Released on Monday was the decision of the Privy Council in Samsoondar v Capital Insurance Co., https://www.bailii.org/uk/cases/UKPC/2020/33.html  which I believe is Lord Burrows’ first judgment in the law of restitution. After a road accident in Trinidad & Tobago, the defendant insured car owner (whose employee was driving at the time of the accident) put in a claim to his insurer, the plaintiff. But the insured was uninsured for this accident, because he had coverage only when he was driving. A first instance court in T&T held in unrelated litigation that legislation obliged the insurer to cover the insured in such a case. The insurer subsequently told the insured he had no coverage, but then without further communication the insurer settled the claim with the victim, paying about $43K. The policy had a term that if the insurer had to pay even where there was no insurance, the insured would indemnify the insurer. The insurer now sought to recover from the driver. The twist was that the Privy Council had later, in unrelated litigation, overruled the interpretation of the T&T legislation, holding that it only made insurers liable to non-parties where the policy did purport to cover them (ie it was intended to overcome the normal operation of privity of contract). As a result, the contractual indemnity clause did not help the insurer, because they were not actually legally liable to the victim (which represents a view of overruling with which some may disagree). It was held that it was not open to the plaintiff to argue mistake on the pleadings, and they failed also to succeed on the basis of compulsory discharge of another’s liability, since they were not actually liable to pay as they had done. Some may find the decision harsh. Since the insurer had settled with the victim (presumably at least partly in the name of the insured), there was no prospect of undoing everything. I wonder whether one could see it as an indirect confirmation of the controversial Owen v Tate: where the plaintiff was legally liable, but only because he chose to make himself so without request from the defendant, he was denied recovery even though he had discharged the defendant’s liability. Here, presumably, the insured made itself liable to the victim when the settlement was reached (since the insurer thought it was liable to the victim and would have wanted to be released along with the insured): as in Owen, one could say, it made itself liable for its own purposes and not at the request of the defendant insured (he had asked them to settle the claim, but on the footing that it would not cost him anything, which as the court said, cannot be treated as an open-ended request).

 

Released today is a case from the Supreme Court of Canada which is mainly about good faith in contract law: C.M. Callow Inc. v. Zollinger,

 https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/18613/index.do , arising out of the deceitful use of a power of termination. The majority judgment of Kasirer J. found liability, applying the Court’s decision in  Bhasin v. Hrynew, 2014 SCC 71, which introduced into Canadian common law contract law an organizing principle of good faith, and a duty of honest performance, and which did so with reference to the civil law of Quebec. Not surprisingly, in this case Kasirer J. said the Supreme Court of Canada in developing either the common law or the civil law may draw on the experience of the other system. The minority judgment of Brown J. argues that a breach of the duty of honest performance gives rise only to reliance and not expectation damages, although in the end the quantum is the same in this case. Of relevance to the RDG, there is a passage ([161]-[163]) in which the experience of the Canadian common law of restitution is used as an example of the dangers of drawing on the other legal tradition. These minority judges would restrict drawing on the other tradition to cases where there is a gap in the common law, or where it requires development. One might think that this includes just about every case that reaches the Supreme Court of Canada.

Côté J. dissented.

 

All best holiday wishes to all,

Lionel