Canadian Indemnity Co. v. Okanagan Mainline Real Estate Board et al.

Canadian Indemnity Co. v. Okanagan Mainline Real Estate Board et al.

The indemnity clause in the application, being referable to and intended by the insurer to form part of the insurance contract but not set out in the issued policy, was unenforceable against the insured under s.13(1) of The Insurance Act; independently, the insurer was precluded from relying on the clause because its agent misrepresented the purpose and contents of the application and thereby induced the insured to sign.

Citation
[1971] SCR 493
Parties
Defendant/appellant: Canadian Indemnity Company; Plaintiff/respondent/appellant (cross Appeal): Okanagan Mainline Real Estate Board; Defendant/respondent: Whillis-Harding Insurance Agencies Ltd.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
27 November 1970
Procedural Posture
Civil Appeal (insurance and Agency) / Appeal to the Supreme Court of Canada From the Court of Appeal for British Columbia (cross Appeal Present)
Outcome
Appeals dismissed: Canadian Indemnity Company appeal dismissed with costs to the Board; Board's appeal against dismissal of action against Whillis-Harding dismissed without costs to Whillis-Harding.
Legal Topics
Indemnity Clause, Validity of Extrinsic Terms, Agent Misrepresentation, Insurance Act S.13, Enforceability of Post Issue Alterations
Source Language
English
Insurance Law Agency Law Contract Law Statutory Interpretation Indemnity Clause Validity of Extrinsic Terms Agent Misrepresentation Insurance Act S.13 +1 more

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Parties

Canadian Indemnity Company

Defendant/appellant

Okanagan Mainline Real Estate Board

Plaintiff/respondent/appellant (cross Appeal)

Whillis-Harding Insurance Agencies Ltd.

Defendant/respondent

Procedural Posture

Civil Appeal (insurance and Agency) / Appeal to the Supreme Court of Canada From the Court of Appeal for British Columbia (cross Appeal Present)

Legal Issues

  1. 1 Whether an indemnity clause contained in an application form executed after issue of the bond is enforceable against the insured when it is not set out in the issued policy
  2. 2 Whether s.13(2) of The Insurance Act operates to validate a written alteration agreed after issue of the policy
  3. 3 Whether an insurer can rely on a clause procured by its agent who misrepresented the reason and effect of the document

Ratio Decidendi

The indemnity clause in the application, being referable to and intended by the insurer to form part of the insurance contract but not set out in the issued policy, was unenforceable against the insured under s.13(1) of The Insurance Act; independently, the insurer was precluded from relying on the clause because its agent misrepresented the purpose and contents of the application and thereby induced the insured to sign.

Court Disposition

Appeals dismissed: Canadian Indemnity Company appeal dismissed with costs to the Board; Board's appeal against dismissal of action against Whillis-Harding dismissed without costs to Whillis-Harding.

Orders

  • Appeal of Canadian Indemnity Company dismissed with costs payable to Okanagan Mainline Real Estate Board.
  • Appeal of Okanagan Mainline Real Estate Board dismissed without costs.