Date of Release: March 29, 1996 No. C920575 Vancouver Registry IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: ) ) GEORGE E. PERCY ) )REASONS FOR JUDGMENT ) PLAINTIFF ) AND: ) ) WEST BAY BOAT BUILDERS AND ) SHIPYARDS LTD. )OF THE HONOURABLE ) DEFENDANT ) AND: ) ) PETER W.T. JOYCE, SUE WATERMAN, ) JOHNSON & HIGGINS LTD., )MADAM JUSTICE DILLON formerly known as JOHNSON & ) HIGGINS WILLIS FABER LTD., ) and MARINE INDUSTRIES LTD. ) ) THIRD PARTIES ) Counsel for the Defendant: J.F. Dixon Counsel for the Third Parties Peter W.T. Joyce, Sue Waterman, and Johnson & Higgins Ltd., J. Hunter and L. Munn Place of date of trial: Vancouver, B.C. December 12-18,1995 1The defendant, West Bay Boat Builders and Shipyards Ltd., has claimed against the third parties, Peter Joyce, Sue Waterman and Johnson & Higgins Ltd., for damages and indemnity based upon negligence, breach of contract and breach of fiduciary duty for failure to place insurance which would have protected the defendant in the claim made by the plaintiff, George Percy. Both the plaintiff's claim and the defendant's third party claim against Marine Industries Co. has been settled. This third party action was severed from the plaintiff's action and the third party proceedings against Marine Industries Co.. The present claim is for amounts payable under the settlement and legal costs including expert fees related to the defence of the Percy claim and pursuit of the third party claim. 2 The defendant company, "West Bay", was in the business of building new pleasure yachts and repairing commercial boats. The pleasure boats built from 1988 - 1991 were 50 to 65 foot luxury yachts valued between $450,000 and $700,000. As this part of West Bay's business increased and as sales were made to the United States, West Bay became increasingly aware of the possibility of products liability claims. 3 Since at least 1986, West Bay's longstanding insurers recommended that West Bay obtain products liability insurance even though it was expensive and hard to place because of the high risks involved. In February 1987, West Bay's insurers found and recommended products liability coverage for bodily injury and property damage arising from operations as a ship builder with a 365 day discovery and reporting period for completed operations at a premium price of $11,625. The insurer said that this would provide vessels with full 12 months completed operations coverage from the completion date of construction. The defendant declined to take it. 4 Sue Waterman, an agent with Johnson & Higgins Ltd., approached Aleida Vermuelen, controller and director of West Bay in charge of placing insurance, in January 1988 to introduce herself as an insurance broker. A meeting was arranged to discuss the insurance needs of the business and the possibility of changing insurers. A. Vermuelen said that the purpose of the meeting was to discuss present insurance coverage and what additional coverage was needed based on the expansion of the pleasure craft part of the business, particularly to the United States. This expansion had made it more feasible financially to consider additional products liability coverage. In preparation for the meeting, A. Vermuelen brought together all of the insurance files and documentation for the business including the letters of recommendation for insurance from previous insurers. 5 At the meeting on February 4,1988, the nature of the defendant's business and insurance needs was discussed. S. Waterman had no specific recollection of the initial meeting but did recall that expansion to the United States was discussed. This led her to be concerned for products liability coverage with respect to bodily harm. She mentioned the risk of bodily harm to purchasers to A. Vermuelen and pointed out the lack of such coverage in the existing policy. There was no discussion about lack of coverage for damage to the boats themselves following completion of construction. All of the defendant's insurance files including correspondence from the present insurer with current and past recommendations were provided to S. Waterman. She expressed confidence that she could do better for the defendant than the previous insurer but needed time to review the files which she took with her. 6 It was too late for S. Waterman to recommend and quote for the forthcoming year. However, Johnson & Higgins reported to West Bay and its parent company, Tilbury Management Ltd., in writing on February 11, 1988. In preparation for the report, S. Waterman had provided information within her group. As the account executive, it was her responsibility to assimilate the client's insurance needs given the type of business. Others such as Peter Joyce, the marine manager at Johnson & Higgins, would then secure information and quotations as necessary. He described West Bay as unique in the sense that he had not previously dealt with a manufacturer of pleasure boats. At the time, 80% of West Bay's sales were within Canada and 20% were to the United States. He reviewed the policies that were given to him by S. Waterman. The report summarized existing policies and provided recommendations for the 1988-1989 insurance year. It was noted that the comprehensive general liability coverage excluded products and completed operations. This exclusion was the basis for S. Waterman's conclusion that there was no product liability coverage. Johnson & Higgins recommended that products liability coverage be obtained and warned that there could be a wide divergence in coverage based on the wording of insurance forms. A move to brokerage forms was recommended with longer discovery periods, presumably for completed operations. 7 The defendant's existing insurers made its recommendations for insurance for the 1988-1989 year by letter of February 10,1988. The insurer had obtained 2 alternative quotations for products and completed operations coverage that included bodily injury and property damage with discovery and reporting periods for completed operations of 365 or 730 days with premiums of $11,000 and $15,938 respectively. The insurer said that this would provide the vessels with a discovery/reporting period commencing with the completion of the vessels. 8 A. Vermuelen met again with S. Waterman to discuss the Johnson & Higgins report. Rather astonishingly, S. Waterman said that the purpose of this meeting and the report was not to solicit West Bay's business but to create a good impression so 'hopefully they would not be sued by a wealthy U.S. businessman'. Although she could not recall the specifics of the conversation, S. Waterman said that she again expressed concern for the lack of products liability insurance which she considered unusual and pointed out the danger of liability for bodily harm. Waterman said that there was no discussion of insurance for the boats themselves. Vermuelen said that the lack of coverage for all products and completed operations really popped out and agreed that the bodily harm aspect was mentioned as the example. 9 A. Vermuelen kept notes of a conversation with S. Waterman about this time which Vermuelen said represented Waterman's advice about what to ask her broker prior to arranging renewal insurance for the forthcoming year. Although S. Waterman denied that she had such a conversation or gave such advice, I prefer the evidence of A. Vermuelen on this issue. S. Waterman advised that West Bay should seek "full comprehensive general liability coverage including products" for Canada and the United States. 10 Up to this point, A. Vermuelen thought that products liability coverage meant coverage both to the boat itself for completed operations up to a certain discovery period and for bodily injury. It did not impress upon her nor did S. Waterman ever say that products liability insurance did not cover damage to the product itself. When A. Vermuelen talked of 'full coverage', she meant both damage to the boat itself and bodily harm. She admitted that S. Waterman only referred to 'products liability ' and 'bodily harm'. S. Waterman said that she never contemplated coverage to the boat itself and would not have expected a request for such coverage because West Bay would not have an insurable interest and she knew of no manufacturer who did that. These statements should be viewed within the realization that S. Waterman had just started her sales career in insurance, was not knowledgable about marine insurance and considered all manufacturing clients to be unique. It should also be considered within the context of the information that was provided to Johnson & Higgins, the expertise available within Johnson & Higgins, and the report prepared by Johnson & Higgins. 11 Peter Joyce said that if the discovery period extended beyond delivery to the customer, then it would provide coverage to the product itself. He knew that discovery periods could be extended beyond the customary 3 to 6 months as found in the standard ship repairers policy. 12 In the February 1987 letter of proposed coverage from West Bay's then insurer, West Bay was advised to obtain coverage for "bodily injury and/or property damage arising out of your operations as a ... ship builder ... subject to a 365 day discovery and reporting period for completed operations." This document was in the insurance file that was given to S. Waterman for review. In cross examination, S. Waterman initially admitted that quite possibly she had not read it in detail because she focused on the policies themselves. She later said it was just plain silly to suggest that she should have reason to have read it. Yet, an undated note written by S. Waterman contained specific contents of the letter of proposed coverage. When Johnson & Higgins were seeking quotes for coverage in late 1988, it was this letter of quotation and recommendation that Johnson & Higgins used for comparison and needed improvement. I reject S. Waterman's evidence that she had not read the letter. Most certainly she had read it at least by December 1988 and knew that there was a quote for a 365 day discovery period for damage to property and bodily harm at a premium of $11,625. 13 It was reasonable for A. Vermuelen to assume that S. Waterman was referring to both coverage for damage to the boats themselves and for bodily harm when Waterman spoke of products liability coverage and full general comprehensive general liability coverage. S. Waterman said that the distinction was covered in the Johnson & Higgins report in the summary of comprehensive general liability insurance by notation of an exclusion for "all products and completed operations". She said that the exclusion should be self explanatory when read with Johnson & Higgins recommendation for broader wordings on broker forms. This broader wording would provide " fuller and more responsive coverage". There was, however, no discussion of broader wording or broker forms or discovery periods. P. Joyce said that the term 'full coverage' is a much misused term that is open to interpretation. S. Waterman said that she did not point out the distinction because A. Vermuelen did not ask. In all of these circumstances, it was unreasonable for S. Waterman to narrow the meaning to be given to the terms "products liability" and "full coverage" as used with West Bay when she should have known that it was open to interpretation and when it was apparent from all of the information and knowledge available to Johnson & Higgins that West Bay sought coverage to the boats themselves after they were delivered to the owners. 14 On the recommendation of the previous insurers from the letter of February 1988, West Bay bought extended insurance in 1988 for an annual premium of $15,938 under a combined ship repairers and boat builders policy (the '1988 policy'). The extension of coverage was attached to a schedule to the policy and said: Coverage hereunder shall however be extended to cover any loss or damage to vessels or caused by vessels constructed or repaired by Assured for which the Assured shall be legally liable, provided such loss or damage is discovered and reported in writing to Underwriters within 730 days of the delivery to owners or within 730 days after the work is completed by the Assured whichever may first occur. These words mirrored the warranties and/or special conditions on the brokers form that had earlier confirmed the insurance except that the broker's form contained a comma between "vessels" and "or". The policy itself specified coverage in paragraph 6 for "loss of or damage to the vessel...in the custody or control of the insured" with an exclusion following paragraph 8 for loss discovered after 90 days following delivery to the owners or 6 months from completion, whichever first occurred. It was this clause that was extended by the schedule. The schedule also said that the coverage attached from the time that the property became at risk of West Bay and until that interest ceased or the expiry of the contract, whichever first occurred. The insurer explained in its covering letter to the insurance documents that the discovery period was applicable from the completion of repairs or construction and the turnover of the vessel to the owner. It should be noted that the insurance policy itself was not sent until February 1989 but the broker's forms were available before then. 15 Whether the 1988 policy covered damage to the boats themselves is central to Johnson & Higgins case. P. Joyce had not seen such coverage prior to this policy but agreed that it did cover damage to vessels after they were delivered to the customer because of the discovery period of 730 days. He admitted that he was not aware of the existence of this policy prior to placing insurance for West Bay. The letters of recommendation leading up to placement of this insurance certainly suggest that this was the effect of what was purchased. The extension of coverage on the schedule to the policy prevails over the broker's form as to interpretation of the policy so that the comma is not effective to separate the words "damage to vessels" from "for which the Assured shall be legally liable". The extension covered vessels "constructed or repaired" and so cannot be limited to the ship repairer's part of the policy as suggested by Johnson & Higgins. Finally, the extension of the discovery period to 730 days after the boat is delivered to the owner indicates that the policy was intended to apply after West Bay ceased to have ownership but was still subject to potential liability. The plain meaning of the extension is that the policy covered loss or damage to vessels for which West Bay could be legally liable for a period up to 730 days after delivery of the completed boats to their owners. 16 On December 16, 1988, S. Waterman wrote to West Bay on behalf of Johnson & Higgins to advise that they had been successful in obtaining "full liability and ship repairers/boat builders coverage...at premiums lower than you presently pay." Peter Joyce, however, admitted that there was no such thing as full liability ship repairers and boat builders coverage at the time. The letter was written to convince West Bay to switch brokers. Johnson and Higgins said that they could considerably improve coverage by providing full comprehensive liability including worldwide products insurance without any limitation of discovery period. Coverage limits would increase and premiums would be reduced by $3,500. The comprehensive general liability coverage was for compensatory damages arising out of products with an extension for products and completed operations. For a total premium of $12,250, there would be "full comprehensive general liability and ship repair/boat builders insurance compared to the $15,750 presently paid for partial liability coverage with limited terms and notice period." There was a stated expectation that insurance would be "substantially cheaper". There was no description of exclusions to coverage. 17 S. Waterman and A. Vermuelen met in December to discuss the contents of this letter. They were joined later in the meeting by B. Vermuelen, president of West Bay and A. Vermuelen's husband. A. Vermuelen told S. Waterman that they had obtained products liability coverage with a 2 year discovery period. Notes made at the time indicate that the present premium of $15,938 was discussed. A. Vermuelen said that "full coverage" was discussed and that she thought that this included damage to the product itself. S. Waterman said that insurance to the boats themselves was not discussed because A. Vermuelen did not ask. The 1988 letter of recommendation from the previous insurer and the policy for 1988 were available for review by Johnson & Higgins. A. Vermuelen explained that the business was expanding and that they needed coverage for loss and damage to the boats. It appeared that Johnson & Higgins could provide better coverage at a better price. West Bay decided to change insurers and to follow the recommendations for insurance as set out by Johnson & Higgins in their December 1988 letter. 18 Johnson & Higgins did not review the coverage provided in 1988 prior to placing insurance in 1989. This was despite the information from West Bay that improved coverage had been obtained by purchase of full products liability coverage and despite the difference in premium from $6,750 in 1987 to $15,938 in 1988. P.Joyce acknowledged that it was important to review the particular policy and said that it provided an advantage when placing insurance. However, not all clients will allow the agent to review previous policies. 19 The placement of West Bay's insurance by Johnson & Higgins was confirmed by letter of February 1, 1989. They advised that they had finalized terms that contained a number of improvements over their December 1988 proposal. The comprehensive general liability policy was said to cover "third party legal liability for compensatory damage including defence costs arising out of your ... products." Extensions of coverage were for products and completed operations worldwide, occurrence property damage, broad form property damage, personal injury, broad form loss of use, broad definition of insured, and intentional injury for purposes of protecting persons or property, among other things. The letter went on to say: Again, this provides significant improvement over last years program that it: - provides full, worldwide products liability coverage for all vessels you have built and sold, or repaired, at any time. - Has limits of $2,000,000. versus last years $1,000,000. - Includes extensions such as your liability for damage caused by subcontractors working on your behalf, which were not previously insured. (italics mine) 20 The letter did not point out any exclusions to coverage, particularly exclusion of protection from damage to the boats themselves after completion of construction and delivery to the customer. There was no mention of discovery times. 21 It was apparent that "full coverage" meant coverage to the boats themselves to A. Vermuelen and that was what she thought that West Bay was buying. S. Waterman said that "full coverage" meant the standard coverage on the Canadian comprehensive general liability forms. It is not in contest that those forms do not include the coverage that A. Vermuelen thought that West Bay was buying. It is also not in contest that Johnson & Higgins did not disclose this exclusion nor did they discuss their meaning of "full coverage". S. Waterman's testimony that full coverage meant use of the standard form is inconsistent with Johnson & Higgins' report that the use of broker forms would provide "fuller and more responsive coverage" than the standard forms. It is also inconsistent with the evidence of P.Joyce who said that broker's forms were used to create customized policies. A. Vermuelen did not read the policy when it was sent to her. 22 S. Waterman left Johnson & Higgins in April 1989 and the West Bay file was taken over by Peter Joyce. The insurance was renewed from 1990 - 1992 without change in coverage. 23 West Bay received the claim of the plaintiff, George Percy, on October 29,1991. The claim arose from damage to the boat, Autumn Passage, from fire arising from the product itself 15 months after it was sold. It was reported to Johnson & Higgins who eventually denied coverage. Johnson & Higgins was told by the insurers in April 1992 that an exclusion in the coverage referred to 'property damage' to 'your product' and arising out of it. They were told that this excluded coverage of risk to the product arising from a defect in the product itself and it was pointed out that there had been considerable litigation in the United States about the scope of this exclusion. West Bay were informed of the lack of coverage in August 1992. 24 West Bay changed brokers in 1992. Coverage for risk as had ensued with 'Autumn Passage' was obtained through the use of broader wording on the comprehensive general liability policy with a 2 year discovery period. However, the business had changed by that time as West Bay Boatbuilders and Shipyard Ltd. was only repairing and not building boats. 25 The action by Percy was settled for $270,000. $200,000 has been paid. The balance is payable "if and when there is recovery" in this action minus legal fees and expenses. The $200,000 was paid as follows: $122,500 by the third party Marine Industries Co. and $77,500 by West Bay's parent company, Tilbury Management Ltd., both paid directly to the plaintiff. West Bay incurred legal expenses to defend against the Percy and third party action in the amount of $110,249.21 plus expert fees of $18,181.79. Of this amount, $13,239.28 was paid by West Bay and the balance was paid by Tilbury Management Ltd. There was an oral agreement between the 2 companies, made through B. Vermuelen on behalf of both companies and subsequently invoiced, that the amounts would be repaid to Tilbury Management Ltd. if this action was successful. Negligence 26 The duty of an agent when advising and procuring insurance depends upon the relationship. In this case, Johnson & Higgins sought out the defendants and proposed insurance coverage to them. They were offered the complete insurance records of West Bay and took them to peruse prior to making recommendations about the type of insurance that the defendants should purchase. Although A. Vermuelen knew the recommendations from previous insurers about products liability, she did not understand the specifics except that there was a gap in coverage with respect to products liability after the boats were handed over to the purchasers. West Bay relied upon the knowledge of Johnson & Higgins to provide it with "full coverage". P. Joyce acknowledged that West Bay was unique and required specific consideration as Johnson & Higgins had not placed this type of manufacturer's insurance before. It is apparent that West Bay relied upon Johnson & Higgins to ensure that it was protected for products liability after the boats left the shop and were placed with the purchasers. This was the protection that was sought. West Bay did not distinguish between insurance for bodily harm as opposed to the boats themselves, but included both within their concept of products liability and full protection. They sought coverage for risks they could incur in connection with their products after they left the shop, told Johnson & Higgins so, and provided any information about themselves that would assist in obtaining "full coverage". Johnson & Higgins said that they had significantly improved over coverage in 1988 by providing "full worldwide products liability coverage for all vessels you have built and sold or repaired at any time". 27 This relationship gives rise to the duty of care as described in Fine's Flowers Ltd. v. General Accident Assurance Co. (1977), 2 B.L.R. 257 (Ont.C.A.) Wilson, J.A. said at 269: In many instances, an insurance agent will be asked to obtain a specific type of coverage and his duty in those circumstances will be to use a reasonable degree of skill and care in doing so or, if he is unable to do so, "to inform the principal promptly in order to prevent him from suffering loss through relying upon the successful completion of the transaction by the agent": Ivamy, General Principles of Insurance Law (2nd ed. 1970), p. 464 But there are other cases, and in my view this is one of them, in which the client gives no such specific instructions but rather relies upon his agent to see that he is protected, and if the agent agrees to do business with him on those terms, then he cannot afterwards, when an uninsured loss arises, shrug off the responsibility he has assumed. If this requires him to inform himself about his client's business in order to assess the foreseeable risks and insure his client against them, then this he must do. It goes without saying that an agent who does not have the requisite skills to understand the nature of his client's business and assess the risks that should be insured against should not be offering this kind of service. As Haines J. said in Lahey v. Hartford Fire Ins. Co., [1968] 1 O.R. 727 at 729, [1968] I.L.R. 1-194, 67 D.L.R. (2d) 506, varied [1969] 2 O.R. 833, [1969] I.L.R. 1-261 (C.A.) " The solution lies in the intelligent insurance agent who inspects the risks when he insured them, knows what his insurer is providing, discovered the areas that may give rise to dispute and either arranges for the coverage or makes certain the purchaser is aware of the exclusion." I do not think this is too high a standard to impose upon an agent who knows that his client is relying upon him to see that he is protected against all foreseeable, insurable risks. 28 In this case, Johnson & Higgins did not consider the risk to West Bay arising from liability for damage to the product itself, did not adequately inspect the earlier proposals for and policies of insurance prior to making recommendations, did not adequately consider the nature of West Bay's business and assess risks accordingly, and did not make sure that West Bay was aware of the exclusion to coverage for property damage to the boats themselves. Most importantly, Johnson & Higgins did not advise of the gap in coverage arising from the exclusion. The critical facts about extended coverage were available to Johnson & Higgins through A. Vermuelen's information, previous letters of recommendation about coverage and the policy of 1988. They were aware that policies could differ based on brokers forms and knew that the needs of West Bay were special. They failed to give the highly personalized service expected of an insurance agent in these circumstances (see Fletcher v. Manitoba Public Insurance Co. (1990), 74 D.L.R. (4th) 636 at 654 (S.C.C.)). More specifically, Johnson & Higgins failed to review existing policies that were available to them to ascertain the coverage that had been obtained and failed to adequately review the previous recommendations to advise West Bay properly about products liability coverage. At the end of the day, they failed to advise West Bay of the exclusion to coverage for damage to the boats themselves for which West Bay could be liable. 29 A gap in insurance coverage prior to 1988 for liability for completed products was the concern of West Bay when it was advised by Johnson & Higgins. It was the duty of Johnson & Higgins either to arrange such coverage or to advise that it was not available and to point out the exclusion in their policy. They did none of these. As a result, West Bay did not look for insurance elsewhere and was exposed to loss when the vessel 'Autumn Passage' was damaged from fire. As in Fine Flowers v. General Accident Assurance Co., supra at 262-264, this failure renders Johnson & Higgins liable in negligence. It is insufficient to say that there was no gap because the insurance placed was typical for the industry when the special circumstances of West Bay were known to Johnson & Higgins and where West Bay had acquired specialized insurance before. 30 Johnson & Higgins argued further that it was necessary for the defendant to show that there was such insurance available at the time so to establish causation in negligence. The case of Markal Investments Ltd. v. Morley Shafron Agencies Ltd. (1990), 43 B.C.L.R. (2d) 348 (C.A.) was said to be applicable. However, in Markal, the arrangement between agent and insured differed because the agent had informed the purchaser that insurance was not available so that the plaintiff had to prove that it was in order to establish that it had sustained damage as a result of the agent's failure. In Fine's Flowers Ltd. v. General Assurance Co., supra, the onus on the plaintiff was discharged by showing that the plaintiff was denied an opportunity to insure for loss that did in fact occur due to creation of a gap in insurance from the agent's negligence. This case is akin to Fine's Flowers Ltd. v. General Accident Assurance Co., supra, as the failure of Johnson & Higgins meant that West Bay did not seek out the insurance from others and suffered a loss. 31 If it is found that the plaintiff must prove that the desired insurance was available (Markal Investments Ltd. v. Morley Shafron Agencies Ltd., supra. at 354 and 359,) then I find that there is sufficient evidence before me to conclude that the onus has been discharged. While there was no specific evidence before me that such coverage was available in 1989-1990, there is sufficient evidence of availability both before and after 1989-1990 to lead me to conclude that West Bay has proven availability on the balance of probabilities. West Bay could probably have obtained insurance to cover liability for damage to the boats themselves after they had been turned over to the purchasers within the time frame of damage to the Autumn Passage. This conclusion is based upon: the letters of recommendation from previous insurers for insurance in 1986,1987 and 1988, the 1988 policy, the statement by Peter Joyce, and subsequent coverage obtained in 1992. 32 Johnson & Higgins stated that, in any event, West Bay did not suffer loss in settling the Percy claim and that the costs to West Bay in defending the action did not exceed $13,000. The loss to West Bay was lessened by recovery of $122,500 from the third party, Marine Industries Co., and so is avoided loss to West Bay (see McGregor on Damages, 15th ed.,at 280; Ataya v. Mutual of Omaha Insurance Co. (1988), 34 C.C.L.I. 307 at 319 (B.C.S.C.)). This amount should not be included in damages. 33 The balance of the payment to Percy and legal costs to defend this action were paid by the parent company but West Bay is indebted for the amount. It is not contested that the costs to defend would have been paid if the insurance had provided coverage. But, Johnson & Higgins maintain that since the parent paid the costs and are not a party to this action, the amounts should not be recovered as damages. This argument cannot stand. Damages should represent the compensation that would have been available if the insurance had been obtained. In this case, West Bay is obliged to repay to the parent company even though the relationship between the 2 companies is close. It is worthwhile to note that the insurance obtained from Johnson & Higgins named Tilbury Management Ltd. as an insured along with West Bay and that the policy said that loss was to be paid to the insured. This situation cannot now be used by Johnson & Higgins to avoid payment of damages. There is precedent in the law of equity for effect to be given to contracts of indemnity so that the amount indemnified be paid even though nothing has been paid by the person indemnified (Boyd v. Robinson (1891), 20 O.R.404 at 409 (C.A.); Mewburn v. Mackelcan (1892), 19 O.A.R. 729 at 743 (C.A.); McDonald v. Peuchen (1918), 41 D.L.R. 619 at 625 (Ont.C.A.); Schick v. Schick (1983), 29 Sask.R. 98 at 101 (Q.B.)). It may be unnecessary to apply these principles here as West Bay is indebted for the amounts. However, if there is doubt, I apply these principles to recovery here. 34 Damages are awarded as follows: (a) settlement funds paid to Percy $ 77,500.00 (b) balance payable to Percy $ 70,000.00 (c) certified costs payable to Percy $ 8,000.00 (d) legal costs for defence of this action $110.249.21 (e) expert reports prepared in relation to Percy claim $ 18,181.79 Total $283,931.00 Contract 35 West Bay also claims for breach of contract for failure to place insurance coverage for West Bay that was equal to or better than the insurance coverage that was in place in 1988-1989. As I have already found for the defendant in negligence, it is not really necessary for me to go on to the contractual basis for liability. 36 Some question has been expressed by Southin, J.A. in Markal Investments Ltd. v. Morley Shafron Agencies Ltd., supra. at 357- 358, as to whether an action will lie in contract by a person who has sought insurance coverage against the agent for failing to obtain it. While contractual liability was found in Fine's Flowers Ltd. v. General Accident Assurance Co., supra, the facts of that case have been distinguished because of the long relationship with expectations for coverage that had developed (see Fletcher v. Manitoba Public Insurance Co., supra at 657). Counsel for Johnson & Higgins said that the degree of mutuality of obligations necessary to found a relationship in contract was absent in this case. 37 Johnson & Higgins sought the business of West Bay and was able to secure it with the offer to obtain significantly improved coverage over the 1988-1989 insurance year by provision of "full worldwide products liability coverage for all vessels...built and sold, or repaired, at any time". On the basis of this, West Bay instructed Johnson & Higgins to obtain insurance and this was done. The coverage that was obtained was not significantly improved but left West Bay subject to loss for which it had been insured in 1988-1989. The failure to protect West Bay from legal liability arising from damage to the boats themselves after they were placed with the purchasers was a foreseeable loss. I have already decided that there was insurance available to cover that loss. Johnson & Higgins knew that the coverage required was not ordinary and it is unreasonable to conclude that the request for full coverage was met by provision of insurance against normal risks. Johnson & Higgins did not review the insurance that was placed in 1988-1989 and made no attempt to secure coverage as described. The breach in placing extraordinary coverage caused West Bay the loss of insurance coverage for the Autumn Passage fire. Damages for breach of contract are the same as above. Breach of Fiduciary Duty 38 While there is authority to find a remedy for breach of fiduciary duty in the circumstances here (Fine's Flowers, supra.), I do not think it desirable to proliferate the remedies when no real consequences flow and counsel have not stressed this cause of action. Conclusion 39 The defendant is entitled to damages in the amount of $283,931 and costs of this action on the scale of 3. "Dillon, J." Vancouver, B.C. March 29, 1996