Date: Sat, 8 Jul 2006 21:36:16 -0400

From: David Cheifetz

Subject: Intangible Injuries for Breach of Contract (Fidler v. Sun Life)

Adam,

I should make one more point on the issue of individualization. Fidler was released on June 29. On June 1 the SCC released Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21. The only difference in the panel was the addition of Fish J. Jesuit Fathers was also unanimous. I'll quote para.32 of its reasons:

32 Nevertheless, even with all these factors being considered, courts must remain mindful of the rules and principles governing insurance law. In the long run, a contextual but unprincipled approach would render a disservice not only to the industry, but also to insureds and to victims. It would lead to further difficulties in obtaining coverage and compensation. Both parties to an insurance contract are entitled to expect that well-established principles will be reflected in the interpretation and application of that contract. In this respect, another form of public interest is also at stake. For these reasons, courts must pay close attention to the structure and actual wording of the policy, read as a whole.

Are we to assume that the Fidler panel forget those words? It seems to me that "contextual but unprincipled" is a nice summary of the type of individualization that Fidler mandates. Yes, somebody looking to justify Fidler's failure to mention that passage might want to argue that the Jesuit Fathers paragraph is aimed only at a different issue: how to interpret the words of the policy and only how to interpret what coverage is provided by the policy. After all, Jesuit Fathers was only a duty to defend case, not a claim against the insurer for damages for breach of the policy. In Fidler, of course, the insurer was being sued for breach of the contract and the SCC wasn't asked to interpret a provision of the policy dealing with the scope of damages recoverable for breach of contract.

Some might find that distinction compelling. I don't. I see inconsistency in principle between Fidler and Jesuit Fathers at the level of the approach the courts are to take to to the interpretation of contracts in general and insurance policies in particular. I suppose I have to assume that the SCC judges didn't and didn't forgot about Jesuit Fathers in the 28 days between its release and Fidler's. If they didn't forget, they distinguished the cases as I have pointed out; or on some other basis I've missed. Regardless, it is difficult to see why the Jesuit Fathers statement is not, in principle, equally applicable to the Fidler question. It is, after all, still an issue of the interpretation of a contract. But, then, that's just my view and I don't have any part of the final word in these matters and don't foresee that situation changing.

Best,

David

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