law Courts 800 Smithe Street Vancouver, BC DATED: _07/DEC/2020 Comore YAN CAMERON ‘Counsel for the Plaintiff zaseaaisz9ee8 ur Docs 20716231 i-14- Rule 7-1 (1) of the Supreme Court Civil Rules states: 1. Unless all parties of record consent or the court otherwise orders, each party of record to an action must, within 35 days after the end of the pleading period, (a) (b) ‘2asesa1529688 prepare a list of documents in Form 22 that lists (all documents that are or have been in the party’s possession or control and that could, if available, be used by any party at trial to-prove or disprove a material fact, and (i serve the list on all parties of record. all other documents to which the party intends to refer at trial, and Mr DOCS 20716231-18- ENDORSEMENT ON ORIGINATING PLEADING OR PETITION FOR SERVICE OUTSIDE BRITISH COLUMBIA The plaintiff, Sea To Sky Gondola Limited Partnership, claims the right to serve this pleading on the defendant, Marsh & McLennan Holdings (Canada) ULC, outside British Columbia on the ‘ground that this claim: (2) concerns contractual obligations that, to a substantial extent, were to be performed in British Columbia, (b) concerns a tort committed in British Columbia, and (©) __concems a business carried on in British Columbia, 2asesars20%e8 ‘ur Docs 20716231-16- APPENDIX PART 1: CONCISE SUMMARY OF NATURE OF CLAIM: 1. Claim against insurance broker. PART2: THIS CLAIM ARISES FROM THE FOLLOWING: ‘A personal injury arising out of: [1 amotor vehicle accident [1 medical malpractice (1 another cause A dispute concerning: [contaminated sites [construction defects [1 teal property (real estate) a personal property [x] __ the provision of goods or services or other general commercial matters [investment losses [1 the'lending of money {1 an employment relationship (1 awillor other issues concerning the probate of an estate [1 amatter not listed here PART3: THIS CLAIM INVOLVES: ( aclass action {J maritime taw LT] aboriginal law [1 constitutional taw [1 conflict of laws 2asesais2see6 ir 008 20716231-17- Px] none of the above [1 donot know PART4: ENACTMENTS ‘The Court Order Interest Act, R.S.B.C. 1996, c. 79. ‘amas1s20088 Mr Docs 20716231