Rockey v. Sutherland, Douglas Rogers Ltd. and Great American Insurance Co., (1978) 27 N.S.R.(2d) 504 (CA)

• Judge: Coffin, Cooper and Macdonald, JJ.A.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: June 22, 1978
• Jurisdiction: Nova Scotia
• Citations: (1978), 27 N.S.R.(2d) 504 (CA)

Rockey v. Sutherland (1978), 27 N.S.R.(2d) 504 (CA);

    41 A.P.R. 504

MLB headnote and full text

Rockey v. Sutherland, Douglas Rogers Ltd. and Great American Insurance Co.

Indexed As: Rockey v. Sutherland, Douglas Rogers Ltd. and Great American Insurance Co.

Nova Scotia Supreme Court

Appeal Division

Coffin, Cooper and Macdonald, JJ.A.

June 22, 1978.

Summary:

This case arose out of a claim against an insurance company for a fire loss. In December, 1974, the insured requested his local agent to increase his fire coverage for a garage attached to the insured's residence. The local agent told the insured that he would look after the request for increased coverage. The local agent wrote to a general agent requesting the increase. The general agent asked the local agent what the garage was used for. The local agent failed to reply to the general agent. Two months later the garage was destroyed by fire. The insured commenced an action against the local agent, the general agent and the insurance company. The Nova Scotia Supreme Court, Trial Division, allowed the insured's action and held all of the defendants liable to the insured (See paragraph 2 for an apportionment of damages). The judgment of the Trial Division is reported at 26 N.S.R.(2d) 516. The general agent appealed to the Nova Scotia Court of Appeal.

The Nova Scotia Court of Appeal dismissed the appeal and affirmed the negligence of both the local agent and the general agent. The Court of Appeal stated that the general agent was negligent in failing to follow up the failure of the local agent to reply to the request for information. The Court of Appeal held that the local agent was negligent in failing to obtain the coverage requested and in failing to notify the insured that there was difficulty in obtaining the additional coverage.

Insurance - Topic 513

Agents - Liability of agent - Negligence - Duty of agent to obtain coverage - An insured requested a local agent to increase his fire coverage (for a garage attached to a residence) - The local agent told the insured he would take care of it - The Nova Scotia Court of Appeal held that the agent was negligent when the agent failed to obtain the coverage requested and failed to notify the insured that there was difficulty in obtaining the additional coverage - See paragraphs 36 to 42.

Insurance - Topic 585

Agents - Liability of general agents respecting coverage - An insured requested a local agent to increase his fire coverage (for a garage attached to a residence) - The local agent told the insured he would take care of it - The local agent wrote to a general agent requesting the increased coverage - The general agent asked the local agent what the garage was used for - The local agent failed to reply to the general agent and two months later the garage was destroyed by fire - The Nova Scotia Court of Appeal held that the general agent was negligent in failing to follow up the failure of the local agent to reply to the request for information - The Court of Appeal stated that the insured was entitled to be informed of whether his request for insurance coverage was accepted or rejected - See paragraphs 43 to 45.

Interest - Topic 5304

Interest as damages - Interest on payment of money or debt withheld - Interest on an amount due under an insurance contract - The Nova Scotia Court of Appeal applied the Interest Act of 1859 and awarded an insured interest on the loss payable under an insurance contract commencing 60 days after completion of the proofs of loss - See paragraphs 48 to 50.

Interest - Topic 5308

Interest as damages - Interest on payment of money or debt withheld - Rate of interest applicable - The Nova Scotia Court of Appeal held that the rate of such interest should reflect current interest rates - The Court of Appeal adopted a rate of 9% per annum to be paid on overdue insurance proceeds - See paragraph 51.

Cases Noticed:

Swan and Swan v. Travelers Indemnity Company et al. (1966), 55 W.W.R. 511, refd to. [para. 14].

Menna v. Guglietti (1970), 10 D.L.R.(3d) 132 (Ont. H.C.), refd to. [para. 42].

Kostiuk v. Union Acceptance Corp. Ltd. (1968), 66 D.L.R.(2d) 430 (Sask. Q.C.), refd to. [para. 42].

J-Bailey's Furniture Market Limited v. Sigma Insurance Limited (1977), 21 N.S.R.(2d) 459; 28 A.P.R. 459, refd to. [para. 42].

Worth v. Walter (1977), 19 N.S.R.(2d) 231; 24 A.P.R. 231, refd to. [para. 48].

Statutes Noticed:

Interest Act, R.S.N.S. 1859 (2d), c. 82, sect. 5 [para. 48].

Insurance Act. R.S.N.S. 1967, c. 148, sect. 121 [para. 49].

Authors and Works Noticed:

Ivamy, General Principles of Insurance Law, (2nd Ed.), p. 464 [para. 38].

Corpus Juris Secundum, Vol. 45, p. 852 [para. 39].

MacGillivray & Parkinton on Insurance Law, p. 199 [para. 40].

McGregor on Damages, (13th Ed.), para. 455 [para. 51].

Counsel:

Stewart McInnes, Q.C., for the appellant, Douglas Rogers Ltd.;

Douglas Caldwell, for the respondent, James A Sutherland;

David Chipman, Q.C., for the respondent, Great American Insurance Co.;

John G. Langley, for the respondent, George Edward Rockey.

This appeal was heard by COFFIN, COOPER and MACDONALD, JJ.A., at Halifax, Nova Scotia, on March 29, 1978.

The judgment of the Nova Scotia Court of Appeal was delivered by MACDONALD, J.A., on June 22, 1978.