In our first case this month, the Ontario Superior Court held that the Applicant, who had murdered his wife but was found not criminally responsible, was disentitled to the proceeds of her life insurance policy on the basis of the public policy rule.
In our second case this month the Ontario Court of Appeal held that the common exclusions contained within a property insurance policy did not apply because the presence of Endorsement 33b amended the policy to provide property coverage for damage to an in-ground pool.
Dhingra v. Dhingra Estate, 2011 ONSC 3741
In this case, an application was brought by Ved Parkash Dhingra (the “Applicant”) for the proceeds of an insurance policy on his deceased ex-wife. The Applicant had acquired a group Accidental Death Benefit Plan policy with Scotia Life Insurance Company (the “insurer”) in June 1998 with his ex-wife being named as a co-insured.
In June 2006, the ex-wife was found dead in her home and the Applicant was charged with second degree murder. He was later found not criminally responsible by reason of a mental disorder. As such, the insurer approved payment of the insurance proceeds to the Applicant. The administrator of the ex-wife’s estate then advised the insurer that the insurance proceeds should be paid to the estate. As there were conflicting claims for the insurance proceeds, the insurer brought an application pursuant to Section 320 of the Ontario Insurance Act.
The Applicant argued that he was the only named beneficiary under the policy and therefore the only person entitled to make a claim for the proceeds. The estate argued that the insurance proceeds should not be paid to the Applicant pursuant to the public policy rule that a person who wrongfully killed another was not allowed to enjoy profits resulting from the act of killing.
After reviewing prior decisions in both Canada and the United States, the Court dismissed the application and held that Canadian courts do not require a finding of intent to commit the crime in order to apply the public policy rule. In the present case, even though the Applicant was found not criminally responsible, he still physically committed the murder of his ex-wife and therefore the public policy rule applied to disentitle him from receiving the insurance proceeds of the policy.
Cabell v. Personal Insurance Co., 2011 ONCA 105
This case involved an in-ground swimming pool which was damaged as a result of hydrostatic uplift pressure. The increase in pressure was due to the build up of groundwater and caused the pool to lift out of the ground, resulting in significant cracking. The Appellants had purchased property insurance from the Respondent and sought a declaration that the damage to the pool was covered under the policy.
The policy included coverage for permanently installed outdoor equipment, including outdoor antennae, fences, retaining walls and driveways. The common exclusion portion of the policy stated that the Respondent did not insure against settling, expansion, contraction, moving, bulging, buckling or cracking of insured property or loss of damage to outdoor swimming pools. To avoid the application of the common exclusions, the Appellants purchased Endorsement 33b which amended the policy to provide property coverage for damage to their pool caused by all risks other than flooding or water-borne objects. The Trial Judge interpreted the policy and corresponding endorsement as excluding coverage for damage caused to the pool because of moving and cracking. The Appellants then brought this appeal.
The Court of Appeal held that the Trial Judge erred in his interpretation of the policy’s common exclusions and their application to the endorsement. The Trial Judge’s interpretation would essentially nullify coverage under the endorsement; a result which could not have been within the reasonable expectation of the parties. As such, the Court of Appeal allowed the appeal and granted the Appellant’s application for a declaration that they were covered under the policy for the loss relating to their pool.