Each instance of identity theft constituted a seperate occurence under an insurance policy covering consumer deposits.
The application for the interpretation of the limits of liability of an insurance policy held by the Real Estate Council of Ontario to cover losses of consumer deposits was allowed in part where the Court held that 22 of the 25 transactions reviewed were separate "occurrences" as they involved different victims and different properties.
Simpson (Receiver of) v. Lloyd's Underwriters [2008] O.J. No. 3919 Ontario Superior Court of Justice S. N. Lederman J. October 8, 2008
The Real Estate Council of Ontario held an insurance policy to cover losses of consumer deposits. The policy provided that each claim had a limit of liability of $100,000 but the aggregate liability for each "occurrence" or "series of related occurrences" was $500,000. The applicant receiver was acting on behalf of victims of a real estate deposit scheme. The applicant argued that each of the 25 deposit thefts was a separate, unrelated occurrence. The insurer argued that all the thefts constituted a single occurrence and, in the alternative, they were a "series of related occurrences" such that the $500,000 limit applied.
The Court reviewed the appropriate interpretation of the phrase "series of related occurrences" by reference to the decision in Pacific Rim Nutrition Ltd. v. Guardian Insurance Co. of Canada, [1995] 8 W.W.R. 74 aff'd [1998] B.C.J. No. 1852 (CA). In Pacific Rim, the Court had reviewed factors such as whether the incidents were committed by the same person, against the same employer, or using the same method to determine that a series of deposit thefts were "related". Other factors which should be considered include the time, place, opportunity, pattern and method of the theft. In this case, the insurance policy was provided as part of a scheme to protect consumers. Therefore, the Court held that the identity of the victim should be the key determinant because this accorded with the intention of the parties to protect consumers. Based on this interpretation, the Court found that 22 of the 25 transactions were unrelated as they involved different victims and different properties. The cases of multiple fraud against a single victim were captured by the aggregate limit as they involved the same thief, the same victim and the same type of method used to cause the loss.
In the result, the Court ordered that each of the deposit thefts in respect of 22 of the victims were separate "occurrences" and did not constitute a "series of related occurrences" within the meaning of the policy.
This case was originally summarized by jmeadows@harpergrey.com and originally edited by dpilley@harpergrey.com
