Citizens Ins v Parsons

jptardif2jptardif2
in McD.Intro

Hi Graham,

I'm a bit confused as to why the company disputed the validity of Ontario's Fire Insurance Act. Isn't it the excuse Citizens was using in order to not pay Parsons? The fact that under the Fire Act, something was violated? I'm confused, please help.

Thanks,

Comments

  • grahamgraham
    edited September 2019

    Hey @jptardif2, here's a link to a nice, simple explanation:

    Here's how I understand this case:

    • Citizen's refused to pay Parson's claim based on the terms of the policy. (Parson's didn't disclose he also had fire coverage with another insurer at the same time.) But Parson's argued that this policy condition violated Ontario's Fire Insurance Act.
    • Citizen's counter-argument was that the Ontario Fire Act was ultra-vires. In other words, Citizen's felt they did not have to comply with ON's Fire Act because they were a federally incorporated insurer.
    • But JCPC, on appeal, ruled that the Ontario Fire Act was intra-vires, and Citizen's did have to comply. They could not deny Parson's claim based on terms of the policy because that policy itself did not comply with the Fire Act.
  • wilsonchan18wilsonchan18

    Hi, one more question here: How the ruling "Trade were Inter-Provincial not intra-provisional) here could help justifying ON Fire Act is Intra-Vires?

    Thanks,
    Wilson

  • grahamgraham

    The explanation in the link I provided for the original poster (see above) explains it quite well, but there lots of legal details that aren't discussed. To fully understand this case you would have to do a lot more research.

    Anyway, the main idea is that under Ontario's laws and regulations, Citizen's Insurance Company should have to pay. But Citizen's claimed that federal laws and regulations should apply instead, so Ontario's laws and regulations didn't (were ultra vires). Apparently federal laws didn't require Citizen's to pay, but this is not explained.

    The reason Ontario laws applied is that insurance contracts are considered "intra-provincial", which means everything happens inside the province. No goods or service have to leave the province for the contract to be fulfilled. This is different from selling cars for example, which may be made in Ontario but then sold in Quebec. Since the cars cross provincial boundaries, that would be "inter-provincial" and federal laws would apply in any disputes.

  • wilsonchan18wilsonchan18

    Yes, exactly. So that is what I understand. Then the reason ON law apply should be because insurance contracts are considered Intra-Provincial by JCPC, not the other way around.

    Cause in the battle quiz it says because of the reason that:
    Trade were Inter-Provincial not intra-provisional

    which is kind of misleading. Thanks Graham!

  • grahamgraham

    I edited the BattleCard. Take a quick look and see if it's clearer. Thx.

  • wilsonchan18wilsonchan18

    It is much more clearer now. Thanks Graham! :)

  • grahamgraham

    Great! B)

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