Moume v Londonderry Shopping Centre Inc., 2011 ABQB 612

Court of Queen ’ s Bench of Alberta Citation: Moume v Londonderry Shopping Centre Inc., 2011 ABQB 612 Date: 20111003 Docket: 0903 03462 Registry: Edmonton Between: Saada Moume, Also Known As Sara Moume, and Sara Moume Carrying on Business As Artz Plus, and the Said Artz Plus Plaintiffs Defendants by Counterclaim - and - Londonderry Shopping Centre Inc. Defendant Plaintiff by Counterclaim - and - ING Insurance Company of Canada and Alberta Best Proteck Insurance Defendants/Third Parties _______________________________________________________ Memorandum of Decision of W.S. Schlosser , Master in Chambers _______________________________________________________

[ 1 ] On July 5 th , 2008 water leaked through the roof of the Londonderry Mall, damaging the premises of ARTZ PLUS. [ 2 ] ARTZ PLUS sought coverage from its own insurer, ING Insurance (now Intact Insurance). ING denied coverage, saying the loss was excluded. ARTZ PLUS then sued its insurer, the insurance agent and the Landlord. The Landlord counterclaimed, saying ( inter alia ) that the Plaintiff was in breach of its lease for not having the coverage it had promised. [ 3 ] The proceedings have created a kind of vicious circle. The Tenant says that its own insurer should pay for the loss.

The Tenant ’ s insurer says the loss is excluded. The Tenant ’ s insurer says that the Landlord or its insurer should pay because it was the Landlord ’ s roof that leaked. The Landlord says that the Tenant has to bear its own loss because it assumed the risk by promising to get coverage for the very damage it suffered. The Landlord says that the Tenant ’ s insurer should have to defend the action against it. Round and round it goes.

Each of these positions were articulately argued. [ 4 ] It is my view that it is appropriate to invoke Rule 7.1 and order a determination of the question or issue of coverage by the Tenant ’ s insurer. There is not enough information before me to determine the issue here and now. I do not have a complete version of the policy. The Landlord has provided a portion of it and the insurer has provided another portion of it.

There is not quite enough evidence to determine whether the source of the leak would trigger the exclusion. [ 5 ] New Rule 7.1, which replaces old Rules 220 and 221, provides a very useful way to break the deadlock. A determination of the coverage issue could dispose of the bulk of the issues in this lawsuit. The existence of coverage would obviate the need for the Tenant to sue the Landlord. The Landlord is apparently a named insured and there would be, consequently, no right of subrogation. It would end the claim against the agent.

It would also preclude a determination of the extent of the covenant to obtain insurance in the lease. It nicely satisfies some of the goals set out in Rule 1.2. [ 6 ] Accordingly: 1. The Plaintiff ’ s Application for

Summary Judgment is dismissed; 2. The Application of Londonderry Shopping Centre for

Summary Judgment is dismissed; 3. The Application for a Declaration that ING is obliged to defend Londonderry Shopping Centre is dismissed. 4. The Application by Londonderry Shopping Centre for a (then) Rule 220/221(now) Rule 7.1 issue to be determined is allowed; 5. The balance of the claim and counterclaim is stayed until the issue is determined; 6. If the parties cannot agree of the definition of the question or issue they may return pursuant to Rule 7.1(1)(

b) for direction. [ 7 ] The parties will bear their own costs.

Heard on the 21 st day of June, 2011. Dated at the City of Edmonton, Alberta this 3 rd day of October, 2011. W.S. Schlosser M.C. C.Q.B.A. Appearances: Jennifer Nowacka Weir Bowen LLP for the Plaintiffs/Defendants by Counterclaim Damian Shepherd Chatwin LLP for the Defendant/Plaintiff by Counterclaim Londonderry Shopping Centre Inc. Leslie C. Paetz Chomicki Baril Mah LLP for the Defendant/Third Party - Alberta Best Protek Insurance Gerald A. Smith Intact Insurance Legal Dept. for the Defendant/Third Party - ING Insurance Company of Canada