Insurance Corp. of British Columbia v. Hosseini, 2006 BCCA 187

• Judge: Newbury, Smith and Thackray, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: April 20, 2006
• Jurisdiction: British Columbia
• Citations: 2006 BCCA 187;(2006), 221 B.C.A.C. 94 (CA);2006 BCCA 4

ICBC v. Hosseini (2006), 221 B.C.A.C. 94 (CA);

    364 W.A.C. 94

MLB headnote and full text

Temp. Cite: [2006] B.C.A.C. TBEd. JA.045

Insurance Corporation of British Columbia (respondent/plaintiff) v. Amin Hosseini (appellant/defendant)

(CA31522; 2006 BCCA 4; 2006 BCCA 187)

Indexed As: Insurance Corp. of British Columbia v. Hosseini

British Columbia Court of Appeal

Newbury, Smith and Thackray, JJ.A.

January 5, 2006 and April 20, 2006.

Summary:

Hosseini was the operator of a stolen motorcycle on which Chan was a passenger. Chan was injured when the motorcycle crashed into a barrier. Chan sued Hosseini. The Insurance Corp. of British Columbia (ICBC) settled with Chan on behalf of Hosseini. ICBC then sued Hosseini, claiming indemnity for the amount it paid to Chan, based on the assertion that Hosseini was uninsured.

The British Columbia Supreme Court in a decision reported [2003] B.C.T.C. Uned. 1875, awarded judgment in favour of ICBC against Hosseini for $1,080,000. Hosseini appealed.

The British Columbia Court of Appeal allowed the appeal, set aside the trial decision and dismissed the ICBC's action.

Insurance - Topic 730

Insurers - Duties - Duty of good faith - The British Columbia Court of Appeal discussed the duty of good faith owed to an insured by an insurer - See paragraphs 54 to 59.

Insurance - Topic 730

Insurers - Duties - Duty of good faith - Hosseini was the operator of a stolen motorcycle on which Chan was a passenger - Chan was injured when the motorcycle crashed into a barrier - Chan sued Hosseini - The Insurance Corp. of British Columbia (ICBC) settled with Chan on behalf of Hosseini - ICBC claimed indemnity from Hosseini for what it paid Chan, based on the assertion that Hosseini was uninsured (i.e., an insured in breach of the owner's policy) - Hosseini argued that the Chan settlement was without his consent and was reached without any deduction because of volenti non fit injuria or contributory negligence on the part of Chan - The British Columbia Court of Appeal dismissed the ICBC's action against Hosseini - The court held that the ICBC breached both its statutory duty and the duty of good faith in not promptly notifying Hosseini that it was treating him as an uninsured motorist - The ICBC also breached the duty of good faith respecting the Chan settlement - These breaches of duty caused Hosseini to suffer predudice and therefore ICBC was estopped from claiming indemnity from Hosseini - The court rejected an argument by ICBC, that even if it breached the duty of good faith, it would still have a remedy of restitution under the equitable doctrine of recoupment - See paragraphs 1 to 107.

Insurance - Topic 2895.1

Subrogation - Action by insurer - Bar - Breach of duty of good faith by insurer - [See second Insurance - Topic 730 ].

Cases Noticed:

702535 Ontario Inc. et al. v. Non-Marine Underwriters, Lloyd's, London et al. (2000), 130 O.A.C. 373; 184 D.L.R.(4th) 687 (C.A.), refd to. [para. 52].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201; 2002 SCC 18, refd to. [para. 57].

Asselstine v. Manufacturers Life Insurance Co. et al. (2005), 213 B.C.A.C. 102; 352 W.A.C. 102; 22 C.C.L.I.(4th) 169; 2005 BCCA 292, refd to. [para. 58].

Shea v. Manitoba Public Insurance Corp. (1991), 55 B.C.L.R.(2d) 15 (S.C.), refd to. [para. 59].

General Security Insurance Co. v. Howard Sand & Gravel Co., [1954] S.C.R. 785, refd to. [para. 90].

1126389 Ontario Ltd. v. Dalton et al. (2000), 106 O.T.C. 333; 20 C.C.L.I.(3d) 68 (Sup. Ct.), refd to. [para. 91].

Moule v. Garrett (1872), L.R. 7 Ex. 101, refd to. [para. 95].

Brooks' Wharf and Bull Wharf Ltd. v. Goodman Bros., [1937] 1 K.B. 534 (C.A.), refd to. [para. 97].

Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd., [1943] A.C. 32 (H.L.), refd to. [para. 98].

Deglman v. Guaranty Trust Co. of Canada - see Deglman v. Brunet Estate.

Deglman v. Brunet Estate, [1954] S.C.R. 725, refd to. [para. 98].

Canada (Attorney General) v. Becker (1998), 223 A.R. 59; 183 W.A.C. 59; 1998 ABCA 283, refd to. [para. 99].

Owen v. Tate, [1976] 1 Q.B. 402 (C.A.), refd to. [para. 99].

Ducker v. Insurance Corp. of British Columbia (1997), 90 B.C.A.C. 248; 147 W.A.C. 248; 33 B.C.L.R.(3d) 243 (C.A.), refd to. [para. 113].

Stiles v. Workers' Compensation Board (B.C.) (1989), 38 B.C.L.R.(2d) 307 (C.A.), refd to. [para. 133].

Leung v. Leung (1993), 77 B.C.L.R.(2d) 314 (S.C.), refd to. [para. 133].

Garcia v. Crestbrook Forest Industries Ltd. (1994), 45 B.C.A.C. 222; 72 W.A.C. 222; 9 B.C.L.R.(3d) 242 (C.A.), refd to. [para. 133].

Statutes Noticed:

Insurance (Motor Vehicle) Act, R.S.B.C. 1979, c. 204, sect. 20(1), sect. 20(2), sect. 20(3), sect. 20(5), sect. 20(9), sect. 20(10), sect. 20(11), sect. 21(1), sect. 21(2), sect. 21(4), sect. 21(7), sect. 21(8), sect. 21(10), sect. 26(1), sect. 30(1)(b), sect. 30(2)(e) [para. 32].

Authors and Works Noticed:

Brown, Craig, Insurance Law in Canada (2002) (2004 Looseleaf Update, Release 2), pp. 10-21 [para. 54]; 10-22, 10-23 [para. 56]; 10-26 [para. 54].

Windt, Allan D., Insurance Claims and Disputes (1982), § 2.01 [para. 70].

Counsel:

G.J. Collette, for the appellant;

P.D.K. Fraser, Q.C., and T.D. Braithwaite, for the respondent.

This appeal was heard at Vancouver, British Columbia, on May 4 and 5, 2005, before Newbury, Smith and Thackray, JJ.A., of the British Columbia Court of Appeal. On January 5, 2006, the following reasons for judgment were delivered by the court, including the following opinions:

Thackray, JA. - see paragraphs 1 to 108;

Smith, J.A. (Newbury, J.A., concurring) - see paragraphs 109 to 130.

Supplementary reasons were delivered by the court on April 20, 2006.