Maison Victoria Homes GP. Ltd. v. Prominent Plumbing and Gas Ltd., 2021 BCPC 255

Citation: Maison Victoria Homes GP. Ltd. v. Prominent Plumbing and Gas Ltd. 2021 BCPC 255 Date: 20211026 File No: 190455 Registry: Victoria IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: RONALD MATTRICK, NANON de GASPE BEAUBIEN-MATTRICK, MAISON VICTORIA HOMES GP. LTD. CLAIMANTS AND: PROMINENT PLUMBING AND GAS LTD. DEFENDANT RULING ON APPLICATION OF THE HONOURABLE JUDGE L. MROZINSKI Counsel for the Claimants: D.Preston by way of MS Teams Counsel for the Defendant: M. Stuckenberg by way of MS Teams Place of Hearing: Victoria , B.C. Date of Hearing: October 8, 2021 Date of Judgment: October 26, 2021 I.

Introduction [ 1 ] This is an application for an order renewing an Amended Notice of Claim filed on November 26, 2019, but served on February 23, 2021, some three months past the expiry date for service. The Applicants maintain the failure to file in time is due to confusion around this Court’s COVID direction suspending mandatory time periods for commencing a small claims or civil proceeding. The Defendant, Prominent Plumbing and Gas Ltd. (“Prominent Plumbing”), opposes the application. Fundamentally, it maintains it will be

prejudiced if the Applicants’ claim is allowed to proceed. [2] At issue in this application is whether this court ought to renew the Amended Notice of Claim given the purpose of the SmallClaims Act and Rules, and the factors governing renewal applications generally. II. Facts [3] The originally filed (now amended) claim is one for damages totalling $35,000 for breach of contract arising out of the allegedfaulty workmanship of Prominent Plumbing, with whom the Applicants had contracted to install a sump pump system in their home (the“Home”).

The claim, at least, alleges that as a result of the Defendant’s failure to install the sump pump system properly, their Homeflooded, resulting in damage to their flooring, drywall, insulation, framing and other components. [4] The claim was filed on November 25, 2019, and amended on November 26, 2019 (the “Amended Claim”).

While the AmendedClaim is not in evidence, the applicant’s submissions indicate the claim, which is one for damages for breach of contract, was amendedto alleged negligence causing or contributing to the loss suffered by the Applicants. [5] Shortly after the flood event, the Applicants submitted a claim for cost of repairs under their insurance policy. Their insuranceadjustor, Mr. Kosolofski, advised Prominent Plumbing of the insurer’s intention to pursue a subrogated claim once it processed theApplicants’ insurance claim.

Correspondence regarding the claim, including discussions around a possible settlement, subsequentlypassed between the Applicants’ insurance adjustor, Mr. Kosolofski, and Prominent Plumbing’s adjustor. [6] In or around December 15, 2019, the Applicants served Prominent Plumbing’s adjustor with a copy of the Amended Notice ofClaim. They did not however serve the Amended Notice on Prominent itself. [7] In March, 2020, as a result of the COVID pandemic, this Court issued a directive suspending mandatory time periods establishedby the laws of British Columbia for commencing a civil proceeding or claim. Mr.

Kosolofski mistakenly assumed this applied to serviceof the Amended Notice of Claim. The Applicants ultimately served the Amended Notice of Claim on Prominent Plumbing in or aroundFebruary 23, 2021. By way of Reply, Prominent pled that the time for service of the Amended Notice of Claim had expired. Still, theApplicants maintain Prominent’s adjustor indicated an interest in settlement discussions. Those proceeded with no resolution.

Sometimeafter obtaining legal counsel in or around April 15, 2021, the Applicants filed this application for an order renewing the Amended Noticeof Claim. [8] The parties each agree that the factors a court should consider when deciding whether to renew a Notice of Claim are essentiallythose taken into consideration by the superior courts for the renewal of a Writ of Summons. The test, widely applied, is found inBearhead v. Moorhouse (1977) (BC SC), 3 B.C.L.R. 81 (S.C.), aff’d (1978) (BC CA), 5 B.C.L.R.380 (C.A.). The factors are: 1. Was the application (to renew) brought promptly 2.

Did the Defendant have notice of the claim from sources other than the writ 3. Has the Defendant suffered prejudice 4. Was the failure to serve the writ attributable to the actions of the Defendant; 5. Was the plaintiff or his solicitor at fault. [9] As the court in Bearhead also held, these factors are not exhaustive: additional factors would include a consideration of themerits of the claim. [10] In Boucher v.

Value Village Stores Inc., 2010 BCPC 112, Judge Wingham of this court confirmed that in an application to renewa Notice of Claim pursuant to Rule 16(3) of the Small Claims Rules, the criteria in Bearhead applies. At para 10 of Boucher, JudgeWingham adds that the court must also consider whether the pleadings disclose a cause of action. In other words, it is appropriate whenconsidering an application to renew in this court, to examine the merits of the claim. [11] The Bearhead factors were earlier applied by Judge Baird Ellan on an application to renew in Isaksson v. Najian, 2006 BCPC292.

At para. 12 in particular, Judge Baird Ellan confirms that in considering such an application, the court should look at the merits ofthe claim; that prejudice to the Defendant may be presumed by the passage of time; and, finally, that “the discretion to renew should beexercised judicially by a careful examination of the injustice to the plaintiff and prejudice to the Defendant.” [12] The Applicants maintain the balancing of the Bearhead factors favors their application to renew.

They rely additionally on thepurpose of the Small Claims Act and Rules which is to enable people who bring claims to this court to have those resolved on the meritsif at all possible. They submit that it would be unjust for this court to refuse to renew their claim, particularly given the absence of anyprejudice to the Defendant. [13] The Defendant does not seriously dispute that most of the factors listed in Bearhead above support the application for renewal. Itstrongly urges however that a renewal would work a prejudice as it is plain and obvious the claim cannot succeed.

This is so, theDefendant submits, because it is an unnamed insured on the Applicants’ own insurance policy. The Defendant relies on the reasoning inCommonwealth Construction Company Ltd., v. Imperial Oil Ltd. et al, (SCC), [1978] 1 S.C.R. 317, for the propositionthat the Applicants (in effect, Maison’s insurers) have no right of subrogation and simply cannot bring this claim against it. TheApplicants submit that Commonwealth is distinguishable on its facts and, in any event, given the rules governing the

interpretation ofinsurance policies, the insurance contract cannot be read as insuring the Defendant in this case. III. Factors Governing Renewal

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a) Was the Application brought in a timely manner? [ 14 ] The application, though set for hearing this October 8, 2021, was filed in this court on July 15, 2021. The date for service of the Amended Notice of Claim, filed on November 26, 2019, expired on November 25, 2020. As noted, it relates to flood damage occurring in or around December 12, 2017, caused by the alleged negligence of the Defendant. Once the flooding occurred, the Applicants submitted a claim under their insurance policy. On or around mid-December 2017, the Applicants’ adjustor, Mr.

Kosolofski, notified the Defendant it intended to pursue a subrogated claim once it processed the Applicants’ claim. Other letters followed, leading ultimately to settlement discussions between the Applicants’ adjustor and the adjustor for the Defendants. Hoping not to disrupt the discussions, Mr. Kosolofski decided not to serve the Amended Notice of Claim. A copy of the Amended Notice of Claim was ultimately sent to the Defendants’ adjustor in or around December 2019.

Then, due to the COVID pandemic, this Court released various directives suspending mandatory time periods for commencing a civil proceeding or claim in BC. Relying on these directions, Mr. Kosolofski mistakenly assumed the time period for service had also been temporarily suspended. Finally, in or around February 23, 2021, the Amended Notice of Claim was served on the Defendant.

Once the Defendant filed its Reply, the error became apparent, legal counsel was hired, and this application ultimately brought. [ 15 ] As the Defendant points out, the Amended Notice of Claim was served on it three months after the period for service expired, but more than three years after the date of loss. Still, this is not a case of a claim languishing dormant or otherwise for months or even years before service. As the Applicants have shown in this application, settlement discussions continued on and off for some time before COVID intervened.

That then did lead to a period of dormancy from on or about December 15, 2019 to February 2021, which the Applicants’ attribute to a misunderstanding of the directions of this court. [ 16 ] The Defendant does take issue with the time it took even after that for the Applicants’ to obtain counsel and to ultimately file this application. It notes, for example, that counsel was obtained some five months after the expiration of the service period. Still, that occurred within a month of the Applicants’ receipt of the Defendants’ Reply.

No one takes issue with the time it took to file the application after counsel was retained. [ 17 ] The question of timeliness is not a measure of when the Application was brought relative to the expiry date for service, but rather when it was brought once it was apparent it had to be brought.

As Judge Wingham puts it in Boucher , at para 12 “the relevant period of delay for the purpose of a renewal application ….runs from the date that the plaintiff learned that the Writ had not been served within time to the date of the renewal application.” Here, the Applicants’ were unaware of the need to bring the application until receipt of the Defendant’s Reply. They sought counsel within weeks and the application was then brought. I do not see how in these circumstances it can be said the application was not brought in a timely manner. I find it was. (

b) Did the Defendant have notice of the claim from other sources? [ 18 ] As the Defendant submits in its written submissions, while it may not have had notice of the Amended Notice of Claim, it did have notice of the claim. The Defendant nevertheless submits it more accurately had notice of a stale claim. Still, its adjustor had notice of both the claim and the Amended Notice of Claim. The Defendant’s adjustor continued with settlement discussions even after the parties knew the time for service of the Amended Notice of Claim had expired. In these circumstances, it is apparent there is some evidence of notice of the claim outside of the actual Amended Notice. (

c) Is the Defendant prejudiced by the passage of time? [ 19 ] In its’ written submissions, the Defendant writes simply that it “has suffered prejudice in that the expiration of the service period for the …. Amended Notice of Claim occurred.” In Boucher , at para 16 , it was held that “delay does not equate with prejudice.” Rather, what is relevant is whether the delay has impeded the ability of the Defendant to defend against the Claim. On the other hand, at para. 12 of Isaksson , Judge Baird Ellen, citing Mountain-West Resources Ltd., v.

Fitzgerald , 2005 BCCA 48 (B.C.C.A.) , notes that prejudice to the Defendant may be presumed from the passage of time. Here, I find the passage of time at issue is insufficient to invoke the presumption of prejudice. It is then simply a question of whether the delay in service at issue in this case has prejudiced the Defendant’s ability to meet the claim. Certainly, that is not argued by the Defendant.

I find in the absence of any evidence indicating such prejudice, I must conclude the delay in this case has not prejudiced the Defendant. [ 20 ] The Defendant does, finally, argue it would be prejudiced by a renewal as the Amended Notice of Claim cannot succeed. I prefer to deal with that point when I address the merits of the Claim after considering the remainder of the Bearhead factors. (

d) Is the Defendant responsible for the failure to serve? [ 21 ] This factor is easily addressed. The parties agree the fault in failing to serve within the time provided under the Small Claims Act and Rules lies entirely with the Applicants. (

e) Was the Applicant at fault? [ 22 ] As I have just noted, the fault herein lies entirely with the Applicants, or, more particularly their adjustor, Mr. Koslofski. As in Boucher , here Mr. Kosolofski has filed materials explaining the reason for the delay. That evidence went unchallenged in this application and I accept therefore that Mr. Kosolofski failed to serve the Amended Notice of Claim on time based on a misunderstanding of this court’s COVID directive regarding times for the bringing of a claim. The fault of the delay lies with Mr.

Kosolofsky to be sure, but the error was unintentional. [ 23 ] If I were deciding this application based solely on the Bearhead factors I would grant it easily. The delay in this instance is not so long as to prejudice the Defendant. The Defendant did have some previous notice of the claim itself in any event. The failure to meet the time for service was in error. Given these facts, in my view the interests of justice support the renewal of the Amended Notice of Claim. However, as in all of these cases, the court must consider the merits of the claim.

Here, it is submitted that the claim is absolutely without merit such that the interests of justice do not support its renewal.

IV. The Merits of the Amended Notice of Claim [ 24 ] At issue in this small claims action is the quality of Defendant’s workmanship in the construction of the Home. The Applicants are said to have collectively constructed the Home and in doing so retained the services of the Defendant, a company specializing in plumbing work. The Applicants allege they retained the Defendant to install a sump pump system near an exterior door of the Home.

The flooding event in December, 2017 is alleged to have been caused solely by the negligence of the Defendant in the faulty installation of the sump pump system. [ 25 ] At the material time the Applicants, or at least Maison Victoria Homes Gp. Ltd., was a named insured on a Builders’ Risk policy (the “Policy”). Apart from naming Maison, and only Maison as a named insured, the Policy (the part provided to this court at least) states that it covers work done on the Home in the course of construction, installation, reconstruction or repair.

Having performed such work on the Home, the Defendant submits it is an unnamed insured whose work is by definition indemnified in the Policy.

In support, the Defendant relies on Commonwealth, first for its treatment of Builders’ Risk policies generally, and secondly, for the proposition that the Applicants’ claim cannot succeed as a subrogated claim against it. [ 26 ] At issue in Commonwealth was whether Commonwealth Construction Ltd., a subcontractor hired to install piping at a large industrial construction site, was an insured whose insurable interest extended to the entire works on the project such that the plaintiff had no right of subrogation.

The policy at issue in Commonwealth is a Builders’ risk policy, just as in this case, but issued in the name of “Imperial Oil, its subsidiary companies, any subsidiaries thereof and any of their contractors or subcontractors.” Imperial Oil had contracted the construction of a fertilizer plant to a second company (Wellman-Lord) who then subcontracted pipe laying work to Commonwealth Construction Ltd. In the course of installing piping, a fire occurred which was admittedly the responsibility of Commonwealth Construction Ltd.

Imperial Oil made an insurance claim for the cost of repairing the damage caused by the fire, which claim was paid by its insurer. Its insurer then brought a subrogated claim on behalf of Imperial Oil against Commonwealth Construction Ltd.

The company argued, ultimately successfully, that there was no right of subrogation as it too was fully insured under Imperial Oil’s Builders’ risk policy. [ 27 ] There is no question in Commonwealth , just as there is no question here, that “subrogation cannot be obtained against the insured himself.” But the question remains whether the Defendant herein, as in Commonwealth , is an insured under the policy to the extent necessary to invoke this legal principle. [ 28 ] At page 321 of Commonwealth , the Court begins its analysis by summarizing the reasoning of the Court of Appeal below.

There the Court held, among other things, that “a policy issued to many persons will amount to several insurance if the persons insured have different interests in the subject-matter of the insurance.” That was, the Court found, the situation with Commonwealth . At this juncture it bears reiterating that list of named insureds on the Builders’ risk policy at issue in Commonwealth is long and clearly included Commonwealth Construction Ltd.

As I say, the issue in Commonwealth was not whether the company as a subcontractor was indemnified by the policy at issue with respect to its own work – the court clearly held it was.

The issue, described at page 326, was whether “Commonwealth was an insured whose insurable interests extended to the entire works prior to the loss so that… the insurers had no right of subrogation.” That issue was resolved in Commonwealth by determining that in that case – a case of several insurance – where the different interests are pervasive and relate to the entire property, the several insureds must be regarded as one and no subrogation is possible. [ 29 ] I find I agree with counsel for the Applicants that this fact alone distinguishes Commonwealth from this case.

The Policy in this case is not one issued to many persons; the Defendant here does not fall into either of the categories discussed by the Court at page 321 of Commonwealth . It is not a question of the Defendant in this case falling within the definition of an insured and then determining, as was the case in Commonwealth , whether the company had an insurable interest in all of the works, including its own, so as to foreclose the option of subrogation.

Here, the Defendant Prominent is neither a named insured, nor does it fall within any definition of an insured. [ 30 ] In my view, Commonwealth does not stand for the proposition that a party who in no way qualifies as an insured, can nonetheless be found to be an insured if the work it performs falls within the definition of work indemnified under the insurance policy of another insured on the same construction site. That seems to be the argument of the Defendant in this application and I find I agree with the Applicant that it is not supported by Commonwealth , or by the principles of contract

interpretation generally. [ 31 ] For these same reasons, I find the Defendant’s submission is not helped by the reasons in Surespan Structures v. Lloyd’s Underwriters , 2018 BCSC 1058 . There, as in Commonwealth , the Petitioner, Surespan, fell within the definition of an insured under the policy: see, para 64. Here, there is no such argument. The Defendants in no way fall within the definition of an insured under the Policy.

For these reasons, I would not find it is plain and obvious that there is no merit to the Amended Claim. [ 32 ] Given my findings above in respect of the Bearhead factors, and finding there is on its face at least merit to the claim, I order the Amended Notice of Claim be renewed for two weeks from the date of this order to enable the Applicants to serve the Defendant. [ 33 ] As the conclusion of its submissions, the Defendant requests in the event the renewal application is granted that this court order the Applicants provide the names and contact information of their subcontractors that performed work on the Home.

Although the Applicants made no submissions in this regard, I am prepared to make such an order. I would order the names and addresses be provided within 14 days of the date of this order. _____________________________ The Honourable Judge L. Mrozinski Provincial Court of British Columbia