The obligation of a liability insurer faced with the intentional
fault of the servant, employee, or mandatary of its insured
The Quebec Court of Appeal rendered another decision on
liability insurance in Royal & SunAlliance du Canada,
société d'assurances v English,1
on November 1, 2012. In this decision, the Court found a liability
insurer liable for the intentional fault of its insured's
servant, employee, or mandatary.
On November 1, 2012, the Quebec Court of Appeal ruled, for a
third time in as many months,2 on the application of
article 2464 of the Civil Code of Québec to
liability insurance policies, more particularly in regard to gross
and intentional fault.
The facts of this case are as follows. Ms. English had to move.
To do so, she retained the services of Transport Matton Inc.
("Matton"). On moving day, Mr. Denis, the stepson of
Matton's owner, presented himself under a fake name at Ms.
English's home. He wore a company uniform and drove a truck
bearing the company's name.
After being put into storage, the property disappeared. The
police investigation revealed that the theft had been orchestrated
and committed by Denis, who, moreover, pled guilty.
At trial, the Superior Court ruled that Ms. English had a direct
right of action against Matton's insurer, Royal &
SunAlliance, which had issued a policy covering Matton's
liability at the relevant time, and that consequently, Royal &
SunAlliance had to pay to Ms. English the admitted amount of the
loss, $37,760.14, equivalent to the depreciated value of her
In a relatively short judgment, the Court of Appeal upheld this
ruling. It concluded that Ms. English was the victim of fraud
orchestrated by Denis and that as Matton had, at all relevant
times, let it be believed that Denis was its servant, employee, or
mandatary, it was liable for Denis's intentional fault.
The Court ruled that Royal & SunAlliance was Matton's
liability insurer at the relevant time and that because the
obligation of coverage of the insurer that is liable for injury
caused by a person for whose acts the insured is liable subsists
regardless of the nature or gravity of the fault, Royal &
SunAlliance was required to indemnify Ms. English for Denis's
This case serves as a reminder that the situations in which an
insurer may deny coverage to its insured as a result of gross or
intentional fault are relatively limited. It provides a perfect
illustration of a case in which, even if its insured (the employer)
committed no fault, the liability insurer is nevertheless required
to indemnify a third party for the consequences of the gross or
intentional fault of a servant, employee, mandatary, or apparent
mandatary of its insured, notwithstanding the exclusions that the
policy may contain.
12012 QCCA 1939.
2SeeSouscripteurs du Lloyd's v
Alimentation Denis & Mario Guillemette Inc., 2012
QCCA 1376; andAudet v Transamerica Life
Canada, 2012 QCCA 1746.
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