Rochon v. Rochon, (2015) 341 O.A.C. 211 (CA)

• Judge: Simmons, Epstein and Pardu, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 26, 2015
• Jurisdiction: Ontario
• Citations: (2015), 341 O.A.C. 211 (CA);2015 ONCA 746

Rochon v. Rochon (2015), 341 O.A.C. 211 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. NO.009

Paulette Rochon and Marcel Rochon (plaintiffs/appellants) v. Francois Rochon (defendant/respondent)

(C58777; 2015 ONCA 746)

Indexed As: Rochon v. Rochon

Ontario Court of Appeal

Simmons, Epstein and Pardu, JJ.A.

November 6, 2015.

Summary:

A fire broke out in the plaintiffs' garage when their son, the defendant, was working on his car in the garage. The plaintiffs were the named insured under a residential home owner's insurance policy (the Policy) issued by "Grenville". The defendant lived at home with the plaintiffs, and was an unnamed insured under the Policy. His car was insured under an automobile policy issued by "Economical". Grenville claimed it was entitled to recover from Economical the $148,581.65 it paid the plaintiffs.

The Ontario Superior Court, in a decision reported with neutral citation 2014 ONSC 2337, concluded that the defendant was negligent, but dismissed Grenville's subrogation claim. Grenville appealed on the grounds that the trial judge erred: (1) in concluding that the defendant was an insured under the Policy; (2) in finding that the defendant had an insurable interest in the loss; and (3) in failing to give effect to the policy argument for allowing subrogation in this case.

The Ontario Court of Appeal dismissed the appeal. Dismissal of Grenville's subrogation claim was consistent with the language of the Policy, the jurisprudence, and the policy against allowing an insurer to subrogate against its own insured.

Insurance - Topic 17

General - Insured - Defined - [See Insurance - Topic 2892 ].

Insurance - Topic 2876.1

Subrogation - Between insurers - A home insurer (Grenville) subrogated against an automobile insurer (Economical) for damages caused by the fire arising from the use and operation of the defendant's motor vehicle in the garage attached to the plaintiffs' home - The defendant was found to be an insured under Grenville's insurance Policy - The Ontario Court of Appeal held that there were cogent policy reasons for dismissing Grenville's subrogation claim against Economical - "I start with the fundamental notion that insurers should not be permitted to subrogate against their own insured ... . The fact that an insured may have other insurance is, in my view, irrelevant. A suit by an insurer against its own insured does not fulfil the aims of subrogation, which is to avoid overpayment of the insured ... . Further, subrogation against an insured should be barred because the insurer has contracted to take onto itself the very risk at issue, thereby taking it away from the insured" - Further, the conditions of the Policy that required the defendant to assist Grenville in recovering the loss would be contrary to his interest if his own insurer could sue him under the Policy - The trial judge correctly held that Grenville could not subrogate against its own insured - See paragraphs 70 to 76.

Insurance - Topic 2883

Subrogation - Action by insured - Entitlement of subrogated insurer to damages awarded - [See Insurance - Topic 2876.1 ].

Insurance - Topic 2892

Subrogation - Action by insurer - Bars - Defendant an "insured" - A fire broke out in the plaintiffs' garage when their son, the defendant, was working on his car in the garage - The plaintiffs were the named insured under a residential home owner's insurance policy (the Policy) issued by "Grenville" - The defendant lived at home with the plaintiffs, and was an unnamed insured under the Policy - His car was insured under an automobile policy issued by "Economical" - Grenville claimed it was entitled to recover from Economical the damages it paid the plaintiffs - The trial judge concluded that the defendant was an insured under the Policy - Grenville appealed the dismissal of its subrogation claim - The Ontario Court of Appeal, in dismissing the appeal, rejected Grenville's argument that the trial judge erred in concluding that the defendant was an insured under the Policy - The language of the Policy was clear, and the trial judge properly gave effect to it - The Policy unambiguously defined the defendant as an insured under Section 1, which paid out the fire loss - All persons listed in the definition of "you" and "your" in Section 2 were "insured": "'You' or 'your' means the person(s) named as Insured on the Declaration Page and, while living in the same household , his or her spouse, the relatives of either ... " - By the definition of "you" and "your", the defendant's rights were the equivalent of the plaintiffs' rights throughout the Policy - See paragraphs 28 to 47.

Insurance - Topic 5524

Fire insurance - The parties - Unnamed insured - [See Insurance - Topic 2892 ].

Insurance - Topic 5753

Fire insurance - Insurable interest - Property of others - A fire broke out in the plaintiffs' garage when their son, the defendant, was working on his car in the garage - The plaintiffs were the named insured under a residential home owner's insurance policy (the Policy) issued by "Grenville" - The defendant lived at home with the plaintiffs, and was an unnamed insured under the Policy - His car was insured under an automobile policy issued by "Economical" - Grenville claimed it was entitled to recover from Economical the damages it paid the plaintiffs - The trial judge, in dismissing Grenville's subrogation claim, found that the defendant had an insurable interest in the loss - The Ontario Court of Appeal, in dismissing Grenville's appeal, held that the trial judge's finding was consistent the jurisprudence - "Coverage C" under Section 1 of the Policy read: "We insure the contents of your dwelling and any other personal property you own, wear or use while on your premises which is usual to the ownership or maintenance of a dwelling." - The trial judge found that the defendant had contents and tools on the premises - Applying the "factual expectancy test", the defendant had an insurable interest in the garage - As a dependent living with his parents, the defendant's interests were "inseparably connected" to those of his parents - The garage formed a part of the residence that he enjoyed with his parents - The defendant received a "benefit" from the family garage and its contents, and suffered "direct prejudice" when it was destroyed by fire - See paragraphs 49 to 69.

Insurance - Topic 5776

Fire insurance - Subrogation - General - [See Insurance - Topic 2876.1 ].

Insurance - Topic 6622

Multi-peril property insurance - Household or homeowner's policies - Insured defined - [See Insurance - Topic 2892 ].

Cases Noticed:

Moraweitz v. Moraweitz (1986), 18 C.C. L.I. 108 (Ont. C.A.), dist. [para. 18].

Scott v. Wawanesa Mutual Insurance Co., [1989] 1 S.C.R. 1445; 94 N.R. 261, refd to. [para. 20].

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633; 461 N.R. 335; 2014 SCC 53, refd to. [para. 25].

Vallieres et al. v. Vozniak (2014), 580 A.R. 326; 620 W.A.C. 326; 2014 ABCA 290, refd to. [para. 26].

Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. et al. (2015), 599 A.R. 363; 543 W.A.C. 363; 2015 ABCA 121, refd to. [para. 26].

Precision Plating Ltd. et al. v. AXA Pacific Insurance Co. et al. (2015), 374 B.C.A.C. 37; 642 W.A.C. 37; 387 D.L.R.(4th) 281; 2015 BCCA 277, refd to. [para. 26].

Riordan v. Lombard Insurance Company (2003), 182 B.C.A.C. 199; 300 W.A.C. 199; 13 B.C.L.R.(4th) 335; 2003 BCCA 267, refd to. [para. 38].

Scalera v. Lloyd's of London, [2000] 1 S.C.R. 551; 253 N.R. 1; 135 B.C.A.C. 161; 221 W.A.C. 161; 2000 SCC 24, refd to. [para. 42].

Kosmopoulos et al. v. Constitution Insurance Co. of Canada et al., [1987] 1 S.C.R. 2; 74 N.R. 360; 21 O.A.C. 4, refd to. [para. 49].

Zurich Insurance Co. et al. v. Ison T.H. Auto Sales Inc., [2011] O.T.C. Uned. 1870; 106 O.R. (3d) 201; 2011 ONSC 1870, affd. [2011] O.A.C. Uned. 586; 342 D.L.R. (4th) 501; 2011 ONCA 663, refd to. [para. 51].

Lucena v. Craufurd (1806), 127 E.R. 630 (H.L.), refd to. [para. 54].

Imperial Oil Ltd. and Wellman-Lord (Alberta) Ltd. v. Commonwealth Construction Ltd., [1978] 1 S.C.R. 317; 12 N.R. 113; 1 A.R. 161, refd to. [para. 73].

Counsel:

Steven Baldwin and Daniel Baldwin, for the appellants;

Alan L. Rachlin, for the respondent.

This appeal was heard on May 26, 2015, before Simmons, Epstein and Pardu, JJ.A., of the Ontario Court of Appeal. In reasons written by Epstein, J.A., the Court delivered the following judgment, released on November 6, 2015.