Fletcher v. Manitoba Public Insurance Co., (1990) 71 Man.R.(2d) 81 (SCC)

• Judge: Lamer, C.J.C., Wilson, Sopinka, Cory and McLachlin, JJ.
• Court: Supreme Court (Canada)
• Case Date: November 22, 1990
• Jurisdiction: Canada (Federal)
• Citations: (1990), 71 Man.R.(2d) 81 (SCC)

Fletcher v. MPIC (1990), 71 Man.R.(2d) 81 (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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Thomas John Fletcher and Cheryl Elizabeth Fletcher (appellants) v. Manitoba Public Insurance Company (respondent)

(21491)

Indexed As: Fletcher v. Manitoba Public Insurance Co.

Supreme Court of Canada

Lamer, C.J.C., Wilson, Sopinka, Cory and McLachlin, JJ.

November 22, 1990.

Summary:

The insured and his wife were seriously injured in an automobile accident. In separate proceedings the insured and his wife sued Piche successfully for damages, but the award exceeded Piche's automobile insurance policy liability limit of $500,000.00. At the time of the accident the insured was covered by an automobile policy issued by the Manitoba Public Insurance Corporation (MPIC). The policy did not provide underinsured motorist protection, although such coverage was available from MPIC. If the insured had purchased such coverage he would have been entitled to recover $887,090.00 from MPIC. The insured and his wife commenced an action against MPIC for damages, alleging that MPIC breached its duty to the insured by not doing more to inform him of the availability of underinsured motorist coverage.

The Ontario High Court of Justice, in a judgment reported 60 O.R.(2d) 629, allowed the insured's action and ordered that MPIC pay the $887,090.00. MPIC appealed.

The Ontario Court of Appeal, Blair, J.A., dissenting, in a judgment reported 32 O.A.C. 81, allowed the appeal and set aside the decision of the trial judge. The Court of Appeal held that there was no breach of duty by MPIC where, inter alia, MPIC notified its customers of the availability of underinsured motorist coverage in a flyer and by a sign in its office, the insured's renewal notice indicated that the insured did not have the coverage and the insured did not seek advice regarding the coverage. The insured appealed.

The Supreme Court of Canada allowed the appeal and restored the trial judge's decision. The court stated that public insurers such as MPIC had a duty in tort to inform their customers of all forms of coverage available, their purpose and cost; that MPIC breached its duty by failing to take sufficient steps to advise the insured of the availability of underinsured motorist coverage. The court found it unnecessary to determine whether MPIC also breached any contractual duty owed to the insured.

Insurance - Topic 724

Insurers - Duties - Duty to inform insured of available coverage - The Supreme Court of Canada stated that private insurance agents owed a duty to their customers to provide not only information about available coverage, but also advice about which forms of coverage they required in order to meet their needs - It was appropriate to hold private insurance agents and brokers to a stringent duty to provide both information and advice to their customers - See paragraphs 55 to 58.

Insurance - Topic 724

Insurers - Duties - Duty to inform insured of available coverage - The Supreme Court of Canada stated that public insurers, such as the Manitoba Public Insurance Corporation, had a duty to inform customers of the available range of coverage, including all optional coverage - The scope of a public insurer's duty was not as onerous as that imposed on private insurers - The court stated that public insurers had no duty to sit down with their customers to inquire into their personal, family and business affairs so as to provide individualized insurance advice - See paragraphs 51 to 61.

Insurance - Topic 724

Insurers - Duties - Duty to inform insured of available coverage - The insured's Manitoba Public Insurance Corporation (MPIC) automobile policy did not include available underinsured motorist coverage - The insured alleged MPIC was negligent in failing to inform him of the availability of the coverage - The insured had asked for the "maximum coverage" - MPIC relied on a flyer sent to the insured with his renewal certificate as proper notice - The renewal notice box for underinsured coverage was marked "not applicable", leading the accused to believe that it did not apply to him since he had "maximum coverage" - The Supreme Court of Canada stated that MPIC was negligent in failing to inform the insured of all available forms of coverage - The flyer and certificate were insufficient, as they were ambiguous.

Insurance - Topic 5181

Automobile insurance - Compulsory government schemes - Uninsured and underinsured motorist coverage - [See third Insurance - Topic 724].

Insurance - Topic 5226

Automobile insurance - Compulsory government schemes - Rights and duties of public insurer - Duty to inform of available coverage - [See second and third Insurance - Topic 724].

Insurance - Topic 5226

Automobile insurance - Compulsory government schemes - Rights and duties of public insurer - Duty to inform of available coverage - An insured argued that the Manitoba Public Insurance Corporation had a contractual duty to provide timely and accurate information concerning all available forms of coverage - The Supreme Court of Canada stated that since it was found that MPIC had a duty in tort to inform customers of all available forms of coverage, and a detailed contractual analysis was not developed on appeal, the question of whether public insurers owed a contractual duty was best left for another day - See paragraphs 62 to 65.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Failure to accept - Effect of - The plaintiffs obtained judgment for $887,090.00 - Two months before trial the defendant had rejected the plaintiffs' offer to settle for $650,000.00 in the form of a structured settlement - The trial judge awarded the plaintiffs solicitor and client costs under rule 49.10(1) - The defendant submitted that rule 49.10(1) did not apply, because with a structured settlement (as opposed to a lump sum) it was impossible to determine whether the settlement or judgment was more favourable - The Supreme Court of Canada affirmed the costs award - The defendant failed to prove that the structured settlement ($650,000.00) was less favourable to it than the judgment ($887,090.00) - See paragraphs 85 to 87.

Practice - Topic 8800

Appeals - Duty of appellate court regarding fact findings by trial judge - The Supreme Court of Canada stated that an appellate court should not interfere with a trial judge's fact findings unless the trial judge made a palpable and overriding error which affected his assessment of the facts - See paragraphs 21 to 26.

Cases Noticed:

The Sir Robert Peel (1880), 4 Asp. M.L.C. 321, refd to. [para. 22].

Clarke v. Edinburgh Tramways Co., [1919] S.C.(H.L.) 35, refd to. [para. 23].

Hontestroom (S.S.) v. Sagaporack (S.S.), [1927] A.C. 37 (H.L.), refd to. [para. 24].

Prudential Trust Co. v. Forseth, [1960] S.C.R. 210, refd to. [para. 25].

Stein Estate et al. v. Ship "Kathy K", [1976] 2 S.C.R. 802; 6 N.R. 359, refd to. [para. 25].

Lewis v. Todd and McClure, [1980] 2 S.C.R. 694; 34 N.R. 1, refd to. [para. 25].

Edgington v. Fitzmaurice (1885), 29 Ch. D. 459, refd to. [para. 31].

Nova Mink Ltd. v. Trans-Canada Airlines, [1951] 2 D.L.R. 241, refd to. [para. 37].

Donoghue v. Stevenson, [1932] A.C. 562, refd to. [para. 39].

Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd., [1964] A.C. 465, refd to. [para. 40].

Haig v. Bamford, [1977] 1 S.C.R. 466; 9 N.R. 43, refd to. [para. 41].

Hofstrand Farms Ltd. v. B.D.C. Ltd., [1986] 1 S.C.R. 228; 65 N.R. 261, refd to. [para. 41].

Nielsen v. Kamloops (City), Hughes and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 41].

Mutual Life & Citizens' Assurance Co. Ltd. v. Evatt, [1971] 1 All E.R. 150, refd to. [para. 42].

Cherry Ltd. v. Allied Insurance Brokers Ltd., [1978] 1 Lloyd's Law Rep. 274 (Q.B.), refd to. [para. 43].

General Accident Fire and Life Assurance Corp. v. Peter William Tanter (The "Zephyr"), [1985] 2 Lloyd's Law Rep. 529 (Eng. C.A.), refd to. [para. 43].

Banque Financière de la Cité SA v. Westgate Insurance Co. Ltd., [1989] 2 All E.R. 952 (Eng. C.A.), refd to. [para. 43].

Pare v. Occidental Life Insurance Co. of California (1986), 23 C.C.L.I. 288 (B.C.S.C.), refd to. [para. 43].

Bell v. Tinmouth (1988), 34 C.C.L.I. 179 (B.C.C.A.), refd to. [para. 43].

Norlympia Seafoods Ltd. v. Dale & Co. Ltd., [1983] I.L.R. 6475 (B.C.S.C.), refd to. [para. 43].

Woodside v. Gibraltar General Insurance Co. (1988), 34 C.C.L.I. 150 (Ont. S.C.), refd to. [para. 43].

Fine's Flowers Ltd. v. General Accident Assurance Co. of Canada (1977), 17 O.R.(2d) 529 (C.A.), refd to. [para. 52].

G.K.N. Keller Canada Ltd. v. Hartford Fire Insurance Co. (1983), 1 C.C.L.I. 34 (Ont. H.C.), refd to. [para. 56].

Sjodin v. Insurance Corporation of British Columbia, [1987] I.L.R. 8319, refd to. [para. 68].

Indemnity Insurance Co. of North America v. Excel Cleaning Service, [1954] S.C.R. 169, refd to. [para. 75].

Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888; 32 N.R. 488, refd to. [para. 75].

Scott v. Wawanesa Mutual Insurance Co., [1989] 1 S.C.R. 1445; 94 N.R. 261, refd to. [para. 77].

Jacuzzi Can. Ltd. v. A. Mantella & Sons Ltd. (1988), 31 C.P.C.(2d) 195 (H.C.J.), refd to. [para. 86].

Statutes Noticed:

Manitoba Public Insurance Corporation Act, R.S.M. 1987, c. P-215; C.C.S.M., c. P-215, sect. 48 [para. 4].

Rules of Civil Procedure (Ont.), rule 49.10(1) [para. 86].

Authors and Works Noticed:

Brown and Meneges, Insurance Law in Canada (1982), p. 138 [para. 76].

MacGillivray and Parkington on Insurance Law (8th Ed. 1988), p. 231 [para. 43].

Snow, H., Liability of Insurance Agents For Failure to Obtain Effective Coverage: Fine's Flowers Ltd. v General Accident Assurance Co. (1979), 9 Man. L.J. 165, p. 169 [para. 55].

Counsel:

Earl A. Cherniak, Q.C., and Peter W. Kryworuk, for the appellants;

Donald H. Rogers, Q.C., and David Stratas, for the respondent.

Solicitors of Record:

Lerner & Associates, London, Ontario, for the appellants;

Osler, Hoskin and Harcourt, Toronto, Ontario, for the respondent.

This appeal was heard on June 1, 1990, before Lamer, C.J.C., Wilson, Sopinka, Cory and McLachlin, JJ., of the Supreme Court of Canada.

On November 22, 1990, Wilson, J., delivered the following judgment in both official languages for the Supreme Court of Canada.