Sentence Analysis:
- "Mrs. Haddo never prided herself on any special gift, but she was well aware of the fact that she could read character with (i) $\qquad$ instinct."
- The phrase "but she was well aware of the fact that she could read character..." indicates that Mrs. Haddo did possess a notable ability, even if she didn't boast about it.
- "Read character" means to accurately understand a person's true nature or personality.
- The blank describes the quality of this "instinct" - it must be a positive or highly effective quality, given her "awareness of the fact" that she could do it.

Analyzing the Options for Blank (i):
- A. adverse: Means unfavorable, harmful, or opposing. An adverse instinct would mean she was bad at reading character, which contradicts the sentence.
- B. paranormal: Refers to phenomena that are beyond the scope of normal scientific understanding. While it suggests a special ability, it focuses on the unexplained nature rather than the accuracy or effectiveness of the instinct, which is what the sentence emphasizes.
- C. imperfect: Means flawed or incomplete. An imperfect instinct would imply she was not very good at reading character, which contradicts the implied ability.
- D. unerring: Means always right or accurate; never mistaken. This perfectly fits the idea that she "could read character" effectively and consistently. It implies a highly reliable instinct.
- E. blemished: Means spoiled by a flaw, mark, or imperfection. This implies a negative quality, suggesting her instinct was faulty, which contradicts the sentence.

Conclusion:

The sentence implies Mrs. Haddo had a very effective and reliable ability to read character. "Unerring" (always accurate) best describes such an instinct.

The final answer is D.