Caisse populaire des Deux rives v. Vallée du Richelieu (La), compagnie mutuelle d'assurance de dommages, (1990) 115 N.R. 1 (SCC)

• Judge: La Forest, L'Heureux-Dubé, Gonthier, Cory and McLachlin, JJ.
• Court: Supreme Court (Canada)
• Case Date: October 04, 1990
• Jurisdiction: Canada (Federal)
• Citations: (1990), 115 N.R. 1 (SCC);115 NR 1;JE 90-1411;[1990] RDI 743;[1990] SCJ No 94 (QL);74 DLR (4th) 161;49 CCLI 23;[1990] 2 SCR 995;1990 CanLII 91 (SCC);34 QAC 241

Caisse pop. v. Vallée du Richelieu (1990), 115 N.R. 1 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Le Groupe Estrie-Richelieu, in continuance of suit from Vallée du Richelieu, compagnie mutuelle d'assurance de dommages (appellant) v. Caisse populaire des Deux rives (respondent)

(21205)

Indexed As: Caisse populaire des Deux rives v. Vallée du Richelieu (La), compagnie mutuelle d'assurance de dommages

Supreme Court of Canada

La Forest, L'Heureux-Dubé, Gonthier, Cory and McLachlin, JJ.

October 4, 1990.

Summary:

The Caisse populaire des Deux rives (the Caisse) held a hypothec (mortgage) on property owned by Leclerc. The contract of hypothec required that Leclerc obtain fire insurance on his property and have the proceeds, if need be, paid to the Caisse. The fire insurance policy then obtained by Leclerc contained the Standard Mortgage Clause approved by the Insurance Bureau of Canada (see paragraph 23). The Clause said, among others, that the insurance remained in force as to the interest of the "mortgagee" (the hypothecary creditor Caisse in this case) "notwithstanding any act, neglect, omission or misrepresentation attributable to the mortgagor [the hypothecary debtor Leclerc in this case] owner or occupant of the property insured". Leclerc set fire to his property. The Caisse sued for the insurance proceeds. The insurer replied that Leclerc's intentional act deprived the Caisse of the insurance proceeds. The Québec Superior Court allowed the Caisse's action. See [1984] S.C. 1180. The insurer appealed.

The Québec Court of Appeal dismissed the appeal. See [1988] R.J.Q. 2355; [1988] R.D.I. 556; 18 Q.A.C. 44. The insurer appealed.

The Supreme Court of Canada dismissed the appeal.

Insurance - Topic 3

General - Sources of the law of insurance - The Supreme Court of Canada discussed the sources of the law of insurance in Québec - The court noted the apparent similarity of rules found in different jurisdictions, including Québec, and declared: "... this apparent similarity of the fundamental rules should not cause us to forget that the courts have a duty to ensure that insurance law develops in a manner consistent with the rest of Québec civil law, of which it forms a part ... However, the development of insurance law must necessarily take place within its own particular socio-economic content, namely North American insurance practice." - See paragraphs 15 to 17, 34 to 50.

Assurance - Cote 3

Généralités - Source du droit des assurances [Voir Insurance - Topic 3].

Insurance - Topic 5963

Fire insurance - Loss payable to mortgagee (hypothecary creditor) - Nature of mortgagee's interest - The Supreme Court of Canada held: "... the insurance clause in the hypothecary loan contract [mortgage] contains all the elements of a contract of mandate, under which the hypothecary debtor [mortgagor] has undertaken to keep the property subject to the hypothec [mortgage] insured. In accordance with that mandate, the hypothecary creditor took out an insurance policy containing a hypothecary clause [here the Standard Mortgage Clause approved by the Insurance Bureau of Canada - See paragraph 23], which sets out a separate insurance contract between the hypothecary creditor and the insurer. Since the hypothecary creditor and not the debtor is the insured under this separate second contract, indemnification of the hypothecary creditor for the loss caused by its debtor's intentional fault is not contrary to the prohibition of public order contained in art. 2563 C.C.L.C."

Assurance - Cote 5963

Assurance-incendie - Indemnité payable au créancier hypothécaire - Nature de l'intérêt du créancier hypothécaire - [Voir Insurance - Topic 5963].

Insurance - Topic 6046

Fire insurance - Defenses - Deliberate act by insured - General - The Supreme Court of Canada held: "... the insurance clause in the hypothecary loan contract [mortgage] contains all the elements of a contract of mandate, under which the hypothecary debtor [mortgagor] has undertaken to keep the property subject to the hypothec [mortgage] insured. In accordance with that mandate, the hypothecary creditor took out an insurance policy containing a hypothecary clause [here the Standard Mortgage Clause approved by the Insurance Bureau of Canada - See paragraph 23], which sets out a separate insurance contract between the hypothecary creditor and the insurer. Since the hypothecary creditor and not the debtor is the insured under this separate second contract, indemnification of the hypothecary creditor for the loss caused by its debtor's intentional fault is not contrary to the prohibition of public order contained in art. 2563 C.C.L.C."

Assurance - Cote 6046

Assurance-incendie - Moyens de défense - Faute intentionnelle de l'assuré - Généralités - [Voir Insurance - Topic 6046].

Cases Noticed:

Lirette v. Madill, [1987] R.J.Q. 993; 8 Q.A.C. 81, consd. [paras. 10, 11, 12, 24, 53].

Guérin v. Manchester Fire Assurance Co. (1898), 29 S.C.R. 139, refd to. [para. 24].

Syndicate Ins. Co. v. Bohn (1894), 65 F. 165 (8th Cir.); 27 L.R.A. 614 (8th Cir.), refd to. [para. 24].

Hallé v. Canadian Indemnity Co., [1937] S.C.R. 368, consd. [para. 25].

Aetna Insurance Co. v. Kennedy (1937), 301 U.S. 389, consd. [para. 36].

Federal National Mortgage Association v. Prudential Property and Casualty Insurance Co. (1987), 517 So. 2d 201 (La. Ct. App.), refd to. [para. 36].

Liverpool and London and Globe Insurance v. Agricultural Savings and Loan Co. (1901), 30 O.L.R. 127 (Ont. C.A.); (1903), 33 S.C.R. 94 (S.C.C.), consd. [paras. 37, 39].

London and Midland General Insurance Co. v. Bonser, [1973] S.C.R. 10, consd. [para. 39].

Hastings v. Westchester Fire Ins. Co. (1878), 73 N.Y. 141, refd to. [para. 38].

London Loan and Savings Co. of Canada v. Union Insurance Co. of Canton Ltd. (1925), 56 O.L.R. 590, affd. (1925), 57 O.L.R. 651, refd to. [para. 38].

Trans Canada Credit Corp. v. Royal Insurance Co. of Canada (1983), 1 C.C. L.I. 300; 58 N.S.R.(2d) 280; 123 A.P.R. 280, consd. [para. 39].

Royal Bank of Canada v. Red River Valley Mutual Insurance Co., [1986] 5 W.W.R. 236; 42 Man.R.(2d) 124, refd to. [para. 39].

National Bank of Canada v. Co-Operators General Insurance Co. (1988), 90 A.R. 295, consd. [para. 39].

West End Investment Co. v. Commerce & Industry Insurance Co., [1977] 2 S.C.R. 1036; 11 N.R. 541, refd to. [para. 45].

Dame Veuve Parfait v. Assurances générales et Nationale incendie (1965), 36 Rev. gén. ass. terr. 333, refd to. [paras. 49, 54].

La Confiance v. Le Phénix, La Nationale et Pinoul (1939), 10 Rev. gén. ass. terr. 469, refd to. [para. 54].

Consorts Poudenx v. Cie d'assurance La France, D. 1947.25, refd to. [para. 54].

Statutes Noticed:

Civil Code of Lower Canada/Code civil du Bas-Canada, art. 13, art. 17(24), art. 984, art. 1173, art. 1174, art. 1701, art. 1702, art. 2468, art. 2499, art. 2563, art. 2572, art. 2578 (old), art. 2582, art. 2586.

Insurance Act/Assurances, Loi sur les, R.S.Q. 1964, c. 295, sect. 238.

Loi du 13 juillet 1930 relative au contrat d'assurance, J.O., July/juillet 18, 1930 (France), sect. 12, sect. 37.

Authors and Works Noticed:

American Jurisprudence, vol. 43 (2nd Ed. 1982), para. 1045 [para. 36].

Appleman, John Alan and Jean Appleman, Insurance Law and Practice, rev. vol. 5A, 1970, para. 3401 [para. 36].

Bergeron, Jean-Guy, L'opposabilité des exceptions à différents intéressés dans un contrat d'assurance (1987), 47 R. du B. 933, pp. 982 [para. 21]; 979-980 [para. 26].

Bigot, Jean, Assurances de responsabilité: les limites du risque assurable (1978), 49 Rev. gén. ass. terr. 169 [para. 49].

Civil Code of Lower Canada: Sixth and Seventh Reports and Supplementary Report, 1865, p. 241 [para. 16].

Comerford Jr., W. Thompson, When Is Money Paid the Mortgagee Recoverable? -- Is the Counterclaim Compulsory? (1986), 22 Tort & Ins. L.J. 113, p. 115 [para. 36].

Côté, Pierre-André, The Interpretation of Legislation in Canada, 1984, p. 441 [para. 46, English version].

Côté, Pierre-André, Interpretation des lois, 1982, p. 488 [para. 46, French version].

Couch, George J., Cyclopedia of Insurance Law, vol. 10A (2nd Ed. 1982), para. 42:728 [paras. 36, 38].

Dwyer, James R. and Carey S. Barney, Analysis of Standard Mortgage Clause and Selected Provisions of the New York Standard Fire Policy (1984), 19 Forum 639, p. 646 [para. 36].

Encyclopédie juridique Dalloz: Répertoire de droit civil, vol. I, 2nd Ed., Assurances terrestres by Georges Durry, para. 116 [para. 48].

Fabien, Claude, Les règles du mandat, In Répertoire de droit: Mandat, 1982, p. 103, para. 64 [para. 20].

Faribault, Bernard, Du papillon à la chrysalide ou l'étrange métamorphose de l'assurance de responsabilité (1987), 55 Assurances 300, p. 308 [para. 17].

Lambert-Faivre, Yvonne, Droit des assurances, 6e éd., 1988, p. 196, para. 168 [para. 49].

Ledru-Rollin, Coup d'oeil sur les praticiens, les arrêtistes et la jurisprudence, 1 Journal du Palais, vol. 1, 3rd Ed., by Ledru-Rollin, 1842, p. xix [para. 17].

Louisiana Civil Law Treatise, vol. 15, by William Shelby McKenzie and H. Alston Johnson, 1986, para. 332 [para. 36].

Picard, Maurice and André Besson, Les assurances terrestres, vol. I, 5e éd., by André Besson, 1982, p. 109, para. 66 [para. 49].

Picard, Maurice and André Besson, Traité général des assurances terrestres en droit français, vol. 2 1940, p. 470, para. 206 [para. 53].

Québec, Assemblée nationale, Journal des débats, vol. 15, No. 82, November 19, 1974, p. 2873 [para. 45].

Québec, Ministère des Institutions financières, Compagnies et Coopératives, Service des assurances, Rapport Faribault, 1957-60, art. 40 [para. 45].

Sicot, Lucien and Henri Margeat, Précis de la loi sur le contrat d'assurance, 4e éd. 1962, p. 222, para. 372 [para. 54].

Simard Jr., François-Xavier, La faute intentionnelle de l'assuré et la clause de garantie hypothécaire (1987), 21 R.J.T. 335, p. 364 [para. 29].

Sumien, Paul, Traité théorique et pratique des assurances terrestres des opérations de capitalisation, d'épargne et de crédit différé, 7e éd. 1957, p. 111, para. 197 [para. 54].

Thisdale, Louise, Quelques innovations législatives en assurance de dommages, [1978] C.P. du N. 1, p. 29, para. 101 [para. 24].

Counsel:

François-Xavier Simard, Jr. and André Desgagné, for the appellant;

Louis Gagné, for the respondent.

Solicitors of Record:

Joli-Coeur, Lacasse, Simard, Normand et Ass., Sainte-Foy, Qué., for the appellant;

Louis Gagné, Nicolet, Qué., for the respondent.

This appeal was heard on March 20, 1990 by, La Forest, L'Heureux-Dubé, Gonthier, Cory and McLachlin, JJ., of the Supreme Court of Canada.

The judgment of the Supreme Court of Canada was delivered on October 4, 1990, in both official languages, by L'Heureux-Dubé, J.