Beaudoin v. Wawanesa Insurance Company, 2013 QCCS 4143

After a major fire in their home, the plaintiffs retained a claims adjuster to present their claim to their insurer. The adjuster drew up a list of all the goods that needed to be replaced and submitted it to the insurer. The insurer denied coverage on the basis that the insureds had made false statements and that the goods had been illegally acquired.

To begin with, the Court found that there had been no deceitful representation. The fact that the insureds had claimed that the loss had been total although a number of items were salvageable could not be deemed false and deceitful for two reasons. First, the insurer’s own claims adjuster had stated that the goods were a total loss. Second, if the insured’s’ adjuster did not update the list of goods claimed, it was because the insurer’s adjuster had purported, wrongly, that the maximum indemnity was about $245,000, while the damage amounted to nearly $600,000. Similarly, the insureds’ reduction of a substantial part of their claim for travel expenses could not be deemed a deceitful representation, because the evidence revealed that a mistake was involved.

Additionally, the insureds’ over-estimate of the value of certain goods did not constitute a deceitful representation. In particular, this was the case for an ancient crystal bottle valued by the insured at $60,000 (he lowered this to $45,000 at the hearing), although its real value was $12,500. Furthermore, the conflicting testimony of one of the insureds concerning the loss of an item did not constitute a deceitful representation because, French not being his mother tongue, he misunderstood what he was being asked.

The judge clarified in an obiter that “even if the claims adjuster made a statement that could be comparable to a deceitful representation, that cannot be held against his client.”

Next, the Court refused to apply the exclusion to the goods illegally acquired or possessed, since the allegation that they had been illegally acquired, having been purchased with income that was not declared to the tax authorities, was groundless.