Schmidt and Schmidt v. Aetna Casualty Co. of Canada and Edelson Leipsic Insurance Ltd., (1982) 37 A.R. 394 (QB)

• Judge: Kryczka, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 01, 1982
• Citations: (1982), 37 A.R. 394 (QB)

Schmidt v. Aetna Casualty Co. of Can. (1982), 37 A.R. 394 (QB)

MLB headnote and full text

Schmidt and Schmidt v. Aetna Casualty Company of Canada and Edelson Leipsic Insurance Ltd.

(No. 7901-03390)

Indexed As: Schmidt and Schmidt v. Aetna Casualty Co. of Canada and Edelson Leipsic Insurance Ltd.

Alberta Court of Queen's Bench

Judicial District of Calgary

Kryczka, J.

June 1, 1982

Summary:

A husband and wife brought an action against an insurer and insurance agent for the proceeds under a fire insurance policy. The insured applied through the agent for insurance on their home. The husband carried on a taxidermy business in the garage, but the agent was told that taxidermy was only a hobby to avoid commercial insurance premiums. Further, although the husband was employed as a meat cutter at the time of the application, he was dismissed before the policy was issued. The garage burned and the insurer denied liability on the grounds of misdescription of the taxidermy business and the failure to inform the insurer of the husband's change in occupation. The insured claimed that, if the policy was void, the agent should indemnify them, because it knew of the taxidermy business.

The Alberta Court of Queen's Bench dismissed the insured's action and held that the policy was void ab initio, because of the insured's failure to fully disclose the nature of the taxidermy operation or the change in the husband's occupation. The court held that the agent was entitled to rely on the information provided by the insured and was not negligent.

Insurance - Topic 5588

Fire insurance - The risk - Material misdescriptions and changes - Property descriptions - The insured applied for insurance on his home - The insured told the agent he carried on taxidermy in the garage as a hobby, when it actually was a business - The insurer denied liability after a fire, and submitted that the misdescription of the use of the garage was a material change in the risk - The Alberta Court of Queen's Bench held the insured breached a statutory condition by failing to fully disclose the nature of the taxidermy operation - See paragraph 34.

Insurance - Topic 5591

Fire insurance - The risk - Material misdescriptions and changes - Description of owner - The insured applied for insurance on his home - Although the insured told the agent he was employed as a meat cutter, he was dismissed before the policy was issued - The insurer denied liability after a fire, and submitted the change in the insured's occupation was a material change in the risk - The Alberta Court of Queen's Bench held the insured breached a statutory condition by failing to disclose change in his occupation - See paragraph 34.

Insurance - Topic 509

Agents - Liability of agents, general - Duty of agent re description of risk - The insured applied for insurance on his home - The insured told the agent that he carried on taxidermy in the garage as a hobby, when it was actually a business - The insurer denied liability after a fire, because of the misdescription of the taxidermy operation - The insured claimed against the agent and claimed the agent knew of the taxidermy business - The Alberta Court of Queen's Bench held the agent exercised reasonable skill and care in placing the insurance and did not know about the taxidermy business - See paragraph 46.

Cases Noticed:

Kelly et al. v. Wawanesa Mutual Insurance Co. et al. (1980), 98 D.L.R.(3d) 29, refd to. [para. 30].

Smith v. Co-Operative Fire and Casualty Company (1977), 5 A.R. 116, refd to. [para. 32].

Hornburg et al. v. Toole, Peet & Co. Ltd., Canadian Home Assurance Company, Marklinger and Smith (1981), 28 A.R. 546; 13 A.L.R.(2d) 363, refd to. [para. 36].

Authors and Works Noticed:

Couch, Insurance (2d Ed.), vol. 3, pp. 349-50 [para. 38].

Crawford, Baer, Donald and Rendell, Cases on the Canadian Law of Insurance, p. 211 [para. 29].

Ivamy, General Principles of Insurance Law (2d Ed. 1970), p. 464 [para. 38].

Counsel:

T.A.B. Jolliffe, for the plaintiffs;

J.N. Thom, for the defendant Aetna Casualty Company of Canada;

V.A. MacDonald, for the defendant Edelson Leipsic Insurance Limited.

This case was heard before KRYCZKA, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on June 1, 1982, at the City of Calgary.