Abdulbaki v. State Farm Mutual Automobile Insurance Co.,

• Judge: Hess
• Neutral Citation: 2009 ABPC 314
• Date: 21 September 2009
• Subject Matter: EQUITY,COURTS,INSURANCE
• Court: Provincial Court of Alberta (Canada)

Abdulbaki v. State Farm (2009), 481 A.R. 376 (PC)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. FE.046

Said Abdulbaki (plaintiff) v. State Farm Mutual Automobile Insurance Company (defendant)

(0890102820; 2009 ABPC 314)

Indexed As: Abdulbaki v. State Farm Mutual Automobile Insurance Co.

Alberta Provincial Court

Hess, A.C.J.P.C.

October 15, 2009.

Summary:

The plaintiff, the owner and operator of a pizza restaurant, insured his vehicle for "pleasure" only, but regularly used the vehicle to deliver pizzas. During one delivery, an acquaintance wrongfully took the vehicle and "totalled" it in an accident. The insurer denied coverage for breach of the statutory condition requiring the plaintiff to notify the insurer of a material change in the risk. The insurer, at that time, was not to insure vehicles for courier service or pizza delivery. The plaintiff sued to enforce his claim, claiming that his admission of using the vehicle for delivery was a misunderstanding. Alternatively, the plaintiff sought relief from forfeiture.

The Alberta Provincial Court dismissed the action. The plaintiff breached the policy by failing to advise the insurer of the material change in the risk. When applying for insurance, the plaintiff misrepresented his intended use of the vehicle. The increased risk in using the vehicle as a delivery vehicle was so material that the insurer would not have initially insured the vehicle and, if notified of the change in vehicle use would have cancelled the policy and not extended coverage. Relief from forfeiture was denied.

Courts - Topic 8407

Provincial courts - Alberta - Provincial Court - Jurisdiction - Equitable - [See Insurance - Topic 5136 ].

Equity - Topic 1063

Equitable relief - Relief from forfeiture - Jurisdiction - [See Insurance - Topic 5136 ].

Insurance - Topic 3137

Payment of insurance proceeds - Actions - Relief against forfeiture - When available - [See Insurance - Topic 5136 ].

Insurance - Topic 4018

Automobile insurance - Liability policy - Risk - Material changes - Duty of insured to notify insurer - [See Insurance - Topic 5136 ].

Insurance - Topic 5136

Automobile insurance - Compulsory government schemes - Actions by insured against insurer - Defences - Breach of statutory condition - The plaintiff operated his own pizza restaurant - His vehicle was insured for "pleasure" only, but he regularly used the vehicle for deliveries - During one delivery, an acquaintance wrongfully took the vehicle and "totalled" it in an accident - The insurer denied coverage for breach of the statutory condition requiring the plaintiff to notify the insurer of a material change in the risk - The insurer, at that time, did not insure vehicles for courier service or pizza delivery - The plaintiff sued to enforce his claim, claiming that his admission of commercial use of the vehicle for delivery was a misunderstanding - Alternatively, the plaintiff sought relief from forfeiture - The Alberta Provincial Court dismissed the action - The plaintiff breached the policy by failing to advise the insurer of the material change in the risk - When applying for insurance, the plaintiff intentionally misrepresented his intended use of the vehicle - The increased risk in using the vehicle as a delivery vehicle was so material that the insurer would not have insured the vehicle and, if notified of the change in vehicle use, would have cancelled the policy and not extended coverage - Relief from forfeiture was denied - Only the Court of Queen's Bench had jurisdiction under s. 10 of the Judicature Act to grant relief from forfeiture - Assuming that the court could grant relief from forfeiture as an "equitable remedy" under s. 9.6(1)(a)(ii) of the Provincial Court Act, this was not an appropriate case to grant relief - Insurance contracts were contracts of the utmost good faith - The plaintiff acted dishonestly in seeking to qualify his admissions once he learned that his admissions would result in a denial of coverage - The insurer was prejudiced by the breach - Dishonest conduct disqualified the plaintiff from any consideration of equitable relief.

Cases Noticed:

Dempsey v. Brown and Prudential Life Insurance Co. (1985), 70 N.S.R.(2d) 415; 166 A.P.R. 415; 47 M.V.R. 327 (T.D.), refd to. [para. 32].

Saskatchewan River Bungalows Ltd. and Fikowski v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490; 168 N.R. 381; 155 A.R. 321; 73 W.A.C. 321, refd to. [para. 36].

Blue Range Resources Corp., Re, [2001] 2 W.W.R. 477; 271 A.R. 138; 234 W.A.C. 138 (C.A.), rerfd to. [para. 38].

Statutes Noticed:

Insurance Act, R.S.A. 2000, c. I-3, sect. 521 [para. 33].

Judicature Act, R.S.A. 2000, c. J-2, sect. 10 [para. 34].

Provincial Court Act, R.S.A. 2000, c. P-31, sect. 9.6(1)(a)(ii) [para. 35].

Counsel:

E. Bruce Corenblum, for the plaintiff;

Dale E. Johns, for the defendant.

This action was heard on September 21, 2009, at Calgary, Alberta, before Hess, A.C.J.P.C., of the Alberta Provincial Court, who delivered the following judgment on October 15, 2009.