The Superior Court of Quebec recently rendered a
decision1 based on insurable interest in a case
involving a sunken boat, a business man named Bonneau and a
convicted drug smuggler known as Grenier.
Bonneau had entered into a finance agreement for the boat and
had taken out a policy of insurance. Bonneau had been paying his
insurance premiums and finance payments on the 2 year old Four
Winns, model 358 Vista boat when it sank. Bonneau's insurer
took the position that Grenier was the true owner of the boat and,
as a result, Bonneau's policy was null and without effect
ab initio for failing to have an insurable interest.
Bonneau's evidence was that he purchased the boat outright
after trading in an older vessel belonging to his good friend
Grenier. However, contradictory paperwork and some other curious
facts led the court to conclude otherwise. The registration and
warranty information were completed in Grenier's name, Grenier
was alone on the boat when the coast guard responded to the
distress call, Bonneau never went to see the boat after it was
pulled from the lake and had not seen the boat before signing the
finance agreement. The Court was also persuaded, among other
things, by the fact that Bonneau did not know how to captain a
boat. This was in spite of Bonneau's claim that he had hired a
captain – an individual who committed suicide before the
In addition to the court not having the benefit of the
captain's evidence, it also lacked Grenier's as he was
being detained in jail after having being caught drug smuggling by
Peruvian authorities and extradited to the US.
Section 2448 of the Civil Code of Quebec provides that
insurance of property in which the insured has no insurable
interest is null. In order for the Court to recognize an insurable
interest (and in the absence of convincing evidence on ownership),
Bonneau had to establish that he suffered direct and immediate
prejudice as a result of the loss of the boat.
The lack of evidence on ownership coupled with Bonneau's
credibility issues, led to the Court to conclude that there was no
insurable interest and that Bonneau's economic obligations
under the finance agreement and his fulfilment of those obligations
were insufficient to create one. The Court considered Bonneau to be
a mere nominee for Grenier, which Quebec courts have previously
decided to be incongruent with an insurable interest.
The insurance contract in the name of Bonneau was determined to
be null and without effect ab initio and the insurer was
only required to refund premiums paid.
At the time of writing we are not aware of whether Bonneau has
sought leave to appeal this decision.
1. Bonneau c. Compagnie d'assurances
Élite, 2014 QCCS 3277 (CanLII).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.
From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.
Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).