Wandlyn Motels Ltd. et al. v. Commerce General Insurance Co. et al. and W. Hedley Wilson Ltd., (1970) 3 N.B.R.(2d) 6 (SCC)

• Judge: Cartwright, C.J.C., Judson, Ritchie, Hall and Spence, JJ.
• Court: Supreme Court (Canada)
• Case Date: November 27, 1968
• Jurisdiction: Canada (Federal)
• Citations: (1970), 3 N.B.R.(2d) 6 (SCC);1970 CanLII 162 (SCC);[1970] ILR 1017;12 DLR (3d) 605;3 NBR (2d) 6;[1970] SCR 992

Wandlyn v. Commerce General Ins. (1970), 3 N.B.R.(2d) 6 (SCC);

    3 R.N.-B.(2e) 6

MLB headnote and full text

Sommaire et texte intégral

Wandlyn Motels Ltd. et al. v. Commerce General Insurance Company et al. and W. Hedley Wilson Ltd.

Indexed As: Wandlyn Motels Ltd. et al. v. Commerce General Insurance Co. et al. and W. Hedley Wilson Ltd.

Répertorié: Wandlyn Motels Ltd. et al. v. Commerce General Insurance Co. et al. and W. Hedley Wilson Ltd.

Supreme Court of Canada

Cartwright, C.J.C., Judson, Ritchie, Hall and Spence, JJ.

June 26, 1970.

Summary:

Résumé:

The Supreme Court of Canada reversed in part the decision of the New Brunswick Court of Appeal and held 6 insurers liable under a subscription policy (which covered building and contents) to a motel owner for $21,810 for the contents only of a motel destroyed by fire. The land on which the motel was situate was owned by the principal shareholder, Charles Llewellyn, of Wandlyn Motels Ltd. The subscription policy was issued in the name of Wandlyn Motels Ltd. and replaced a builder's risk policy which named as insureds both Charles Llewellyn and Wandlyn Motels Ltd.

The Supreme Court of Canada held that the insurers were not liable for the fire loss to the building because the land and building was owned at the time of the fire loss by the principal shareholder of Wandlyn Motels Ltd., which corporation was the named insured in the fire insurance policy. The Supreme Court of Canada dismissed a claim for rectification of the fire insurance policy to add the name of Charles Llewellyn as a named insured because the Court held that the insurance agent on receiving instructions intended only to add the Motel to an existing subscription policy and to cancel the builder's risk policy. Spence, J., dissenting, would have granted the application to rectify the fire insurance policy because he found that the intent of the insured and the agent was that the builder's risk policy should be replaced by coverage under the subscription policy.

The Supreme Court of Canada dismissed a claim for negligence by the insured against the insurance agent because the court held that insurance agents do not owe a duty to their insureds to make inquiries with respect to title to property being insured.

Appeal from a judgment of the New Brunswick Court of Appeal dated November 27, 1968 (1969), 1 N.B.R.(2d) 213, which reversed an unreported judgment of Pichette, J., dated October 10, 1967.

Insurance - Topic 5752

Fire insurance - Insurable interest - Ownership of property insured - Fire insurance policy - Supreme Court of Canada held that insurer is not liable under a fire insurance policy where the property insured is not owned by the policy holder.

Deeds and Documents - Topic 5055

Rectification - When available - Intention of parties - Equity - Rectification of insurance policy to add name of owner of motel destroyed by fire - Supreme Court of Canada dismissed claim for rectification because intention of insurance agent and insured was carried out by the insurance agent.

Insurance - Topic 506

Agents - Liability of agent, general - Duty to inquire respecting property insured - Negligence - Supreme Court of Canada held that insurance agents do not owe a duty to their insureds to make inquiries with respect to the title of the property being insured under a fire insurance policy.

Insurance - Topic 424

Agents - Authority of agent - Implied or apparent authority to bind insurer - Agency - Implied authority - Supreme Court of Canada held that a local insurance agent had implied authority to bind insurers under a subscription policy for the purpose of extending coverage.

Cases Noticed:

World Marine & General Insurance Co. Ltd. v. Leger, [1952] 2 S.C.R. 3, folld.

Keefer v. The Phoenix Insurance Co. of Hartford (1901), 31 S.C.R. 144, dist.

Macaura v. Northern Assurance Co., [1925] A.C. 619 (H.L.), dist.

Harley v. Canada Life Assurance Co., [1911] 20 O.W.R. 54, folld.

Hough v. The Guardian Fire and Life Assurance Company (1902), 18 Times L.R. 273, folld.

Counsel:

D.M. Gillis, Q.C., for the appellants;

J. Edward Murphy, Q.C., and E. Neil McKelvey, Q.C., for the respondents, Commerce General Insurance Company et al.;

H.A. Hanson, Q.C., and D.T. Hashey, for the respondent, W. Hedley Wilson Ltd.

JUDSON, RITCHIE AND HALL, JJ. concurred with CARTWRIGHT, C.J.C.