Member Article

On May 12, 2006, the Court of Appeal rendered a decision in a case involving the concept of intentional fault.(1) This judgement, written by Judge Louis Rochette, once again further complicates the idea of an intentional fault committed by an insured. I. The facts Assurances générales des Caisses Desjardins Inc. (referred to herein as “Desjardins”) insured Mr. Fournier’s property. In May 1999, Mr. Fournier committed suicide by setting his home on fire. The neighbouring house, insured by Axa, was damaged. Axa, subrogated in the rights of its insured, sued Desjardins, which refused to indemnify Axa on the ground that the damage resulted from an intentional fault by Mr. Fournier and such fault was not insured by virtue of article 2464 C.C.Q. and the exclusion clause in the insurance policy issued by Desjardins. At trial, the parties admitted that: - The May 1999 fire was the result of an intentional act by Mr. Fournier for the purpose of committing suicide. - Mr. Fournier deliberately emptied a can of gasoline in his home in order to start a fire while he was still inside. - Had the expert engineer testified, he would have established that: a) As the fire was started with gasoline, it very rapidly reached the flashover point. b) Regardless of how the fire was started, once it had reached the flashover point it would have caused radiating damage to the neighbouring buildings that were, in the case of Axa’s insured parties, approximately 18 feet from Mr. Fournier’s home. c) Damage to the neighbouring buildings was the direct and immediate consequence of the fire on Mr. Fournier’s property, given the respective positions of the buildings. II. The Superior Court’s judgement On the basis of the foregoing facts, the trial judge held that not only was Mr. Fournier conscious of the damage that would be caused to his property, but he was also aware of the damage that would be caused to his neighbours’ properties. He therefore accepted Desjardins’ defence and dismissed Axa’s lawsuit. III. The Court of Appeal’s judgement The Court of Appeal stated that the question it had to answer was whether Mr. Fournier wanted his intentional act to adversely affect the occupants of the neighbouring building. If so, there was intentional fault and the resulting damage was not covered whereas if not, the damage was covered and Desjardins had to indemnify Axa. Citing the decisions in La Royale du Canada v. Curateur public(2) and Goulet v. Transamerica Life Insurance Co. of Canada(3), the Court stated that [translation] “the insured must have been seeking to bring about not only the event that is the object of the risk but also the damage itself ” for the concept of intentional fault to apply. It is well established that the insurer has the burden of proving the intentional nature of the fault. The insurer must not only prove that the wrongful act itself was intentional, but also that [translation] “the insured intended to cause the damage or at least was, or should have been, aware of the inevitability of the damage”. The Court added that while it would be difficult to prove the insured’s [translation] “state of mind”, the exclusion clause covering intentional fault must be strictly construed. Lastly, ruling on whether the fault committed by Mr. Fournier was intentional, and based on the above-mentioned admitted facts, the Court held that the evidence did not establish that Mr. Fournier wanted to damage the neighbouring properties or that he could think that such a result was not only foreseeable, but also inevitable. According to the Court, the insured’s state of mind in this regard was unknown at the time of the events: [translation] “The insured certainly wanted to end his life, as swiftly as possible, but what did he know about the “flashover point” that, according to the expert, would have been reached very rapidly? What does “very rapidly” mean? What did he know about “radiating damage”? Did he believe that such damage was possible, probable, or even certain? We have no idea. Nor do we know what would have been the expectations of a reasonable person in the same situation, of which only bits and pieces are revealed to us.” Therefore, the Court allowed the appeal and refused to apply the intentional fault exclusion invoked by Desjardins. To summarize, this judgement reaffirms the principle that the insured’s intention to deliberately cause the damage must be proved on a balance of probabilities. The insurer has the burden of proving that not only was the insured aware of the intentional nature of his action, but he was also aware that his intentional act would, inevitably, result in damage to another person.

 

Footnotes: 1. Axa Assurances Inc. v. Assurances générales des Caisses Desjardins inc., May 12, 2006, 500-09-014594-048, Judges Chamberland, Rochette and Trudel (ad hoc). 2. REJB 2000-18860 (C.A.). 3. [2002] 1 S.C.R. 719.