2015 QCCQ 1413, 2015 QCCQ 1413

Fairfax c. Wawanesa Mutual Insurance Company 2015 QCCQ 1413 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-135427-120 DATE: February 12, 2015 ______________________________________________________________________ BY THE HONOURABLE JEFFREY EDWARDS, J.C.Q. ______________________________________________________________________ NATHALIE ANNE FAIRFAX Plaintiff v.

THE WAWANESA MUTUAL INSURANCE COMPANY Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Nathalie Anne Fairfax claims from The Wawanesa Mutual Insurance Company (“ Wawanesa ”) payment of her claim resulting from the theft of her car. Wawanesa has declined to pay the claim. [ 2 ] The questions in issue are: 1) Was the car in fact stolen? 2) If the Court decides in the affirmative for question 1), did Ms.

Fairfax make, at the time of her claim, deceitful representations to her insurer which would cause the forfeiture of her right to the indemnity otherwise payable under the insurance policy? Context [ 3 ] On June 26, 2011, Ms Fairfax returned to her home late at night where she lived in a condominium. She had gone out for the evening to be with friends, and used one of her cars. Upon her return, she noticed that her other car, namely a Mercedes Benz ML350 2003 (“ car ”) was not in the exterior parking lot of the condominium building. Ms.

Fairfax was surprised as she recalled having seen her car parked there when she left earlier that evening. She went to her condo unit and verified that she still had the key there. She then went back down to where the car should have been parked. She found something on the ground which appears to be a rubber pump mechanism. She then went back to her condo unit and called the police. As there was no answer, and there is a police station across the street from her building, Ms Fairfax walked to the police station and filed a police report for the theft of her car [1] . The car was never found. [ 4 ] Ms.

Fairfax made a claim for the loss to her insurer Wawanesa who had insured the car since September 14, 2010 [2] . On June 30, 2011, Ms. Fairfax met with Wawanesa’s claims adjuster, Mr. Christophe Gonthier. She explained the circumstances of the theft, her discovery of the disappearance of the car and gave a detailed declaration. Wawanesa had further questions about the claim. They obtained a credit check on Ms. Fairfax and other search data. They then asked Ms. Fairfax to come in and meet with a more senior claims adjuster/analyst, Mr. Luc Pouliot. On August 5, 2011, Mr.

Pouliot conducted and recorded an examination of Ms. Fairfax and went over all the facts of the disappearance of the car, her declaration and personal matters in her life. The examination took approximately 1 hour and forty minutes. The recording of this examination was also filed into Court with the consent of Ms. Fairfax [3] . After that examination, Ms. Fairfax requested payment of her claim for her stolen car. The Wawanesa representatives instead said that they had more questions about the claim.

[ 5 ] They requested an examination under oath from Ms. Fairfax to be conducted by an attorney of Wawanesa (" statutory examination ") and which would be transcribed by an official Court Reporter. On November 28, 2011, that examination took place and the transcript of approximately fifty pages has been filed by both parties [4] . After that examination, Ms. Fairfax requested payment of her claim but she did not receive any clear answer from Wawanesa who responded that the claim was still being analyzed. Wawanesa never provided Ms. Fairfax with a written or detailed letter of denial of her claim. Ms.

Fairfax made further requests for payment but didn't get any answer to her claim. In the end, Wawanesa’s representative stated verbally to Ms. Fairfax that it would not pay and that the claim was denied. [ 6 ] On August 17, 2012, Ms. Fairfax sent a formal written demand to Wawanesa for payment of $10,000 for the claim of her stolen car [5] . On September 21, 2012, Ms. Fairfax filed the present motion in Court. In order for her claim to be admissible in the Small Claims Division of this Court, she reduced the amount of her claim to $7,000.

On October 18, 2012, Wawanesa filed a defence which, for the first time, put in writing why it denied Ms. Fairfax’s claim. [ 7 ] Wawanesa acknowledges that Ms. Fairfax had a valid automobile insurance contract with it at the time of the loss of the car. At the hearing, Wawanesa’s representative also acknowledged and recognized that the value of the lost car was at least in the amount of $7,000. [ 8 ] Wawanesa submits in its defence that it does not believe Ms. Fairfax’s version of events that the car was stolen. Wawanesa raises various points that it considers are inconsistencies in Ms.

Fairfax’s version of the events. Alternatively, Wawanesa contests the claim on the basis that Ms. Fairfax made, after the disappearance of the car, several deceitful representations in the statement in support of her claim, thereby nullifying her right to payment under the insurance policy. Analysis and Decision [ 9 ] The Court heard the testimony of Ms. Fairfax. The Court heard the testimony of the representatives of Wawanesa, Mr. Gonthier and Mr. Pouliot. The Court also benefitted from listening to the recording of the very detailed examination of Ms. Fairfax by Mr.

Pouliot as well as taking cognizance of the transcript of the very detailed statutory examination of Ms. Fairfax taken by the attorney of Wawanesa. Whether the Car was stolen [ 10 ] Based upon the evidence and the Court’s assessment of the sincerity, honesty and credibility of Ms. Fairfax, the Court believes that she is the innocent victim of the theft of her car and was not at all implicated in its disappearance. Ms. Fairfax had the burden to prove the existence of a valid insurance contract with Wawanesa covering the loss of her car and that the car was stolen. In the Court’s opinion, Ms.

Fairfax has established these facts. [ 11 ] Wawanesa alleges certain facts in the background of Ms. Fairfax or contemporaneous to the disappearance of the car and submits that these facts should form the basis of presumptions inferring that the car was not stolen [6] . [ 12 ] First, Wawanesa alleges that Ms. Fairfax was selling her condo at the time of the loss. The Court does not see this as relevant. [ 13 ] Second, Wawanesa alleges that according to its calculations, Ms. Fairfax was using her car excessively and that it had excessive mileage or kilometre use.

The Court does not see this as relevant. [ 14 ] Third, the car was stolen in plain sight of the condominium building and its unit owners since, at the time of its disappearance, it was located in the exterior parking lot next to the building. This submission is unconvincing especially since the car was stolen at night when it was dark.

[ 15 ] Fourth, in the police report, Ms. Fairfax indicated that she presumed that she had lost the registration of the car as it was in the car when it was stolen. But when she met with Mr. Gonthier, she gave him a copy [7] . The Court does not consider that fact supports Wawanesa’s position. On the contrary, Ms. Fairfax testified that she was confused at the time of the immediate crisis over the theft of her car. She simply assumed that the current registration was in the car. It was justifiable and normal. However, the renewal of the registration had just been received from the SAAQ and is dated June 7, 2011.

It is more plausible that Ms. Fairfax simply had not yet got around to putting the new registration in the car’s glove compartment. The old registration was in fact stolen, as declared. Ms. Fairfax was simply being honest in giving a copy of the new registration to Mr. Gonthier. Had she had the intention of being dishonest, she would not have provided a copy of the car registration. [ 16 ] Fifth, at the hearing, Wawanesa states that Ms. Fairfax had two keys to her car and only gave one to Mr. Gonthier. Wawanesa also pointed out that in the police report she mentioned only having a key.

But the transcript of the statutory examination of Ms. Fairfax indicates that she always acknowledged having received two keys at the time of the purchase. But she states that Mr. Gonthier only asked for one of the keys, was satisfied with that and that he never asked for more. This was the same answer that Ms. Fairfax gave at the recorded examination, when questioned at length on the issue. It is significant to note that there is nothing in the record which indicates that Mr. Gonthier or anyone else at Wawanesa ever asked for more than one key. At the hearing, Wawanesa’s representative reproaches Ms.

Fairfax for not bringing the remaining key to the hearing but he never made any request in writing for that, nor did he send a subpoena requesting that she bring the remaining key. Furthermore, this point was not even alleged in the written contestation of Wawanesa and Ms. Fairfax states that she was taken by surprise by this request at the hearing. The Court concludes that this is not a valid reproach against Ms. Fairfax in the circumstances. [ 17 ] Sixth, Wawanesa alleges that Ms.

Fairfax paid off her loan for the car at the bank on June 23, 2011, two days before the disappearance of the car by making a payment of $3,172. Wawanesa files a credit report by an investigation agency to that effect signed by a Mr. Michel Rochon [8] . However, this factual version of the payments under the car loan has been consistently and emphatically denied by Ms. Fairfax at the recorded examination, at the statutory examination [9] and at the trial. Ms.

Fairfax denied that she made any such large payment and instead testified that she in fact made a regular deposit after the theft, namely on June 28, 2011 for a loan payment (June 30, 2011). That would have been the final payment for the car loan which was thereafter fully paid. In support of her testimony, Ms. Fairfax filed a copy of the bank statement issued by the Royal Bank over this relevant period for the relevant bank account [10] .

This document fully supports her testimony and her version of events. [ 18 ] Wawanesa did not call as witnesses either representatives of this branch of the bank or the author of the report of the investigation agency to contest Ms. Fairfax’s version or to support Wawanesa’s version.

Furthermore, the credit report indicates that this information did not come from the actual branch of the Royal Bank in issue but instead from another undisclosed “source”. [ 19 ] Based upon the clear preponderance of the proof, namely the actual evidence of the loan account payments and the consistent statements and testimony of the person making the payments, it appears that the version of the facts presented by Wawanesa is erroneous.

That is important because, based upon the defence filed by Wawanesa and the representations of its representatives before the Court, that information weighed very heavily in the decision of Wawanesa to decline payment under the valid insurance policy. [ 20 ] There is no proof, either direct or by presumption [11] that would connect Ms.

Fairfax with the disappearance of her car. [ 21 ] For the reasons stated, including the testimony before the Court and the exhibits, in addition to the rule of our civil law that good faith is always presumed [12] , the Court concludes that the preponderance of the proof [13] establishes that Ms. Fairfax’s car was stolen on June 26, 2011 and that she was in no way implicated in its disappearance. Alleged Deceitful Representations With Respect to the Claim [ 22 ] Alternatively, Wawanesa also pleads that even if the car of Ms.

Fairfax was stolen, she subsequently made deceitful representations in her claim which should cause the forfeiture of her right to claim the insurance indemnity under her policy. Wawanesa refers specifically to Article 2472 (1) of the Civil Code of Quebec which reads as follows: “Any deceitful representation entails the loss of the right of the person making it to any indemnity for the risk to which the representation relates.” « Toute déclaration mensongère entraîne pour son auteur la déchéance de son droit à l'indemnisation à l'égard du risque auquel se rattache ladite déclaration. »

[ 23 ] As stated, on June 30, 2011, at a meeting with Mr. Gonthier, claims adjuster, Ms. Fairfax signed a written statement [14] in support of her claim. She did not write up the statement. According to Mr. Gonthier’s testimony, it was handwritten by himself. He tried his best to summarize Ms. Fairfax’s answers to his questions. [ 24 ] Wawanesa takes the position that Ms. Fairfax made three deceitful representations (“declarations mensongères”) that, each taken individually, suffice to forfeit her claim. [ 25 ] First, Wawanesa reproaches Ms.

Fairfax for having declared that “I never had accident with this vehicle” in her statement. Wawanesa says that it learned as a result of the examinations that Ms. Fairfax did have a minor incident with the car when it was parked at a Provigo grocery store. Apparently, according to the transcript, another car had backed into it and the light on the driver’s side was slightly damaged [15] . The damage was promptly repaired.

This all occurred well before Wawanesa became the insurer. [ 26 ] According to established jurisprudence, not every inaccurate statement by an insured constitutes a “deceitful representation” within the meaning of those words under

Article 2472 C.C.Q. The insurer has the burden to prove that the inaccurate statement was made in bad faith with the intention of deceiving the insurer and in order to gain an advantage [16] . [ 27 ] In the Court’s opinion, the statement in issue appears to be completely immaterial to the claim and without relevance. According to the transcript of the statutory examination, the car was fully repaired and without damage at the time of the theft.

Even if this previous incident was relevant, Wawanesa has not established that such statement was made for the purpose of intentionally deceiving Wawanesa nor that the omission to declare the incident was made for the purpose of gaining any advantage at the time of the claim. [ 28 ] Ms. Fairfax explained that the incident was so minor and the damage so slight and that it was promptly repaired and that therefore she honestly thought her statement to be correct and accurate. The Court is of the view that her minor mistake was understandable and certainly not in bad faith. [ 29 ] Second, Wawanesa reproaches Ms.

Fairfax for also signing a statement wherein she declared having “No financial problems. Never made a bankrupt”. While it was true that Ms. Fairfax had never gone bankrupt, it was not true that she had “no financial problems”. It appears that she did have financial difficulties at the time. Her home-based business of an answering service was not doing well and this was causing a significant decrease in her revenues. This caused her to fall behind in her mortgage payments and some of her car payments. When the Court asked Ms.

Fairfax why she was not more forthright with her statement in that regard, she testified that she was embarrassed about it and she felt that her financial issues were confidential and private to her and had nothing whatsoever to do with the theft of her car. [ 30 ] In the Court’s view, that was a mistake in judgment in good faith. The Courts have decided that a mere misstatement or error in good faith does not constitute in law a deceitful representation within the meaning of

Article 2472 C.c.Q. , which is predicated on an intention of the insured to deliberately trick or deceive the insurer [17] . As the Court is of the view that this misstatement was innocent and without deceitful or fraudulent intention by Ms. Fairfax, the Court concludes that Wawanesa cannot invoke Art. 2472 C.C.Q. to cancel her right to the indemnity otherwise owing under the policy. [ 31 ] Third, Wawanesa reproaches Ms. Fairfax for signing a statement which read “I have no criminal record”. It appears that in May 2010, Ms. Fairfax was charged with a criminal offence.

At the time of the signing of the statement in June 2011, the matter was still pending before the Courts. So technically, her answer was correct at the time that she made it. The question asked and the answer given were not whether she had been charged with a criminal offence but whether she had a criminal record, namely as to whether she had been convicted of a crime at that time of signing. Ms. Fairfax did not know at that time whether she would be acquitted, in which case, she would not have a criminal record [18] .

The responsibility of the insured is to answer honestly all questions put to her by the insurer. If the insured wanted to know whether the insured had ever been charged with a criminal offence, then its claims adjuster should have asked that direct question. [ 32 ] Mr. Pouliot testified that, in his recorded examination of Ms. Fairfax, he clearly asked the broader question as to whether she was subject to any criminal charges. He stated to the Court that Ms. Fairfax failed again to answer the question honestly.

However, after having listened to the recording of the examination, the Court notes that the testimony of Mr. Pouliot on this point was not true. In his question to Ms. Fairfax in the recorded examination, he clearly stated that his question related to charges for which Ms. Fairfax had been found guilty. So again, for that examination, Ms. Fairfax answered accurately.

[ 33 ] The Courts have decided that a mere lack of precision of language in no way demonstrates an intention to deceive under

Article 2472 C.C.Q. [19] . This is even more the case when the lack of precision relates to the question asked by the insurer. [ 34 ] Accordingly, Wawanesa has failed to establish that, upon making her claim, Ms. Fairfax made deceitful representations or false declarations. Therefore, this ground of defence also fails. [ 35 ] As soon as Wawanesa discovered that Ms. Fairfax had financial problems, its representatives appear to have concluded that she was necessarily in bad faith. Thereafter, Ms.

Fairfax’s personal lifestyle choices or any inconsistency in any statement, no matter how minor, slight, irrelevant or inadvertent, were considered by Wawanesa as proof that Ms. Fairfax was in bad faith and connected to the theft of her car. That position, based upon conjecture and speculation, is not valid or sustainable in fact or in law. Wawanesa did not appear to allow for the scenario that an insured could have financial problems and still have his or her car stolen, which is what the Court concludes transpired in the case of Ms. Fairfax. [ 36 ] Ms.

Fairfax has established that she had a valid automobile insurance policy with Wawanesa when the loss occurred, namely the theft of her car. Wawanesa acknowledges the value of the loss to be at least $7,000. The loss of the car by theft was a risk covered by the insurance policy. Accordingly, judgment will be entered in favour of Ms. Fairfax for the amount of $7,000, plus the applicable interest and additional indemnity provided by law.

FOR THESE REASONS, THE COURT: CONDEMNS The Wawanesa Mutual Insurance Company to pay Nathalie Anne Fairfax the amount of $7,000 with legal interest of 5% per annum and the additional indemnity provided by

Article 1619 of the Civil Code of Quebec from the date of her demand letter (Exhibit P-1), namely August 17, 2012. WITH JUDICIAL COSTS of $163 in favour of Ms. Nathalie Anne Fairfax. __________________________________ Jeffrey Edwards, J.C.Q. The Wawanesa Mutual Insurance Company: Mr. Mathieu Philippe Bouliane Ms. Nathalie Anne Fairfax: Herself Date of hearing: December 22, 2014