DesRoches v. Graham et al., (1995) 132 Nfld. & P.E.I.R. 142 (PEITD)

• Judge: DesRoches, J.
• Case Date: June 05, 1995
• Jurisdiction: Prince Edward Island
• Citations: (1995), 132 Nfld. & P.E.I.R. 142 (PEITD)

DesRoches v. Graham (1995), 132 Nfld. & P.E.I.R. 142 (PEITD);

    410 A.P.R. 142

MLB headnote and full text

Clifford DesRoches (plaintiff) v. Blaine Graham (defendant) and Economical Mutual Insurance Company (third party)

(No. GSS-3238)

Indexed As: DesRoches v. Graham et al.

Prince Edward Island Supreme Court

Trial Division

DesRoches, J.

July 25, 1995.

Summary:

The plaintiff sued the defendant for injuries suffered in a motor vehicle accident. The defendant, using a false name and driv­er's licence, was issued a motor vehicle liability policy by the insurer. The insurer claimed the policy was void ab initio, there­fore it was not required to respond to the plaintiff's claim against the defendant. The insurer, by way of special case under rule 22, sought the court's opinion on the issue.

The Prince Edward Island Supreme Court, Trial Division, held that s. 240(5) of the Insurance Act, purposively interpreted, provided that once the liability policy was issued the insurer could not, under any circumstances, deny liability to an innocent third party (plaintiff) on the ground that the policy was invalid as against the insured (defendant).

Insurance - Topic 4603

Automobile insurance - Actions by third parties against insurer on public liability policy - Defence by insurer respecting extent or validity of coverage or policy - The plaintiff sued the defendant for injuries suffered in a motor vehicle acci­dent - The defendant, using a false name and driver's licence, was issued a motor vehicle liability policy by the insurer - The insurer claimed the policy was void ab initio, therefore it was not required to respond to the plaintiff's claim against the defendant - Section 240(5) of the Insur­ance Act provided that it was not a defence to a claim against an insured that an instrument issued as a motor vehicle liability policy was not a motor vehicle liability policy - The Prince Edward Island Supreme Court, Trial Division, held that s. 240(5) of the Insurance Act, purposively interpreted, provided that once the liability policy was issued the insurer could not, under any circumstances, deny liability to an innocent third party (plaintiff) on the ground that the policy was invalid as against the insured (defendant).

Cases Noticed:

Bourgeois et al. v. Prudential Assurance Co., [1946] 1 D.L.R. 139 (N.B.C.A.), refd to. [para. 14].

Comer v. Bussell et al., [1940] S.C.R. 506; 3 D.L.R. 417, refd to. [para. 14].

Ontario (Minister of Transport) v. London & Midland General Insurance Co., [1973] 3 O.R. 147; 19 D.L.R.(3d) 643 (C.A.), not folld. [para. 17].

Lawrence v. Powell, Hannam, A.B.C. Taxi Co. and Findlay (1977), 28 N.S.R.(2d) 167; 43 A.P.R. 167 (T.D.), not folld. [para. 17].

Llewellen Estate v. Neault Estate (1990), 101 N.S.R.(2d) 387; 275 A.P.R. 387; 26 M.V.R.(2d) 230 (C.A.), not folld. [para. 17].

Sun Alliance Insurance Co. v. Judgment Recovery (N.S.) Ltd. - see Llewellen Estate v. Neault Estate.

Wolfe v. Oliver, Oliver and Co-operative Fire and Casualty Co. (1974), 8 N.S.R.(2d) 313; 46 D.L.R.(3d) 380 (C.A.), not folld. [para. 17].

Dixon v. MacCormack (1985), 55 Nfld. & P.E.I.R. 53; 162 A.P.R. 53 (P.E.I.T.D.), dist. [para. 18].

Marshall v. Law Union & Rock In­surance Co. (1958), 18 D.L.R.(2d) 442 (N.B.C.A.), not folld. [para. 18].

Blair v. Royal Exchange Assurance (1968), 67 D.L.R.(2d) 420 (Man. Q.B.), affd. (1968), 69 D.L.R.(2d) 340 (Man. C.A.), not folld. [para. 18].

Gorveatt v. Canadian General Insurance Co. (1974), 7 Nfld. & P.E.I.R. 70; 3 A.P.R. 70; 47 D.L.R.(3d) 701 (P.E.I.S.C.), not folld. [para. 18].

Thornhill v. Bennett (1985), 55 Nfld. & P.E.I.R. 81; 162 A.P.R. 81 (Nfld. C.A.), refd to. [para. 21].

Murphy v. Casualty Co. of Canada, White, Singleton and Pittman (1987), 63 Nfld. & P.E.I.R. 59; 194 A.P.R. 59; 36 D.L.R.(4th) 87 (Nfld. C.A.), refd to. [para. 23].

Dore v. General Insurance Corp. of New Brunwsick, [1992] I.L.R. I-2784; 115 N.B.R.(2d) 123; 291 A.P.R. 123 (T.D.), refd to. [para. 24].

Weavers Estate v. Biseau, [1992] I.L.R. I-2843; 8 O.R.(3d) 781 (Gen. Div.), refd to. [para. 25].

Steyns v. Manitoba Public Insurance Corp., [1994] 4 W.W.R. 449; 88 B.C.L.R.(2d) 125 (S.C.), refd to. [para. 26].

Statutes Noticed:

Civil Procedure Rules (P.E.I.), rule 22 [para. 1].

Insurance Act, R.S.P.E.I. 1988, c. I-4, sect. 1(d.2), sect. 1(j), sect. 1(j.2), sect. 1(m.1), sect. 1(o.1), sect. 1(q) [para. 4]; sect. 222(1) [para. 9]; sect. 240(1), sect. 240(4) [para. 11]; sect. 240(5) [para. 3].

Counsel:

E.S. Murphy, Q.C., for the third party;

Graham W. Stewart, Q.C., for Judgment Recovery (P.E.I.) Ltd.

This case was heard on June 5, 1995, before DesRoches, J., of the Prince Edward Island Supreme Court, Trial Division, who delivered the following judgment on July 25, 1995.