Corrosion Exclusion II - McCague Borlack LLP

General factual background

The general factual background of the case was summarized in the earlier paper. For convenience, I repeat that here (in grey), and I also reproduce the corrosion exclusion.

A leak of heavy water coolant containing a radioactive element (tritium) occurred at the Nuclear Research Universal Reactor (referred to in the reasons for judgment as the NRU) in Chalk River, Ontario. The leak was discovered during the course of a generalized power shutdown in Eastern Ontario and Quebec which automatically triggered a shutdown of the NRU. Although the leak was small, the NRU was shut down, ultimately for a period of 15 months, for defueling, drainage of the heavy water, identification, investigation, and repair of the leak location and other pre-leak corroded areas, and to satisfy the regulator's protocols. The plaintiffs were insureds under an all-risk policy and claimed to have lost approximately $121 million, due to loss of sales of medical isotopes and other material that could not be produced during that period of shutdown. There was coverage under the policy for this type of claim in the amount of $25 million.

...claimed to have lost approximately $121 million, mostly due to loss of sales...

The leak consisted of a single, isolated, small penetration in the wall of the calandria, a vessel or tank which contained the heavy water, resulting in the water entering what was known as the J-rod annulus. The leak was localized, unexpected, and was the result of an accelerated process. There were a further nine sites of similar localized, unexpected, and accelerated corrosion which had not yet penetrated the calandria wall. A finding of fact was made that the leak, and the other nine corrosion sites which had not yet progressed to the stage where there was a leak, were due to corrosion, which in turn had been caused by the unknown and unanticipated presence of a contaminant/aggressive agent, probably chlorine.

Interestingly, there was generalized corrosion of the outside walls of the calandria, but that corrosion had been ongoing for several decades (1974 to 2009) and was the result of nitric acid in the J-rod annulus that was created by water leaking from the reflector. The operator of the NRU (AECL) had known about the presence of that generalized corrosion for many years, although it was not considered to be dangerous or yet to require remedial action.

The trial judge drew a clear distinction between the two types of corrosion:

The localized corrosion which caused the penetration of the calandria wall (and the nine other pre-leak sites), had been quick-acting and was not known to be present. This was classified and treated as fortuitous corrosion. It was found to be unanticipated/unexpected, unpredictable, and accidental corrosion.²
The generalized corrosion, on the other hand, was classified as non-fortuitous corrosion, because not only was it anticipated/expected and normal, it was actually known to be present and was monitored.

The insurer acknowledged that the corrosion which caused the leak was fortuitous, in that it was unique, unexplained, unexpected, and unknown.

The corrosion exclusion

The corrosion exclusion provided as follows:

This Policy excludes the following, but, if physical damage not excluded by this Policy results, then only that resulting damage is insured:

3) deterioration, depletion, rust, corrosion...

Additional facts relevant to the exception to the exclusion

Any unexplained leak of heavy water containing tritium is significant and potentially dangerous.³ The tritium that was observed when the leak was discovered “was at actionable levels, in the sense that its presence triggered mandatory reporting...though not [at] dangerous levels”.⁴

The leak was a “serious...and major event”.⁵“Once it was determined that the leak was through the wall of the calandria, and not merely located at a repairable mechanical fitting where leaking may be anticipated to occur, the NRU could not return to service until the protocol requirements of the CNSC [the governing regulatory agency] were satisfied.”⁶“After the discovery of the unanticipated through-wall leak, CNSC established a protocol on August 14, 2009...that was revised and enhanced in January 2010 that established conditions that must be met by AECL before the NRU could restart. The process to identify the cause of the leak, to conduct the repairs and to meet the CNSC protocol took 15 months...In total, ten sites were repaired.”⁷

The coverage provision under which the claim was made

The insured made its claim for loss of profits under the Contingent Time Element...

The insured made its claim for loss of profits under the Contingent Time Element (“CTE”) coverage provision in the policy.⁸ An adjuster for the insurer testified that “the CTE business interruption coverage was additional coverage purchased by MDS for the type of loss in this case, when a supplier experienced a physical loss affecting the supply of product and hence profits of [the insured]...The Policy treats the loss at the supplier location in the same way as a loss at the insured location. Hence, if a supplier has an interruption of production caused by physical loss or damage, the loss of profits of MDS flowing from that damage would be covered by the CTE [section] in the Policy, unless a Policy exclusion applies.”⁹

The loss which was the subject matter of the claim under the policy

I am not privy to the evidence led at trial other than as summarized in the reasons for judgment. As best I can tell, the claim made by MDS under the policy consisted entirely of the loss of profit sustained by it as a result of the lengthy shutdown of the nuclear plant. There were, of course, expenses incurred for the repair of the single, small, corrosion-caused penetration of the calandria wall, and of the nine other sites where the unknown, unanticipated, and accelerated corrosion had occurred. Those costs were most likely incurred by AECL, the owner and operator of the plant. It may be that repair costs were also incurred for the rectification of the generalized corrosion that was classified by the trial judge as non-fortuitous corrosion. In addition, expenses presumably were incurred for investigation, removal of heavy water and tritium in the J-rod annulus, and perhaps for other purposes, although again by AECL, not MDS. Those expenses, however, probably represented no more than a fraction of the claim made under the policy by MDS for loss of profit.

To my knowledge, MDS made no claim under the policy for expenses incurred by it for the investigation or repair of any physical damage, or for loss of any kind related to the rectification, in any manner, of any physical damage. Its claim under the policy apparently was limited entirely to a claim for loss of profit arising from the disruption of the supply of medical isotopes during the protracted shutdown of the plant. That was, of course, a type of claim for which it had sought coverage,¹⁰ for which it had paid a premium, and which was undeniably covered under the CTE section in the policy. Coverage for MDS's loss was not an issue; the issues rather were (a) whether the admitted coverage under the insuring agreement for this particular type of loss (loss of profit) was then excluded by the corrosion exclusion and, if so (b) whether the exception to the exclusion applied to preserve the coverage for that loss.¹¹

This was an insurance claim

It is important to bear in mind that this was a claim made under an insurance policy, not a claim made by MDS against AECL in tort and/or for breach of contract. The special rules and considerations governing tort claims for economic loss¹² were inapplicable, as were any special provisions, such as limitation of liability clauses, that might have been present in the contract made between MDS and AECL. The claim under the insurance policy was governed predominantly by the language of the policy¹³ (and more particularly the language of the corrosion exclusion clause), and by the principles and rules that apply to insurance claims.

The short and simple answer

The exception contained within the corrosion exclusion saved coverage for “resulting [physical] damage”. The claim for loss of profit was a claim for “resulting” damage, in that the loss of profit ultimately resulted from the corrosion. It was not, however, a claim for resulting physical damage; it was plainly a claim for resulting economic loss or damage. Coverage for this entirely different type of loss, therefore, was not preserved by the exception contained in the exclusion.

The questions raised by the language of the exception

The language of the exception to the exclusion raises the following questions:

Is it a claim for physical damage?
Is coverage for that physical damage excluded by the policy, either because the physical damage was the direct and immediate result of the excluded peril, or for some other reason?
Was that physical damage a result, other than a direct and immediate result, of the excluded peril – i.e. was there a secondary causal connection between the physical damage and the excluded peril?

...the trial judge held that the exclusion applied only to non-fortuitous corrosion...

As to (i), there was certainly at least some physical damage. There was a penetration of the calandria wall and nine pre-leak corrosion sites.

As to (ii), the factual cause of this physical damage was corrosion, but the trial judge held that the exclusion applied only to non-fortuitous corrosion. For the reasons outlined in my earlier paper, I disagree with that conclusion. This physical damage was the direct and immediate result of the excluded peril of corrosion and, had a claim been made for reimbursement of the costs of repairing that physical damage, that loss would, in my opinion, have been excluded from coverage.¹⁴

As to (iii), this physical damage was a result, but as already stated it was a direct and immediate result, of the excluded peril of corrosion.

For those reasons, had a claim been made for reimbursement of the costs of rectifying those corrosion sites, it is my view that coverage for that loss would not have been preserved by the exception. That is not, however, the loss we are now considering: MDS's claim for loss of profit.

MDS took the position that, in addition to the penetration of the wall and the other corrosion sites, there was a considerable degree of additional physical damage that resulted from the corrosion:

The Plaintiffs argue that the presence of heavy water containing Tritium in the J-rod annulus constitutes resulting physical damage under the Policy. The character of the J-rod annulus was changed in an important way by the heavy water leak, requiring a shutdown and rendering the entire NRU unusable. The Plaintiffs argue that it is not necessary to have tangible damage to the J-rod annulus itself to qualify for the exception to the corrosion exclusion. The through-wall leak of heavy water at J-41 caused the NRU to be shut down until the problem of the leaking water and safety concerns relating to that leak were addressed to the satisfaction of the CNSC.¹⁵

The insurer, on the other hand, argued that there was no other “physical damage” because “the presence of the leaking heavy water in the J-rod annulus did not cause actual tangible damage in the interior of the J-rod annulus,” a fact which was not disputed.¹⁶

The trial judge referenced “two very different interpretations of the meaning of physical damage in the various cases, reflecting two approaches which suggest that the meaning of the term 'resulting physical damage' is ambiguous:

Does resulting physical damage require actual tangible corporal damage to the J-rod annulus where the leaking water was present? (Insurer's position)
Alternatively, does the leak of the heavy water causing the shutdown of the NRU constitute resulting physical damage as the leaking water impaired the use or function of the NRU as a whole? (Plaintiffs' position)”¹⁷

...the trial judge ultimately adopted the latter approach...

After stating that “there is no bright line or a single case that is dispositive of the meaning of resulting physical damage for this case”,¹⁸ the trial judge ultimately adopted the latter approach, saying:

The leak of heavy water has a context. The possibility of meltdown if the leak increased is a unique and important fact. The NRU was prudently shut down to avoid the possibility of a nuclear accident. The definition of resulting physical damage in this factual matrix should not be limited to the occurrence of an actual nuclear event¹⁹ ...In this case, the leak of heavy water required the shutdown of the NRU rendering it unusable. With continued operation there was a very real imminent risk of harm.²⁰

...

In Western Fire Ins. Co. v First Presbyterian Church (437 P 2d 52, Col. Sup. Ct. 1968), the property was rendered uninhabitable due to the infiltration and saturation of gasoline vapours from an adjacent property. These circumstances, combined with a government declaration of uninhabitability, amounted to a direct physical loss, allowing coverage...The order by the CNSC in this case required the continued shutdown of the NRU until its safety protocol was met. By analogy, this is the equivalent to a declaration of uninhabitability amounting to a direct physical loss in Western Fire...until the safety conditions imposed by the public body for the building had been satisfied.²¹

...

I conclude that a broad definition of resulting physical damage is appropriate in the factual context of this case to interpret the words in the Policy to include impairment of function or use of tangible property caused by the unexpected leak of heavy water.²²

I believe the trial judge was correct in finding that, where the resulting condition of tangible physical property (such as the NRU) is such that it is unsafe for normal function or use, then there has been “resulting physical damage”, notwithstanding the fact that there has not yet been, as argued by the insurer, any “actual tangible corporal damage” to that property. There is supportive authority for,²³ as well as clear and persuasive merit to, that position.

I, therefore, agree that the unsafe conditions in the J-rod annulus amounted to “physical damage,” that that physical damage was a secondary result of the excluded peril of corrosion, and that coverage for that resulting physical damage was not excluded by the policy. Had a claim been made for reimbursement for the costs of restoring the J-rod annulus to a safe condition, coverage for that loss would have been preserved by the exception to the exclusion.²⁴

The issue was whether the exception preserved coverage for MDS's claim for loss of profit.

That was not, however, the issue. The issue was whether the exception preserved coverage for MDS's claim for loss of profit. The trial judge's reasoning fails to answer the question whether economic loss, in the form of loss of profit, constitutes “physical damage,” that being one of the conditions for preservation of coverage under the exception to the exclusion.

“resulting physical damage” v “resulting economic loss”

The exception to the corrosion exclusion preserves coverage “only” for resulting physical damage. An unsafe condition is a form of resulting physical damage, but loss of profit is a form of resulting economic loss. Those are two entirely separate and distinct types of loss or damage. The only connection between the two losses in this case was that the loss of profit was a consequence of the “resulting physical damage”.

Merely because one loss is a consequence of another – merely because, in other words, there is a causal connection between two losses – does not mean that the two losses must be lumped together in the same category. In fact, the word “resulting” makes a causal connection a condition of the applicability of the exception. Nor does a causal connection make a reference to one a reference to both. In this case, the differences between the two losses were clear and stark. Most importantly, one involved physical damage, while the other involved economic loss. That difference was spotlighted by the fact that the language of the exception clearly and unambiguously referred only to physical damage.

A review was conducted in Ledcor²⁵ of a number of decisions in which “resulting damage” exceptions were contained in faulty workmanship exclusions, but in each of those cases the issue was whether the exception saved coverage for the costs of making good physical damage that had resulted from the faulty workmanship. None of the cases involved the question whether the exception to the exclusion preserved coverage for claims for economic loss resulting from the faulty workmanship. The decision does, however, include the following comment, which clearly shows that economic loss is a type of loss that is separate and distinct from physical loss or damage. They are types of loss that are different in kind, and are understood to be so:

Bearing the above-mentioned principle in mind, the Policy in this case contains exclusions that do not pertain to "physical loss or damage" otherwise covered under clause 2. For instance, clause 4(A)(a) of the Policy excludes from coverage "[a]ny loss of use or occupancy or consequential loss of any nature howsoever caused including penalties for non-completion of or delay in completion of contract or non-compliance with contract conditions". This exclusion deals with a form of pure economic loss stemming from contractual breach, not physical loss or damage. Additionally, clause 28 of the "standard conditions" section excludes "costs, fines, penalties or expenses" imposed by governments under environmental legislation. This also does not relate to the Policy's base coverage for physical loss or damage.²⁶

The fact that there is a well-understood difference between the two types of damage is also seen in the following statement:

What was insured here was “physical loss or damage” to property of “every kind and quality, including but not limited to the [TBM]” plus any consequent economic loss occasioned by delay in the opening of the tunnel. The TBM²⁷ suffered physical damage and the consequent delay occasioned substantial economic loss.²⁸

The difference between resulting physical damage and consequential economic loss must have been well-known to, and understood by, both parties to this insurance policy, each being a large and sophisticated business entity. They must both have known that a specific reference to only one of the two kinds of loss would not bring under the same umbrella the other type of loss; that if it was intended that the provision apply to both types of loss, then it was necessary to use language that would clearly make it applicable to both types of loss, instead of employing language that expressly referenced only one of the two.

A further noteworthy point is that neither of the “two very different interpretations of the meaning of physical damage in the various cases” that were considered by the trial judge included consequential economic loss. Her comment that the fact that two approaches had been taken in the case law “suggest[ed] that the meaning of the term ‘resulting physical damage' [was] ambiguous” may well be correct, but that does not expand the ambiguity so as to incorporate a third meaning. The trial judge chose the second of the two proffered meanings (and as stated above, I agree with that choice), but the ambiguity upon which she relied did not encompass, as one of the “reasonable but differing interpretations”²⁹ of the term “resulting physical damage”, a meaning which would include consequential economic loss.

The insured had specific knowledge even apart from general understanding

...MDS was well aware that economic loss was a type of loss that was entirely separate from physical loss...

The fact that the policy contained a separate CTE section which was specifically designed to provide coverage for loss of profit shows that MDS was well aware that economic loss was a type of loss that was entirely separate, different than, and distinct from physical loss or damage.

MDS knew that it required, and therefore purchased, a separate and distinct coverage for loss of profit. MDS was, in fact, in discussions to increase the limit of that coverage at the time when the physical damage was discovered. It must have known that reference in the exception that was directed solely and clearly to a different type of loss – resulting physical damage – would be insufficient.

The type of language that should have been used

Had there been an intention to preserve coverage for consequential economic loss as well as for resulting physical damage, the exclusion ought to have been worded along the following lines:

This Policy excludes the following, but, if physical damage or economic loss not excluded by this Policy results, then only that resulting damage is insured.

The decision in MDS had the effect of reading language into the exception to the exclusion. As noted in the earlier paper, that is impermissible.

Alternatively, a definition could have been employed

Many policies, particularly CGL policies, contain a definition of the term “property damage” as follows or in similar language:

physical injury to or destruction of tangible property, including all resulting loss of use thereof, or
loss of use of tangible property that is not physically injured.

I do not know whether the policy in MDS contained such a definition, but even if it did, the relevant language in the exception is “physical damage”, not “property damage”. A definition of “physical damage” similar to the definition reproduced above would have accomplished the result sought by MDS. The policy almost certainly, however, did not contain any such definition, because MDS would have raised it and it would have been considered by the trial judge.

There was a failure to consider the limitation in the exception to the exclusion

The trial judge (correctly in my view) held that the term “resulting physical damage” included the costs associated with the return of the NRU to a condition which permitted safe normal function and use. There was a failure, however, to then consider the unambiguous limitation placed on the preservation of coverage, that being that coverage was preserved “only” for “physical damage”. Coverage for a claim for loss of profit – a claim for consequential economic loss – clearly was not a claim for the type of resulting physical damage that the trial judge herself found to be the subject matter of the exception to the exclusion.

Unlike a reliance by an insurer on an exclusion clause, where “[The insurer] must show that an exclusion clearly and unambiguously excludes coverage”,³⁰ the onus rests with the insured to show that an exception to the exclusion preserves coverage for all or part of the claim.³¹ MDS failed in this case to satisfy that onus.

As already mentioned, it might also be noted that the costs associated with the rectification of the unsafe conditions in the J-rod annulus – the actual and true “resulting physical damage” – presumably were incurred by AECL, not by MDS, and that MDS apparently has not made a claim under the policy for those expenses.

Responses to other positions taken by the trial judge

The trial judge relied on the following statement:

“[L]iteral meaning should not be applied where to do so would bring about an unrealistic result or a result which would not be contemplated in the commercial atmosphere in which the insurance was contracted. Where words may bear two constructions, the more reasonable one, that which produces a fair result, must certainly be taken as the interpretation which would promote the intention of the parties.³²

Apart from the fact that the words “physical damage” cannot reasonably bear, as a second meaning, “economic loss”, who is to say that the exclusion of economic loss consequent to physical damage caused by corrosion was, in the circumstances of this case, “an unrealistic result or a result which would not be contemplated in the commercial atmosphere in which the insurance was contracted”? The insurer was entitled to limit its exposure to loss, and it did so in a measured way: It excluded coverage for losses caused by certain perils, including corrosion, but then restored coverage for those otherwise excluded losses to the extent that they consisted of resulting physical damage. I have never seen a policy that does not contain exclusions of various sorts. The mere fact that this policy contained an exclusion which, in the circumstances of the case, happened to be engaged, and that the insured was unable to show that the loss came within the exception to the exclusion, does not mean that the application of that exclusion brought about “an unrealistic result or a result which would not be contemplated in the commercial atmosphere in which the insurance was contracted”.

An insurance policy does not provide unconditional coverage for loss.

The fact that the insured suffered a misfortune does not per se mean that this was a result of the type described in the passage above. The reasons for judgment do not reference any evidence that would suggest that this was any such result, nor does it appear on its face to be any such result. An insurance policy does not provide unconditional coverage for loss.

The trial judge said that “Exceptions to exclusion clauses should be interpreted broadly”.³³ A broad interpretation does not, however, justify the inclusion of economic loss within the meaning of “physical damage”. That would mangle the meaning of “physical damage” beyond all recognition.

The trial judge said that “resulting physical damage is intended to include loss of use of the NRU in the context of the CTE coverage”.³⁴ She said that the language of the insuring, and the period of liability, provisions in the CTE section of the policy “clarif[ied] whether physical damage at the NRU was intended to cover loss of use of the NRU facility” and “support[ed] the argument of the Plaintiffs that the disruption of the flow of isotopes from loss of use of the NRU was intended to be included in the resulting physical loss...The physical loss or damage of the leak of heavy water triggered the shutdown, and caused ‘the disruption of the normal movement' of the supply of isotopes to MDS until the NRU was reopened in August 2010 as approved by the CNSC.”³⁵

That sounds more like wishful thinking based on the intentions of the insured than an analysis of the actual language of the policy. There is no doubt that the insured intended to have coverage for consequential loss of profit, and it was not disputed that the language of the insuring provisions showed an intention to, and in fact did, provide coverage for that type of loss. It is the language of the exclusion clause, however, that governs in this situation, not the intentions of the insured or the language of the insuring provisions. As previously stated, the mere fact that a causal connection (the fact that the leak “triggered the shutdown”, which in turn led to the loss of profit) is present between two different types of loss does not mean that a reference to one is to be treated as a reference to both.

The language of the exception is clear and unambiguous; it contains limitations, one of which is that it restores coverage “only” for “physical damage”, and, therefore, does not preserve coverage for a claim for loss of profit.

The trial judge also said:

The purpose of the Policy in this case is to insure the Plaintiffs for loss of profits in their business operations...The Plaintiffs were dependent on the continued operation of the NRU to conduct its business and to generate profits. The Plaintiffs could not mitigate by simply seeking another supplier of radioactive isotopes, as there was no alternative supplier worldwide. [The insurer] was aware of this fact. As confirmed in Ledcor, all-risks insurance is purchased to provide peace of mind in case the unforeseen occurs. In this case the purpose of the all-risks Policy in terms of the operation of the NRU is to compensate the Plaintiffs for loss of profits if a fortuitous event interrupted the supply of the radioactive isotopes.³⁶

Here again, I fail to see how any of the considerations listed in that comment can overcome the plain meaning of the language of the exception.

Conclusion

As stated above, I agree with the trial judge's view that unsafe conditions at the J-rod annulus constituted “resulting physical damage”. Coverage for the costs associated with the rectification of those unsafe conditions – the “resulting physical damage” – therefore, was preserved by the exception,³⁷ but coverage for consequential economic loss in the form of loss of profit was not. Loss of profit plainly and unambiguously is not a form of physical damage.

2020 ONSC 1924
"I conclude that the unanticipated pitting corrosion was caused by the presence of an aggressive agent, probably chlorine, that was not supposed to be in the water that leaked from the reflector to the J-rod annulus”: MDS, at para. 417.
MDS, at para. 15.
MDS, at para. 92.
MDS, at para. 108.
MDS, at para. 107.
MDS, at paras. 119-20.
MDS, at para. 5.
MDS, at para. 189 (emphasis added).
In fact, discussions were underway at the time of the loss to increase the coverage for this type of loss from $25 million to $80 million: MDS, at para. 191.
See the extract from the evidence reproduced at fn. 9 above.
See, for example, Design Services Ltd. v R. 2008 SCC 22 and Arora v Whirlpool Canada LP 2013 ONCA 657.
“The relationship between an insured and the insurer is a contractual one governed primarily by the terms of the insurance policy”: Markham (City) v AIG Insurance Co. of Canada 2020 ONCA 239 at para. 44.
This appears to be a moot issue, as the costs of rectifying those areas presumably were borne not by MDS, but by AECL, the operator of the NRU.
MDS, at paras. 450-51.
MDS, at para. 447.
MDS, at para. 464.
MDS, at para. 469.
MDS, at paras. 503-04.
MDS, at para. 511.
MDS, at paras. 513-14.
MDS, at para. 518.
Alie v Bertrand & Frere Construction Co. (2002) 62 O.R. (3d) 345, C.A. at para. 38; Canadian Equipment Sales & Service Co. v Continental Insurance Co. (1975) 9 O.R. (2d) 7, C.A. at para. 12.
Assuming MDS, and not AECL, incurred or was otherwise responsible for those costs.
Ledcor Construction Ltd. v Northbridge Indemnity Insurance Co. 2016 SCC 37.
Ledcor, at para. 57 (emphasis added).
TBM stood for Tunnel Boring Machine.
Canadian National Railway v Royal & SunAlliance Insurance Co. of Canada 2008 SCC 66 at para. 31 (emphasis added). There must be countless other decisions in which a distinction has been made between physical damage and consequential economic loss. To identify just one, see Rivtow Marine Ltd. v Washington Iron Works [1974] S.C.R. 1189 at paras. 21-22, 36 and 48-57. The fact that there are specialized rules for recovery in tort of claims for pure economic loss (and it should be noted that MDS’s claim is one for “pure” economic loss, as all claims for physical loss or damage appear to belong to AECL), as compared to claims for physical loss or damage, is a further indication that there is a difference in kind between the two types of loss.
Chilton v Co-operators Insurance Co. (1997) 32 O.R. (3d) 161, C.A. at para. 26. This issue of ambiguity was discussed in the earlier paper.
Progressive Homes Ltd. v Lombard General Insurance Co. of Canada 2010 SCC 33 at para. 51.
Ledcor, at para. 52.
Consolidated-Bathurst v Mutual Boiler [1980] 1 S.C.R. 888 at para. 26, quoted in MDS, at para. 273.
MDS, at para. 441, citing Monk v Farmers and Muskoka Insurance 2017 ONSC 3690 at para. 132.
MDS, at para. 453.
MDS, at paras. 459-61.
MDS, at paras. 499-500.
Although, as already noted, to the best of my knowledge those costs were incurred not by MDS but by AECL, and MDS made no claim under the policy for reimbursement of those costs.

Corrosion Exclusion II - Resulting Physical Damage