André Gagnon

The appellants appealed a decision dismissing their action to recover the proceeds of a life insurance policy.

The insured signed an application and paid a deposit, but the initial premium was not fully paid until a month later, after the insured's health had deteriorated and he was hospitalized for what was later diagnosed as lung cancer.

The Supreme Court of Canada held that under art. 2516 of the Civil Code of Lower Canada, the insurance never came into effect because the insurability of the risk had changed before the initial premium was paid.

The Court also found no evidence that the insurer waived the application of art. 2516.

The appellant hotel owner applied for fire insurance, which was accepted without a requirement to maintain his automatic extinguisher system.

The subsequently issued policy contained a clause requiring bi-annual maintenance by an authorized representative.

Following a fire where the extinguisher failed, the insurers denied coverage based on the maintenance clause.

The Supreme Court of Canada held that under the Civil Code of Lower Canada, the insurance contract was formed upon acceptance of the application.

Because the insurer did not indicate the inconsistency between the application and the policy in writing, the application prevailed, and the insurers were liable to compensate the appellant.

A municipal fire and water services appeal arising from a hotel fire in Quebec where hydrants were snowed in, frozen, broken, or unusable, and firefighters allegedly committed operational faults while fighting the blaze.

The Court held that public law governs when private law applies to municipalities, but once a municipality moves from policy to operational implementation, liability is determined under Quebec civil law, including arts. 1053 et seq.

C.C.L.C. The city was liable for negligent maintenance of hydrants and for firefighting faults that causally contributed to additional fire damage.

The Court restored the trial judgment subject to a deduction of $77,000 for incidental reopening expenses and corrected the calculation of the additional indemnity under art. 1056c.