Superior Court deals with multiple refusals in environmental claims totalling about $2 billion

The Ontario Superior Court of Justice recently addressed numerous refusals in a case seeking coverage for environmental claims amounting to approximately $2 billion, dating back more than four decades ago in connection with mining site operations. 

In Vale Canada Limited v. Royal & Sun Alliance Insurance Co. of Canada, 2025 ONSC 4153, the defendant insurers filed refusals motions, which initially proceeded before Associate Justice Michael McGraw on Dec. 18, 2024. 

Vale Canada Limited was the successor-in-interest to Inco Ltd., which operated 26 mining sites in Ontario, Manitoba, Wales, Japan, Indonesia, and the UK. Vale sought coverage and damages under insurance policies bought from 1958–85. 

Specifically, Vale wanted coverage for alleged or actual damage to Crown and third-party property caused by groundwater and surface water contamination due to acid rock drainage and metal leaching. Vale had parallel proceedings in New York, US. 

The discovery phase resulted in voluminous documents and data, given the age, amount, size, and complexity of Vale’s claims. Vale produced around 300,000 documents with over three million pages in all. 

The insurers asked about 15,000 questions in writing and 3,000 questions while examining Vale’s representative. This led to around 10,000 refusals, many of which have since been resolved, withdrawn, or narrowed.

The proceedings entailed exchanges of charts, including the exemplar chart, which had questions mostly applicable to all sites. On the other hand, the bridge chart involved questions only applying to one or some sites. 

McGraw said he had no jurisdiction to order that his directions and the parties’ agreements concerning the exemplar chart would likewise bind Vale on flow-through refusals in the bridge chart. 

According to McGraw, as the insurers had given the bridge chart only eight days before the Dec. 18, 2024 attendance, he could not make orders or directions when Vale and the court could not review it, and case management could not yet cover the additional questions. 

By a Dec. 25, 2024 endorsement, as case management judge, Justice Frederick Myers refused to issue orders or directions regarding the bridge chart, but expanded the court’s jurisdiction to adjust the timetable. 

McGraw convened case conferences on Jan. 20, May 1, and May 28. At the Jan. 20 case conference, the insurers prepared two charts with the remaining refusals: the site-specific chart for questions on specific sites, and the general chart for questions on all sites. 

In the present matter, the Ontario Superior Court addressed the following refusals, among others, in the site-specific and general charts. 

Site-specific chart

• Question #31: Vale agreed to request copies of organizational charts showing reporting lines for Inco’s environmental and health and safety departments, dating back to 1967. 
• Question #117: Vale alleged that the policies covered current and future environmental expenditures to remediate property damage, as stated in a Mar. 7 expert report. The court asked Vale where the information was found in the report. 
• Questions #170-171: Vale said it could not contact the retired author of a report addressing the environment ministry’s concerns about acid rock drainage. Vale consented to make further efforts to reach out to her. 
• Questions #294, 295, and 296: The insurers issued a production request on the question of whether Inco had subcommittees tackling pollution or environmental matters from 1966–2005. Justice McGraw asked Vale to make further inquiries. 
• Questions #531 and 534: The insurers wanted Vale to produce documents containing Inco’s environmental disclosures concerning the sites. McGraw asked Vale to identify where to find the documents. 
• Question #555: Vale agreed to give a further answer regarding its assertion that the request for the identity of the Inco employee responsible for reporting potential environmental liability claims from 1996–2005 had already been addressed. 
• Question #557: The insurers asked whether Vale’s insurance department knew about acid rock drainage as a possible source of environmental liabilities. Vale agreed to identify the expert report answering the insurers’ question. 

General chart

• Groups A and BB: The insurers requested details on spills or releases of contaminants from Vale’s operations that led to environmental contamination at the sites. Justice McGraw found Vale’s response to this request sufficient. 
• Groups E and F: The insurers wanted the particulars of the alleged defence and investigation costs and the underlying environmental claims. McGraw said Vale adequately advised that the Mar. 7 expert report addressed these matters. 
• Groups G and H: The insurers sought details on Vale’s protocols for reporting environmental contamination at the sites and its processes for responding to such contamination. Vale agreed to rephrase its answers to these requests. 
• Group J: The insurers asked for descriptions of audits, assessments, investigations, research, studies, or tests regarding environmental contamination. Vale sufficiently advised that it provided information responsive to this request. 
• Group M: The insurers wanted the particulars of the risks of environmental impacts identified. Vale agreed to give more information and state where the information was found in the site closure plans.