Bullock v. Trafalgar Insurance Co. of Canada et al., (1996) 9 O.T.C. 245 (GD)

• Judge: Cumming, J.
• Court: Ontario Court of Justice General Division (Canada)
• Case Date: July 12, 1996
• Jurisdiction: Ontario
• Citations: (1996), 9 O.T.C. 245 (GD)

Bullock v. Trafalgar Ins. Co. (1996), 9 O.T.C. 245 (GD)

MLB headnote and full text

James Bullock and Carol Bullock (plaintiffs) v. Trafalgar Insurance Company of Canada, Harris, Harding & Bickers Insurance Adjusters Limited and Michael Pizzey (defendants)

(22938/87Q)

Indexed As: Bullock v. Trafalgar Insurance Co. of Canada et al.

Ontario Court of Justice

General Division

Cumming, J.

July 12, 1996.

Summary:

Bullock's Corvette burned (replacement value of $36,780.32). Bullock's insurer (Trafalgar) denied his claim, alleging arson. Bullock sued Trafalgar, the company which was hired to report on the fire's cause (Harris, Harding and Bickers Insurance adjusters) and the adjuster who investigated the claim (Harris), in both tort and contract. Trafalgar made offers to settle for $50,000, $75,000 and $100,000 including interest and costs, but refused to withdraw its allegation of arson. Bullock, a member of the insurance profession, sought to clear his name from the accusation. He claimed for special, general, aggravated and punitive damages, including a substantial loss of income.

The Ontario Court (General Division) allowed the claim against Trafalgar and dismissed the claim against Harris, Harding and Bickers Insurance adjusters and Harris. The court awarded Bullock $36,780.32 (the car's replacement value), $25,000 aggravated damages and solicitor and client costs. The court rejected the claim for loss of income and declined to award punitive damages.

Damage Awards - Topic 2412

Aggravated damages - Insurers - See paragraphs 167 to 173.

Damages - Topic 912

Aggravation - In contract - For breach - See paragraphs 164 to 166.

Damages - Topic 1305

Exemplary or punitive damages - Breach of contract - See paragraphs 174, 175.

Damages - Topic 1532

General damages - Elements of general damages - Mental distress or emotional upset - See paragraphs 150 to 155, 164 to 166.

Insurance - Topic 727

Insurers - Duties - Fiduciary duties - See paragraphs 92 to 95.

Insurance - Topic 730

Insurers - Duties - Duty of good faith - See paragraphs 96 to 127.

Insurance - Topic 3303

Payment of insurance proceeds - Actions - Defences - Criminal act by insured to bring about loss or damage - See paragraphs 1 to 179.

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Improper, irresponsible or unconscionable conduct - See paragraph 178.

Practice - Topic 7470

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Unproved allegation of fraud - See paragraph 178.

Torts - Topic 60

Negligence - Causation - Foreseeability - See paragraphs 142, 143.

Torts - Topic 61

Negligence - Causation - Causal connection - See paragraphs 144 to 146.

Torts - Topic 81

Negligence - Duty of care - Requirement that duty be owed to plaintiff - See paragraphs 128 to 130.

Torts - Topic 5208

Interference with economic relations - Contracts - Inducing or procuring breach of contract - See paragraph 131.

Cases Noticed:

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 90].

Indemnity Insurance Co. of North America v. Excel Cleaning Service, [1954] S.C.R. 169, refd to. [para. 90].

Dalton Cartage Co. v. Continental Insurance Co. and St. Paul Fire and Marine Insurance Co. (1982), 40 N.R. 135; 131 D.L.R.(3d) 559 (S.C.C.), refd to. [para. 91].

MacDonald v. Canada Accident and Fire Assurance Co. (1977), 27 N.S.R.(2d) 23; 41 A.P.R. 23 (T.D.), refd to. [para. 91].

Karadimas v. Gibraltar General Insurance Co., [1978] I.L.R. I-944 (Ont. H.C.), refd to. [paras. 91, 103].

Bernardi v. Guardian Royal Exchange Assurance Co., [1979] I.L.R. 1-1143 (Ont. C.A.), refd to. [para. 91].

Caesar's Palace Ltd. v. Elite Insurance Co. (1987), 22 C.C.L.I. 120 (Sask. Q.B.), refd to. [paras. 91, 104].

Netzel v. Zurich Indemnity Co. of Canada, [1994] 9 W.W.R. 268; 94 Man.R.(2d) 306 (Q.B.), refd to. [para. 91].

Plaza Fiberglass Manufacturing Ltd. v. Cardinal Insurance Co. et al. (1994), 72 O.A.C. 66; 18 O.R.(3d) 663 (C.A.), refd to. [paras. 93, 101].

Guerin v. Canada (1984), 55 N.R. 161; 13 D.L.R.(4th) 321 (S.C.C.), refd to. [para. 93].

Hodgkinson v. Simms et al. (1994), 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1; 117 D.L.R.(4th) 161 (S.C.C.), refd to. [para. 93].

Knoch Estate v. Picken (Jon) Ltd. et al. (1991), 49 O.A.C. 321; 4 O.R.(3d) 385 (C.A.), refd to. [para. 94].

Fredrikson v. Insurance Corp. of British Columbia, [1990] 4 W.W.R. 637 (B.C.S.C.), refd to. [para. 94].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84, refd to. [para. 94].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57, refd to. [para. 94].

Gateway Realty Ltd. v. Arton Holdings Ltd. and LaHave Developments Ltd. (1991), 106 N.S.R.(2d) 180; 288 A.P.R. 180 (T.D.), affd. (1992), 112 N.S.R.(2d) 180; 307 A.P.R. 180 (C.A.), refd to. [para. 96].

Labelle v. Guardian Insurance Co. of Canada (1989), 38 C.C.L.I. 274 (Ont. H.C.), refd to. [paras. 97, 168].

Thompson v. Zurich Insurance Co. (1984), 45 O.R.(2d) 744 (H.C.), refd to. [paras. 98, 165].

Adams v. Confederation Life Insurance Co., [1994] I.L.R. 1-3096; 152 A.R. 121 (Q.B.), refd to. [paras. 99, 102, 169].

Dillon v. Guardian Insurance Co. (1983), 2 C.C.L.I. 227 (Ont. H.C.), refd to. [para. 102].

Fredrickson v. Insurance Corp. of British Columbia (1986), 3 B.C.L.R.(2d) 145 (C.A.), affd. [1988] 1 S.C.R. 1089; 86 N.R. 48, refd to. [para. 102].

Banque Keyser Ullman S.A. v. Skandia (U.K.) Insurance Co., [1991] 2 A.C. 249; 199 N.R. 382 (H.L.), refd to. [para. 117].

Canadian Newspapers Co. v. Kansa General Insurance Co. (1991), 5 C.C.L.I.(2d) 66 (Ont. Gen. Div.), refd to. [para. 117].

Pelky v. Hudson Bay Insurance Co. (1981), 35 O.R.(2d) 97 (H.C.), refd to. [para. 125].

Crisci v. Security Insurance Co. of New Haven, Connecticut (1967), 58 Cal. Rptr. 13 (Cal. S.C. Bktcy.), appld. [paras. 126, 136].

Sulzinger v. Alexander (C.K.) Ltd. et al., [1972] 2 O.R. 720 (C.A.), refd to. [para. 128].

Hamilton v. Marion (Chris) Holdings Ltd., [1981] I.L.R. 1-1398 (Ont. H.C.), refd to. [para. 129].

Posluns v. Toronto Stock Exchange and Gardiner, [1964] 2 O.R. 547 (H.C.), refd to. [para. 131].

Ribeiro v. Canadian Imperial Bank of Commerce (1989), 67 O.R.(2d) 385 (H.C.), refd to. [paras. 131, 145, 170].

Central Trust Co. v. Rafuse and Cordon (1986), 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109; 37 C.C.L.T. 117 (S.C.C.), refd to. [para. 133].

BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241, refd to. [para. 133].

Anns v. Merton London Borough Council, [1977] 2 W.L.R. 1024 (H.L.), refd to. [para. 134].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 134].

Gibson v. Parkes District Hospital (1991), 26 N.S.W.L.R. 17, refd to. [para. 136].

Burdan v. Progressive Casualty Insurance Co. (1993), 20 C.C.L.I.(2d) 126 (Ont. Gen. Div.), refd to. [para. 138].

Koufos v. Czarnikow (C.) Ltd.; Ship Heron II, Re, [1969] 1 A.C. 350 (H.L.), refd to. [para. 140].

Bourhill v. Young, [1943] A.C. 92 (H.L.), refd to. [para. 142].

Hay (or Bourhill) v. Young - see Bourhill v. Young.

Janiak v. Ippolito, [1985] 1 S.C.R. 146; 57 N.R. 241; 9 O.A.C. 1, refd to. [para. 142].

Yoshikawa et al. v. Yu (1996), 73 B.C.A.C. 253; 120 W.A.C. 253 (C.A.), refd to. [para. 142].

Cotic Estate v. Izquierdo Estate (1981), 51 N.R. 46; 2 O.A.C. 191; 17 C.C.L.T. 138 (C.A.), affd. [1983] 2 S.C.R. 2; 51 N.R. 42; 2 O.A.C. 187, refd to. [para. 142].

Cotic v. Gray - see Cotic Estate v. Izquierdo Estate.

Elloway v. Boomars (1968), 69 D.L.R.(2d) 605 (B.C.S.C.), refd to. [para. 142].

Marconato v. Franklin, [1974] 6 W.W.R. 676 (B.C.S.C.), refd to. [para. 142].

Overseas Tankships (U.K.) Ltd. v. Morts Dock & Engineering Co., [1961] A.C. 388 (P.C.), refd to. [para. 143].

Wagon Mound (No. 1) - see Overseas Tankships (U.K.) Ltd. v. Morts Dock & Engineering Co.

Overseas Tankships (U.K.) Ltd. v. Miller Steamship Co. Pty., [1967] 1 A.C. 617 (P.C.), refd to. [para. 143].

Strutz et al. v. Ellingson et al. (1977), 2 A.R. 485 (T.D.), refd to. [para. 145].

Hadley v. Baxendale (1854), 9 Exch. 341; 156 E.R. 145, refd to. [para. 150].

Newell et al. v. Canadian Pacific Airlines Ltd. (1977), 14 O.R.(2d) 752 (Co. Ct.), refd to. [para. 150].

Kirsch Holdings Ltd. v. Insurance Corp. of British Columbia (1984), 6 C.C.L.I. 68 (B.C.S.C.), refd to. [para. 151].

Peso Silver Mines Ltd. (NPL) v. Cropper, [1966] S.C.R. 673, refd to. [para. 152].

Crew Estate v. Nicholson et al. (1989), 32 O.A.C. 39; 68 O.R.(2d) 232 (C.A.), refd to. [para. 163].

Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085; 94 N.R. 321, refd to. [paras. 164, 169].

Warrington v. Great-West Life Assurance Co., [1995] I.L.R. 1-3208 (B.C.S.C.), refd to. [para. 166].

Taylor v. Pilot Insurance Co. (1990), 75 D.L.R.(4th) 370 (Ont. Gen. Div.), refd to. [para. 169].

Huff v. Price (1990), 76 D.L.R.(4th) 138 (B.C.C.A.), refd to. [para. 171].

Authors and Works Noticed:

Barker, William T., Glad, Paul E.B., and Levy, Steven M., Is An Insurer a Fiduciary To Its Insureds? (1989), 25 Tort and Ins. L.J. 1, pp. 2, 8 to 9 [para. 99].

Belobaba, E., Good Faith in Canadian Contract Law (1985), p. 73 to 92 [para. 96].

Cohen, Reconstructing Breach of the Implied Covenant of Good Faith and Fair Dealing as a Tort (1985), 73 Cal. L. Rev. 1291, generally [para. 136].

Matthews, Paul, Uberrima Fides in Modern Insurance Law (1987), pp. 47 to 48 [para. 99].

Reiter, Contracts, Torts, Relations and Reliance (1980), pp. 269 to 272 [para. 133].

Waddams, Steven M., The Law of Damages (Rev. 2nd Ed. 1991) (1995 Looseleaf Ed.), p. 11-9 [para. 174].

Counsel:

D.A. Quirt, for the plaintiffs;

Harvey Klein, for the defendant, Trafalgar Insurance Company of Canada;

Robert S. Sutherland, for the defendants, Harris, Harding & Bickers Insurance Adjusters and Michael Pizzey.

This action was heard on November 27 to 30, December 1, 4, 8 to 12, 1995, by Cumming, J., of the Ontario Court (General Division), who released the following decision on July 12, 1996.