SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Canada Brokerlink Inc. v. Lori I. Patterson a.k.a. Lori I. Walsh
BEFORE: Weekes J., at Bracebridge
COUNSEL: Rajesh K. Datt, for Ms. Walsh, Appellant
Mark A. Reid, for Canada Brokerlink Inc., Respondent
On appeal from Deputy Judge Deacon
E N D O R S E M E N T
Background
1This is an appeal from a decision granting judgment in favour of Canada Brokerlink Inc. (Brokerlink) for the amount of an unpaid insurance premium. In this Endorsement I am referring to the Defendant as Ms. Walsh as she goes by that surname.
2In early 2002 Ms. Walsh sought insurance for a trail ride business she was to operate at Deerhurst Resort commencing May 18, 2002. She contacted her insurance broker, Brokerlink, in February 2002 and dealt with Ms. Martin.
3Ms. Martin had no previous experience in equine insurance matters. Having made some investigations about potential insurers, Ms. Martin obtained a quote from Sports-Can Insurance (Sports-Can) which charged an annual premium of $27,247.00 plus taxes. Ms. Martin obtained no other quotes. Ms. Martin obtained the quote from Sports-Can on April 30, 2002. Ms. Martin advised Ms. Walsh that Sports-Can was the only Canadian company she could find with appropriate coverage. As Ms. Walsh needed the insurance, she agreed to accept this policy.
4In July 2002 Ms. Walsh learned of George Whiteside, a broker specializing in equine insurance. Mr. Whiteside obtained a quote for a premium of $7,500.00 plus taxes from Equine Insurance Underwriters Limited (Equine) for the same coverage Ms. Walsh had through Sports-Can. Ms. Walsh placed insurance through Mr. Whiteside and cancelled the policy with Sports-Can. Sports-Can’s policy provided for a $5,000.00 retained premium. As Ms. Walsh did not pay all of that amount, Brokerlink sued for the balance. Ms. Walsh defended alleging negligence on the part of Ms. Martin. The trial judge found that Ms. Martin was not negligent and awarded judgment in favour of Brokerlink in the amount of $2,846.32 together with costs of $400.00.
5Ms. Walsh appeals that judgment alleging errors of fact and law.
Errors of Fact
The call to Equine
6It was argued on behalf of Ms. Walsh that the trial judge made several palpable and overriding errors of fact. I will address two of them. The first relates to his finding that Ms. Martin gave clear and unequivocal evidence that she had contacted Equine before placing the insurance with Sports-Can. The trial judge found that she had done so and that Equine had not returned her call. This finding of fact was significant as it related to Ms. Walsh’s contention that Ms. Martin did not investigate the potential of placing insurance with Equine even though she had been advised to do so by the central marketer for Brokerlink.
7The trial judge’s reasons on this issue are as follows:
The position of the defendant is that the plaintiff (through Ms. Martin) was negligent in not finding the least expensive coverage for her business. Ms. Martin, in her evidence, acknowledged that she was made aware of Equine Insurance as a possible carrier. She gave evidence that she contacted them by telephone but never received a return call. She acknowledged that there was nothing in her activity reports relating to Equine and that her summary report referred to leaving voice mails when, on the evidence, Equine did not have a voice mail system. She openly acknowledged in cross-examination that there was no corroborating evidence to confirm any contact with Equine Insurance, but she was clear and unequivocal that she made telephone contact with this company and that no response was received from them.
8In cross-examination Ms. Martin gave the following evidence at pages 39-40, 43-44 and 46 of the transcript:
Q. Okay. So obviously, you knew that Equine Insurance was a potential market for the defendants.
A. Correct.
Q. Okay. It was a potential option.
A. Correct, yeah.
Q. Okay. Do you recall how many times you contacted Equine Insurance?
A. I …
Q. On behalf of the defendants?
A. I believe I called twice.
Q. You – you believe?
A. Yes.
Q. Do you know it for a fact?
A. No, I would say two to three times.
Q. Two to three times?
A. Yeah.
Q. Okay. It doesn’t sound like you’re clear. And would you agree with me that …
A. I would say two times. I called two times.
Q. Okay. And you would also agree with me that the written statement doesn’t at all mention the number of times you contacted Equine Insurance, right?
A. Correct.
Q. So it’s fair to say that the number two you’ve given me, it – it’s been a while, so even that you can’t be 100 percent clear on.
A. Correct, I don’t have an Activity to back it up, correct.
Q. Okay. What I’m asking is that it’s clear that even the number two which you gave me, you can’t be – you can’t today say that’s 100 percent clear.
A. Correct.
Q. Okay. So it could be – could be one.
A. Correct.
Q. Could be none.
A. Correct.
Q. Okay. I mean, you would agree with me that – you’ve already indicated that it’s possible that you didn’t make any calls.
A. I have to agree with it.
9At the end of the day, Ms. Martin acknowledged that she may not have called Equine. I find that the trial judge made a palpable and overriding error in concluding that Ms. Martin gave clear and unequivocal evidence that she called Equine to inquire about placing insurance with it. There is no basis for such a conclusion.
Whether there was a relationship between Brokerlink and Equine
10At p.3 of his reasons for judgment the trial judge made the following observation:
I also note that Mr. Whiteside dealt with Equine Insurance two or three times a week while the plaintiff did not have an existing relationship and would not necessarily have received the same consideration even if full contact had been established. Equine Insurance’s failure to respond to Ms. Martin’s call or calls suggests a lack of interest in dealing with an unknown broker.
11It was argued that the trial judge made a palpable and overriding error in concluding that Brokerlink did not have an existing relationship with Equine and that this may be the reason that Equine did not call back. The submission on behalf of Ms. Walsh is that the trial judge ignored Ms. Martin’s evidence on the point. She testified that Equine was an insurer recommended to her by Brokerlink’s central marketer as one of the markets with which Brokerlink dealt. She gave the following evidence at page 38 of the transcript:
Q. Okay. So you would agree with me that’s one of the markets that Canada Brokerlink Inc. deals with.
A. We can deal with them, yes.
Q. It is a market it deals with, right?
A. Okay.
12This evidence demonstrates that Brokerlink had a relationship with Equine. The trial judge erred in concluding otherwise. Moreover, given the evidence of Ms. Martin that she may not have called Equine, it seems reasonable to conclude that to be the reason it ‘did not call back’.
Was Ms. Martin Negligent
13This is a legal question and the standard of review is correctness.
14The submission on behalf of Ms. Walsh is that Ms. Martin was under a duty to advise her of the potential of placing coverage with Equine and that Ms. Martin breached that duty by advising her to place the insurance with Sports-Can while knowing of the existence of Equine.
15This submission is grounded in Fletcher v. Manitoba Public Insurance Co., [1990] S.C.J. No. 121. At paragraph 57 of that decision Wilson J., for the court, wrote:
In my view, it is entirely appropriate to hold private insurance agents and brokers to a stringent duty to provide both information and advice to their customers. They are, after all, licensed professionals who specialize in helping clients with risk assessment and in tailoring insurance policies to fit the particular needs of their customers. Their service is highly personalized, concentrating on the specific circumstances of each client. Subtle differences in the forms of coverage available are frequently difficult for the average person to understand. Agents and brokers are trained to understand these differences and to provide individualized insurance advice. It is both reasonable and appropriate to impose upon them a duty not only to convey information but also to provide counsel and advice. (my emphasis)
16It was submitted on behalf of Brokerlink that a decision finding Ms. Martin negligent would amount to imposing a duty on the broker to find adequate coverage for the absolute cheapest premium. It is contended this would constitute an unreasonable expansion of the duties imposed on brokers.
17I am not persuaded that this case is about whether Ms. Martin ought to have found the least expensive policy providing the requisite coverage for Ms. Walsh. Rather, it is about whether there was a duty on Ms. Martin to advise Ms. Walsh of the possibility of obtaining coverage with Equine before advising her to take the Sports-Can coverage. Based on Fletcher, I conclude that there was such a duty. Ms. Martin breached that duty by not informing Ms. Walsh of this possibility. The trial judge’s conclusion to the contrary was incorrect.
18The evidence is clear that had Ms. Martin told Ms. Walsh about the possibility of Equine Ms. Walsh would have directed Ms. Martin to make further inquiries. There was ample time to do so. It is reasonable to infer that the result of those inquiries would have been the placing of coverage with Equine.
Damages
19The evidence of Mr. Whiteside demonstrated that a policy of insurance could have been placed with Equine at the outset. Sports-Can’s policy was in place for two and one-half months. The retained premium was $5,000.00 of which $2,153.68 was paid.
20The Equine premium was $625.00 per month. Had the coverage been placed with Equine from the outset the cost to Ms. Walsh for those two and one-half months would have been $1,562.50. Ms. Walsh therefore paid $591.18 more than she would have for those two months but for Ms. Martin’s negligence. Mr. Datt advised that his client does not ask for a refund of that amount. Ms. Walsh is not responsible for the unpaid portion of the retained premium. Its existence is due to the negligence of Brokerlink and it is the responsibility of that company.
Conclusion
21For these reasons, the appeal is allowed. The action is dismissed with costs of the action to defendants fixed at $400.00. The costs of the appeal are reserved. If the parties are unable to agree on those costs they may arrange a conference call through the Trial Co-ordinator at Barrie to speak to the issue.
Weekes J.
DATE: October 18, 2006