Retrospect on O’Hearn v. Yorkshire Insurance Company
M. L. Marasinghe*
When a criminal act lies behind an insurance claim, public
policy largely determines the issues involved. In applying these
notions of public policy, the courts have often failed to draw a
distinction between the effect of a criminal activity on insurance
claims and the effect of a similar act upon rights to succession. As
a result, courts have sometimes proceeded to resolve insurance claims
using authorities concerned, with the right of a criminal to succeed
to the estate of his victim. At the outset it must be stated that the
law of insurance and the law of succession have developed from
different sources along very different lines. It is suggested, therefore,
that any attempt to use authorities derived from succession cases
to support decisions in the field of insurance would result in a
substantial error of jurisprudence. It is in this light that the decision
in O’Hearn v. Yorkshire Insurance Co.” will be examined.
O’Hearn was charged, convicted and sentenced to two years
imprisonment under section 285 of the Criminal Code.2 It was alleged
that on the September 11, 1919, O’Hearn, while driving his auto-
mobile along King Street, in Toronto, in a state of intoxication and
at an excessive speed, struck and injured a man named Plum who
was an employee of the Toronto Railway Company, and then engaged
in repairing railway lines for that Company. As a direct result of
the mishap, Plum died. His dependents claimed and received
payment of $6,133.51 from the Railway Company under the Work-
men’s Compensation Act.2 Having paid the claim the Railway Com-
pany became subrogated to the rights of Plum’s dependents, and
successfully claimed $6,275 from O’Hearn. O’Hearn in turn claimed
the sum from his insurer, the Yorkshire Insurance Company. He
based his claim upon the policy of insurance under which the
defendant Company had agreed to indemnify O’Hearn for all losses
incurred “by reason of the liability imposed upon him by law for
* Professor of Law, University of Windsor, Windsor.
1 (1922) 67 D.L.R. 735 (S.C.C.). See infra, note 95.
2 R.S.C. 1906, c.146, s.285: “Everyone is guilty of an indictable offence and
liable to two years’ imprisonment who, having the charge of any carriage
or motor vehicle, automobile or other vehicle, by wanton or furious driving,
or racing or other wilful misconduct, or by wilful neglect, does or causes to be
done any bodily harm to any person.”
3 Workmen’s Compensation for Injuries Act, R.S.O. 1914, c.146.
1976] RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
631
damages on account of bodily injuries accidentally sustained, in-
cluding death at any time resulting therefrom” 8 The insurance
company argued that it was contrary to public policy that O’Hearn
“should be indemnified against his criminal act”.Y The Ontario Su-
preme Court (Trial Division)” upheld this defense and dismissed
O’Hearn’s action. O’Hearn then unsuccessfully appealed to the Ap-
pellate Division of the Ontario Supreme Court. In dismissing his
appeal, Meredith C.J.O. wrote:
In the case at Bar, the appellant’s negligence, apart from it resulting in
the death of the injured man, was a crime; and, according to the cases
to which I have referred, the appellant cannot maintain an action to
indemnify him against the injury caused by that act.7
In support of its decision the Court referred mainly to cases from the
law of succession.8 Where a felon or his heirs attempts to succeed to
the estate of the victim of the felony the law of succession, as a matter
of public polcy, prevents such a succession from taking place. The
Court made reference to the views expressed by Fry LJ. in Cleaver
v. Mutual Reserve Fund Life Association, namely, that:
… no system of jurisprudence can with reason include amongst the rights
which it enforces rights directly resulting to the person asserting them
from the crime of that person. If no action can arise from fraud, it
seems impossible to suppose that it can arise from felony or mis-
demeanour0
In deriving support from decisions from the law of succession, the
Court, in my view, committed a fundamental error which has since
influenced the direction taken by Canadian courts in this area of
insurance law.’
4 Supra, note 1.
5 Ibid., 736.
6 (1921) 64 D.L.R. 437, per Middleton J.
7 Supra, note 4, 738.
SAmicable Society v. Bolland (1830) 4 Bli.N.S. 194, 5 E.R. 70; Cleaver v.
Mutual Reserve Fund Life Association [1892] 1 Q.B. 147 and Lundy v. Lundy
(1895) 24 S.C.R. 650.
9 Ibid., 156. The equitable origins of the idea can be traced to opinions
expressed in Villers v. Beaumont (1682) 1 Vern 100, 101, and Bridgman v.
Green (1755) 2 Ves.sen. 627-628.
0 O’Hearn has received wide acceptance in Canadian courts. See: Smith v.
National Guaranty Co. (1929) 4 D.L.R 486 (Ont. C.A.); Re Millar [1937] 3 D.L.R.
234 (Ont. CA.); La Foncigre Cie v. Perras [1942] 4 D.L.R. 244 (Que. C.A.); Home
Insurance Co. v. Lindal and Beattie [1934] S.C.R. 33 (Alta. C.A.). Although
O’Hearn was not expressly mentioned, its influence can be found in Crisp v.
Delta Tile & Terrazzo Co. (1961) O.W.N. 278 (Ont. CA.); Pont v. Perth Mutual
Insurance Co. (1967) 59 W.W.R. 550 (B.C. Cty Ct.). Judicial ingenuity saved the
plaintiff from the full rigours of the O’Hearn rule in Bunting v. Hartford Ac-
cident Co. (1955) 2 D.L.R. 700 (Ont. Cty Ct.).
McGILL LAW JOURNAL
l’Vol. 22
The obvious difficulty which the Ontario Court of Appeal faced
was the need to reconcile” its decision with Tinline v. White Cross
Insurance Association, Limited, 2 a decision from the English Court
of King’s Bench. The English courts, in recognizing the different
paths of development taken by the laws of succession and of in-
surance, had, in my view, correctly applied a pattern of public
policy peculiar to insurance claims arising out of a criminal activity.
They had not confused the public policy considerations in insurance
matters with public policy considerations in matters of succession.
On the other hand, the line adopted by the Ontario Court of Appeal
was in direct conflict with English decisions.
In Tinline the plaintiff drove a motor car at an excessive speed
along Shaftesbury Avenue in London. The car, having gone out of
control, ran into three pedestrians who were crossing the street; two
of them were injured and the third killed. Tinline was convicted of
manslaughter. The insurance policy co-Vered, inter alia, compensation
for accidental personal injury. The injured persons and the re-
presentatives of the person who was killed claimed compensation
from Tinline and he in turn sought a declaration that he was entitled
to be indemnified in respect of those claims. Granting the plaintiff’s
claim against the insurance company, the Court observed:
A man does not become liable to pay compensation for accidental personal
injury unless the accident is due to his negligence. The policy therefore
is one which insures against the consequences of negligence, including
personal negligence. The defendants say however that where the negligence
is so gross and excessive that as a result of it a man is killed and the crime
of manslaughter is committed the assured cannot claim an indemnity, for
it is said it is against public policy to indemnify a person against the
civil consequences of his criminal act … but the policy is an insurance
against negligence whether slight or great, and it seems to me that it
covers this case. It must of course be clearly understood that if this
occurrence had been due to an intentional act on the part of the plaintiff,
the policy would not protect him. 3
The Court in O’Hearn’s case was unwilling to draw the distinction
between an intentional act and a negligent act. Meredith C.J.O. dist-
inguished the Tinline case on the ground that “there was no legisla-
tion similar to that in section 285 of the Criminal Code, and there-
” The relationship which existed between Canadian courts and English
courts at the time O’Hearn was decided (1922) was a cordial one. The attitude
of Commonwealth courts was to pay due deference
to English decisions
without any particular feeling of obligation. “In the end result, however,
deference did not differ very much from duty.” B. Laskin, The British
Tradition in Canadian Law (1969), 61.
12 [1921] 3 K.B. 327.
13 Ibid., 330-332.
19763 RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
633
fore the negligence of the plaintiff did not constitute a crime, al-
though in the result it was a criminal offence – manslaugher –
which was committed”.14 In, a subsequent decision,15 on similar
facts, the English Court of King’s Bench, in an exercise of remarkable
restraint, thought that O’Hearn was a decision based on public policy
considerations peculiar to the Province of Ontario. 6
The line of casesy7 in the English law, following Tinline is both
long and impressive, as is the line of Canadian decisions following
O’Hearn.8 Despite the valiant effort by Meredith C.S.O. to distinguish
Tinline,19 it must be said at once that O’Hearn and Tinline are, in fact,
irreconcilable. In order to determine the error of jurisprudence, it
would be necessary to examine the development of both the law of
succession and the law of insurance in the Common Law.
Succession
Up to 1857 in England,20 testamentary matters as well as matri-
monial2′ and defamatory matters,22 were the exclusive concern of
Ecclesiastical Courts. Prior to the Norman Conquest, the Church
had its own courts. In England, however, these church courts
exercised a shared jurisdiction with both the Shire Courts and the
Hundred Courts. All three, therefore, had jurisdiction both in tem-
poral and spiritual matters. After the conquest, the difficulties stem-
ming from a shared jurisdiction became apparent to William I,
and in 1072 A.D. he separated the jurisdiction of the spiritual courts
from the temporal courts. At the same time, William I left defama-
tion, matrimonial and testamentary matters, among others, within
the exclusive jurisdiction of the spiritual courts. These matters re-
mained within the ambit of religious influence for the next eight
14Supra, note 4.
25 James v. British General Insurance Co. [1927] 2 K.B. 311.
1 Ibid., 324.
17Marles v. Philip Trant & Sons [1954] 1 Q.B. 29; Askey v. Golden Wine Co.
[1948] 2 All E.R. 35 (K.B.D.); Haseldine v. Hosken [1933] 1 K.B. 822; Beresford
v. Royal Insurance Co. [1938] A.C. 586 (H.L.) and James v. British General
Insurance, supra, note 15.
18 Supra, note 10.
29 Supra, note 7, 738.
20 By the Court of Probate Act, 1857, 20-21 Vict., c.77, jurisdiction as to
matters testamentary was transferred to the Common Law Courts.
21 By the Matrimonial Causes Act, 1857, 20-21 Vict., c.85, jurisdiction in
matrimonial matters was transferred to the Common Law Courts.
22By the Ecclesiastical Courts Act, 1855, 18-19 Vict., c.41, jurisdiction
in defamation was transferred to the Common Law Courts.
McGILL LAW JOURNAL
[Vol. 22
centuries, 23 a fact which must not be forgotten when examining the
modern law of succession.2
During the period between 1078 A.D. and the Reformation, 2
5 the
Ecclesiastical Courts periodically expanded and contracted their
jurisdiction, depending on the warmth of the relationship between
the Pope, the head of the Church and the King, the head of State.
Despite the strained nature of that relationship, the Ecclesiastical
Courts hung on to their jurisdiction over defamation, matrimonial
and testamentary matters throughout this period.2 Dr. Stubbs, in
1883, catalogued the law which the English Ecclesiastical Courts used
up to the time of the Reformation:
…
the Canon Law of Rome, comprising the decretum of Gratian; the
decretals of Gregory IX, published in 1230; the sext, added by Boniface
VIII; the Clementines, issued in 1318; and the extravagants, or uncodified
edicts, of the succeeding popes. A knowledge of these was the scientific
equipment of the Ecclesiastical jurists … X
The Reformation brought in the final and irrevocable break with
Rome, but the spiritual courts continued to exercise equal authority
in their area of jurisdictional competence with the temporal courts.
This was true, not only ,during the reign of Henry VIII, but also
throughout the post-reformation period. Although Henry VIII re-
placed papal supremacy with a royal supremacy, the next 150 years
were used to translate gradually the personal power of the King
into a power of the King-in-Parliament. Throughout these turbulent
times, the sources of the Canon Law applied by the Ecclesiastical
Courts in England were the general codes coming down from Rome,
the Papal decretals, the ordinances of the Provinces of York, of
Canterbury and of the local dioceses and, in addition, the Church’s
concept of the fundamental laws of God. The latter were reinter-
preted according to the religious views of the new Church of
England.28 The lawyers, however, had some considerable difficulty
in ascertaining the extent to which the pre-Reformation Law was
abrogated in post-Reformation times.
Another difficulty was the extent to which legislation passed in
Parliament could affect settled principles of the Canon Law. By 1603,
23A.D. 1072 to A.D. 1855.
24 See G. Moore, The English Canon Law (1967), 125-129; F.E. Maitland, The
Roman Canon Law in the Church of England (1898), Chapter II.
1530, Henry VIII broke with the Pope and in 1531 was recognized as
2In
the head of the Church of England.
2 0 Moore, supra, note 24.
v Ecclesiastical Courts Commission of 1883, Part I, 24. See in addition F.
Makower, The Constitutional History of the Church of England (1895), 421-425.
28 Moore, supra, note 24, 5.
19761 RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
635
during the reign of James I, the state had found it expedient to re-
furbish the former convocations of Canterbury and of York, which
indeed pre-dated the origins of Parliament in England. In the newly
constituted convocations there were two tiers: the Upper House of
Bishops and a Lower House of elected and ex-officio representatives.
The convocation was empowered to enact canons, but they required
Royal assent before they became the law in England.29 This in effect
was a device introduced to preserve the supremacy of Parliament
and the King-in-Parliament, over the Church and its laws, a result
of “the settlement” worked out as part of the Reformation. Parlia-
ment did restrain itself from interfering with spiritual matters,'”
and since the doctrines of the Christian Church were not amenable
1 matrimonial3 2 and testamen-
to outside influences, defamation 3
29 Ibid., 6-7.
O The relationship between Parliament and the Church during the post-
Reformation period was a cordial one. Except for three major interventions,
parliamentary excursions into the area left to the Church were both minimal
and insignificant. In 1603, under James I, by the publication of new canons,
Catholic truths were preserved and restated in terms which were acceptable
to Protestant zeal. In 1662 Parliament passed the Act of Uniformity, 13-14 Car.
II c.IV. In the schedule to that Act was the Book of Common Prayer. An
attempt to replace the Book of Common Prayer in 1927 with a new version;
by the then Church assembly, was prevented by Parliament. Finally, in 1919,
by the Church of England Assembly (Powers) Act, 9-10 Geo. V, c.76,
Parliament gave the Church assembly powers to pass measures concerning
the Church, its officers and the law. These measures, however, required
Royal Assent before they became the law of the’ realm. But the giving of
the Royal Assent was made subject to consent of both houses of Parliament,
by resolution.
31 Until the 16th century the citizen had no remedy for defamation except
the subjection of the miscreant to suffer penance. In exasperation, the
Common Law, in the 16th century forged a remedy in damages, at first
limiting it to imputations of an offence triable at Common Law. This was
the birth of slander and such slanders were triable at Common Law without
proof of damage. Davis v. Gardiner (1593) 4 Co. Rep. 16b, 76 E.R. 897, appears
as the first such case. See also T.F.T. Plucknett, A Concise History of the
Common Law 5th ed. (1956) Ch.5 and R.C. Donnelly, History of Defamation
[1949] Wis.L.Rev. 99.
32The doctrine of indissolubility of marriage- was accepted by the English
Ecclesiastical Courts after the Reformation. The courts, therefore, were not
empowered to pronounce a decree of divorce, a vinculo matrimonii, which
would permit parties to remarry. The matrimonial remedy that was available
was a divorce –
relieving the petitioner from the duty
to co-habit only, but not to remarry. The marriage was reckoned to be
continuing. Until 1857, when the Matrimonial Causes Act, 1857, 20-21 Vict., c.85
was passed, the only matrimonial remedy available enabling the parties to
remarry was by way of an Act of Parliament.
a menso et thoro –
McGILL LAW JOURNAL
[Vol. 22
taryr3 matters have seen little or no reform since very early times.
Reform, if any, needed to come from within the Church, and when it
did, Parliament was not prepared to interfere in an area where the
Church had jurisdiction.
Dr Moore commented on the nature of the law practised in the
Ecclesiastical Courts:
In the beginning God created the heaven and the earth. There, in the
opening words of Genesis, is the root of our study of the Canon Law. In
the study of Moral Theology we are concerned with the whole of God’s
Law in so far as it is immediately relevant to man. In the study of the
Canon Law We are concerned with so much of the Moral Law as is en-
forced, directly or indirectly, by human sanctions. The basis of the Canon
Law is theological. 34
So long as the Ecclesiastical Courts held jurisdiction over testamen-
tary matters, the secular legal order unhesitatingly recognized the
exclusive right of Canon Law to determine rights to succession
within the realm. In adjudicating in disputes arising out of a right
to succession, the Canon Law’s notion of “morality” or “moral
theology” was the guide to a just decision. The Canon Law was not
concerned with the niceties of legal culpability; its concern was
merely one of moral culpability.
This notion of moral culpability appears to govern the right to
succession both in the pre-1857 decisions and, surprisingly, in the
modern law of succession. The influence of Canon Law on the law of
succession has left a lasting impression on the testamentary laws
of the countries that have inherited the Common Law tradition.
Canada is one such country.
A brief survey of the law of succession in Canada should indicate
the extent to which the courts have used the criterion of moral
culpability in determining the rights of a felon to succeed to the
estate of his victim. There is no doubt that a murderer cannot suc-
ceed to the estate of his victim35 except where it can be established
that he or she was legally insane at the time the murder was
3The Canon Law received the Roman view that a bastard would become
legitimate if his parents were free to marry each other at the time of the
child’s birth, and did in fact marry each other subsequently. This excluded
the rights of an “adulterine” bastard from successding to his father’s properties
despite the subsequent marriage. This situation was not corrected until well
into the twentieth century. See Legitimacy Act, 1926, 16-17 Geo. V, c.60.
34 Moore, supra, note 24, 1.
3 5Deckert v. The Prudential Insurance Company Of America [1943] O.R.
448; Re Gore [1972] 1 O.R. 550; Re Dreger (1976) 12 O.R. (2d) 371. The position
is the same in England. See Cleaver v. Mutual Reserve Fund Life Association,
supra, note 8 and In the Estate of Crippen [1911] P. 108.
1976) RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
637
committed,36 the rationale being that an insane person is not morally
culpable for killing. Voluntary manslaughter 1 has clearly excluded
the felon from a right to succeed to his victim’s estate; the intentional
act which results in the death of, the victim involves a question of
moral turpitude, and therefore. the law will not allow him to benefit
from it.
A more difficult question arises where the death is a result of
involuntary manslaughter, as in O’Hearn. Some commentators have
expressed the view that a person who causes the death of another
by reckless or dangerous driving does not commit an act of such
moral turpitude so as to merit exclusion from his victims’ estate.38
However, in Caldwell v. Erasmus,9 a South African case, there are
dicta to support the view that such claimants may suffer the same
fate as those guilty of voluntary manslaughter. There, the father was
arrested and charged with the murder of his son, a minor. As an in-
digent, and while awaiting trial, the father claimed an amount for his
defense out of his deceased son’s estate. The argument was made that
until he was found guilty, the father should be presumed innocent,
and must, therefore, be taken to have a right to succeed to his son’s
estate. The Transvaal Supreme Court disallowed his claim, and Black-
well J. in the course of his judgment wrote:
But the father stands charged with having murdered his son and, if he be
convicted either on this charge or even on a lesser charge of culpable
homicide, or possibly even of having caused the death by negligence,
it is clear that he cannot be allowed’ to inherit. Under our law, if we
adopt the principles enunciated by the old text writers, he would be
disentitled as indignus.40
Despite dicta to the contrary, the criterion which the courts utilize
is one of moral culpability which seems justifiable when one recalls
that the modem law of succession was developed in the Ecclesiastical
Courts.
z6 Re Estate of Maude Mason (1916) 31 D.L.R. 305 (B.C.S.C.); Nordstrom v.
Baumann [1962] S.C.R. 147. The Ontario Supreme Court in Re Charlton (1968) 2
O.R. 96 has held that once an accused pleads guity to the manslaughter of his
testator, he cannot change his plea into one of insane automatism at the
Probate hearing despite the rule in Hollington v. F. Hewthorn & Co. [1943]
2 All E.R. 35 (CA.).
37 Lundy v. Lundy, supra, note 8; In Re Hall [1914] 1 P. 1 and In Re Giles
[1971] 3 W.L.R. 640. See also T.K. Farnshaw and P.J. Pace, Slaying a testator
(1972) M.L.R. 426.
38 T.K. Farnshaw and PJ. Pace, “Let the hand receiving it be ever so chaste…”
(1974) M.L.R. 481, 493-494.
39 [1952] 4 S.A. 43 (T).
40 Ibid., 49. See Ex Parte Steenkamp and Steenkamp [1952] 1 S.A. 744, 748-
752 (T).
McGILL LAW JOURNAL
(Vol. 22
If volens is absent in the case of an insane killer, it is likewise
absent where a driver is merely negligent. The fundamental question
is one of moral culpability, and not one of legal fault. Bailhache 3.
in Tinline alluded to this issue in the -following passage:
Precisely the same negligence which injured the two persons killed the
third, but to hold that there is any difference in the liability to in-
demnity would be to hold that the indemnity depends upon the nature
and result of the injury sustained by the person who is knocked down, or,
to put it another way, that it depends in some degree upon the amount
of the insured’s negligence. That will not do, because there is very
often quite as much negligence in knocking down a person who is not
killed as there is … a person who is killed [under circumstances amounting
to] manslaughter.41
The function of the courts here is not to determine the broad legal
issue of “fault” but to see that the person receiving the estate is not
tainted with moral culpability. No fine considerations of legal fault
could ever achieve that result. Therefore, in my view, the question
of involuntary manslaughter should be separated from voluntary
manslaughter, moral innocence being the decisive factor.
Insurance
The earliest commercial transaction involving an insurance con-
tract dates as far back as 1318 A.D.4 and the earliest insurance
policy, 1347 A.D.43 There is abundant evidence that insurance,
“considered as an arrangement whereby a person subjected to any
peril may be indemnified for loss on account of such peril, was
known to the -ancients and was made use of by them to a very con-
siderable extent; but that commercial insurance, as practised so
extensively in modern times, was either unknown to them or was
little used”.”4
The introduction of insurance law to England was the work of the
Italian underwriters who, during the 12th century A.D., commenced
their underwriting business on Lombard Street in London.” The
Italian Republics of Venice, Florence and Genoa were renowned
for flourishing insurance businesses during the Middle Ages. There-
fore, when the Italians, mostly Lombardians, moved into London
41 Supra, note 12, 331-32.
42 W.R. Vance, The Early History of Insurance Law [1908] 8 Colum.L.Rev.
1, 6-7. See also supra, notes 20 and 21.
43 Ibid.
441bid., 6.
45An excellent account of the early history of insurance and of the sources
of insurance law may be found in the judgment of Bradley J. in New England
Marine Ins. Co. v. Dunham (1870) 20 L. Ed. 90.
1976] RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
639
they brought with them an established insurance practice, a settled
set of customs and a system of adjudication with a tradition and
authority of some antiquity. In England, the Lombardians established
merchants’ courts similar to those they had had in Italy. All disputes
arising out of insurance contracts were submitted to these institu-
tions (separate and distinct from the Common Law courts), presided
over by judges with specialized knowledge and experience. The
obvious drawback was that their judgments had no effect -unless
the parties were willing to abide by them. Until the 16th century, the
sheriffs of the Common Law courts were not available to enforce
the judgments,46 one of the reasons which led to legislation during
the reign of Elizabeth I in 1601.41 Although as early as 1545 the Court
of Admiralty, in Emerson v. De Sallanova,48 was prepared to hear
arguments on some aspects of insurance law, the procedure was to
petition the Privy Council, the Lord Mayor of London, or the Court
of Admiralty for relief. Upon such a petition, the custom was to
appoint a group of merchants to hear the cause as a merchants’
court and report back to the court of the realm which appointed
them. This circuitous approach justified the intervention of the
State in enforcing the decision arrived at in the merchants’ court.
Notwithstanding these improvements, by 1601 the merchants and
underwriters sought relief from Parliament,49 and the latter in 1601
enacted the first insurance legislation in England.
In the preamble
to the Act, the draftsmen plotted the history and development of
insurance law and practice, and in the three succeeding sections re-
organized the administration of justice in insurance matters. The
preamble to the Act -recognized the merchants’ courts but re-organiz-
ed them in such a way that the authority was vested in the Lord
Chancellor or the Lord Keeper who was empowered to constitute a
Commission that would enquire into an insurance dispute. The
“Commission shall be directed to the judge of the Admiralty for
46 Vance, supra, note 42, 13.
47 An act concerning Matters of Assurances used among Merchants, 43 Eliz.
c.12. This was the first insurance statute in England. See Statutes at Large,
Vol.2, pp.7 18-719 .
48 Setden Soc. Pub., Vol.XI, p.lxvi.
49 The need to resort to legislation resulted from a display of obvious envy
by the Common Law courts at the success with which the Admiralty Courts
were attracting foreign litigants. W. Holdsworth, History of English Law 4th
ed., vol.I (1966), 554, supports this view. See also H. Potter, Historical In-
troduction to English Law 4th ed. (1962), 199-200, where he quotes from a
pamphlet setting out the reasons why the Admiralty Courts suited the
civilians better than the Common Law courts.
5 Supra, note 47.
McGILL LAW JOURNAL
(Vol. 22
and to commit to prison without bail –
the time being, the Recorder of London for the time being, two
Doctors of the Civil Law, and two Common Lawyers, and eight grave
and discreet Merchants or to any five of them”.” By section 2, the
Commission was given the power “to examine upon oath any witness
any person that shall
–
wilfully condemn or disobey their final orders or decrees”. 2 Section
3 gave a right of appeal to the Lord Chancellor or the Lord Keeper
who “shall have full power and authority by virtue of this Act –
to reverse -or affirm every such sentence or decree, according to
equity and conscience”.5 3
These provisions achieved two important results. First, while
maintaining the separate development of insurance law both from
the Common Law and from Canon Law, its administration was
brought under the umbrella of the courts of the realm. Secondly,
the litigants in insurance matters were given a right of appeal from
the decisions of the Court of the Commissioners to the Lord Chan-
cellor or the Lord Keeper for the time being. These, admittedly,
were signifiant improvements, but the failure of the Common Law
courts to absorb into their jurisdiction the Law Merchant seems to
have reduced the effect of the new legislation on insurance matters.
Between 1601 and the appointment of Lord Mansfield in 1756, a
period of 145 years, Park observes that no more than sixty cases
reached the law reports.5 This does not in any way indicate the
precise number of insurance cases which went before the Court of
Commissioners, but the view generally held is that the non-participa-
tion of the Common Law courts in insurance matters disadvantaged
the workings of the 1601 legislation 5
The role played by Lord Mansfield in incorporating the Law
Merchant into the Common Law has been well documented.6 The
commencement of Lord Mansfield’s tenure as the Chief Justice of
51 Ibid., preamble.
52Ibid.
53Ibid.
-4See Vance, supra, note 42, 16, fn.49.
55 Potter, supra, note 49, 198-203, fns.82, 89, 91.
50Potter, ibid., 477-478, 595-596, 208-209, 279-280. Plucknett, supra, note 31,
248-251, 653-656; Holdsworth, supra, note 49, volxii, 464-560 and C. Fifoot, Lord
Mansfield (1936). Vance, supra, note 42, 16-17, wrote with reference to Mans-
field:
“This great judge, thanks to his more liberal Scottish training, was not so
slavishly attached to common law precedents as to be unable to perceive
the necessity of recognizing merchants’ customs in determining rights
under merchants’ contracts, not so bigoted as to be unwilling to seek light
from foreign sources.”
19763 RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
641
the King’s Bench marks the beginning of the development of the
modern law of insurance as a part of the Common Law system. In
Luke v. Lyde,57 Lord Mansfield laid down the sources of the law of
insurance in the Common Law. Having prefaced his judgment with
an allusion to the universality of the Law Merchant “- non erit alia
lex Romae, alia Athenis; alia nunc, alia posthoc; sed et apud omnes
gentes et omni tempore, une aedemque lex obtinebit -,,5118 Lord
Mansfield continued that “… the ancientest laws in the world (the
Rhodian Laws) … consolato del mare, a Spanish book, …
the laws
of Oleron, …
the Usages and the Customs of the Sea, (a French
book) … and the Ordinances of Lewis the 14th, established in 1681,
(collected and compiled under the authority of M. Colbert),” 59 are
the sources to which the insurance law could be traced. These sources
continued to guide the development of insurance law in the Common
Law courts during the next two centuries.
Quod Erat Demonstrandum
The Ecclesiastical Courts and the Canon Law did not participate
in the development of insurance law in England. The law of succes-
sion and the law of insurance have evolved independently from
separate and distinct sources along equally separate and distinct
paths. The notions of public policy- applicable are equally distinct;
public policy fashions its content and sets its direction with reference
to the legal system within which it evolves. The peculiar considera-
tions that lie behind a “rule-system” which is traceable to the
Ecclesiastical jurisdiction and the Canon Law are not suited to
resolving disputes in insurance questions. The courts have ignored
the historical evolution of insurance law and have been led astray.
O’Hearn0 and the cases that follow are clear examples of the result-
ing confusion.
t
I
Much of the damage done by the O’Hearn decision has now been
repaired by statute,”‘ but the O’Hearn syndrome appears to pervade
the Canadian courts, notwithstanding the legislative intervention.
Co-operative Fire & Casualty Co. v. Saindon et al.62 in the Supreme
5 (1759) 2 Burr. 882; 97 E.R. 614.
68 Ibid., 617.
GO Ibid., 619.
Io Supra, note 4.
61 Ontario: Insurance Act, S.O. 1970, c.224, s.92; British Columbia: Insurance
Act, S.B.C. 1960, c.197, s.100. New Brunswick: Insurance Act, S.N.B. 1968, c.6,
s.2.
2 (1975) 56 D.L.R. (3d) 556 (S.C.C.).
McGILL LAW JOURNAL
[Vol. 22
Court of Canada is a recent instance. There the respondent, Saindon,
was insured by the appellant insurance company. The insurance
policy included a comprehensive personal liability clause:
To pay on behalf of the Insured all sums which the Insured shall become
obligated to pay by reason of the liability imposed by law upon the
Insured, or the liability of others, assumed by the Insured under any
written agreement relating to the premises, for damages, including damages
of care and loss of services, because of bodily injury or property damage.p
On the afternoon of July 22 1972, while Saindon was using a gasoline-
driven power lawnmower, he saw his neighbour Armand Sirois,
whom he accused of cutting the cherry branches on his property.
During the ensuing argument, Saindon walked across to Sirois’
property and thrust the lawnmower, still running, at Sirois’ face.
Sirois, in a fright, involuntarily shielded his face with his hands. The
revolving blades of the lawnmower cut off the fingers of his left
hand and injured his right wrist. Saindon is then said to have walked
back to his premises and continued to mow the lawn. In an action
for damages in tort, Sirois was awarded $39,942 by way of special
and general damages against Saindon. Saindon brought in his
insurance company as a third party. Against the third party Saindon
claimed an indemnity under the Comprehensive Personal Liability
Policy covering his premises in the Village of Claire.
At first instance,04 Pichette J. of the New Brunswick Supreme
Court gave judgment for the third party based on the public policy
rule found in section 6 of the New Brunswick Insurance Act:0 5
Unless the contract otherwise provides, a violation of any criminal or
other law in force in the Province or elsewhere shall not, ipso facto,
render unenforceable a claim for indemnity under a contract of insurance
except where the violation is committed by the insured, or by another
person with the consent of the insured, with intent to bring about loss or
damage, provided that in the case of a contract of life insurance this
section shall apply only to disability insurance under and akin as part
of the contract.6
After quoting with approval a passage from a judgment of Middle-
ton J.A.,7 Pichette J. concluded:
63Ibid., 563.
64[1974] 7 N.B.R. (2d) 285.
65 S.N.B. 1968, c.5.
6 Supra, note 64, 287.
67Lang Shirt Co.s Trustee v. London Life Insurance Company [1928] 2
D.L.R. 449 (Ont.C.A.). MiddletonJ.A. wrote at p.467:
“… while the rule is not so strict in civil cases as in criminal, I think
that when a right or defence rests upon the suggestion that conduct is
criminal or quasi-criminal the court should be satisfied not only that the
circumstances proved are consistent with the commission of the suggested
1976] RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
643
In this case, the -defendant admits that the raising by him of the lawn-
mower in motion in the face of the plaintiff was a deliberate intentional
act. True it is he said he did so to scare the plaintiff but the fact remains
that the defendant knew or ought to have known that this act on his
part was a very dangerous one. In my opinion his conduct was criminal.
The proper interpretation of this section of our ‘Insurance Act’ has always
been to the effect that where injuries are caused to a Third Party by a
calculated act, the assured cannot recover indemnity from
deliberate
his insurer. On this ground of its defence, the Third Party is, in my opinion
entitled to succeed. 8
The result, therefore, equates Saindon’s activity with “intent” to
bring about the loss or damage insured against. Saindon appealed to
the New Brunswick Court of Appeal.0 9 The appeal was allowed on
the grounds that “the injury to the plaintiff was not intentionally
inflicted, but was the unforeseen result of a criminal act”7 0 The
insurance company appealed the decision to the Supreme Court of
Canada. – The Supreme Court allowed the appeal by a majority, 2
with Laskin C.J.C. dissenting” 3 Ritchie J., who gave the majority
decision, drew heavily from Gray v. Barr,74 a decision from the
English Court of Appeal. Although recognizing the fact that the
English Court was deciding the question of “accident” rather than
“intent”, Ritchie J. proceeded to write:
It is true that in Gray’s case the liability of the insurance company
depended on whether or not the fatal shot was fired by “accident” within
the meaning of its policy, whereas the liability of the appellant in this
case depends on whether the damage sustained by Sirois was “caused
intentionally by or at the direction of the insured”, but in my view the
issue must be determined on the ground that under the circumstances
of this case, the intentional act of the respondent in raising the lawn-
mower as he did was the “cause” of the accident as that word is generally
understood in the interpretation of policies of insurance.7 5
Laskin C.J.C. distinguished Gray v. Barr:
There is another, a more cogent ground for rejecting the relevance of
Gray v. Barr to the present case, and especially in so far as Gray v. Barr
the category of
excludes acts with foreseeable consequences
accidents ….
from
act but that the facts are such as to be inconsistent … with any other
rational conclusion than that the evil act was in fact committed.”
68 Supra, note 64, 288.
09 [1974] 44 D.L.R. (3d) 469.
‘O Ibid., 472.
71 Supra, note 62.
7 Spence, Dickson and de Grandpr6 JJ. concurred with Ritchie J.
’73 Pigeon and Beetz JI. concurred with Laskin J.
74 [1971] 2 All E.R. 949 (C.A.).
75 Supra, note 62, 566.
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… It follows, so far as this Court is concerned, that an act or omission
which involves a calculated risk or amounts to a dangerous operation from
which injury or damage results cannot be said to be done or omitted with
intent to cause the injury or damage in the absence of a specific finding
that there was such intent.7 6
There being no such “specific intent”, Laskin C.SC. concluded, that
the risk fell within the policy of insurance and outside the Public
Policy Section of the New Brunswick Insurance Act.” He therefore
allowed the appeal.
At no stage in these proceedings did any court refer to O’Hearn
although the end result of this dispute appears to bear the stamp
of O’Hearn. One way of explaining the decision of the Supreme Court
of Canada is to equate the moral turpitude displayed by Saindon
in his activities on that day in July 1972 with the turpitude he would
have displayed had he intented to injure Sirois in the way he did.
This would certainly justify Ritchie J.’s adherence to Gray v.
Barr”8 where the Court derived authority from two lines of cases.
Barr’s activity was termed “criminal” and supported by criminal
case law79 despite the fact that he was acquitted, not only of murder
but also of manslaughter, at a trial held at the Central Criminal
Court in London. 0 Notwithstanding this acquittal, Geoffrey Lane 3.
at first instance said:
He broke almost every rule there is as to the safe handling of guns.
Any reasonable man would have foreseen, and the defendant doubtless
did foresee, that what he was doing was likely to cause injury to the
deceased.81
Having first borrowed the reasonable man test from the law of
torts to fix Mr Barr with foresight, the Court then proceeded to attach
a criminal culpability in the face of his acquittal (admittedly against
a much higher burden of proof) .82
70 Ibid., 559.
T7.Supra, note 61, s.6.
78 [1971] 2 All E.R. 949, aff’g. [1970] 2 All E.R. 702, per Geoffrey Lane J.
79 See [1971] 2 All E.R. 949, 954-955, per Denning LJ., 960-961 per Salmon L.J.,
968 per Phillimore L.J. and [1970] 2 All E.R. 702, 707-708 per Geoffrey Lane J.
80 [1970] 2 All E.R. 702, 706 per Geoffrey Lane J. This view could be explained
according to the decision of the Court of Appeal in Hollington v. F. Hew-
thorn & Co. Ltd [1943] 1 K.B. 587. See J.A. Coutts, The Effect of a Criminal
Judgment on a Civil Action (1955) 18 M.L.R. 231, 242.
81 [1970] 2 All E.R. 706.
82 While in criminal matters the standard of proof is beyond reasonable
doubt, the test used in England in civil (non-criminal) matters is the “Carr-
Briant rule”, i.e., one of balance of probabilities: [1943] K.B. 607.
1976] RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
645
The first line of cases succeeded in imputing a moral culpability
which allowed a second line of cases to apply: Cleaver,8 Crippen,8
and Beresford,8 5 all succession cases. At first instance Geoffrey
Lane 1. stated the principle as “the obvious one, that no man should
be allowed to profit at another person’s expense from his own cons-
cious and deliberate crime”.86 In the Court of Appeal, Lord Denning
decided that:
… Mr. Barr cannot recover on the policy. It was not an “accident”, and
also he is defeated by “public policy”. It will be noticed by the observant
that the two questions raise one and the same point of “causation”. If
the death of Mr. Gray was caused by the deliberate act of Mr. Barr in
going up the stairs with a loaded gun, it was no accident, and it would, in
any case, be against public policy to allow him to recover indemnity for
the consequences of it.87
the Court of Appeal, Salmon L.J. based his judgment on the
In
“criminal” element of the act:
Manslaughter is a crime which varies infinitely in its seriousness. It may
come very near to murder or amount to little more than inadvertence,
although in the latter class of case the jury only rarely convicts. In the
Estate of Hall, Hall v. Knight and Baxter … may seem to be an authority
for the proposition that anyone who has committed manslaughter, in any
circumstances, is necessarily under the same disability as if he had com-
mitted murder.88
Phillimore L.J., however, based his decision on policy. The judgment
as a whole brings out three propositions. First, if the act amounts to
a crime, then the moral culpability which attaches to a conviction
for that offence attaches to the insured’s rights under his policy.
Secondly, where such a moral culpability exists, then as in succession,
the insured cannot claim under the insurance contract. It is against
83 Supra, note & See [1970] 2 All E.R. 702, 711 per Geoffrey Lane J.
84 Supra, note 35. See [1970] 2 All E.R. 702, 711 per Geoffrey Lane J. [1971] 2
All E.R. 949, 964 per Salmon LJ.
85 Supra, note 17: See [1970] 2 All E.R. 702, 711 per Geoffrey Lane J.; [1971] 2
All E.R. 949, 964 per Salmon LJ.; ibid., 969 per Phillimore LJ.
86 [1970] 2 All E.R. 702, 709.
87 [1971] 2 All E.R. 949, 957.
88 Ibid., 964.
89 Ibid., 970:
an age where the use of firearms is all too frequent –
“It is wiser I think to confine my decision to the facts in this case. In an
age of violence –
it would I think be very odd if a man who had had in his hands a loaded
shotgun from which a shot had been fired and had killed another at a time
when he had just assaulted that other with the gun could recover on an
insurance policy which protected him from liability if he was negligent in
the use of the shotgun. This was in fact a grave case of manslaughter
and in my judgement the learned judge was right in saying that the
defendant could not recover…”.
McGILL LAW JOURNAL
[Vol. 22
public policy to do so. Thirdly, by resting the -decision to deny in-
demnity upon cases drawn from the law of succession, the court
endorsed the (erroneous in my opinion) view that the public policy
considerations for succession purposes are identical to those for
insurance purposes.
Ritchie J. in Saindon links “culpability”
to non-recovery and
omits, as did the Court in Gray v. Barr, the element of “intent”,
which is fundamental to the “public policy” rule in the New Bruns-
wick Insurance Act. This is the crucial passage:
The respondent’s action did indeed have the result of “scaring” Sirois to
such extent that he raised his hands in an automatic gesture to shield
his face. The fact that the lawn-mower tipped when put to such an un-
natural use was an eminently foreseeable development and one which the
respondent ought to have known to be a part of the danger to which
he was exposing his neighbour. The immediate cause of Sirois’ injury was
a combination of his gesture of self-protection and the tipping of the
lawn-mower but, in my opinion, these two circumstances flowed directly
from the respondent’s deliberate act in raising the lawn-mower as he did,
which was the dominant cause of the occurrence. I agree with the learned
trial Judge that this constituted criminal conduct which caused damage
and the fact that the “scare” intended by the respondent had more
serious consequences than he may have anticipated does not alter the fact
that it was his threatening gesture which caused the damage. I am
accordingly of the opinion that the respondent’s actions were in breach
of the public policy rule as expressed in s.2 of the New Brunswick
Insurance Act.90
The judgment of Laskin C.J.C. is to be preferred. It is clearly in
line with principle. The error that underlies Ritchie J.’s judgment is
a basic misunderstanding of the separate development of the law
of insurance and the law of succession. Insofar as the law of in-
surance is concerned, where “intent” is required to be proven, it
must be “actual intent”. Uberrimae fides,91 the form of “commercial
morality”, is a far cry from the moral principles that evolved from
administration of the Canon Law by the Ecclesiastical Courts in
England.
Insurance law developed in a completely different ideological
setting. At the base of the Law Merchant are the economic realities
of the time, not traditional Christian morality. Doctrines such as
“abandonnent” in insurance law, “stoppage-in-transitu” in sales and
the anomalous endorser or the “Aval” in negotiable instruments
90 Supra, note 62,, 564.
9′ Carter v. Boehm (1776) 97 E.R. 1162; De Hahn v. Hartley (1786) 99 E.R.
1130. For a more modern example of Uberrimae fides see Dawson Ltd v.
Bonnin [1922] 2 A.C. 413; Sleigh v. Stevenson [1943] 4 D.L.R. 433 (Ont.C.A.);
Taylor v. London Assurance Co. [1935] 3 D.L.R. 129 (S.C.C.).
19761 RETROSPECT ON O’HEARN v. YORKSHIRE INSURANCE CO.
647
were developments protecting the economic interests of the one
whose money has contributed towards the acquisition of capital by
another. Morality here is the economic morality which arises out
of a notion of fair business practice. The requirement of bona fides
in all contractual relationships (except in insurance contracts) was
a morality generated by the laws and customs prevailing among men
of commerce. In insurance contracts the requirement of good faith
was even more stringent; it was termed “Uberrimae fides”.92 The
commercial world had its own code of ethics, particular to it, drawn
largely from the customs of its own trades but which had no
relationship to the idea of ‘moral culpability’ used by the Ecclesias-
tical Courts.
Until the mid-eighteenth century the Law Merchant was ad-
ministered by a group of specialists guided by ideological and policy
considerations different from those present in both the Ecclesiastical
and Common Law systems in England. It is this fact which compels
us to conclude that it is a basic error of jurisprudence to justify
insurance decisions by resorting to principles derived from the law
of succession, or vice versa. It must, therefore, be submitted that the
decision in O’Hearn v. Yorkshire Insurance Co.93 was wrong. The
decision was wholly, based on principles derived from succession
cases. Had the Ontario Court looked into insurance authorities, as
did the English Court in Tinline v. White Cross Insurance Associa–
tion, Limited,9 it would surely have reached a different conclusion
in O’Hearn. This same criticism applies to the recent Supreme Court
decision in Saindon, which was decided in the same spirit as
O’Hearn.9 5 It is unfortunate that the Court did not keep in mind
92 In Carter v. Boehm, supra, note 91, 1164, Lord Mansfield CJ. explained
the doctrine of Uberrimae fides in the following passage:
“Aliud est celare; aliud, tacere; neque enim id est celare quicquid reticeas;
sed cum quod tuscias, id ignorare emolumenti tui causa velis eos, quarum
intersit id scire.”
(It is one thing to conceal; another to keep silent; for it is not con-
cealment in every case when you are silent about something; but when you
keep quiet about a fact and wish for your own advantage that these people
be ignorant of it who profit by knowing it –
that is concealment.)
93Supra, note 4.
94 Supra, note 12.
95 Under statutory condition 2(1) of An Act to Amend The Insurance Act, S.O.
1972, c.66, s.8, five prohibited uses of an automobile by an insured are detailed.
This set of conditions does not include driving “while under the influence of
intoxicating liquor or drugs to such an extent as to be for the time being
incapable of the proper control of the automobile”. That quote was found in
The Insurance Act of Ontario, R.S.O. 1970, c.224, s.205, statutory conditions
2(1)(a). It is arguable that this omission could now amount to taking away
McGILL LAW JOURNAL
[Vol. 22
the obiter of Pigeon J. in Canadian Indemnity Co. v. Walkem Ma-
chinery & Equipment96 decided not long before Saindon.0 There
Pigeon J. wrote:
In my view, the test laid down by the statute, namely, whether or not
something was done by or for the insured “with intent to bring about
loss or damage” is the very same test which must be applied to decide
whether the occurrence is an accident or whether it is a crime barring
recovery.9 8
Saindon could have been the beginning of a new line of reasoning in
cases where an insured claims an indemnity for a loss arising out
of an act which is arguably criminal.
from the insurer the right to refuse payment in a fact situation like in O’Hearn.
On the other hand it may be suggested that this amounts to an exclusive sub-
mission to s.92, in all cases where a criminal act is involved. For one clearly
commits a crime by driving under the influence of drugs or intoxicating
liquor. It is the latter suggestion which is preferred here. In my view, O’Hearn
would still fall under s.92 and it will be necessary to establish that the
insured intended “to bring about the loss or damage” for which the indemnity
is sought, before his right to indemnity is denied. To that extent the views
expressed here on the assessment of O’Hearn remain unaffected. In any case
the Act applies only to Ontario.
96 (1975) 53 D.L.R. (3d) 1 (S.C.C.).
97 Walkem was decided on January 28, 1975. Saindon was decided on
in
March 26, 1975. LaskinCJ.C. alone cited Walkem
Saindon. RitchieJ. made no reference to Walkem.
98 Supra, note 96, 7.
in his judgment
