Automotive Products Company Limited et al. v. Insurance Company of North America et al., [1969] S.C.R. 824 (1969)

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Automotive Products Company Limited et al. v. Insurance Company of North America et al., [1969] S.C.R. 824 (1969)

Supreme Court of Canada

Automotive Products Company Limited et al. v. Insurance Company of North America et al., [1969] S.C.R. 824

Date: 1969-05-16

Automotive Products Company Limited and Maurice Gagnon (Plaintiffs) Appellants;

and

Insurance Company of North America (Defendant) Respondent;

and

Industrial Acceptance Corporation Limited Mis-En-Cause.

1968: May 24; 1969: May 16.

Present: Fauteux, Judson, Ritchie, Spence and Pigeon JJ.

ON APPEAL FROM THE COURT OF QUEEN'S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC

Insurance-"Blanket or reporting policy"-Clause obliging insured to report all sales-Interpretation-Whether reporting requirement a condition of the contract-Policy null-Art. 1013, 2490 and 2491 of the Civil Code.

The appellant company is a dealer in heavy equipment. Its sales are often made on a deferred payment basis and were, during the period relevant to this case, financed by one of the finance companies with which it had arrangements. Through the agency of its brokers and representatives, which incidentally were also brokers for the other party, the appellant negotiated with the respondent three blanket insurance policies very similar in substance, one related to each of the three finance companies. These policies contemplate insurance coverage from the date the sale is completed to the end of the financing period. The contract, inter alia, provides that "all such sales" shall be reported "as soon as practicable" to the respondent or to its brokers. The appellant company sold a tractor to the appellant G. This sale was referred to and approved by the finance company (mis-en-cause) but before notice of such sale had been given to the respondent or its brokers, the tractor was damaged beyond repairs. It was then found that some of the clients of the appellant company had insured their financed equipment through their own finance company. Upon request by the appellants for the issuance of an insurance certificate, the respondent denied all liability under the contract and refused to issue such a certificate on the grounds that all financed sales had not been reported and that such a failure amounted to a breach of a condition which is of the essence of the contract. In the Superior Court the trial judge came to the conclusion that the disputed clause of the blanket policy could not be interpreted as being a reciprocal undertaking by the appella...

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