Publications

Packed with valuable information, our publications help you stay in touch with the latest developments in the fields of law affecting you, whatever your sector of activity. Our professionals are committed to keeping you informed of breaking legal news through their analysis of recent judgments, amendments, laws, and regulations.

Advanced search
  • The Court of Appeal: The liability of the life insurance broker is not limited to the framework of the contractual relationship

    The facts of the Roy v. Lefebvre case On June 25, 2014, the Superior Court1 allowed the action of an insured against a life insurance broker and his firm. The context of the subscription of the insurance policy is somewhat unusual and deserves explanations. In 1992, the purchaser of an immovable property undertook to pay part of the purchase price through the subscription of an insurance policy (the “Policy”) on the life of the seller for the benefit of the estate of the seller. The purchaser undertook to pay the premiums by subscribing to an annuity contract with the insurer, which included the payment of the premiums for the first year. The insurance broker represented to his client and to the seller that the annuity contract would pay for all the premiums since they would be paid for the subsequent years from the accumulation fund of the policy, on the basis of an estimated annual return of 7.8%. On August 19, 2008, the purchaser notified the seller that the funds accumulated were insufficient to pay the premiums. On June 3, 2009, the purchaser notified the seller that if the insurance premiums were not paid for the next three years, the Policy would lapse. Although formally put on notice by the seller, the purchaser of the immovable and the insurance broker neglected to take the necessary means to ensure that the premiums would be paid. On August 19, 2011, the seller instituted proceedings against the purchaser, the insurance broker and the brokerage firm. The purchaser instituted warranty proceedings against the broker and the firm. Starting on June 25, 2013, the seller had no alternative but to personally assume the payment of the premiums to maintain the Policy in force. The decision of the trial court The Superior Court noted that the insurance product proposed by the broker did not meet the needs of his client. Indeed, the broker had sold a “prepaid” Policy, not a “fully paid up” Policy on which no further premiums were payable. The prepaid Policy entailed risks since the payment process for the premiums from the annual estimated return of the accumulation fund of the Policy was not adequately explained to the client. The broker was held liable to his client, the purchaser of the immovable, because he had erroneously represented that only the premiums of the first year had to be paid at the time of the subscription of the policy and that all the subsequent premiums would be paid for with the returns from the annuity contract. The broker, thus, failed to discharge his duty to inform and to advise his client. As for the extracontractual liability (tort) of the insurance broker toward the seller of the immovable property, the trial judge relied on the principles of the Supreme Court decision Bank of Montreal v. Bail Ltée2 to conclude that the broker had failed in his obligation to act in good faith and adequately inform a third party. In fact, the broker clearly understood the objectives sought by the third party. The broker was fully aware of the business agreement entered into between the third party and his client, but nonetheless failed to discharge his duty to inform and, in so doing, committed an extracontractual fault for which he ought to be held liable. The purchaser of the immovable, the broker and his firm were condemned to pay to the plaintiff an amount of $1,200,010 representing the value of the insurance coverage on his life. The broker and his firm were also condemned to indemnify the purchaser for any amount due in the principal action. The judgment of the Court of Appeal: The extracontractual liability of the life insurance broker The Court of Appeal upheld the trial decision on the issue of the extracontractual liability of the broker and his firm toward the third party. The Court of Appeal seems to send a clear message to life insurance brokers whereby they are bound by a duty to inform and a duty of good faith beyond the framework of the contractual relationship and must necessarily consider the interests and rights of a third party when selling an insurance product.   Robinson c. Lefebvre, 2014 QCCS 3045 (CanLII). Montréal v. Bail Limitée, [1992] 2 S.C.R. 554.

    Read more
  • $8 million awarded to a quadriplegic hockey player: the Court of Appeal confirms the Superior Court's decision

    Last May 2, the Court of Appeal granted a motion to dismiss an appeal against a significant decision in the area of civil liability in the context of the practice of a sport.1 Decision at trial2 The facts in the case date back to October 3, 2010. A few seconds after the start of a hockey game between two junior teams, the plaintiff, Andrew Zaccardo, was violently body checked from behind by the defendant Ludovic Gauvreau-Beaupré, a player on the opposing team. Zaccardo, who became quadriplegic as a result of the incident, brought an action in damages against Gauvreau-Beaupré and his insurer, Chartis, claiming $8 million in damages. We commented this decision in a previous publication.3 At trial, Justice Daniel W. Payette noted that a hockey rink is not [translation] "a law-free zone".4 The Court found that by body checking Zaccardo from behind, Gauvreau-Beaupré had breached the basic rules of care, thereby committing a fault within the meaning of the civil law. In addition, the Superior Court pointed out that while it is true that hockey involves certain inherent risks, Zaccardo could not reasonably have expected to become quadriplegic as a result of an illegal body check. Gauvreau-Beaupré and Chartis, his insurer, were therefore ordered to indemnify Zaccardo for $8 million, which amount had been the subject of an agreement between the parties. Court of Appeal's decision In a short decision, the Court of Appeal dismissed the appeal by Chartis and Gauvreau-Beaupré against the decision at trial, noting that it had no reasonable chance of success, since the trial judge had carefully assessed the evidence in reaching his decision. Moreover, the Court dismissed the argument by Chartis that Gauvreau-Beaupré had committed an intentional fault when he made the body check from behind, stating that [translation] "where the insured is accused of committing an intentional fault, the intention must relate not only to the act committed, but also to the results of that act".5 At trial, Chartis had, moreover, waived the right to invoke this exclusion. Ultimately, the Court of Appeal upheld the award against the insurer to pay the total amount of $8 million in compensation for the injuries suffered by Zaccardo. This amount is certainly one of the highest ever granted by a Canadian court in such a context. Chartis Insurance Company of Canada c. Zaccardo, 2016 QCCA 787 ["decision of the Court of Appeal"]. Zaccardo c. Chartis Insurance Company of Canada, 2016 QCCS 398. Need to Kwow publication, march 2016. Supra note 2, at paragraph 10. Paragraph 5 of the decision of the Court of Appeal.

    Read more
  • Insurance contract terminology: the Court of Appeal clarifies the scope of the word ”building”

    In insurance law, as well as in other areas of contract law, the precise definition and scope of the terminology used in a contract are very important since they have a direct effect on the obligations of the parties and, in the case under review, the scope of the insurance coverage. On February 11, 2016, the Nova Scotia Court of Appeal1 issued two judgments while it analyzed the scope to be given to some expressions inherent to insurance contracts. This terminology analysis led the Court to conclude that contaminated soil under an insured building does not constitute insured property within the usual meaning of the terms “dwelling”, “premises” and “building”. The Snow Case facts The members of the Snow family obtained from the trial judge2 a court order against the insurer pursuant where it was required to pay them an indemnity for the hydrocarbon contamination of the soil under their residence resulting from an oil spill from the neighbouring property. The reasoning of the trial judge relied on his broad interpretation of the terms “dwelling“, “premises“ and “building “ contained in a property insurance contract (home owner’s policy). The Snow judgment The Court of Appeal3 disagreed with the interpretation of the trial judge who gave a broad interpretation to the term “building”, which included the soil under the residence of the insured from the definition of insured property in the insurance contract. Moreover, the insurance policy was covering the specified peril of damages caused by hydrocarbons (“escape of fuel oil“). Under the principles of interpretation of an insurance contract stated in the case of Progressive Homes Ltd. v. Lombard General Insurance Company of Canada, 2010 SCC 33 (para. 21 à 24), applied to the expressions contained in Coverage A and Coverage B of the contract, the Court of Appeal concluded that the term “dwelling” referred to the residential building as described in the declarations, while the term “premises” was defined as the residential building and the items of property located within the limits of the land where the building was erected. The Court noted that one must not mix up the three concepts of “insured property”, “insured perils” and “specified perils”. The term “premises” did not constitute insured property in and of itself, even if the loss was a covered specified peril, for the latter only served to define the location where the items of property had to be located in order to be included in the definition of insured property in the insurance contract. In the case under review, the residential building of the insured included the earth floor of the crawl space located immediately below the residence, in the same manner as the concrete floor of a basement would naturally be included in the definition of insured property, including the insured building (“dwelling” and “building”). If “dwelling” and “building” may be synonyms defining the insured property, the word “premises” is not a synonym. This last term simply establishes the limits of the land on which the residence is located and cannot be used to include the soil under the residence as insured property under the insurance contract. The word “building” cannot be interpreted as broadly, in a way to require the insurer to indemnify its insured for the hydrocarbon contamination of the soil of the crawl space down to an infinite depth, as if the soil under the insured building was also an item of insured property. The land (“premises”) and the building (“dwelling”) are two separate concepts in insurance law. The word “building” was clear in its common meaning and required no interpretation. The specified peril of damages caused by hydrocarbons (“escape of fuel oil”) could not include the soil under the residence as insured property. The obligation of the insurer The cases of Snow and Garden View Restaurant Ltd. show that the words “dwelling”, “premises” and “building”, taken in their usual meaning, do not implicitly include the soil under an insured building located within the limits of the insured location, although it may constitute a specified peril. Therefore, the insurer had no obligation to indemnify its insured for the hydrocarbon contamination in the soil within the limits of the insured location.   Royal & Sun Alliance Insurance Company of Canada v. Snow, 2016 NSCA 7; Garden View Restaurant Ltd. v. Portage La Prairie Mutual Insurance Company, 2016 NSCA 8. Snow v. Royal & Sun Alliance Insurance Company, 2015 NSSC 44. Royal & Sun Alliance Insurance Company of Canada v. Snow, 2016 NSCA 7.

    Read more
  • The Ontario Court of Appeal rules on the coverage exclusion of faulty workmanship by a contractor

    On December 23, 2015, the Ontario Court of Appeal1 set aside a decision of the motion judge2 which had granted a motion for summary judgment brought by the insurer to dismiss a claim by its insured. Facts The insured had entered into an agreement with a contractor to restore the exterior cladding of her home. The restoration process involved the use of water jets. The contractor was first required to seal all areas where water might enter the interior of the home. The insured submitted a claim to her insurer for water damage caused to the interior of her home by the contractor resulting from the exterior restoration work. The insurer denied coverage based on the “making good faulty workmanship” and “property being worked on” exclusions. Motion judge The motion judge interpreted the “making good faulty workmanship” and “property being worked on” exclusions broadly to exclude coverage for all damages caused directly or indirectly by the contractor and damages caused to the property being restored, thereby rendering ineffective the specific exception for resulting damages the restoration work. According to the motion judge, the exception was overridden by the two general exclusions. The insured had contracted a Security Plus “all-risks” homeowner’s insurance policy. The first of the two aforesaid exclusions, under the heading “Losses Excluded”, read as follows: We do not insure: […] 2. the cost of making good faulty material or workmanship; The second exclusion, under the heading “Property Excluded”, read as follows: We do not insure loss or damage to: […] 4. property: (ii) while being worked on, where the damage results from such process or work (but resulting damage to other insured property is covered); The decision The Court of Appeal totally dismissed the motion judge’s reasoning, based on the following principles of interpretation3: a) Exclusions are to be interpreted narrowly b) Exceptions are to be interpreted broadly c) Ambiguities in the interpretation of the clauses of an insurance contract are to be resolved in favour of the insured The damages suffered by the insured resulted from the contractor’s work and fell within the scope of the exception which maintains insurance coverage for resulting damage to “property being worked on”. The exclusion for “making good faulty workmanship” and the exclusion for “property being worked on” could not be construed in a manner that rendered a clear exception ineffective. If the insurer had clearly wished to exclude all damages resulting directly or indirectly from a contractor’s work, it would not have stipulated an exception to an exclusion in this all-risks type of insurance policy. Therefore, the insured was entitled to coverage. It is noteworthy that the Supreme Court of Canada4 has agreed to hear an appeal from the Alberta Court of Appeal5 which, among other things, should establish an analytical process that will clarify the distinction between the concepts of “making good faulty workmanship” and “resulting damage” in the context of a builder’s risk insurance policy.   Monk v. Farmers’ Mutual Insurance Company, 2015 ONCA 911. Monk v. Farmers and Muskoka Inc., 2014 ONSC 4956. MacDonald v. Chicago Title Insurance Company of Canada, 2015 ONCA 842, para. 66. Ledcor Construction Limited, et al. v. Société d’assurance d’indemnisation Northbridge, et al., 2015 CanLII 60494 (CSC). Ledcor Construction Limited v. Northbridge Indemnity Insurance Company, 2015 ABCA 121.

    Read more
  • The Québec Court of Appeal rules on the duty to defend and the exclusion of liability assumed by contract

    Last April 4, in the case of Aldo Group Inc. v. Chubb Insurance Company of Canada,1 the Court of Appeal ruled on the insurer’s duty to defend its insured and on the interpretation to be given to a clause excluding insurance coverage for liability contractually assumed by the insured. The decision highlights the difficulties of interpretation sometimes faced by the parties and the courts in situations involving complex contracts where the parties have adduced no evidence of what their respective intentions were at the time the contract was concluded. It also illustrates the importance of assessing each insurance policy on a case-by-case basis. Facts Aldo Group Inc. (“Aldo”) had concluded various agreements including, in particular, with Moneris (“Moneris”), an agent of the Bank of Montreal (“BMO”), in order to facilitate purchases made by its clients with MasterCard credit cards. Pursuant to these agreements, Aldo agreed with Moneris to abide by certain IT security standards in order to protect the personal information of its clients. In particular, it undertook to pay penalties and other charges in the event of a breach of these standards. Moneris, in turn, entered into similar agreements with MasterCard. Aldo’s computing system was subsequently hacked, thereby jeopardizing its clients’ data. Pursuant to the aforesaid agreements, MasterCard charged Moneris with more than $4.8M in penalties and other costs, which Moneris in turn charged against Aldo. No debate was held on this issue as these charges were automatically deducted, so that they could not be contested by Aldo. Instead, Aldo filed a claim in Ontario against Moneris and MasterCard, alleging that the amounts were deducted unfairly. Aldo then applied to the Superior Court of Québec for an order against its liability insurer, Chubb Insurance Company of Canada (“Chubb”), to pay for its legal costs, i.e. its defence, in the action instituted in Ontario. Trial judgment The Superior Court dismissed the motion to force Chubb to pay for Aldo’s legal costs2 (its defence) in the action instituted in Ontario against Moneris and MasterCard. While the judge came to the conclusion, after interpreting the terms of the insurance contract between Aldo and Chubb, that the action instituted by Aldo was a valid claim within the meaning of the insurance policy, she found that the exclusion relating to liability assumed by contract applied. She also found that Aldo had contractually waived certain rights that it could have asserted against Moneris or MasterCard, thereby justifying the refusal by Chubb to assume its defence. Court of Appeal judgment Two preliminary comments by the Court of Appeal are important for parties and lawyers faced with resolving problems in the interpretation of insurance policies. Firstly, the Court of Appeal noted that this decision was not intended to “set a precedent” (“translation”), since it dealt with the analysis of contracts between the parties and an insurance policy specific to that case. In other words, each situation must be assessed in light of the particular insurance policy and the specific facts of each situation. Secondly, the Court of Appeal stressed that there was no evidence of the circumstances surrounding the negotiation and conclusion of the insurance contract between Aldo and Chubb, including the specific exclusion at issue in this case. In the absence of evidence of the negotiations that led to the conclusion of the contract, or of the application of this exclusionary clause in the past, the court’s analysis was limited to the text of the insurance policy alone, according to the applicable rules of interpretation. On the merits, the Court of Appeal concluded, firstly, that the action instituted by Aldo against Moneris and MasterCard was a claim within the meaning of the insurance policy. Given the terms of the contract, the mere fact that Aldo itself had instituted the proceeding instead of being sued was not a sufficient reason, by itself, to conclude that Chubb’s duty to defend had not been triggered. Secondly, the Court of Appeal held, contrary to the trial judge, that Aldo had not contractually waived the ability to assert certain rights against MasterCard and Moneris, as Chubb had claimed. The mere fact that deductions had been made for the amount of the penalties did not constitute a waiver of the right of contestation. Furthermore, Aldo could not be accused of having failed to cooperate with Chubb. Thirdly, the Court of Appeal confimed the trial judgment and concluded that Moneris’ claim against Aldo was contractual in nature. The exclusion contained in the insurance policy for any liability assumed by contract therefore applied. In interpreting the policy, the Court held that this was a clause by which the insurer excluded claims from the liability insurance policy so as to avoid being held liable for any defaults by the insured in fulfilling its contractual obligations, such as unpaid accounts or other debts to third parties. In addition, the Court held that the exception to this exclusion relating to extra-contractual liability did not apply because Moneris could not have asserted its rights against Aldo in the absence of the contract. The fact that third parties, such as the victims of the leak of personal information, might potentially have been able to assert their rights against Aldo, was not a situation that enabled the exception to the exclusion to apply in this case. The Court of Appeal therefore concluded that Chubb did not have the obligation to pay for Aldo’s legal costs (its defence) in the claim brought in Ontario against Moneris and MasterCard. Conclusions In summary, the Court of Appeal concluded as follows: while no legal action was brought against Aldo, Aldo’s claim against Moneris and MasterCard was a valid claim within the meaning of the insurance policy and the duty to defend it would have been triggered, had it not been for the exclusion; Aldo had not waived the ability to assert any right whatsoever which prejudiced Chubb, and Chubb could therefore not claim on this basis that its duty to defend Aldo was not triggered; Chubb nevertheless had no duty to pay for the legal costs, i.e. the defence, of Aldo’s claim against Moneris and MasterCard because this situation was covered by the clause excluding insurance coverage for any liability contractually assumed by Aldo. As the Court of Appeal noted, this case in no way changes the principles governing the duty to defend. In this regard, Justice Bich wrote as follows: [Translation] [53] One cannot deny the atypical nature of this situation, which is certainly not an ordinary case. But, one must also see that the interpretation reached by the trial judge is not meant to be a general postulate that is intended to transform the duty to defend. It is a specific solution, based on the specific terms of a specific contract. The fact that we are outside the norm does not mean, by itself (subject to a palpable and overriding error), that we are justified in substituting the trial judge’s interpretation of the text of the policy with a reading that would be consistent with Chubb’s conception thereof. [54] The defence contemplated in clause 16 is not therefore limited to contesting a legal action brought against the insured. This is, moreover, in no way incompatible with the meaning given by current dictionaries to the verb “to defend”/”défendre”, which is not limited to a defence against a duly instituted court action, but more generally connotes such concepts as to protect, sustain, help, intercede and support. The Court of Appeal also issued a warning to the parties to the insurance contract: if a contract such as an insurance policy must be interpreted with the help of other elements than the text, then evidence must be presented. Otherwise, only the text will guide the court, in light, of course, of the rules of interpretation as provided in the legislation and case law. Finally, each insurance contract must be construed in accordance with its own wording and the facts of the case. Therefore, even in the presence of similar terms, insurers and insureds must nevertheless avoid speaking in generalities when the time comes for determining whether, for instance, the insurer has the duty to defend or indemnify.   2016 QCCA 554 (Justices Yves-Marie Morrissette, Marie-France Bich and Marie St-Pierre); reasons given by Justice Bich. Aldo Group.inc. c. Chubb Insurance Company of Canada 2013 QCCS 2006 (Justice Marie-Anne Paquette).

    Read more
  • Judge blows whistle to put a stop to checks from behind: $8,000,000 awarded to a quadriplegic hockey player

    On February 1, 2016, the Superior Court of Québec rendered a significant decision in the area of civil liability in the context of the practice of a sport1. The judgment was widely reported in the media due, on the one hand, to the importance of the amount granted by the judge (8 million dollars) and, on the other hand, because it is closely related to the practice of the national sport of Canadians. Will this judgment, through which a junior hockey player who became quadriplegic after receiving a check from behind has been allowed such an important amount as compensation, change the rules of the game? The facts The plaintiff, Andrew Zaccardo (hereinafter, “Zaccardo”), who was 16 years old at the time of the events, was a junior amateur hockey player. On October 3, 2010, his life took a turn for the worse when he received a check from behind from another player, defendant Ludovic Gauvreau-Beaupré (hereinafter, “Gauvreau-Beaupré”), who violently hit him from behind. Zaccardo became quadriplegic. The video clip, filed as evidence at the trial, shows a sequence resembling those routinely seen by hockey fans in sports information bulletins (at 0:15 to 0:30 more specifically). Zaccardo instituted civil proceedings against Gauvreau-Beaupré, his insurer, as well as Hockey Québec and Hockey Canada, claiming damages, particularly for the costs and expenses related to the care required by his physical condition for the remainder of his life. Prior to the hearing, Zaccardo discontinued his action against Hockey Québec and Hockey Canada. The hearing showed that for many years both entities had systematically discouraged and condemned checking from behind. At the time of the hearing, the parties agreed to an admission as to the quantum of damages for an amount of 8 million dollars. Mr. Justice Daniel W. Payette came to the conclusion that Gauvreau-Beaupré had committed a fault and found him liable for the damages suffered by Zaccardo. The Judgment At the outset, Justice Payette stated that players participating in hockey games are subject to the law as any other citizens: [TRANSLATION] “an ice rink is not a law-free zone”2. Justice Payette reviewed the relevant case law, both from Quebec and the common law provinces and concluded that strictly speaking, “sports liability” does not exist as a separate area of liability: players are subject to the usual rules governing civil liability and are thus required to act like [TRANSLATION] “reasonable players placed in the same circumstances”. The judge also confirmed that the practice of hockey involves inherent risks which a player accepts by participating in a game, but that by doing so, he is not however deemed to accept unreasonable risks which he is not aware of. Accordingly, the violent check suffered by Zaccardo did not constitute a risk which he should have foreseen when participating in the game. Moreover, the judge noted that a breach of the rules of the game, whether sanctioned by a penalty or not during the game, will not always constitute a fault within the meaning of civil law. Therefore, the court ordered Gauvreau-Beaupré and his insurer to pay to Zaccardo the admitted amount of 8 million dollars. It must be noted that at the beginning of the hearing, Gauvreau-Beaupré’s insurer informed the court that it was not alleging the intentional fault of the insured and, accordingly, the judgment does not deal with this issue. In the circumstances, the court also ordered the insurer to indemnify Zaccardo for the damages he suffered. The surgical precision with which the judge dissected the sequence of the check shows that he no doubt has experience of the practice of hockey and leads one to believe that this may have influenced the conclusions of the judgment. In addition, the legal reasoning put forward confirms that the efforts made by Hockey Québec and Hockey Canada to promote the safe practice of hockey are still encouraged. Echoes beyond the legal sphere In addition to being the highest amount ever granted to a victim of an injury in such a context, at least in Canada according to our verifications, this judgment already echoes beyond legal circles. For the time being, it is difficult to determine the scope that this decision will have and whether it will impact sports in general. Indeed, despite the magnitude of the amount granted to Zaccardo which, again, had not been contested, the judge noted that each case is dealt with on its own merits and only involves the application of general civil liability principles. In that sense, each situation is to be considered according to its own set of facts. In an era where class actions are instituted by former professional athletes who suffered concussions3 and following numerous other cases of violent actions with serious consequences4this decision may have an impact on the prevailing culture of hockey, which is more than ever called upon to change. Lastly, it must be noted that on March 2 2016, Gauvreau-Beaupré and his insurer appealed the decision5. The conclusions reached by the judge regarding liability will therefore be reviewed in the following 18 to 24 months. Conclusion The judgment in favour of young Zaccardo and the impressive monetary compensation he was granted attest to the numerous efforts made during the last few years to raise players’ awareness to the risk of serious harm associated to the practice of contact sports. The often critical attitude of Justice Payette toward the aggressor also demonstrates that this awareness had at least already entered the mind of the judge. Despite the fact that all the calls for prudence, by-laws and increased sanctions have not succeeded in actualizing the culture of hockey6, it is to be hoped that the whistle blown by Justice Payette will accelerate the changes. Zaccardo v. Chartis Insurance Company of Canada, 2016 QCCS 398, appeal pending: 500-09-025937-160 and 500-09-025938-168. Paragraph 10 of the judgment. For illustration purposes, a group of over 100 former players of the National Hockey League filed an application to be authorized to institute a class action against the NHL for damages suffered as a result of repeated shocks received to the head while they played as professionals: http://www.cbc.ca/sports/hockey/nhl/grand-ledyard-nhl-lawsuit-1.3432273. Also see: http://www.nhlconcussionlitigation.com For example we may think about the action of Todd Bertuzzi against Steve Moore, following which Moore was unable to continue his professional hockey career: https://www.youtube.com/watch?v=Fz9RE9RGrVY. The hockey stick hit given by Marty McSorely to Donald Brashear constitutes another example: https://www.youtube.com/watch?v=eTOfsoJAij4 500-09-025937-160 and 500-09-025938-168. Only a few days ago, another young hockey player from the Montreal region suffered an injury to the neck following a check from behind by another player. However, the young man has been “luckier” than young Zaccardo since his spinal cord was not damaged: http://montrealgazette.com/news/local-news/local-midget-hockey-player-suffers-broken-neck-after-illegal-hit

    Read more
  • The Supreme Court of Canada will not review the duty of the insured to collaborate

    On February 18 last, the Supreme Court of Canada1 denied leave to appeal in the matter of Intact Compagnie d’assurance c. 9221-2133 Québec inc.2, thus confirming the principles applicable to the duty of the insured to collaborate. The facts Following the theft of his vehicle, the insured filed a claim with his insurer, but refused to submit to a statutory examination and provide authorizations for obtaining additional information, for example, his driver file at the Société d’assurance automobile du Québec. The judgment At trial, the Court of Québec ordered the insurer to pay its insured the indemnity arising from the theft of the insured’s vehicle but, particularly due to the [TRANSLATION] “lack of collaboration” of the insured, dismissed his claim for trouble and inconvenience. The Court of Appeal reversed the judgment and concluded that the insured has a duty to closely collaborate with his insurer in the context of settling a loss, which includes the duty to answer the questions of the insurer respecting all the circumstances surrounding the loss and provide all the documentation in support of his claim. The insured must also agree to the collection of the necessary documents and sign the authorizations required for that purpose. The duty of the insured to collaborate is not subject to any duty of the insurer to conduct investigations with third parties. In the circumstances, the Court concluded that since the insured demonstrated bad faith by systematically refusing to answer the questions of the insurer, which suffered harm as a result, he had no right to be indemnified. The refusal of the Supreme Court to review this issue also confirms the principles already established by the Court of Appeal respecting the duty of the insured to collaborate3.   9221-2133 Québec inc., F.A.S.R.S. Centre Mécatech c. Intact Compagnie d’assurance, 2016-02-18, 36569. 2015 QCCA 916. See more particularly the following cases: Northumberland General Insurance v. Genziuk, J.E. 81-1072 (C.A.) and Di Capua c. Barreau du Québec, J.E. 2003-1310 (C.A.).

    Read more
  • On appeal from a judgment on a Wellington-type motion

    The Court of Appeal of Quebec recently ruled on a leave to appeal from an interlocutory judgment dismissing a Wellington type motion seeking to order an insurer to take up the defence of its insured. The decision of the Court in Technologies CII inc. v. Société d’assurances générales Northbridge1 follows the one issued on April 21, 2015 by the Honourable Michel A. Pinsonnault, dismissing a motion of this type in the context of litigation opposing the Attorney General of Quebec (hereinafter, the “AGQ”) and the Commission scolaire de la Rivière du Nord (the “School Board”) and, among others, Technologies CII Inc. (“CII”) and its liability insurer Northbridge General Insurance Corporation (“Northbridge”). After analysis, Ms. Justice Marie-France Bich concluded that an interlocutory judgment dismissing a Wellington-type motion must still be recognized as a judgment contemplated in second paragraph of the first alinea of article 29 Code of Civil Procedure (Quebec) (“CCP”). THE DISPUTE CII is a business specializing in the installation of heating and air conditioning systems. It was sued, solidarily with other defendants, for an amount of $16,537,687.00 by the AGQ and the School Board for a fire which occurred on September 21, 2011. The plaintiffs alleged that the fire was caused by the negligence of CII while performing its work, since it failed to comply with the legal requirements and standards of care applicable to welding activities. After it conducted a statutory examination of a CII representative, Northbridge refused to take up the defence of its insured on the ground that the coverage provided under the insurance policy was suspended at the time the events took place. It argued that CII had failed to comply with an endorsement, thus contravening to article 2412 of the Civil Code of Québec (“CCQ”) which provides that a breach of warranty aggravating the risk suspends the insurance coverage. The endorsement in question set out specific conditions for the control of sparks during welding activities, such as the use of protective screens or canvases. Therefore, Northbridge blamed CII for having breached what it considered to be a warranty by carrying out welding work in a closed environment without using any form of fire protection. For its part, CII argued that the endorsement did not constitute a warranty, but an endorsement modifying the terms of the policy. It added that this endorsement could not be held against CII because it had not been brought to the attention of a person in authority, that it did not form part of the original policy and because Northbridge would not have complied with the provisions of article 2405 CCQ. Hence CII filed a Wellington-type motion with the Superior Court to force Northbridge to take up its defence in the proceedings against the AGQ and the School Board. THE JUDGMENT ON THE WELLINGTON-TYPE MOTION2 The Superior Court concluded that, based on the allegations of the proceedings, the insurance policy, the exhibits filed and the statutory examination, CII had clearly breached the terms of the endorsement. According to the Court, [TRANSLATION] “there is no doubt that when the work was performed by its employees [CII’s] on the day the fire occurred, the employees did not use any protective screen or asbestos canvas to limit the spread of sparks (…).” The Court added that the endorsement indeed constituted a warranty incurred in the original policy, dismissing CII’s arguments and thus, its Wellington-type motion. THE LEAVE TO APPEAL FROM THE JUDGMENT OF THE SUPERIOR COURT On the basis of article 511 CCP, CII applied for a leave to appeal from the judgment of the Superior Court. From the outset, the Court of Appeal reiterated the two conditions which are necessary to obtain a leave to appeal from an interlocutory judgment, namely: the judgment is one that is contemplated in article 29 CCP; and the pursuit of justice requires that the leave be granted. The Court of Appeal wondered whether the case law prior to 2012, according to which a judgment dismissing a Wellington-type motion is a judgment contemplated in the second paragraph of the first alinea of article 29, still applied in the wake of the case of Elitis Pharma inc. v. RX Job inc.3 In this last case, Justices Rochon and Kasirer wrote that the sole economic harm or the financial or business inconvenience arising from an interlocutory judgment was not sufficient to consider same as a judgment ordering the doing of something which cannot be remedied by the final judgment. The Court concluded that it must still be recognized that an interlocutory judgment dismissing a Wellington-type motion may be appealed on the basis of this provision. Indeed, in addition to the economic harm caused to the insured by the dismissal of this type of motion, the Court was of the view that the insured is also deprived of one of the substantive rights provided in his insurance policy and by article 2503 CCQ. The second criteria, which relates to the pursuit of justice is not discussed in detail in this decision. The Court simply mentioned that this condition weighed in favour of granting the leave to appeal. In the end, the Court, reiterated that a judgment which dismisses a Wellington-type motion is a judgment contemplated in the second paragraph of the first alinea of article 29 CCP. WHAT ABOUT THE LEAVE TO APPEAL A JUDGMENT GRANTING A WELLINGTON-TYPE MOTION? If it seems henceforth clear that a judgment dismissing a Wellington-type motion is a judgment contemplated in the second paragraph of the first alinea article 29 CCP, such is not necessarily the case of a judgment granting such a motion. Indeed, the issue remains as to whether the harm suffered by an insurer who is required to take up the defence of its insured is purely economic and may be remedied by the final judgment. In the judgment rendered in the Lloyd’s Underwriters v. 4170831 Canada inc.4 on August 12 last, Justice Kasirer accepted, for discussion purposes only, that an interlocutory judgment allowing in part a Wellington-type motion satisfies the conditions of section 29 CCP., but denied the leave to appeal from on the basis of the pursuit of justice criteria. However, referring to the decision of Ms. Justice Bich, Justice Kasirer wrote the following: [TRANSLATION] “One may wonder, in circumstances where the harm suffered by the insurer is purely economic and may be redressed on the merits, whether article 29 CCP is truly satisfied in all cases. I note the relevance of the discussion of this issue by my colleague Ms. Justice Bich in the context of the dismissal of a Wellington-type motion in Technologies CII inc. v. Société d’assurances générales Northbridge, 20015 QCCA 1246, par.[9] (sitting alone). This being said, in view of my conclusion respecting the criteria set out in article 511 CCP, I reckon that it is not necessary to rule on the issue for the purposes of this motion.” Having determined that the pursuit of justice did not weight in favour of granting the leave to appeal, the Court preferred not to deal with the issue of whether the judgment allowing a Wellington-type motion is a judgment contemplated in the second paragraph of the first alinea of article 29 CCP. We’ll take a raincheck! 1 2015 QCCA 1246. 2 2015 QCCS 1988. 3 2012 QCCA 1348. 4 2015 QCCA 1333.

    Read more
  • Civil law interpretation : Does coverage under a builder’s risk insurance policy extend to an existing structure?

    On February 19, 2015, the Court of Appeal of Quebec1 overturned a judgment rendered by the Superior Court2, on July 12, 2013, which granted the defendants’ motion to dismiss. Essentially, the Court had to determine whether coverage under a builder’s risk insurance policy extends to damage caused by the work to an existing structure, or whether it is limited to the site on which the work is being done. THE FACTS The facts of this case were discussed in further detail in a newsletter published in October 2014.3 However, for ease of reference, we have summarized the main facts of the case. Quebec City (“the City”) intended to convert the Palais Montcalm from an entertainment venue into a concert hall. On December 1, 2004, it retained the services of Génitech as a general contractor to carry out work on the existing structure of the Palais Montcalm. CFG Construction was retained as a subcontractor to perform the required demolition work. The City required the contractor to obtain builder’s risk insurance. The policy, obtained from Promutuel, named Génitech and the City as co-insured, and the protection was also extended to subcontractors. On February 26, 2005, following the faulty performance of the demolition work, a fire caused significant damage to parts of the existing structure which were not included in the transformation work. On February 22, 2008, the City instituted two actions. The first against Promutuel, for compensation under the builder’s risk insurance policy, and the second against Génitech and CFG, based on their contractual and extracontractual liability. On November 5, 2008, the City withdrew its first action and signed a settlement declaration. SUPERIOR COURT The defendants asked for the dismissal of the action on a preliminary basis on three grounds: the builder’s risk insurance policy applies not only to the items that are the subject of the transformation work, but to all property damaged in relation to the transformation work, including damage to the existing structure of the Palais Montcalm; the City no longer has a recourse against the defendants, because it had withdrawn and filed a declaration of settlement in the first action relating to the same facts and claiming almost identical damages; and since the City was a co-insured under the terms of the builder’s risk insurance policy, it cannot sue the defendants. Applying the same reasoning as the Alberta Court of Appeal in Medicine Hat College (“Medicine Hat”),4the Court held that the subcontractors have an insurable interest on the construction project in its entirety, and that, consequently, the builder’s risk policy covers the entire structure of the Palais Montcalm. In addition, the Court held that the settlement in the first action had the effect of res judicata, because the builder’s risk insurance covers all the damage claimed by the City and the City could not commence a second action based on the same facts. Lastly, the Court added that the City could not sue the defendants due to its status of co-insured. The Court therefore granted the motion to dismiss the City’s action. COURT OF APPEAL The Court confirms that the decision in Medicine Hat is the only Canadian decision on this issue. It reiterates that, in matters of insurance, decisions from other jurisdictions can be considered when they are consistent with the general scheme of civil law.5 However, the Court found that since the Civil Code of Québec contains provisions specific to insurable interests,6 distinctions are likely to be made between civil law and common law. Consequently, the question whether builder’s risk insurance applies to an existing structure must be analysed in light of Quebec civil law. Therefore, the Court held that it is premature to dismiss the action at this stage. As for the other grounds for dismissal, the Court of Appeal held that the first action did not disqualify the second on the basis of res judicata, because the two actions are based on distinct contracts. More specifically, the first action, which was withdrawn, was based on the builder’s risk insurance policy, whereas the second action was based on the contractual liability of Génitech and the extracontractual liability of CFG. Furthermore, the Court found that evidence regarding the circumstances surrounding the settlement declaration may be relevant to the outcome of the dispute, noting, in passing, that the grounds for dismissal are surprising. Indeed, if, as the defendants argue, the builder’s risk insurance covered all the damages caused to the Palais Montcalm, why had the City still not been compensated? In light of the foregoing, and given that motions to dismiss must be considered with caution, the Court of Appeal overturned the decision of the Superior Court, and dismissed the defendants’ motion to dismiss. CONCLUSION Since the motion to dismiss has been set aside, the case continues to follow its course. The interpretation of a builder’s risk insurance policy is especially important for the parties to the contract who must determine which property is truly covered. It will therefore be interesting to see whether Quebec courts will adopt the same reasoning as the common law provinces, or whether civil law principles will influence how the question of insurable interest is addressed in relation to whether builder’s risk insurance extends to an existing structure. _________________________________________ 1 Québec (Ville de) v. CFG Construction inc., 2015 QCCA 362. 2 Ville de Québec v. Génitech Entrepreneur général inc. et al., 2013 QCCS 5042. 3 See the Need to Know newsletter published in October 2014 by Louise Cérat and Odette Jobin-Laberge with the collaboration of Alexandra Dubé-Lorrain in respect to the Superior Court’s decision: “Builder’s risk insurance: Insurable interest and subrogation rights”: https://www.lavery.ca/en/publications/our-publications/1834-builders-risk-insurance-insurable-interest-and-subrogation-rights.html. 4 Medicine Hat College v. Starks Plumbing & Heating Ltd, 2007 ABQB 691. 5 Optimum, société d’assurances inc. v. Plomberie Raymond Lemelin inc., 2009 QCCA 416, para. 41. 6 Articles 2481 and 2484 C.C.Q.

    Read more
  • Overlapping Insurance Policies: The Court of Appeal of Ontario toes the line!

    On January 16 last, the Supreme Court of Canada refused to grant leave to appeal by Lombard following a judgment rendered on June 20, 2013 by the Ontario Court of Appeal.1This decision deals with the issue of overlapping excess and umbrella policies.THE FACTSIn January 1995, an apartment building was destroyed by fire. Six people died and many others were injured. Actions were then instituted by the victims for several millions of dollars against: Axes Investment (“Axes”) the owner of the building Tandem Group Management (“Tandem”, a building manager) Lombard and Aviva insured Axes and Tandem’s liability in the following way: Lombard was the primary insurer of Axes and Tandem with a $1M policy limit Lombard was the umbrella insurer of Axes and Tandem for a $9M policy limit Aviva was the excess insurer of Tandem for a limit of $5M Within the scope of the liability proceedings instituted by the victims against Axes and Tandem, Lombard assumed Axes and Tandem’s defence by retaining one and the same counsel. The same defence was filed by Lombard, Aviva, Axes and Tandem and none of them ever requested that the liability between Axes and Tandem be apportioned. Axes and Tandem were found liable as if they were a single defendant.Lombard took the position that Aviva’s excess policy would be required to respond after Lombard’s primary policy and that Lombard’s umbrella policy was triggered only after Aviva’s $5M policy was exhausted. Aviva took the position that Lombard’s policy should be next to respond completely as it covered both Tandem and Axes.Following this decision, a judgment of the Ontario Court of Appeal confirmed a priority proceeding that the Aviva’s excess policy was triggered prior to Lombard’s umbrella policy with respect to Tandem’s liability only. This decision is known as the “Ranking Decision”.Faced with a threat of having to pay punitive damages and a refusal of Lombard to a joint contribution, Aviva “blinked” and paid the balance of the claims made both against Axes and Tandem in the amount of almost $2.5M as the two were held solidarily liable. Lombard had paid the first million dollars.Neither the Priority decision nor the Ranking Decision addressed whether, or to what extent, liability would be shared if Aviva’s payment on behalf of Tandem exhausted the liability of both defendants, jointly.Aviva then sued Lombard in order to claim the payments made on behalf of Axes, whom it did not insure. Lombard argued that its umbrella policy did not apply once Aviva’s excess policy limits were exhausted. The Superior Court ordered Lombard to reimburse half of the damages by Aviva. Lombard appealed.ONTARIO COURT OF APPEAL JUDGMENTRelying on the Supreme Court of Canada’s decision in Family Insurance Corp. v. Lombard Canada,2 and on the theory of equitable contribution and the restitutionary principles of unjust enrichment, both notions imposed by equity, the Court of Appeal of Ontario confirmed the judgment holding Lombard responsible. The theory of equitable contribution between insurers was applied in this case to require Lombard to contribute to Aviva’s payment of the loss. Payment of the loss by Aviva was, in reality, according to the Court of Appeal, payment on behalf of both Tandem and Axes. Lombard insured both Tandem and Axes. The Court held that while Lombard was not required to respond next to the loss on behalf of Tandem in light of the Ranking Decision, it was required to respond to the loss on behalf of Axes and should therefore contribute 50% of the total loss.In fact, since the two insurers purposely decided to not request an apportionment of liability between Axes and Tandem, they rendered themselves liable towards the victims to indemnify them completely and equally. In other words, Lombard and Aviva were each equally obligated to respond to the plaintiffs’ claim in full. The Court added that “The fact that Aviva blinked first” does not detract from Lombard’s legal obligations to respond, had the tort plaintiffs pursued Aviva alone. “Blinking” cannot be the defining principle of insurance law upon which the respective responsibilities of Aviva and Lombard for responding to the losses are determined.CONCLUSIONThis decision is interesting notably with respect to the impact that the choice of the defence strategy can have on another insurer. Hence, if for strategic or economic reasons an insurer decides not to request the apportionment of liability between insureds and there is a judgment without the apportionment of liability, it may be ordered to pay its part of indemnity to the victims._________________________________________1 Aviva Insurance Company of Canada v. Lombard General Insurance Company of Canada, 2013 ONCA 416.2 [2002] 2 S.C.R. 695.

    Read more
  • Supreme Court of Canada agrees to hear Réjean Hinse appeal

    On March 20, 2014, the Supreme Court of Canada granted Réjean Hinse leave to appeal a decision involving an action in damages he brought against the federal authorities, represented by the Attorney General of Canada.In 1964, Mr. Hinse was wrongly convicted of taking part in an armed robbery and ordered to serve fifteen (15) years in prison. He was acquitted by the Supreme Court of Canada in 1997, thirty-three (33) years later.After he was acquitted, Mr. Hinse sued the City of Mont-Laurier, the Attorney General of Quebec and the Attorney General of Canada solidarily. He settled out of court with the City of Mont-Laurier and the Attorney General of Quebec.On April 13, 2011, the Superior Court granted his action and ordered the Attorney General of Canada to pay him close to $5.8 million1. The Quebec Court of Appeal reversed that decision on September 11, 2013, ruling that Mr. Hinse had not met his burden of proving fault on the part of the federal authorities2.The upcoming Supreme Court of Canada decision will have a significant impact on the rights of victims of legal errors and the liability of the authorities responsible for them, but it could also establish guidelines for evaluating the damages suffered in this type of case.________________________________1 Hinse v. Québec (Procureur général), 2011 QCCS 1780.2 Canada (Procureur général) v. Hinse, 2013 QCCA 1513.

    Read more
  • The Robinson Case: The Final Chapter

    Last December 23, the Supreme Court of Canada partially overturned the decision of the Quebec Court of Appeal in the case of Cinar Corporation v. Robinson1 and reinstated most of the conclusions of the Quebec Superior Court.BACKGROUNDIn the 1980s, Claude Robinson (“Robinson”) developed a project for a television series entitled “The Adventures of Robinson Curiosity” (“Robinson Curiosity”). He partnered with Pathonic to whom he had presented his project. His copyright was registered shortly afterward and Productions Nilem Inc. (“Nilem”), of which he was the sole shareholder, was named owner of the copyright. In 1986, Pathonic partnered with Cinar so that Cinar could represent Pathonic’s interests in the United States. Cinar’s directors, Micheline Charest and Ronald Weinberg, were provided with a copy of all of the documents for the Robinson Curiosity project. However, the project never saw the light of day.In parallel with Robinson’s activities, during the 1990s, a producer with France Animation, Christophe Izard, presented a project for a televised series whose main character was named Robinson Sucroë (“Sucroë”). Cinar was involved as early as 1992 in the production of this project, and, as of 1993, in the writing and co-script writing under contracts with France Animation.Robinson continued his work on his Curiosity project during 1994. In August 1995, Cinar registered copyright to the Sucroë project which was first broadcast in September 1995. Robinson immediately noticed similarities between the Sucroë project and his Curiosity project.In July 1996, Robinson and Nilem Inc. brought an action for damages and an injunction against Cinar, Charest, Weinberg, France Animation, Izard and other European partners, including Ravensburger and the BBC, alleging plagiarism of their work.DECISION OF THE SUPERIOR COURT OF QUÉBECAfter 83 days of trial, Justice Claude Auclair concluded that the defendants had had access to the Robinson Curiosity project and work during the 1980s.The judge found that even though the Robinson Curiosity work had not been completed, it was nevertheless an original work because it was sufficiently developed and advanced. There were many similarities between the characters and drawings of Sucroë and the original Robinson Curiosity project, despite some misleading changes. According to the Court, a layperson would have been convinced of the similarity, which gave rise to a presumption of infringement that was not rebutted by the defendants.The Court found the defendants solidarily liable and that Cinar and its two directors, Charest and Weinberg, had violated their obligations of good faith and loyalty. Therefore, Charest and Weinberg could not hide behind the corporate veil to escape their liability.The injunctions issued applied against the BBC preventing it from broadcating Sucroë. The Court also ordered that the copies be returned, followed by their destruction within 60 days.As for the damages, Justice Auclair ordered the defendants to pay a total of $5,224,293, detailed as follows:  $607,489 in compensatory damages for pecuniary loss; $1,716,804 in loss of profits (50% of the profits earned by the Sucroë project, given the plaintiffs’ partnership with Pathonic); $400,000 for the psychological harm suffered by Robinson; $1,000,000 in punitive damages; $1,500,000 for costs on a solicitor-client basis, since the defendants tried to exhaust the plaintiffs in their conduct of the proceeding. COURT OF APPEAL’S DECISIONThe Court of Appeal allowed the appeal in part. It upheld the trial judge’s decision on the infringement of Robinson’s work, finding that there was no error in the trial judge’s reasoning. The Court also affirmed the liability of Cinar and of Weinberg, both personally and in his capacity as liquidator of the estate of the deceased, Micheline Charest as well as of Izard.However, the Court of Appeal reduced the damage award to a total of $2,736,416. As for the loss of profits, the Court set aside the awards against Weinberg and Izard because only Cinar and France Animation benefited from the use of the Sucroë work. The Court also set aside the award of $1,117,252 relating to the musical rights, based on the finding that the Robinson Sucroë musical work was original and dissociable from the Curiosity project. According to the judgment, there was therefore no violation of Robinson’s copyright in this respect.Finally, according to the Court of Appeal, the psychological harm suffered by Robinson was a bodily injury of a non-pecuniary nature for which compensation was limited by the cap set by the Supreme Court of Canada.2 Since the present value of this cap was $242,700, the Court awarded 50% of this amount, or $121,350, in light of the circumstances and the seriousness of the psychological harm.The Court of Appeal also reduced the amounts awarded in punitive damages and assessed them individually at $100,000 for Cinar and $50,000 each for Weinberg, Charest and Izard. It further declared that these awards were not solidary.As for costs, the Court of Appeal upheld the trial judge’s decision, but did not allow the solicitor-client costs incurred in the appeal proceedings.THE SUPREME COURT’S DECISIONIn a unanimous judgment the reasons of which were written by Chief Justice McLachlin, the Supreme Court upheld the judgment of the Court of Appeal on the issue of the defendants’ liability. It stated that one must determine the cumulative effect of the copied features of the Curiosity project in deciding whether they amount to a substantial part of Robinson’s skill and judgment expressed in his work as a whole. To determine whether a substantial part has been copied, one must conduct a qualitative and holistic assessment of the similarities between the works, taking into account the relevant resemblances and differences. In the absence of a palpable and overriding error in both the trial judge’s and Court of Appeal’s assessment of the facts, the Supreme Court refused to intervene and affirmed the defendants’ liability.On the assessment of damages, the Court noted that the Court of Appeal could not intervene unless there was a palpable and overriding error in fact by the trial judge and reassessed each head of damages. It set the amount to which Robinson and Nilem was entitled at $4,379,293. With respect to the loss of profits, the Supreme Court found that the trial judge had committed no error in allowing the amount for the soundtrack to the work on the basis that it was indissociable from the work itself, and reinstated the holding of the trial judgment on this point. However, it found that this award must not be solidary since its aim was the disgorgement of the profits illegally obtained by each of the defendants personally. Accordingly, Charest, Weinberg and Izard were not personally bound to disgorge the profits since they did not benefit therefrom.As regards the non-pecuniary damages, the Supreme Court held that the application of the cap on claims should not be extended beyond those stemming from bodily injury. In this case, the non-pecuniary damages suffered by Robinson did not stem from a bodily injury. It should rather be characterized as psychological suffering stemming from material injury, i.e. the infringement of his copyright which is equivalent to a breach of his property rights. The Court reinstated the trial judgment and confirmed that Robinson was entitled to the amount of $400,000 under this head.The Court also confirmed that punitive damages cannot be awarded on a solidary basis. However, it found that, while the Court of Appeal was correct in reassessing the amount thereof, it did not give sufficient weight to the gravity of the defendants’ conduct. In the Court’s view, the amount of $500,000 achieved an appropriate balance between the overarching principle of restraint that governs the awarding of such damages and the need to deter conduct of such gravity. It apportioned the liability for these damages, awarding $200,000 against Cinar and $100,000 against each of Weinberg, Charest and Izard.COMMENTSThis decision finally brings to a close this dispute between the parties which has lasted nearly 18 years, and largely upholds the trial judge’s analysis of the case.The judgment will certainly have a significant impact on subsequent case law not only on copyright, but also on other areas of the law, particularly the characterization of psychological damages based on their source and the refusal to apply the cap on non-pecuniary damages for psychological harm stemming from material prejudice. The judgment will also guide the courts in the awarding of punitive and exemplary damages and on the principles of solidarity applicable thereto._________________________________________ 1 2013 SCC 73.2According to the trilogy of cases, i.e. Andrews v. Grand & Toy Alberta Ltd. [1978] 2 S.C.R. 229, Thornton v. Board of School Trustees of School District No. 57 [1978] 2 S.C.R. 267, and Arnold v. Teno [1978] 2 S.C.R. 287, which set this cap at $100,000 in 1978.

    Read more
  • To What Extent are Insurers Required to Cover Premises where Criminal Activities are Conducted?

    In a recent decision by the Court of Appeal of Québec, the Honourable Jacques Chamberland, J.C.A. reviewed the application of exclusion clauses contained in a home insurance policy in the context of criminal activities1.THE FACTSThe Appellant, Union canadienne compagnie d’assurance insured the building of respondent, Mrs. Lise Houle and her spouse, Christian Alexandre. The latter was growing cannabis in the insured building. In fact, the residence (the kitchen and possibly the basement) was used for germinating the cannabis seeds while the garage was used for growing the seedlings after they were planted. This was unknown to Mrs. Houle, who never went into the garage as she was disabled.A fire caused by the electrical installations used for growing cannabis occurred on August 8, 2006 and damaged both the residence and the garage.EXCLUSIONSThe insurer relied on the two following exclusions to deny coverage to its insured:  [translation] “16. In addition to the exclusions set out elsewhere in this contract, WE DO NOT COVER:(…)The constructions:(…)Occupied by the INSURED and used for illegal or criminal activities.21. The LOSSES caused by the criminal acts (…) of an INSURED.” THE JUDGMENT IN THE FIRST INSTANCEIn the first instance, judge Sophie Picard first examined exclusion clause 16. She concluded that in the absence of the words “in whole or in part”, as was the case in the decision Promutuel Bagot v. Lévesque2, this exclusion only applied to constructions of which “a substantial part” is used for criminal activities. Therefore, she was of the view that the garage was excluded, but not the residential building, which was only used in part for growing marijuana.The judge also concluded that exclusion clause 21 applied to Mr. Alexandre, who was producing cannabis, but not to Mrs. Houle, who was completely unaware of these activities.THE JUDGMENT OF THE COURT OF APPEALThe Court of Appeal examined exclusion clause 16, first referring to article 2402 par. 1 C.C.Q., which provides that an insurer may be released from its obligations in the events that a breach of the law constitutes a criminal act:  « 2402. In non-marine insurance, any general clause whereby the insurer is released from his obligations if the law is violated is deemed not written, unless the violation is an indictable offence. (…)» The Court noted that the clause of the policy provided for an exclusion for the “constructions” and not the “insured premises”, used for illegal activities. Accordingly, this clause had to be analyzed in relation to each of the constructions and not the insured premises as a whole, as the Appellant was maintaining.However, contrary to the trial judge, the Court of Appeal was of the view that it was wrong to tie the application of the exclusion clause to the extent the building was used for criminal activities. [translation] “ [26] In my view, the occupation of a construction by the insured and its use for illegal activities are sufficient to conclude that this construction is not insured, regardless of whether all or only part of the construction is used.” Despite the fact that the words “in whole or in part” are absent from the wording of the clause, it remains that it is not necessary for the insurer to demonstrate that a “substantial part” of the construction has been used for criminal activities. The Court of Appeal therefore concluded that the issue to be decided was whether the construction had been used for criminal activities, without it being necessary to determine the degree of such use. In the circumstances, since both the residence and the garage were used for criminal activities, both constructions were excluded from insurance coverage. In view of this conclusion, the Court deemed it unnecessary to review exclusion clause 21. CONCLUSIONWe note that the very wording of the various clauses is particularly important when analyzing insurance policies. In the case under review, the absence of the words “in whole or in part” resulted in a debate before the Court of Appeal.This case also raises the issue of knowledge by an insured of an illegal use of the premises when examining the exclusion. The Court of Appeal does not specifically deal with this issue in the case under review. However, the Superior Court, examining a similar exclusion, came to the conclusion that the use for criminal purposes by a third party cannot be used against an insured where the insured does not have specific control over such use for criminal purposes3. However, the clause examined in that decision did not provide that the premises had to be occupied by the insured, as was the case in the Union canadienne v. Houle decision. It will be interesting to see whether the Court of Appeal will eventually deal with this specific issue._________________________________________ 1 L’Union canadienne compagnie d’assurance v. Houle, 2013 QCCA 677. 2 EYB 2011-28493 (C.A.). 3 Lévesque v. Compagnie d’assurance Desjardins, 2013 QCCS 1552.

    Read more
3 4 5 6 7