Executive Summary: Key Legal and Evidentiary Issues

• Allocation of responsibility for two hydrocarbon spills between the site owner (Fiducie), the operator (Harnois), and the insurers (Lloyd’s and Chubb), including the impact of alleged operational faults and deficient maintenance on causation.
• Interaction between the environmental indemnity clause in the Fiducie–Harnois operating contract and the insurance coverage positions, particularly where “faute lourde” (gross fault) by Harnois employees is alleged.
• Disputed validity and scope of a “Site Pollution Liability” policy issued by Lloyd’s, including claims of nondisclosure, misrepresentation, and alleged exaggeration of damages by the insured.
• Procedural management of highly technical petroleum and environmental evidence, specifically whether expert evidence on petroleum norms and site conditions should be common to all parties or distinct but joint for Aon and Lloyd’s.
• Tension between proportionality and cost-efficiency in expert evidence versus the parties’ right to a full, adversarial presentation of competing technical theories on causation and standard of care.
• Extent to which a court may impose a single joint expert where parties advance diametrically opposed factual hypotheses about the causes of pollution events and the adequacy of inspection, maintenance and transshipment practices.

Background and parties

Fiducie pour l’approvisionnement en hydrocarbures des municipalités de la Moyenne et de la Basse Côte Nord (Fiducie) is responsible for supplying hydrocarbons to communities on the Middle and Lower North Shore of Québec. It owns petroleum terminal sites, including those at Harrington Harbour and La Tabatière. For the period from 1 July 2021 to 30 June 2026, Fiducie entrusted the operation of these terminals to Harnois Énergies inc. under an operating agreement. That contract contains a detailed environmental indemnity clause under which Fiducie generally holds Harnois harmless from environmental liability related to the leased and sub-leased property, including damages and costs from third-party claims, subject to notable exceptions. One key carve-out is where environmental liability, damages and costs result from Harnois’s gross or intentional fault (faute lourde ou intentionnelle) or from supplying hydrocarbons to non-designated customers, in which case Fiducie’s obligation to indemnify falls away. This contractual allocation of risk sits in the background of the disputes over responsibility for the spills and any insurance response.

The pollution incidents and claimed losses

Fiducie purchased a “Site Pollution Liability” insurance policy from the Lloyd’s underwriters (Lloyd’s), in force from 23 December 2021 to 23 December 2022, to cover pollution risks at its sites. During the policy period, two hydrocarbon spills occurred. On 29 April 2022, a spill took place at the Harrington Harbour terminal. Fiducie alleges that the incident was caused by the lack of tightness in two valves and claims total related costs of $729,228.52. Applying a $100,000 deductible, it seeks $629,228.52 for that event from Lloyd’s. A second spill occurred overnight from 22 to 23 May 2022 at the La Tabatière terminal. Based on information communicated by Harnois, Fiducie alleges that an error by a Harnois employee was at the origin of this spill. The costs associated with this incident are said to total $945,434.62, leading to a net claim of $845,434.62 from Lloyd’s after a further $100,000 deductible. In total, Fiducie claims $1,474,663.14 from Lloyd’s under the Site Pollution Liability policy for the two events combined.

Insurance coverage disputes and the role of Aon

Lloyd’s contests coverage and invokes nullity ab initio of the policy. It alleges that Fiducie, through its representatives and/or brokers, failed to declare all known circumstances that were material to the risk and would have significantly influenced Lloyd’s decision to accept or refuse the risk, as well as its assessment of terms. Lloyd’s further claims that Fiducie, again personally or via its representatives and/or brokers, made representations contrary to the reality about matters of the highest importance to the underwriters, and that the damages now claimed are grossly exaggerated and indirect. In light of Lloyd’s coverage position, Fiducie amended its originating application to add Aon Reed Stenhouse inc. (Aon) as a defendant, alleging that Aon acted as intermediary in placing the policy and that Fiducie itself did not participate in the exchanges between Lloyd’s and Aon during underwriting. Fiducie pleads that, if the court ultimately declares the policy null ab initio due to misrepresentations, any inaccurate representations would not originate from it, and Aon should instead be liable to reimburse the decontamination costs of the two sites. Aon contests this, arguing that it committed no fault in the subscription process, made no false representations or omissions to Lloyd’s, and that Lloyd’s own representative allegedly acknowledged in examination that, despite confusion around the alleged misrepresentations, Lloyd’s remained willing to insure the risk. Aon also directly challenges the merits of Lloyd’s nullity position, describing it as manifestly ill-founded and doomed to fail.

Disputed causation and operational fault at La Tabatière

In defence to Fiducie’s claim, Aon raises technical and factual arguments about the state of the installations, their maintenance, and the conduct of Harnois. For the La Tabatière incident, Aon alleges that the Harnois employee committed a gross fault in the performance of his functions by failing to close a valve after transshipment operations from the vessel Tuvaq, conduct that would depart from the most basic norms and practices in the handling of petroleum equipment. Aon further suggests that a loss of tightness in the retention basin (for example, a defect in basin watertightness or at the interface between the basin membrane and the drainage conduit) probably created a secondary leak path that aggravated the damages, and that adequate maintenance would have prevented this aggravation. In Aon’s theory, the poor condition and deficient maintenance of Fiducie’s installations at La Tabatière played a significant role in the extent of the losses. These contentions go to both causation and potential allocation of responsibility between the operator (Harnois), the site owner (Fiducie) and the insurers.

Disputed causation and operational fault at Harrington Harbour

For the Harrington Harbour event, Aon similarly frames the loss as linked to operational behaviour and maintenance. It asserts that investigations showed the leak originated from snow accumulation on a valve at a Fiducie installation and that the hydrocarbon release continued over several weeks. According to Aon, no plug was installed on the critical equipment, contrary to industry practice and basic prudence, which it characterizes as gross negligence. Adequate compliance, maintenance and monitoring by Harnois or Fiducie, in Aon’s view, would have either prevented the incident entirely or at least limited the scale of the damages now claimed. Aon also points to alleged failures by Harnois to conduct required weekly and monthly checks of the installations, as well as inadequate snow and ice removal to maintain safe access to key equipment such as valves, manifolds and loading ramps, which would have hampered early detection of the leak. These theories underscore why Aon and Lloyd’s see a need for specialized petroleum expertise to address both the standard of care and the technical causes of the spills.

Third-party proceedings against Chubb and Harnois

Lloyd’s, for its part, has filed a forced intervention calling Chubb du Canada compagnie d’assurance (Chubb) and Harnois in warranty. Lloyd’s alleges that Harnois falls within the definition of an insured under the Lloyd’s policy, that Harnois’s operations are at the origin of the alleged spills, and that Harnois also benefits from coverage with Chubb. On that basis, Lloyd’s contends that Chubb must indemnify its insured under the plurality of insurance clause in Chubb’s policy. This brings into play multiple overlapping insurance relationships—between Fiducie and Lloyd’s, Harnois and Lloyd’s, and Harnois and Chubb—against a backdrop of alleged gross fault and environmental indemnity obligations in the Fiducie–Harnois operating agreement.

Competing approaches to expert evidence in the petroleum domain

Early in case management, Aon and Lloyd’s announced their intention to file expert evidence “in the petroleum field” addressing industry norms, transshipment practices, inspection and maintenance standards, and the condition of the installations at both sites. Fiducie, Chubb and Harnois reserved the right to file counter-expertise. At a December 2025 case management conference, the judge then presiding ordered, on his own initiative, that the petroleum expert evidence be common to all parties wishing to participate, unless a party later obtained authorization to file a distinct expert report. The judge emphasized that, absent a reasonable basis, a common expert should prevail. Subsequently, at a January 2026 conference, Aon advised that it and Lloyd’s had begun steps to retain a distinct, but joint, expert for their defences and would seek authorization to depart from the common-expert model. Aon argued that a truly common expert was impossible because of the fundamentally incompatible positions of the parties on the causes of the spills and the applicable norms. Fiducie, supported by Chubb and Harnois, opposed the request but acknowledged that at least the portion of the Aon/Lloyd’s expertise relating to the condition of Fiducie’s installations at Harrington Harbour and La Tabatière might appropriately be the subject of a distinct but joint expert for Aon and Lloyd’s, provided the other parties could then file counter-expert reports on those issues.

Legal framework on common versus distinct experts

The Superior Court analyzed the request under article 158(2) of the Code of Civil Procedure, which gives the court broad management powers over expert evidence, including the ability to assess the object and relevance of expertise, set its modalities and timelines, and, where parties have not agreed on a common expertise, to impose one if proportionality so requires and if doing so does not jeopardize parties’ rights to present their case. The judge relied on guidance from prior appellate and Superior Court decisions, which emphasize that a common expert is not the default rule in Québec civil procedure; rather, the guiding principle remains the adversarial nature of proceedings. The court must examine, case by case, the source and components of the dispute, the complexity and technical nature of the questions, and three key criteria: whether proportionality favours a common expert; whether parties have already undertaken steps for separate experts; and whether a common expert would imperil a party’s right to advance its position. The jurisprudence also cautions that a single common expert may be ill-suited where there are highly technical issues, competing schools of thought, or sharply divergent causal theories, because such a model can have the unintended effect of shifting effective decision-making power from the judge onto the expert.

Application of the proportionality and fairness criteria

On proportionality, the court rejected Fiducie’s suggestion of splitting the petroleum issues into two expert streams—one common to all parties on “norms of transshipment, petroleum equipment and handling,” and another distinct and joint for Aon and Lloyd’s limited to the state of the installations, with leave for others to file counter-experts. The judge noted that this approach would likely increase, not decrease, the number of expert reports, risk unnecessary duplication, and oblige Aon to obtain two separate expert opinions on closely linked issues that a single petroleum expert could coherently address in one report. Given the intertwined nature of the standard-of-care, operational and condition-of-installations questions across both incidents, the court considered that a single, distinct joint report for Aon and Lloyd’s, supplemented by any counter-expertise for the other parties, better satisfied proportionality and efficiency. As for the second criterion, Aon and Lloyd’s had already identified and consulted an expert and obtained indicative timelines for a report once instructions were confirmed. The judge ultimately treated this factor as neutral but acknowledged some preparatory steps had been taken. The decisive consideration was the third criterion: whether a common expert would endanger the parties’ ability to present their case. The court accepted that Aon and Lloyd’s had developed preliminary working hypotheses with their potential expert about alternative or contributory causes at La Tabatière (such as a breach in the retention basin, potential defects at the membrane-drainage interface, adherence to or departures from procedures by Harnois personnel, and questions about training and competence), as well as about alleged failures in inspection, snow and ice removal, and valve-closing practices at Harrington Harbour. Because these hypotheses went to the very core of Aon and Lloyd’s theory of causation and responsibility, the court considered it unrealistic to expect Fiducie, Harnois, Chubb, Aon and Lloyd’s to agree on a set of common factual assumptions or parameters for a single, all-party expert, particularly where their interests and positions are diametrically opposed.

Outcome of the motion and consequences for the parties

In light of the complex, technical nature of the petroleum issues; the sharply conflicting causal narratives; and the need to preserve a robust adversarial process, the Superior Court granted the motion of Aon and Lloyd’s. It authorized them to file a distinct, but common between them, expert report in the petroleum field, to be served within 16 weeks of the judgment. At the same time, the court allowed Fiducie, Chubb and Harnois to file counter-expert evidence in the petroleum domain, including expert opinions on the state of Fiducie’s installations at Harrington Harbour and La Tabatière, if they so choose, and left the parties free to agree among themselves on timelines for any such counter-reports, with the understanding that an extension of the inscription-for-trial deadline would later be sought. The ruling is explicitly procedural and case-management in nature: it does not adjudicate liability, coverage, or the quantum of any damages arising from the spills, and “frais de justice” are ordered to follow the eventual outcome of the main action. Accordingly, the successful parties in this decision are Aon Reed Stenhouse inc. and Les Souscripteurs du Lloyd’s, whose request to proceed with a distinct joint petroleum expert was granted, but no specific monetary award, damages amount, or costs figure is ordered in their favour at this stage, and the total financial consequences will only be determined when the merits of the underlying pollution and coverage disputes are finally decided.