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Johnston c

Johnston c. Chubb Insurance Company of Canada

2010 QCCA 1066

 

COURT OF APPEAL

 

CANADA

PROVINCE OF QUEBEC

REGISTRY OF MONTREAL

 

No:

500-09-019125-087

 

(500-17-027026-056)

 

 

MINUTES OF THE HEARING

 

 

DATE:

June 2, 2010

 

CORAM: THE HONOURABLE

ANDRÉ ROCHON, J.A.

PIERRE J. DALPHOND, J.A.

JEAN BOUCHARD, J.A.

 

APPELLANT(S)

ATTORNEY(S)

PHILIP E. JOHNSTON

Mtre Eric L. Clark

CLARK ATTORNEYS

 

 

 

RESPONDENT(S)

ATTORNEY(S)

CHUBB INSURANCE COMPANY OF CANADA

Mtre Louis Charette

LAVERY DE BILLY

 

 

 

 

On appeal from a judgment rendered on October 2, 2008 by the Honourable Justice Gilles Hébert of the Superior Court district of Montreal

 

NATURE OF THE APPEAL:

Insurance

 

Clerk:  Marcelle Desmarais

Court Room:  Antonio-Lamer

 


 

 

HEARING

 

 

11 h 21 Argumentation by Mtre Eric L. Clark

11 h 52 Argumentation by Mtre Louis Charette.

11 h 59 Rebuttal by Mtre Eric L. Clark

12 h 01 End of argumentations.

12 h 01 Suspension

12 h 10 Resumption

BY THE COURT:

Judgment - see page 3.

 

 

 

 

 

 

 

 

 

 

 

 

Marcelle Desmarais

Clerk

 


BY THE COURT

 

 

JUDGMENT

 

 

[1]               Subsequent to the sale of the appellant’s house to a third party for $ 825, 000.00, an old and unused oil tank was found buried in the back lawn of the property. The purchaser sued the appellant alleging that he would not have paid so high a price if he had been aware of the latent defects (art. 1726 C.C.Q.). The appellant responded by an action in warranty against the respondent, an insurance company.

[2]               The appellant concedes that he was not covered for latent defect under the property coverage of his policy with the respondent. However, he contends that the liability coverage extends to whatever he is legally obliged to pay to a third party, including a claim for latent defects, since such a claim is not specifically excluded by the policy.

[3]               The trial judge did not agree with this interpretation of the policy and dismissed the action in warranty. His ratio decidendi is the lack of an occurrence, an event necessary to activate the liability coverage. The trial judge also concluded that the obligation to defend did not arise considering the nature of the claim against the appellant.

[4]               Art. 2465 C.C.Q. provides that the insurer is not liable to indemnify for injury (property and liability) arising from an inherent defect in the property.

[5]               This principle was not excluded in the instant case. To the contrary, the property section of the appellant's policy specifically excludes latent defect.

[6]               With regard to the personal liability coverage, it is defined as follows:

We cover damages a covered person is legally obligated to pay for personal injury or property damage which take place anytime during the policy period and are caused by an occurrence (…)

[7]               The trial judge was right to conclude that this coverage could not be trigged here since there had been no damage caused by an occurrence to the property. This conclusion is the only one to be drawn from a correct interpretation of the policy, as it was decided in numerous cases.[1]

[8]               In reality, the amount that the appellant was condemned to pay to the purchaser was nohting but the restitution of a part of the paid purchase price to reflect the true value of the property at the time of the sale considering its real state.

[9]               In conclusion, the Court is of the view that the trial judge did not commit any error of law when resuming the state of the law with regard to the obligation to defend or the interpretation of the appellant's insurance policy.

[10]           WHEREFORE, THE COURT:

[11]           Dismisses the appeal, with costs.

 

 

 

ANDRÉ ROCHON, J.A.

 

 

 

PIERRE J. DALPHOND, J.A.

 

 

 

JEAN BOUCHARD, J.A.

 

 



Géodex inc. c. Zurich Compagnie d'Assurances, [2006] R.R.A. 278 (C.A.), 2006 QCCA 558 , para. 45 and 70; Assurance Générale des Caisses Desjardins c. Groupe Commerce, [2001] RRA 133 (C.S.); Bachand c. Munger J.E. 2002-1690 (C.S.); Lalancette c. Appartement Josam Inc. EYB 2005-99892 (C.S.); Flam c. Sécurité nationale compagnie d'assurance, J.E. 2006-1124 (C.S.), 2006 QCCS 1893 (appeal dismissed); Deas c. Maréchal , B.E. 2009BE-356 (C.S.), 2009 QCCS 248 (leave to appeal denied).

 

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