Digests

Strachan v. Constant Craving (The)

T-448-98

2003 FCT 86, Gibson J.

28/1/03

35 pp.

Action for damages to plaintiffs' pleasure craft as result of explosion of defendant's ship, motor vessel Kyhita--Counsel for defendant urged award of damages to plaintiffs for decrease in value of Constant Craving that is not reduced by amount recovered by plaintiffs from own insurers in respect of repair of ship would amount to unjustified collateral benefit to plaintiffs--Issue arising from relatively unusual set of circumstances--Normally, plaintiffs' insurer would have been subrogated to rights of plaintiffs as against defendant to extent of loss suffered by plaintiffs recoverable against defendant and for which insurer has indemnified plaintiffs cost of repairs of Constant Craving, cost recovered by plaintiff from insurer--In present case, plaintiffs' insurer indemnified plaintiffs for cost of repairs--Plaintiffs sued insurer-- Litigation discontinued and insurer surrendered subrogation rights against defendant in favour of plaintiffs--Thus, plaintiffs' insurer would not recover amount indemnifying plaintiffs if amount recovered from defendant--In effect, plaintiffs would have recovered cost of repairs to Constant Craving from insurer and would again recover same cost of repairs from defendant--Issue of double recovery or collateral benefit addressed by Supreme Court of Canada in Cunningham v. Wheeler; Cooper v. Miller; Shanks v. McNee, [1994] 1 S.C.R. 359--Double recovery not permitted-- Exception to general principles called private insurance exception--Insurance arrangements at issue here between plaintiffs and insurer with respect to Constant Craving falling within private insurance exception--In conclusion, no modification made regarding appropriate damages payable by defendant to plaintiffs for decrease in value of vessel because plaintiffs will experience a degree of double recovery--As between double recovery to plaintiffs and windfall benefit to defendant by reason of prudence of plaintiffs in maintaining insurance on Constant Craving, result should favour plaintiffs --Judgment in favour of plaintiffs for sum of repair costs in respect of Constant Craving for total of $55,812.70--No adjustment to award made because portion related to repair costs might be seen as collateral benefit to plaintiffs-- Simplified action by plaintiffs allowed.