MARC GIROUARD, Plaintiff, - v. -, 2023 NBKB 38

Marc Girouard v. Frank Cowan Company Limited , 2023 NBKB 038 IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF MONCTON MC-630-2020 BETWEEN: MARC GIROUARD, Plaintiff, - and - FRANK COWAN COMPANY LIMITED, Defendant. DECISION BEFORE: Justice Jean-Paul Ouellette AT: Moncton, New Brunswick DATE OF HEARING: October 6, 2022 DATE OF DECISION: March 13, 2023 APPEARANCES: Marc Girouard , on his own behalf; Marc-Antoine Chiasson , on behalf of the defendant. [TRANSLATION] Ouellette, J.

INTRODUCTION [1] Marc Girouard, in his capacity as creditor, seeks a payout from Frank Cowan Company Limited (“insurer”), the insurer ofthe assets of Maison de la Butte Ltée (“insured”), which were destroyed following a loss. The assets were subject to a mortgage on thereal and personal property of the insured. [2] The parties agreed on the value of the real property in the course of this action and the remaining dispute has to do with thecurrent value of the personal property. Mr. Girouard, on motion, seeks

summary judgment for the value accepted by him based on theappraisal prepared by the insurer in the course of these proceedings pursuant to s. 107 of the Insurance Act. FACTUAL BACKGROUND [3] An insurance policy was issued on March 30, 2019, through March 30, 2020, for coverage in the event of a loss to the realand personal property of the insured. On November 6, 2019, the insured suffered a loss to the property wherein the property wasconsidered a total loss. On November 5, 2020, Mr.

Girouard filed his Notice of Action against the insurer. [4] On March 8, 2021, the current value of the building was determined to be $822,000 by an appraiser appointed under s. 107of the Insurance Act. [5] On April 21, 2020, a personal property appraisal was prepared at the request of the insured for submission to the umpire.During the hearing before the umpire to determine the value of the property, the umpire ruled that his decision excluded the value of thepersonal property.

For the record, the insurer had not provided its appraisal on the personal property to proceed with the current valueassessment for that property. [6] Mr. Girouard filed a motion for

summary judgment. On September 22, 2021, at the hearing of that motion, the insurer raisedthe fact that the parties had not complied with s. 107 of the Insurance Act and the hearing was adjourned with the intention that theinsurer would obtain its appraisal and so proceed. At the material time, Mr. Girouard had submitted an appraisal prepared at the requestof the insured in the amount of $178,386 plus H.S.T. in support of his claim. [7] At the hearing on January 19, 2022, following a motion brought by Mr.

Girouard, the Court ordered the insurer to appoint anappraiser to determine the current value of the related property as required by s. 107. [8] Following this Order, the insurer appointed an appraiser and the current value of the personal property was determined to be$117,418.80.

In his report, the appraiser expressed certain reservations about the property, stating that he would need further informationregarding the market value, resale value and life expectancy of the property, as well as other related factors, all of which would be in thepossession of the insured; in the insurer’s view, the current value of the property could, therefore, be subject to change.

Clearly, theappraiser did not approach the insured to obtain this information if he thought it necessary, nor did the insurer take any steps to add theinsured to this action with a view to reaching a settlement. [9] Concurrently with these proceedings, in another action against the insurer, the insured filed a Notice of Action without astatement of claim. At a case management conference held on April 7, 2021, after the insured had filed a Notice of Motion for

summaryjudgment, the trial judge ruled that the only way this action could proceed without a filed statement of claim was with the leave of theCourt or the consent of the insurer. Since then, no statement of claim has been filed and no further proceedings have been commenced bythe insured in this matter. [10] After receiving the insurer’s appraisal, which determined the current value of the personal property to be $117,418.80,notwithstanding the higher appraisal previously obtained from the insured, Mr. Girouard advised the insurer that he would accept theinsurer’s current value to bring the

summary judgment proceedings to a close and that he saw no need to incur additional costs to appointa mediator for obvious reasons. According to Mr. Girouard, the insurer had been playing games to unduly delay the outcome of thismatter since the motion for

summary judgment was filed. ISSUE [11] At the hearing of the motion, the insurer took the position that the Court could not proceed on the basis that the procedure setout in s. 107 had not been completed, suggesting that Mr. Girouard might, by his position, prejudice not only the insurer but also theinsured by accepting the insurer’s appraisal. [12] Given the position taken by the insurer, the insurer asked what rights and obligations the insured and Mr. Girouard have underthe insurance policy and whether Mr.

Girouard can take the position on behalf of the insured considering that the insured is not a party tothis action. [13] The insurer added that it was considering the issues raised in their appraisal through the addition of relevant reservations andthat it could have the current value of the property reduced at the hearing with an umpire. [14] Finally, can the Court grant

summary judgment in this case and, if so, what would be the consequences of that judgment forthe insured? ANALYSIS AND CONCLUSION [15] The insurer agrees that in this case Mr. Girouard is dependent on the course of dealings between the hypothecary debtor (i.e.,the insured) and the insurer. It goes without saying that the mortgage clause in the insurance contract in this case created a new contractbetween the insurer and Mr. Girouard. Finally, to hold otherwise would strike at the very raison d'être of the mortgage clause (seeNational Bank of Greece (Canada) v. Katsikonouris, (SCC), [1990] 2 SCR 1029).

[ 16 ] Accordingly, Mr. Girouard is justified in law in pursuing his own interests and rights under his contract with the insurer independently of the hypothecary debtor (i.e., the insured). As underwritten by the insurer, Mr. Girouard is in the same position as the insured and can proceed under the insurance policy for the value of his claim, and he is in that position until he has been paid. [ 17 ]

Section 107 of the Insurance Act provides: Condition re appraisal 107

(1) This

section applies to a contract containing a condition, statutory or otherwise, providing for an appraisal to determine specified matters in the event of a disagreement between the insured and the insurer. 107

(2) The insured and the insurer shall each appoint an appraiser, and the two appraisers so appointed shall appoint an umpire. 107

(3) The appraisers shall determine the matters in disagreement and, if they fail to agree, they shall submit their differences to the umpire, and the finding in writing of any two determines the matters. 107

(4) Each party to the appraisal shall pay the appraiser appointed by him and shall bear equally the expense of the appraisal and the umpire. 107

(5) Where, (

a) a party fails to appoint an appraiser within seven clear days after being served with written notice to do so, (

b) the appraisers fail to agree upon an umpire within fifteen days after their appointment, or (

c) an appraiser or umpire refuses to act or is incapable of acting or dies, a judge of The Court of Queen’s Bench of New Brunswick sitting in the judicial district in which the appraisal is to be made may appoint an appraiser or umpire, as the case may be, upon the application of the insured or of the insurer. Condition prévoyant une estimation 107

(1) Le présent

article s’applique à un contrat renfermant une condition légale ou autre qui prévoit une estimation pour régler certaines questions en cas de désaccord entre l’assuré et l’assureur. 107

(2) L’assuré et l’assureur doivent chacun nommer un estimateur, et les deux estimateurs ainsi désignés doivent nommer un arbitre. 107

(3) Les estimateurs doivent régler les points de désaccord et, s’ils ne peuvent s’entendre, soumettre leurs différends à l’arbitre; la décision écrite de deux d’entre eux règle ces points. 107

(4) Chaque

partie à l’estimation paye l’estimateur qu’elle a nommé et supporte, par parts égales, les frais de l’estimation et de l’arbitre. 107

(5) Lorsque

a) une

partie omet de nommer un estimateur dans un délai de sept jours francs après qu’elle a reçu signification d’un avis écrit à cet effet,

b) les estimateurs ne peuvent s’entendre sur le choix d’un arbitre dans les quinze jours qui suivent leur nomination, ou

c) un estimateur ou arbitre refuse d’agir, en est incapable ou décède, un juge de la Cour du Banc de la Reine du Nouveau-Brunswick siégeant dans la circonscription judiciaire où l’estimation doit se faire peut désigner un estimateur ou un arbitre, selon le cas, à la demande de l’assuré ou de l’assureur. [ 18 ] Under the Act, in s. 127 on Statutory Conditions, para. 11 reads as follows:

Appraisal 11 In the event of disagreement as to the value of the property insured, the property saved or the amount of the loss, those questions shall be determined by appraisal as provided under the Insurance Act before there can be any recovery under this contract whether the right to recover on the contract is disputed or not, and independently of all other questions. There shall be no right to an appraisal until a specific demand therefor is made in writing and until after proof of loss has been delivered. Évaluation 11

En cas de différend sur la valeur du bien assuré, du bien sauvé ou du montant du sinistre, ces questions doivent être tranchées par évaluation conformément à la

Loi sur les assurances avant tout recouvrement dans le cadre du présent contrat, que le droit de recouvrer prévu au contrat soit contesté ou non et indépendamment de toutes autres questions. Il ne peut y avoir de droit à une estimation avant qu’une demande spécifique à cette fin ait été faite par écrit et que la preuve du sinistre ait été présentée. [ 19 ] In this case, Mr. Girouard informed the insurer that he accepted the appraisal it had provided to him and upon receipt of payment he would discontinue his action and thus put an end to the litigation and release the insurer.

In addition, he did not want to incur any further costs in this matter. [ 20 ] The insurer refused and objected to the Court granting

summary judgment without it having had the opportunity, however bizarre it may seem, to challenge its own appraisal before an appraiser. In addition, it wondered about the consequences of Mr. Girouard’s judgment for its insured in this case. [ 21 ] First, the insured did not wish to take

part in these proceedings and did not file a statement of claim against the insurer despite the opportunity to do so. Should the insured decide to proceed, it will have to seek the Court’s leave by way of motion. Therefore, the insurer will be able to argue the prejudice of this decision, if any, in the event of a judgment in favour of Mr.

Girouard. [ 22 ] Finally, the Court is not persuaded of the merits of being able to challenge its own appraisal before an umpire. [ 23 ] The purpose of s. 107 is to settle a dispute between the parties on specified matters in the event of a disagreement between the insured and the insurer. Mr. Girouard is the insured because of his position as creditor under the insurance contract.

In this case, the insurer can create a disagreement with a party that it has seen fit not to add to this action, especially since, at the insurer’s request, the insured has declined to participate and has not filed a statement of claim in the parallel action. [ 24 ] There is no disagreement between the insurer and Mr. Girouard, and to require Mr. Girouard to agree to the appointment of an umpire to challenge the insurer’s own appraisal, which he does not dispute, is absurd. [ 25 ] Turning to the appraisal already submitted by the insured, which Mr.

Girouard had adopted in the context of the claim of greater value than that of the insurer, all monies paid to Mr. Girouard by the insurer under an eventual judgment, monies owing to him under the insurance policy, will necessarily have to be taken into consideration vis-à-vis its insured, which is Mr. Girouard’s debtor in any potential proceedings. The minimum amount estimated in the insurer’s appraisal, which is not disputed by Mr.

Girouard, is the minimum amount payable under the insurance contract. [ 26 ] The insurer’s concern appears to be nothing more than an attempt to defer or delay the settlement of this matter. The insured filed a Notice of Action and the insurer obtained a stay of proceedings in that matter, as discussed above. It is futile to object to a

summary judgment motion filed by a creditor on the basis that the creditor should have added the insured as a party under Rule 5.02 - Required Joinder of Necessary Parties, or to serve these proceedings on the insured, which has already been notified of them in any event. If this is not the case, the insurer should take steps to that end. It has never done so. [ 27 ] All the case law submitted by the insurer in this case is directed at challenging the assessment of two appraisals and none of it has any application, being distinguishable from the facts of this case. Mr. Girouard does not challenge the insurer’s appraisal. [ 28 ] Before considering the issue of

summary judgment, the Court considered all the issues raised by the insurer and either deemed them irrelevant to the issues in this case or disposed of them. [ 29 ] Finally, the motion for

summary judgment was brought pursuant to Rule 22.04 of the Rules of Court , which sets out a standard that allows the Court to grant judgment only if the defence is without merit. [ 30 ] The case law has established that a trial is not required if a

summary judgment can achieve a fair and just adjudication, provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result. [ 31 ] Common sense should dictate that the parties do their best on a motion for

summary judgment that must lead trump or risk losing. [ 32 ] The insurer objected primarily to the determination of the loss, which is to be resolved between the insurer and the insured through an umpire under s. 107 of the Insurance Act , and by challenging its own appraisal at that hearing. [ 33 ] Mr. Girouard submitted an appraisal greater than the value determined by the insurer’s appraiser and the insurer accepted that Mr. Girouard was entitled, as creditor, like the insured, to payment up to the policy limit or the limit of the amount owing by the insured after seeking to have their dispute determined by an umpire. Mr. Girouard accepts the insurer’s appraisal. What more is required?

[ 34 ] In this case, there is no defence on the basis that Mr. Girouard, having agreed to the insurer’s appraised value, refused to appoint an umpire. After considering the insurer’s arguments about the reservations in their own appraisal, the Court is of the view that they are without merit and full of nonsense. [ 35 ] In this case, the Court is satisfied that the evidence presented by Mr. Girouard proves he is owed the current value determined by the insurer’s appraisal to be $117,418.80, which Mr.

Girouard accepts as the final settlement of his claim against the insurer. [ 36 ] These findings of fact allow the Court to apply the previously discussed law relating to the insurance policy and rights entitling Mr. Girouard to claim the amount he accepts.

Moreover, a trial would serve no useful purpose in this case and the findings based on the evidence are a proportionate, more expeditious and less expensive means to achieve a just result. [ 37 ] The insurer will have the benefit of this judgment and the monies paid if the insured wishes to pursue its claim, which, according to the information on the record, it does not seem to want to do. [ 38 ] Considering the evidence on the record submitted by the parties, and in particular the insurer, there is no need to go to trial to determine the facts, and there are no genuine issues requiring a trial.

The evidence makes it possible for the Court to fairly and justly adjudicate the dispute and is an expeditious, affordable and proportionate procedure. [ 39 ] The insurer in this case has essentially attempted to persuade the Court that the procedure to be followed requiring the appointment of an umpire would change the facts and the Court’s decision. The Court finds this proposition to be without merit. [ 40 ] Accordingly, Mr.

Girouard will, for the foregoing reasons, be entitled to judgment in the amount of $117,418.80 less the $70,000 already paid, plus interest on the balance owing at the rate of 7% from the date of filing this action on November 5, 2020, to the date of this decision. [ 41 ] The Court also awards costs in the amount of $4,500 by way of fees and disbursements to be paid to Mr. Girouard by the insurer. DATED at Moncton, New Brunswick, on March 13, 2023. _____________________________________________ Jean-Paul Ouellette , Judge of the Court of King’s Bench of New Brunswick