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Channeling Wallis Simpson
Published in the November 2008 issue of Litigation Notes - View Article
Synopsis: A series of thefts perpetrated by one fraud artist on different victims is found to be neither a single Occurrence, nor a series of related Occurrences
On December 10, 1936 King Edward the VIII abdicated the throne of England to marry the divorced American commoner, Wallis Simpson. Wallis Simpson was vilified by many as a gold digger who had pursued that King solely for his wealth and position.
Some seventy years later, 22 victims were bilked out of $4.5 million dollars in a fraudulent real estate deposit scheme. Should their suspicions have been aroused when they were informed that the woman with whom they invested their money was named Courtney Wallis Simpson? Did they pay a heavy price for sleeping through history class?
Fortunately for the victims, they had some insurance to cover their losses. They may not have even known they had it because it was purchased by the Real Estate Council of Ontario (“RECO”), which administers the Real Estate and Business Brokers Act, 2002 of the Province of Ontario. RECO purchased a policy of insurance from Lloyd’s Underwriters with a limit of $100,000 per Occurrence and a $500,000 aggregate limit for any one Occurrence or series of related Occurrences.
The court-appointed Receiverof Courtney Wallis Simpson and her company sought to recover pursuant to the insurance policy on behalf of Ms. Simpson’s 22 victims. There were in fact 25 deposit thefts, as three of the victims claimed twice. Lloyd’s took the position that each theft was a single Occurrence and in the alternative that they were a “series of related Occurrences” and that the $500,000 aggregate limit should apply.
The policy defined “Occurrence” to mean, among other things the “…theft, fraud, misappropriation or wrongful conversion… of monies or other property…”. The Applicant argued that the use of the singular “theft” as opposed to the plural “thefts” meant that each act of thefts was a separate occurrence. The insurer, on the other hand, pointed to the use of the word “monies” to suggest that an occurrence includes a scheme involving multiple instances of theft of money or a single theft encompassing several transactions. On this point the Court agreed with the Applicant, stating that “to find that the 25 thefts perpetrated by Ms. Simpson are a single Occurrence stretches the singular into plural and may also render the aggregate limit of liability meaningless”. The Court also pointed out that the word “monies” appears in the definition of “loss” in the policy, where “loss” is defined as meaning “loss of deposit in the form of monies or other property”.
With respect to whether or not the thefts constituted a series of related Occurrences, the Court pointed out that based on the definition of the word “related” any two thefts could be deemed to have been related simply by reason of the fact that they were thefts. Clearly that could not have been the intention of the parties to the insurance contract and the Court stated that it was necessary to examine those intentions in the context of the particular policy. In this case the Court pointed out that the intention of the parties was to create protection for consumers who provide deposits to a registered real estate agent or broker and that consequently the identity of the consumer claimant would be an important factor in interpreting the wording of the policy. The Court concluded that the fact that there were different and unrelated victims was more important than the fact that they were all clients of Courtney Wallis Simpson. As a result, the Court concluded that 22 of the 25 transaction were unrelated but that the cases of multiple fraud against a single victim (i.e. three of the 25) would be captured by the aggregate limit.
Simpson v. Lloyd’s Underwriters, 2008 CanLII 51771