Date: 20070129
Docket: T-1006-04
Citation: 2007 FC 23
BETWEEN:
STEWART
MCINTOSH
Plaintiff
and
ROYAL & SUN ALLIANCE
INSURANCE COMPANY OF CANADA
and OGILVY
& OGILVY (ONTARIO) INC.
Defendants
AMENDED REASONS FOR JUDGMENT
MACTAVISH
J.
[1]
Stewart
and Catherine McIntosh’s dream for their retirement years was to live at their
family cottage, and to run a small business chartering a high performance power
boat. With the theft of their boat, and the subsequent denial of their
insurance claim, the couple’s dream has turned into a nightmare.
[2]
By
this action, Mr. McIntosh seeks a declaration that his insurance policy is
binding on, and enforceable against his insurer, Royal & Sun Alliance
Insurance Company of Canada, and that, as a consequence, he is
entitled to be fully indemnified by Royal for the losses sustained as a result
of the theft of the boat. Mr. McIntosh further seeks specific performance of
the insurance contract and payment of the amount of $240,000 for his loss.
[3]
In
the alternative, Mr. McIntosh seeks damages for breach of contract and
negligence in the amount of $240,000 from Ogilvy & Ogilvy (Ontario) Inc., the
insurance brokerage firm that had assisted him in obtaining the insurance on
the boat.
[4]
Royal
and Ogilvy & Ogilvy have each cross-claimed against the other, asserting
that if there is liability in this case, it is their co-defendant that is
responsible for Mr. McIntosh’s loss.
Background
[5]
In
2002, Mr. McIntosh was employed in the automotive industry in Windsor,
Ontario,
and Mrs. McIntosh worked in human resources at the Windsor Casino. The couple
had two adult children, who by this point were well on their way to financial
independence. Like many people at this stage of their lives, the couple were
turning their minds to their future, and were planning for their retirement.
[6]
Mr.
and Mrs. McIntosh owned a cottage in the Muskoka area north of Toronto, and each
loved boating and cottage life. Much of the time that the couple spent at
their cottage was spent with family and friends on their ChrisCraft Bowrider
boat and their SeaDoo jet ski.
[7]
The
McIntoshs hoped to eventually leave their jobs, sell their home in Windsor, and move to
their cottage on a full-time basis. From there, they planned on running a
small business in an effort to supplement their retirement income.
[8]
Because
of their love of boating, the couple decided to work towards developing a
business chartering a high speed power boat for “poker runs”, and other types
of boat tours. “Poker runs” are boating events in which participants travel on
high performance boats from location to location, collecting playing cards in
sealed envelopes along the way. At the end of the day, each boat has amassed a
poker hand, and the boat with the strongest hand wins the event.
[9]
In
pursuit of their dream, in July of 2002, the couple purchased a 32 foot
Advantage Victory power boat for the sum of $220,000. The boat had high
performance engines, and was equipped with a stereo system, a galley and a
head. The couple also bought a trailer for the boat, as well as life insurance
to cover the financing on the boat. After taxes, the couple’s total
expenditure was $290,353.02.
[10]
Part
of the purchase price came from the proceeds of the sale of the family home in Windsor and from the
couples’ Registered Retirement Savings Plans. The balance was financed through
the Bank of Montreal.
[11]
Asked
why he chose this particular boat, Mr. McIntosh responded that after
researching various types of high-performance power boats on the market, he had
settled on the Advantage Victory because it provided the best value for money.
In his words, the Advantage boat was “like the Rolls Royce of boats for the
price of a Cadillac”. He also stated that the boat was very fast, and that it
was the power of the boat that had attracted him.
Insuring the Boat
[12]
Before
taking possession of the boat, Mr. McIntosh began exploring the options
available for insuring it. He testified that he contacted the insurance
brokerage firm of Ogilvy & Ogilvy in an effort to obtain insurance for the
boat, because the firm was well known in the poker run business. Ogilvy &
Ogilvy was also recommended to Mr. McIntosh by the marina where he bought the
boat.
[13]
Mr.
McIntosh’s first contact with Ogilvy & Ogilvy took place sometime in early
July of 2002. He spoke by phone to an insurance broker at the firm by the name
of Ted Macaulay. Mr. Macaulay was an experienced insurance broker, who had
recently joined Ogilvy & Ogilvy, where he was specializing in marine
insurance.
[14]
Mr.
Macaulay was himself a boater, and had considerable experience with high
performance boats such as the one purchased by Mr. McIntosh.
[15]
Mr.
McIntosh and Mr. Macaulay discussed the type of insurance that was available
for the boat. They agree that either in this initial discussion or in
subsequent telephone discussions between the two, Mr. McIntosh told Mr. Macaulay
about his plan to eventually develop a business chartering the boat for poker
runs and other such events.
[16]
It
is also not disputed that Mr. Macaulay told Mr. McIntosh that commercial
insurance coverage for a boat such as his would be very expensive. Mr. Macaulay
also told Mr. McIntosh that he would try to obtain a quote for commercial
coverage for the boat, but that Mr. McIntosh should consider simply insuring
the boat for personal use until such time as he was ready to take paying
customers on the boat.
[17]
Mr.
McIntosh completed a “Pleasure Craft Application” for insurance, listing
himself and his brother-in-law, Lyle Niemi, as the operators of the boat. The
completed application was returned to Mr. Macaulay, and an insurance binder was
then issued by Ogilvy & Ogilvy effective July 19, 2002.
[18]
Mr.
McIntosh’s application form was then forwarded to Royal by Ogilvy & Ogilvy.
At no time prior to the 2002 insurance policy being issued did Mr. Macaulay, or
anyone else at Ogilvy & Ogilvy, tell anyone at Royal anything about Mr.
McIntosh’s plans for starting a business using the boat.
[19]
By
letter dated August 20, 2002, Ogilvy & Ogilvy sent Mr. McIntosh a copy of
the insurance policy for his boat. The letter concludes by stating “We are
attempting to obtain a commercial quote as requested, however in the interim
coverage is for private pleasure use only.”
[20]
Under
the heading “WARRANTIES”, the policy states:
In order to keep this policy
in effect, [y]ou must make, and must keep, certain promises. These are known
as warranties. If any of these promises are violated, coverage will be
suspended from the time of such violation. The following warranties apply to
this insurance:
1. The vessel will be used
solely for Private Pleasure Purposes. The vessel will not be chartered or
leased or used for any commercial purpose.
[21]
“Private
Pleasure Purposes” is defined in the policy meaning that “the insured Vessel is
used for recreational or leisure time activities, and includes entertainment of
business clients provided it is not being chartered or hired”.
[22]
Mr.
McIntosh acknowledges receiving the 2002 policy, and says that he understood
that as long as he did not take any paying customers on the boat, he would have
insurance coverage.
[23]
At
some point in the summer of 2002, Mr. Macaulay contacted Royal in order to
determine what it would cost to obtain commercial coverage for Mr. McIntosh’s
boat. He spoke first with Steve Scharien, a marine underwriter and the
national pleasure craft manager at Royal, who was Mr. Macaulay’s regular
contact at the company. Mr. Macaulay was not certain if he told Mr. Scharien
the name of the client on whose behalf he was making the inquiry. In any
event, Mr. Scharien referred Mr. Macaulay to Mike Krunic, who was a commercial
marine underwriter at Royal.
[24]
After
discussing the boat, and Mr. McIntosh’s plans for it, with Mr. Macaulay, Mr.
Krunic told Mr. Macaulay that Royal was not interested in taking on the risk of
insuring the boat for commercial use.
[25]
Mr.
Macaulay testified that he advised Mr. McIntosh that he was unable to obtain a
quote for commercial insurance coverage for the boat, and that “the marketplace
did not have an appetite for this type of coverage at this time”. According to
Mr. Macaulay, Mr. McIntosh thanked him for his efforts on his behalf, and
indicated that in the event that he required commercial coverage for the boat
in the future, he would give Mr. Macaulay a call.
[26]
Mr.
McIntosh confirms that Mr. Macaulay had advised him that he had been unable to
obtain a quote for commercial coverage, and that he understood that his boat
was only insured for personal use.
[27]
Mr.
McIntosh paid for his insurance coverage through a pre-authorized chequing
program. His payments were initially drawn on his personal bank account,
although Mr. McIntosh advised Mr. Macaulay that he would be providing updated
banking information as soon as he was able to set up another bank account for
the business.
[28]
Mr.
McIntosh explained at trial that a dedicated account for the boat was set up as
he and his wife wanted to keep the expenses for the boat separate from the
family’s personal finances.
[29]
In
early August of 2002, Mr. McIntosh provided Mr. Macaulay with a void cheque for
an account in the name of “Offshore Performance Tours”, and asked to have his
automatic payments changed to this account. Mr. Macaulay forwarded the void
cheque to Royal, and the automatic payments were subsequently taken from this
account.
The Use of the Boat in
the Summer of 2002
[30]
Shortly
after taking possession of the boat, Mr. McIntosh began making efforts to get
his charter business up and running. Although his family cottage was in the
Muskokas, he decided to store the boat at a marina near Mr. Niemi’s home in Bradford, Ontario. Mr.
McIntosh explained that this was a more central location, being closer to Lake Ontario and Georgian
Bay, and thus provided a better launching point for the boat. As Mr. McIntosh
put it in his testimony, this location was “better for the business”.
[31]
Storing
the boat at this location also allowed Mr. Niemi to keep an eye on things.
[32]
In
addition to establishing a bank account in the name of Offshore Performance
Tours, Mr. and Mrs. McIntosh also set up a numbered company for the boating
business in July of 2002, in a further effort to keep the financial
arrangements for the boat separate from those of the family.
[33]
In
an attempt to get the business going, Mr. McIntosh put a large Offshore
Performance Tours decal on the deck of the boat, along with decals of checkered
flags. He also had 100 or 150 business cards printed up in the name of
Offshore Performance Tours.
[34]
In
a further effort to market the charter business, Mr. McIntosh took the boat to
three poker runs during the summer of 2002, one in Gananoque, one at Ontario
Place
in Toronto, and one on
Georgian Bay. Mr. McIntosh says that Mr. Niemi would take the boat out on the
water for the poker runs, while he would hang around on the shore, checking out
the competition, and handing out business cards in an effort to promote his
business.
[35]
Mr.
McIntosh says that he quickly realized that his boat “was the runt of the
litter” and that many of the boats that were available for hire were bigger and
more powerful than his. He realized that he had been naive in his choice of
boat, and that he should have done more research before purchasing a boat.
[36]
Perhaps
because of the size of the boat, Mr. McIntosh says that he had difficulty
getting the business off the ground. According to Mr. McIntosh, while he did
have some inquiries from people at poker runs who were interested in hiring the
boat, at no time during the summer of 2002 did he have any paying customers on
his boat.
The Renewal of the
Insurance Policy in 2003
[37]
In
July of 2003, Mr. McIntosh’s insurance policy came up for renewal. A letter
was sent to Mr. McIntosh by Ted Macaulay with the renewal of the policy. The
letter asked Mr. McIntosh to “Please review your policy to make sure that it
remains accurate. Advise our office immediately if any changes are required.”
[38]
The
2003 policy came with an information sheet or “tag”, which highlighted the
changes to the policy. Amongst other changes, the tag sheet noted that there
had been changes made to the policy provisions dealing with warranties.
[39]
In
this regard, the tag sheet stated:
Warranties Section
All warranties have been split
into two sub-categories, either Absolute (which apply to the entire policy
period) or Suspensive ...
[40]
The
warranty relating to the use of the boat is contained in the section of the
policy dealing with Absolute warranties. The policy stated:
Warranties - Absolute
The following absolute
warranties apply to this insurance.
1. The vessel will be used
solely for Private Pleasure Purposes. The vessel will not be chartered or
leased or used for any commercial purpose....
If any of the above absolute
warranties in this section have been breached, [c]overage will cease
immediately and cannot be reinstated once the violation ends. You will have no
coverage from the date of the breach.
[41]
“Private
Pleasure Purposes” is defined in this policy as meaning that “the insured
Vessel is used for recreational or leisure time activities” . The reference to
the entertainment of business clients being allowed was deleted from this
version of the policy.
[42]
While
both the 2002 and 2003 policies stipulated that the policies would be void from
their inception if there had been concealment, misrepresentation or fraud, the
2003 policy added a provision that the policy would be void ab initio if
the insured concealed or misrepresented a material fact relating to the
“previous, current or future use of the boat”. This change in the wording of
the policy was not noted on the tag sheet.
[43]
There
were no discussions between Mr. McIntosh and Mr. Macaulay or anyone else at Ogilvy
& Ogilvy in the summer of 2003 with respect to the status of Mr. McIntosh’s
charter business, his use of the boat or the changes to the insurance policy.
[44]
Mr.
McIntosh acknowledges receiving the new policy, but says that he did not read
it over in detail. It is clear, however, that Mr. McIntosh continued to
understand that he would be in breach of his insurance policy if he were to
take any paying customers on the boat.
The Use of the Boat in
the Summer of 2003
[45]
Mr.
McIntosh continued with his marketing activities during the summer of 2003 in
an effort to establish a business chartering the boat. To this end, he again
took the boat to poker runs in Gananoque, Toronto and Georgian
Bay. He had intended to take the boat to a fourth event, but it was cancelled
at the last minute.
[46]
Mr.
McIntosh also increased his marketing efforts for the business by setting up a
web site for Offshore Performance Tours, and by placing advertisements for the
boat in conventional and on-line boating magazines.
[47]
Mr.
McIntosh also had post-card style flyers printed up, with pictures of the boat,
a description of the services offered, and a price list for these services. By
way of example, the cards note that for $375.00, plus GST, an individual could
participate in a poker run, and receive lunch, dinner, a team shirt, and a
video of the event, amongst other things.
[48]
Mr.
McIntosh says that he would hand these cards out at poker runs, and would also
post them on bulletin boards in malls and grocery stores, all in an effort to
attract business.
[49]
Some
of Mr. McIntosh’s marketing efforts involved a measure of embellishment on his
part. By way of example, the boat is described in the web site as being 36
feet long, whereas in actual fact it was only 32 feet in length. Similarly,
the magazine advertisement says that the boat would go 85 miles per hour,
whereas in his application for insurance coverage, Mr. McIntosh stated that the
maximum rated speed for the boat was 75 miles per hour.
[50]
Mr.
McIntosh acknowledged that he exaggerated the attributes of his boat in an
effort to make it look bigger and more powerful than it actually was, in an
attempt to attract customers.
[51]
Mr.
McIntosh was pleased when a photograph of his boat appeared in “Poker Runs
America”, an on-line magazine relating to performance boating. The magazine
was covering the Lake Ontario Hall of Fame Poker Run, which took place on
September 12 and 13, 2003. The photograph in question shows Mr. McIntosh’s
boat with five people on board. Mr. McIntosh says that the boat was being
driven by Mr. Niemi in the photograph, and that the other individuals in the
boat were friends and family, who went out on the poker run in an effort to
make the business look like it was up and running.
[52]
Despite
all of these efforts, Mr. McIntosh says that his business was not going
anywhere, and that he was unable to attract a single paying customer in the
summer of 2003.
The Theft of the Boat
[53]
On
his way to visit his own family in Northern Ontario for the Thanksgiving
weekend in October of 2003, Mr. Niemi dropped the boat off at the McIntosh
family cottage in the Muskokas. After using the boat for recreational purposes
over the weekend, Mr. McIntosh secured the boat to its trailer, and left it at
the cottage, returning to his home in Windsor. Mr. McIntosh says
that he had arranged for Mr. Niemi to pick up the boat to deliver it to the
marina in Bradford, where it would be stored for the winter.
[54]
Mr.
McIntosh got a phone call a few days later from the Hamilton-Wentworth police,
to advise him that the remains of his boat had been found in Ancaster, Ontario, and that
the boat had been completely stripped.
[55]
Mr.
McIntosh contacted the Bracebridge office of the Ontario Provincial Police to
report the theft. He was subsequently interviewed by Constable Rick Poulton,
who had been assigned to investigate the matter. Mr. McIntosh also reported
the theft to Ted Macaulay.
[56]
Constable
Poulton testified that the theft appeared to be “legitimate”, and there is no
suggestion that the McIntoshs had anything to do with it.
The Denial of Mr.
McIntosh’s Insurance Claim
[57]
Mr.
McIntosh’s insurance claim was investigated by Royal, initially by Jim Goertz,
one of its own employees, and later by Gary South, an outside adjuster. By
letter dated November 12, 2002, Mr. South advised Mr. McIntosh that his
investigation had raised serious underwriting concerns, which could affect the
existence of Mr. McIntosh’s insurance policy.
[58]
After
further investigation, the decision was made by Royal to deny coverage, and Mr.
McIntosh was advised of this decision by way of a letter to his counsel dated
April 8, 2004. The reason given for this decision was that:
After analysis of the facts
disclosed by this investigation, the Royal and SunAlliance Insurance Company is
aware that your client used the vessel in contravention of the policy.
Specifically, there has been a breach of the warranty concerning use of the
subject vessel for the purpose of chartering and personal use.
[59]
Through
inadvertence, Royal continued to take premium payments from the Offshore
Performance Tours bank account after denying coverage on the policy. This
continued for a couple of months, until Mr. McIntosh closed the account. Royal
then referred Mr. McIntosh’s supposedly delinquent account to a collection
agency, once again as a result of inadvertence on the part of the company.
[60]
Royal
has never returned any of the premiums paid by Mr. McIntosh, but says that it
is prepared to do so in the event that it is successful in this litigation.
Issues
[61]
The
following issues were identified by the parties in the course of this trial:
1. Did Mr. McIntosh
take paying customers on his boat?
2. Did
the marketing activities engaged in by Mr. McIntosh and Mr. Niemi amount to use
of the boat for a commercial purpose, thereby breaching the insurance policy?
3. Is Royal liable
under the policy?
4. Is Ogilvy &
Ogilvy liable for Mr. McIntosh’s loss?
5. If
there is liability on behalf of one or other defendant, what are Mr. McIntosh’s
damages?
6. Is Mr. McIntosh
entitled to a return of his premiums, and if so, from what date?
Analysis
[62]
For
the reasons that follow, I find that Mr. McIntosh took paying customers out on
his boat during the summer of 2003, an activity that clearly breached the
absolute warranty against commercial use of the boat contained in the 2003
insurance policy.
[63]
As
counsel for Mr. McIntosh conceded in argument, if I were to find that Mr.
McIntosh actually took paying customers on his boat, his claim against Royal
must necessarily fail, and indeed it does.
[64]
I
also find that Ted Macaulay and Ogilvy & Ogilvy failed to meet the standard
of care required of reasonably prudent marine insurance brokers. Nevertheless, in
the absence of a causal link between Mr. Macaulay’s actions and Mr. McIntosh’s
loss, I am of the view that Ogilvy & Ogilvy should not be held liable for
Mr. McIntosh’s loss.
[65]
My
reasons for making these findings are as follows.
Did Mr. McIntosh Take
Paying Customers on His Boat?
[66]
Mr.
McIntosh would have me believe that his plans for his charter business were
long-term in nature, and that the business was something that he hoped to
develop in the future for his retirement years. In this regard, he testified
that he anticipated that it could take up to ten years for his business to
become operational.
[67]
However,
the contemporaneous documentation suggests that his plans for the business were
much more immediate. That is, in a note faxed to Mr. Macaulay by Mr. McIntosh
on or around July 10, 2002, Mr. McIntosh stated “Short term I need coverage to
transport the boat (personal) however, please inform me of the cost for
commercial coverage as I plan on taking people on the boat very soon”.
[68]
I
prefer the contemporaneous documentation on this point to the oral testimony of
Mr. McIntosh, and find that as of July of 2002, his intention was to get the
charter business up and running, and to begin taking paying customers on the
boat within a short period of time.
[69]
Mr.
McIntosh would also have me believe that he would not have taken a paying
customer out on his boat without having first obtained insurance coverage for
such a risk.
[70]
However,
knowing that he did not have the necessary insurance coverage, Mr. McIntosh
nevertheless continued to actively market his charter business through the
summers of 2002 and 2003. Mr. McIntosh says that his plan was that once he had
a customer ready to pay to ride on the boat, he would have made the necessary
arrangements by telephone, in order to obtain the appropriate coverage.
[71]
I
do not accept Mr. McIntosh’s evidence in this regard.
[72]
Mr.
McIntosh and Mr. Macaulay agree that during the summer of 2002, Mr. Macaulay
told Mr. McIntosh that he would try to get Mr. McIntosh a quote for commercial
insurance coverage for Mr. McIntosh’s boat, and that no such quote was ever
forthcoming.
[73]
Moreover,
Mr. Macaulay testified that he told Mr. McIntosh that he had been unable to get
a quote for commercial coverage, and that the marketplace did not have an
appetite for this type of risk at that time. While Mr. McIntosh did not
specifically recall this discussion, he did not deny that Mr. Macaulay may have
told him this, and I find that he did.
[74]
Thus
Mr. McIntosh knew in the summer of 2002 that Ogilvy & Ogilvy - the company
that he had consulted specifically because of their expertise in marine
insurance for performance boats - had been unable to even get him a quote for
commercial coverage for his boat, much less actual insurance coverage for
commercial purposes.
[75]
Mr.
McIntosh also knew that in July of 2002, before getting an insurance binder to
insure his boat for personal use, he first had to complete a written
application for pleasure craft insurance, and to submit the completed form to Ogilvy
& Ogilvy.
[76]
In
these circumstances, I do not believe that Mr. McIntosh could reasonably have
thought that he could simply pick up a telephone and obtain a commercial
insurance binder in a timely fashion, while a prospective paying customer
simply stood idly by, waiting to get onto the boat.
[77]
Given
that Mr. McIntosh continued to actively promote his charter business in the
full knowledge that Ogilvy & Ogilvy could not get commercial insurance
coverage for him, I find it far more probable that at some point during the
summer of 2002, Mr. McIntosh made the conscious decision to simply go ahead
with his charter business without commercial insurance coverage for his boat,
and that he was prepared to take paying customers out on the boat, without
having first obtained the necessary coverage.
[78]
I
am further satisfied that it is more probable than not that at the very least
by the summer of 2003, paying customers had indeed been taken out on the
McIntosh boat.
[79]
In
coming to this conclusion, I rely on several things, one of which is the banking
records for Offshore Performance Tours. Both Mr. and Mrs. McIntosh testified
that they used the Offshore Performance Tours account for all of the expenses
for the boat, and that they would from time to time deposit funds from their
personal account into the Offshore Performance Tours account in order to cover
these expenses.
[80]
Rather
than simply transferring money between the accounts, both of which were with
the same branch of the Canadian Imperial Bank of Commerce in Windsor, Mr. and
Mrs. McIntosh each testified that their practice was to withdraw sums of cash
from their personal account, and to deposit the money - sometimes upwards of a
couple of thousand dollars - at automated teller machines in Bradford, a
practice their own counsel conceded was odd.
[81]
A
review of the banking records discloses that the couple made regular ATM
deposits in the Offshore Performance Tours account, many of which were in round
amounts such as $1,000 or $2,000.
[82]
There
were, however, exceptions to this rule, one of which was a cash deposit made on
August 18, 2003, in the amount of $401.25. Unlike all of the other bank
deposits, which were evidently made by Mr. or Mrs. McIntosh, Mr. McIntosh says
that this deposit was made by Mr. Niemi. Mr. McIntosh and Mrs. McIntosh were
both at a complete loss to explain why a deposit in this amount was made, and
Mrs. McIntosh herself conceded that it was indeed an odd amount to have
deposited in the account.
[83]
Not
only is the deposit of $401.25 in cash unusual in light of the McIntosh’s description
of their banking practices, the amount itself is also significant, in that it
represents the precise advertised cost of a day spent on the McIntosh boat
while attending a poker run - namely $375.00, plus GST.
[84]
My
suspicions about this deposit are further heightened by the fact that Mr.
McIntosh chose not to call Mr. Niemi to testify at trial, and provided no
explanation for his failure to do so. Mr. McIntosh says that it was Mr. Niemi
who actually made this deposit, and thus it would presumably have been Mr.
Niemi who would have been in the best position to explain where the $401.25
came from. In the circumstances, I am prepared to draw an adverse inference
from the fact that Mr. McIntosh chose not to call Mr. Niemi, and find that Mr.
Niemi’s evidence would likely not have assisted him.
[85]
In
the interest of completeness, it should also be noted that counsel for Royal
endeavoured to subpoena Mr. Niemi to testify as part of Royal’s case, but was
unable to effect service of the subpoena. The affidavit of attempted service
sworn by Royal’s process server suggests that Mr. Niemi may have been
attempting to evade service.
[86]
In
the absence of any explanation from either of the McIntoshs or from Mr. Niemi
as to source of the funds reflected in the August 18, 2003 deposit, I find that
it is more probable than not that the $401.25 deposited in the Offshore
Performance Tours account on August 18, 2003 represented the payment received
from an Offshore Performance Tours customer on or shortly before that date.
[87]
The
August 18, 2003 deposit is not, however, the only deposit in the Offshore
Performance Tours bank account that is of concern. There was an earlier
deposit, made on June 30, 2003, in the amount of $3,210.00, a deposit that was
admittedly made by either Mr. or Mrs. McIntosh. Once again, the amount is
unusual, in that it is not the sort of round number that one would expect to
see if one were merely topping up an account to cover expenses coming due, and
no explanation as to why a deposit in this amount was made was forthcoming from
either of the McIntoshs.
[88]
Moreover,
not only is $3,210.00 a large amount of cash for anyone to carry around, here,
once again, the amount itself is significant, in that it is precisely the total
cost for a day on the McIntosh boat for a party of eight people ($375.00 + GST
x 8).
[89]
In
the absence of any real explanation from either Mr. or Mrs. McIntosh with
respect to this deposit, I find on a balance of probabilities that the source
of these funds was paying customers taken on the boat during the weekend of
June 28-29, 2003.
[90]
Finally,
my conclusion that paying customers were indeed taken on the McIntosh boat
during the summer of 2003 is reinforced by the evidence of Constable Poulton,
who, it will be recalled, was the OPP officer assigned to investigate the theft
of the McIntosh boat.
[91]
Constable
Poulton interviewed Mr. McIntosh in relation to the theft in October of 2003.
It was clear from Constable Poulton’s testimony that he has a strong present
recollection of the interview, which he explains by the fact that the
investigation into the theft was a lengthy one, and involved an expensive
boat. Moreover, Constable Poulton’s testimony was largely, although not
entirely, corroborated by his contemporaneous notes of the interview. Finally,
Constable Poulton was an entirely disinterested witness, and had no reason not
to be completely truthful in his testimony.
[92]
For
these reasons, I accept Constable Poulton’s testimony without reservation, and
find that in the course of Mr. McIntosh’s interview with the officer, Mr.
McIntosh told Constable Poulton that he had used his boat mostly for pleasure
in 2003, but that he had also chartered the boat out for different tours,
including poker runs.
[93]
Based
on the above, I therefore find that at least as early as the weekend of June 28-29,
2003, Mr. McIntosh took paying customers out on his boat, in breach of the
suspensive warranty in his original insurance policy, which expired on July 19,
2003.
[94]
Moreover,
I am satisfied that Mr. McIntosh continued to take paying customers out on his
boat during the summer of 2003, in clear breach of the absolute warranty
contained in his 2003-2004 insurance policy.
[95]
Having
breached the absolute warranty against commercial use of the boat, the renewal
policy was voided, and was no longer in effect at the time that Mr. McIntosh
suffered the loss of his boat. As a result, this action will be dismissed as
against Royal.
[96]
Before
leaving this issue, it should be noted that in coming to the conclusion that
Mr. McIntosh’s action should be dismissed as against Royal, I have considered,
and rejected, Ogilvy & Ogilvy’s argument that having continued to deduct
premiums from the Offshore Performance Tours bank account, Royal should be
treated as having waived the breach of the policy by Mr. McIntosh.
[97]
In
this regard, I note that neither Mr. McIntosh nor Ogilvy & Ogilvy raised
the waiver issue in their pleadings. Moreover, it would be difficult to find
either an express or implied waiver on the part of Royal, given that the denial
letter is absolutely clear that Royal intended to treat the policy as void.
[98]
Finally,
I accept the evidence of Mr. Scharien that the continued withdrawal of premiums
from Mr. McIntosh’s account was the result of inadvertence on the part of Royal,
namely the failure of one branch of the company to communicate with another,
and that there was no intent to waive the breach of the warranty on the part of
Royal.
[99]
As
was noted earlier, my finding that Mr. McIntosh actually took paying customers
out on his boat in the summer of 2003 is determinative of Mr. McIntosh’s claim
against Royal. It does not, however, determine the question of Ogilvy &
Ogilvy’s liability for Mr. McIntosh’s loss. This issue will be considered
next.
Is Ogilvy & Ogilvy
Liable for Mr. McIntosh’s Loss?
[100] Mr.
McIntosh’s claim against Ogilvy & Ogilvy asserts that the firm breached the
duty of care owed by an insurance broker to an insured to make sure that the
insured had adequate insurance coverage in place in the event of a loss.
[101] Mr. McIntosh
says that he chose Ogilvy & Ogilvy as his insurance broker specifically
because of the firm’s reputation in the marine insurance industry, and that he
relied on Ogilvy & Ogilvy’s knowledge, expertise and advice to ensure that
appropriate coverage was put in place for his boat.
[102] Mr. McIntosh
points to the fact that he was completely up front with Mr. Macaulay about his
plan to try to develop a charter business using the boat, and says that he
relied on Mr. Macaulay’s advice that he did not need commercial coverage for
the boat until such time as he actually had a paying customer, to his
detriment.
[103] As a
consequence, Mr. McIntosh says that in the event that it is determined that he
breached his insurance policy in any way, the fault for that contravention lies
at the feet of Ogilvy & Ogilvy, and that Ogilvy & Ogilvy should be
liable for his loss.
[104] Mr.
McIntosh’s argument raises two issues. The first is whether Mr. Macaulay and Ogilvy
& Ogilvy met the standard of care required of an insurance broker in light
of the advice provided to Mr. McIntosh by Mr. Macaulay. In the event that I
determine that they did not do so, the question then arises as to whether Ogilvy
& Ogilvy should be held to account for Mr. McIntosh’s loss.
[105] Insofar as
the standard of care required of the reasonable insurance broker is concerned,
the parties agree that the duty of an insurance broker is to ask the necessary
questions of an applicant for insurance in order to assess the risks that
should be insured against, to assess the foreseeable risks, and insure the
client against them. The broker also has a duty to explain the limitations of
the coverage to the insured: see Fine’s Flowers Ltd. et al. v. General
Accident Insurance Co. of Canada et al., (1978), 17 O.R. (2d) 529 (C.A.), at para.
35. See also Elite Marine Co. v. Southlands Insurance Inc., [1994]
B.C.J. No. 3188, at paras. 12-14.
[106] For the
reasons that follow, I find that Mr. Macaulay did not meet the standard of care
required of a reasonably prudent insurance broker, as he failed to ask relevant
questions of Mr. McIntosh, given what Mr. Macaulay knew about Mr. McIntosh’s
plans for the boat.
[107] I am further
satisfied that Mr. Macaulay failed to meet the necessary standard of care by
providing inaccurate information to Mr. McIntosh with respect to his need for
commercial coverage, given Mr. McIntosh’s plans for his boat.
[108] However, for
the reasons set out below, I am nevertheless satisfied that Ogilvy & Ogilvy
should not be held liable for Mr. McIntosh’s loss.
[109] Dealing with
first with the question of Mr. Macaulay’s failure to ask the necessary
questions of Mr. McIntosh during the application process, Mr. Macaulay says
that Mr. McIntosh’s plan to develop his business was long-term in nature, that
many clients have these kinds of dreams, and that few ever realize on them. In
these circumstances, Mr. Macaulay says that he had no obligation to explore Mr.
McIntosh’s business plans with him in any detail.
[110] I do not
accept Mr. Macaulay’s argument in this regard, as the facts simply do not
support it. As I have previously noted, before Mr. Macaulay obtained personal
use insurance for Mr. McIntosh’s boat, he had been informed, in writing, that
Mr. McIntosh intended to take paying customers on his boat in the very near
future. In these circumstances, I am satisfied that Mr. Macaulay had an
obligation to explore Mr. McIntosh’s business plans with him in much greater
detail, and, if necessary, to discuss these plans with Royal, in order to
ensure that Mr. McIntosh obtained adequate insurance coverage.
[111] Before
leaving this point, I should also note that Andrew Robertson, the expert called
by Ogilvy & Ogilvy on the duty of insurance brokers in obtaining marine
insurance for clients, was of the opinion that Mr. Macaulay had asked the right
questions of Mr. McIntosh when arranging for the insurance on Mr. McIntosh’s
boat, and thus fulfilled the duty owed to him.
[112] Mr.
Robertson’s opinion was, however, premised on the assumption that Mr.
McIntosh’s plans to start a business were indeed long-term in nature. Given
that this assumption is not supported by the evidence, I give no weight to Mr.
Robertson’s opinion on this point.
[113] Insofar as
the accuracy of the advice provided to Mr. McIntosh by Mr. Macaulay is
concerned, Mr. Macaulay says that his understanding that a boat would not be
considered to have been used for a commercial purpose until such time as paying
customers were actually taken on board was based on discussions that he had had
with underwriters at Royal itself, most likely with Steve Scharien, or possibly
with another individual by the name of Paul Gespechne [phon.].
[114] I do not
accept Mr. Macaulay’s evidence in this regard.
[115] Mr. Macaulay’s
evidence on this point was vague and entirely lacking in any specifics. Not
only did he not have anything in writing from Royal to confirm that this was
Royal’s view of the situation, Mr. Macaulay himself could not provide any
details as to when or where it was that these discussions ostensibly took
place, nor could he say with any certainty who at Royal it was that was
supposed to have told him this.
[116] Steve
Scharien was responsible for underwriting and policy development for pleasure
craft insurance at Royal, and was Mr. Macaulay’s primary contact at the
company. Mr. Scharien denies ever having told Mr. Macaulay that commercial
coverage was only required when an insured was ready to actually take a paying
customer on board a boat.
[117] Mr. Scharien
reviewed Royal’s marine underwriting practices at some length in his testimony,
and it was clear from his evidence that Royal’s concerns with respect to the
risks posed by commercial activities involving boats extended well beyond those
raised by the taking of paying customers on board.
[118] Moreover, Mr.
Scharien’s evidence that the promotion and use of a boat to generate business
for a charter company would raise significant underwriting concerns for a
marine insurer was confirmed by the experts who testified at trial with respect
to marine insurance underwriting and brokerage practices.
[119] As a result, it
does not make sense that Mr. Scharien - or anyone else at Royal for that matter
- would have told Mr. Macaulay that boat owners whose craft were insured for
personal use would have insurance coverage as long as they did not take paying
customers on board their boats.
[120] Regardless of
where he got the information, Mr. Macaulay clearly believed that ‘commercial
purpose’ as the term was used in Royal’s marine insurance policies was to be
equated with the taking of paying customers on a boat, with the result that
personal use insurance would suffice for an individual intending to develop a
charter business until such time as the individual was ready to take paying
customers on the boat in question.
[121] The question,
then, is whether in providing this advice to Mr. McIntosh, Mr. Macaulay and Ogilvy
& Ogilvy breached the duty of care owed by insurance brokers to their
clients.
[122] Two experts
were called with respect to the duty of insurance brokers in obtaining marine
insurance for clients - Mr. Robertson by Ogilvy & Ogilvy and Justin
MacGregor by Royal, and both experts discussed the sort of activities that
would amount to the commercial use of a boat in their testimony.
[123] In Mr.
MacGregor’s view, it was the act of holding a boat out for hire that amounted
to commercial use, regardless of whether or not the boat owner actually got
paid for taking customers on board.
[124] In contrast,
Mr. Robertson was initially of the view that it was the act of entering into a
contract with a third party that crossed the boundary into commercial use.
Later on in his testimony, however, Mr. Robertson qualified his opinion,
stating that in his view, the act of taking family and friends on a boat at
poker runs to create the illusion that a charter business was up and running
would amount to the use of a boat for a commercial purpose, even though no
contract was involved.
[125] Mr. Robertson
further conceded that giving a prospective customer a “freebie” - that is
taking the individual out on the boat without charge, in the hope of generating
future business, would also amount to a commercial use of the boat.
[126] Thus, by the
time that he had finished testifying, Ogilvy & Ogilvy’s own expert in
marine insurance brokerage and underwriting practices agreed that the act of
using a boat to promote a charter business amounted to a commercial use of the
boat, regardless of whether or not any fees were paid to the owner of the boat.
[127] A similar
view was also expressed by Claudio Verconich, the expert in marine insurance
underwriting matters, who testified on behalf of Royal.
[128] At the end of
the day, no one agreed with Mr. Macaulay that a private pleasure purposes
warranty would only be breached when a boat owner took a paying customer on a
boat, and that it was only then that the owner required commercial insurance
coverage for the boat.
[129] Moreover, I
am satisfied that the meaning of the words ‘commercial purpose’, as they are
used in the insurance policy in issue here, cannot reasonably bear the
interpretation advanced by Mr. Macaulay, and extends beyond the narrow
definition advanced by him.
[130] In this
regard, Mr. McIntosh argues that in the absence of any clear definition as to
what will and will not amount to a “commercial purpose” in the insurance
policies, the policies are ambiguous. Relying on cases such as Consolidated
Bathurst Export. Ltd.
v. Mutual Boiler and Machinery Insurance Co., [1980] 1 S.C.R. 888,
and Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance
Co., [1993] 1 S.C.R. 252, Mr. McIntosh submits that to the extent that
there is an ambiguity in the policies, this ambiguity should be resolved in
favour of the interpretation advocated by Mr. McIntosh and Ogilvy & Ogilvy.
[131] I do not
accept these submissions.
[132] Warranties
contained in insurance policies are to be given a strict, though reasonable
construction: Staples v. Great America Insurance Co., New York, [1941]
S.C.R. 213.
[133] The warranty
in issue in this case states that the boat was to be used “solely for Private
Pleasure Purposes.” and that “[t]he vessel will not be chartered or leased or
used for any commercial purpose”. While the phrase “any commercial purpose” is
not defined in the policy, the ordinary meaning of the term clearly extends
beyond that suggested by Mr. Macaulay.
[134] Moreover, the
phrase has to be read in context: see Lake v. Simmons, [1927] A.C. 487,
at p. 499, as cited in Malcolm A. Clarke, The Law of Insurance Contracts,
(London: Lloyds of London Press Ltd., 1989).
[135] That is, the
statement in the warranty that the boat is not to be used for “any commercial
purpose” has to be interpreted in light of the earlier statement that limits
the use of the boat to “Private Pleasure Purposes”, which are defined as
meaning “recreational or leisure time activities” .
[136] It is not
necessary to try to lay down a global definition as to what will and will not
amount to a commercial purpose, and indeed, the experts struggled to come up
with a clear and all-encompassing definition of the term. That does not,
however, mean that the term is ambiguous. Rather, it simply reflects the fact
that the determination of whether activities involving the use of a boat amount
to use for a commercial purpose will depend to a large extent on the specific
facts in issue in a given case.
[136]
[137] It is also
not necessary to determine whether marketing activities, such as the handing
out of flyers, and the creation of a web site - activities that do not actually
involve the use of the boat itself - amount to use of a boat for a commercial
purpose. This is because I am satisfied that, at a minimum, the activities in
issue here involving the actual use of the boat, including the storing of the
boat at a location specifically because of its proximity to business
opportunities, the transporting of the boat to poker runs in order to promote
the business, the participation in those poker runs for promotional reasons,
and the taking of friends and family on the boat during the poker runs in order
to make the business appear operational, are not recreational or leisure time
activities, and amount to the use of the boat for a commercial purpose.
[138] I am also
satisfied that a reasonably prudent marine insurance broker would understand
that use of a boat for a commercial purpose was not limited to the situation
where paying customers were being taken on the boat, and would not have offered
the simplistic advice that was provided to Mr. McIntosh by Mr. Macaulay in this
case.
[139] As a result,
I am satisfied that in providing the advice to Mr. McIntosh that he did, in the
full knowledge that Mr. McIntosh intended to try to get his charter business up
and running, and to take paying customers on board in the near future, Mr. Macaulay
and Ogilvy & Ogilvy fell below the standard of care demanded of reasonably
prudent insurance brokers.
[140] Moreover, I
am also satisfied that Mr. Macaulay fell below the requisite standard of care
in failing to ask the necessary questions of Mr. McIntosh, and in failing to
obtain the relevant information regarding the risk from him.
[141] Mr. Macaulay
says that if he had been aware of Mr. McIntosh’s plan to begin marketing his
boat right away, he would have asked him for more information, and would
“absolutely” have checked with Mr. Scharien to see if these plans would have
any impact on Mr. McIntosh’s insurance coverage with Royal.
[142] However, as I
have previously noted, Mr. Macaulay was specifically told about Mr. McIntosh’s
plan to develop a business chartering his boat during the time that Mr. Macaulay
was arranging for Mr. McIntosh’s boat insurance, and was made aware of the fact
that Mr. McIntosh hoped to take paying customers on the boat in the very near
future. There is no suggestion in the evidence, however, that Mr. Macaulay
asked Mr. McIntosh for any information about his business plan, nor did he ask
Mr. McIntosh any questions about how these plans would affect his use of the
boat.
[143] I am of the
view that once Mr. McIntosh told Mr. Macaulay about what were clearly
short-range plans to try to develop a charter business for the boat, Mr. Macaulay
had a duty to explore Mr. McIntosh’s business plans with him in order to
determine whether these plans had any implications for Mr. McIntosh’s insurance
coverage. Having failed to do so, I find that Mr. Macaulay and Ogilvy &
Ogilvy fell below the standard of care expected of a reasonably prudent
insurance broker.
[144] The next
question, then, is whether Ogilvy & Ogilvy should be held to account for
Mr. McIntosh’s loss.
[145] Having
carefully considered the matter, I have concluded that notwithstanding the
shortcomings in the advice and services provided to Mr. McIntosh by Mr. Macaulay,
Ogilvy & Ogilvy should not be held liable for Mr. McIntosh’s loss.
[146] While Mr. Macaulay
unquestionably gave Mr. McIntosh bad advice, at the end of the day, Mr.
McIntosh did not rely on that advice to his detriment. Rather Mr. McIntosh
chose instead to disregard Mr. Macaulay’s advice, in the full knowledge that
his insurance coverage could be affected by his actions.
[147] That is, Mr.
McIntosh knew from the beginning that he was not to take paying customers out
on his boat, and that if he did so, his insurance coverage would be in
jeopardy. I have already found that he did precisely this during the summer of
2003.
[148] Reliance on
the advice provided by Mr. Macaulay is necessary for Mr. McIntosh to be able to
establish a causal link between the breach of the duty owed to Mr. McIntosh by
Mr. Macaulay and Ogilvy & Ogilvy, and Mr. McIntosh’s loss: see Linden and
Feldthusen, Canadian Tort Law, 8th Ed., at p. 467.
[149] In the
circumstances of this case, it does not now lie with Mr. McIntosh to say that
he relied on the bad advice provided by Mr. Macaulay to his detriment. While
Mr. Macaulay’s advice as to what constituted use of a boat for a commercial
purpose might not have been accurate, it was correct insofar as it went, in
that the taking of paying customers on the boat would indeed amount to
commercial use.
[150] Having
consciously chosen to disregard Mr. Macaulay’s advice in this regard, and to
take paying customers out on his boat, Mr. McIntosh knowingly put his insurance
coverage in jeopardy, and was ultimately the author of his own misfortune.
[151] Before
leaving the matter of Ogilvy & Ogilvy’s liability, I should note that it
does not appear that there was ever any discussion between Mr. Macaulay and Mr.
McIntosh with respect to either the suspensive nature of the personal use
warranty in the 2002 policy, or the absolute nature of the personal use
warranty in the 2003 policy.
[152] In my view,
these are matters that should have been discussed with Mr. McIntosh, especially
given what Mr. Macaulay knew about Mr. McIntosh’s plans for the boat. In
failing to discuss these matters with Mr. McIntosh, Mr. Macaulay and Ogilvy
& Ogilvy once again fell below the standard expected of the prudent
insurance broker.
[153] That said, as
I noted earlier, Mr. McIntosh clearly understood from the outset that his
insurance coverage would be jeopardized if he took paying customers out on his
boat. At no time in his testimony did Mr. McIntosh suggest that he relied on
the fact that the personal use warranty was originally suspensive in nature
when he made his decision to take paying customers out on his boat.
[154] Nor did Mr.
McIntosh ever suggest that he would have conducted himself any differently, had
he been made aware of the fact that the personal use warranty became absolute
in nature when his insurance policy was renewed in July of 2003.
[155] Rather, Mr.
McIntosh’s position was always that he never took any paying customers on his
boat at all, a position that I have specifically rejected.
[156] As a
consequence, the action will also be dismissed as against Ogilvy & Ogilvy.
Is Mr. McIntosh entitled
to a return of his premiums, and if so, from what date?
[157] Given that
the private pleasure purposes warranty contained in Mr. McIntosh’s original
insurance policy was merely suspensive in nature, Mr. McIntosh retained his
insurance coverage when he was using the boat for recreational or leisure time
activities, and thus is not entitled to a return of the premiums paid during
the term of this policy.
[158] In contrast,
the private pleasure purposes warranty contained in the 2003-2004 policy was
absolute in nature. That is, once the boat was chartered or used for any
commercial purpose, the policy was voided, and coverage could not be
reinstated.
[159] I have found
that after renewing his insurance policy in July of 2003, Mr. McIntosh used his
boat for a commercial purpose, namely the carriage of paying customers. I have
also found that a number of other activities that he engaged in with the boat during
the summer of 2003 amounted to the commercial use of the boat.
[160] The evidence
as to precisely when various events such as poker runs took place is not
entirely clear. Nor do we know where the boat was at different points during
the summer of 2003. We do know, however, that Mr. McIntosh took paying
customers out on his boat on or shortly before August 18, 2003.
[161] Mr. McIntosh
having clearly breached the absolute warranty in the policy by that date at the
latest, Royal was entitled to act as it did, and to treat the policy as void.
In accordance with the provisions of subsection 85(2) of the Marine
Insurance Act, Mr. McIntosh is entitled to the return of any insurance
premiums paid by him after August 18, 2003.
[162] Although not
mentioned in oral argument, Royal submitted in its written argument that it
should be entitled to deduct the costs of its investigation and defence from
the premiums to be returned.
[163] As requested
by the parties, I will not deal with the issue of costs until such time as the
parties have an opportunity to make submissions in this regard, and thus the
matter of Royal’s entitlement to its costs has yet to be determined. Moreover,
Royal has led no evidence with respect to any costs that it may have incurred
in investigating Mr. McIntosh’s insurance claim. In the circumstances, I
decline to make any order in this regard.
Damages
[164] Having found
no liability on the part of either defendant, it is not, strictly speaking,
necessary to assess the damages in this case. However, I will do so in the
event that an appellate court takes a different view of this matter.
[165] Although Mr.
McIntosh’s expert was of the view that the boat was a total loss, at trial,
counsel for Mr. McIntosh conceded that the boat could indeed be repaired. Thus
the question to be decided is what it would cost to repair the boat.
[166] Two witnesses
were called on this point, both of whom were marine surveyors, and both of whom
were qualified as experts in appraising damage to boats. There was very little
difference in the experts’ assessment of what needed to be done to return the
McIntosh boat to its previous condition, insofar as that was possible, nor was
there much disagreement between the witnesses as to the cost of repairs.
[167] Mr. McIntosh
relies on the evidence of Gerry Montpellier, who inspected the boat on
September 26, 2006, and who estimated the cost of repairing the boat, as of
October, 2006, to be $121,387.20, with a further sum of between $15-20,000 to
be allocated for additional repairs identified in the course of the work. When
asked how he arrived at the figure for the ‘extras’, Mr. Montpellier said that
there was “no magic” to this, and it appears that this was something of a ‘ball
park’ figure.
[168] In contrast,
Royal called David Buchanan, who prepared his repair estimate in November of
2003. In his report to Royal, Mr. Buchanan recommended that a reserve of
$125,000.00 be set aside to cover the cost of repairs. Like Mr. Montpellier’s
estimate, Mr. Buchanan’s figure also included a component for unforeseen costs,
although he did not identify what this amount would be.
[169] There is a
difference in the operative dates of the two assessments, which would account
for some of the disparity in the two estimates, although Mr. Buchanan testified
that while the cost of major components might have increased “a bit”, all of
the other costs of repair would have remained more or less the same.
[170] Mr.
Montpellier’s estimate also included the cost of repairing the transom of the
boat, which had delaminated. Mr. Montpellier conceded in cross-examination
that he did not know whether this delamination pre-dated the theft of the boat
or not. In contrast, while Mr. Buchanan’s report noted the presence of the
delamination observed during his inspection in November of 2003, he was of the
view that this was a pre-existing condition, and was not attributable to the
theft. As a result, Mr. Buchanan did not allocate anything for the cost of
this repair, although he testified that it would take approximately six to ten
hours of work to repair, at a labour cost of between $80 and $90 an hour.
[171] Given that
Mr. Buchanan actually inspected the boat in 2003, he was in the best position
to determine whether the delamination of the boat’s transom was related to the
theft or not. As a result, I accept his evidence that this was a pre-existing
condition, and should not be taken into account in determining the cost of
repairing the boat.
[172] I am also
satisfied that had Mr. McIntosh been able to establish that he was entitled to
compensation for his loss, he would be entitled to the present cost of the
components needed to repair the boat, given his evidence that he was not in a
financial position to effect the repairs himself, without the proceeds of his
insurance.
[173] Taking all of
this into account, I am satisfied that the damages suffered by Mr. McIntosh in
relation to the cost of repairing his boat should properly be assessed in the
amount of $130,000.00.
Conclusion
[174] For these
reasons, this action will be dismissed. Each party shall have two weeks from
the date of judgment to serve and file their written submissions with respect to
the matter of costs, which submissions are not to exceed three pages in length.
“Anne
Mactavish”
Ottawa, Ontario
January
29, 2007
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