2015 QCCA 1378, 2015 QCCA 1378

Srsa c. Capitale (La), Insurance 2015 QCCA 1378 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-025348-152, 500-09-025436-155 (500-22-217835-142) MINUTES OF THE HEARING DATE: August 27 th , 2015 THE HONOURABLE MARIE ST-PIERRE, J.A. No: 500-09-025348-152 PETITIONERS ATTORNEY LADISLAV SRSA KRYSTYNA SRSA Mtre CHARLES O’BRIEN ABSENT (Charles O’Brien) RESPONDENTS ATTORNEY LA CAPITALE INSURANCE LA CAPITALE ASSURANCES GÉNÉRALES INC. Mtre juliA DE rose ABSENT (Lapointe Rosenstein Marchand Melançon, s.e.n.c.r.

l) GENERAL ACCIDENT INSURANCE COMPANY OF CANADA, now AVIVA CANADA INC. Mtre isabelle gauthier-brancoli ABSENTE (Robinson Sheppard Shapiro sencrl)

LLOYD’S Mtre matthew angelus ABSENT (Stikeman Elliott s.e.n.c.r.l., s.r.

l) ROYAL and SUN ALLIANCE OF CANADA INSURANCE COMPANY Mtre STEPHANIE BEAUCHAMP ABSENT (Donati Maisonneuve) 9099-0383 QUÉBEC INC. faisant affaire sous le nom D’ASSURANCE ET SERVICE FINANCIER CAA QUÉBEC INC.

Mtre MÉLISSA TALBOT ABSENT ( Weidenbach, Leduc, Pichette) IMPLEADED PARTY ATTORNEY SYLVIE CORBEIL Mtre REGIS NIVOIX ABSENT (Doyon Izziz Nivoix) DESCRIPTION: Motion for authorization to appeal de bene esse from a judgment rendered on May 14, 2015 by the Honourable Justice Sylvain Coutlée from the Court of Quebec, district of Montreal. (Art. 26, 29 & 511 Code of civil procedure) No: 500-09-025436-155 PETITIONERS ATTORNEY LADISLAV SRSA KRYSTYNA SRSA Mtre CHARLES O’BRIEN ABSENT (Charles O’Brien) RESPONDENTS ATTORNEY LA CAPITALE INSURANCE LA CAPITALE ASSURANCES GÉNÉRALES INC.

Mtre juliA DE rose ABSENT (Lapointe Rosenstein Marchand Melançon, s.e.n.c.r.

l) GENERAL ACCIDENT INSURANCE COMPANY OF CANADA, now AVIVA CANADA INC. Mtre isabelle gauthier-brancoli ABSENTE (Robinson Sheppard Shapiro sencrl) LLOYD’S Mtre matthew angelus ABSENT (Stikeman Elliott s.e.n.c.r.l., s.r.

l) ROYAL and SUN ALLIANCE OF CANADA INSURANCE COMPANY Mtre STEPHANIE BEAUCHAMP ABSENT (Donati Maisonneuve) 9099-0383 QUÉBEC INC. faisant affaire sous le nom D’ASSURANCE ET SERVICE FINANCIER CAA QUÉBEC INC.

Mtre MÉLISSA TALBOT ABSENT ( Weidenbach, Leduc, Pichette) IMPLEADED PARTY ATTORNEY SYLVIE CORBEIL Mtre REGIS NIVOIX ABSENT (Doyon Izziz Nivoix) DESCRIPTION: Amended motion for authorization to appeal de bene esse from a judgment rendered on June 17, 2015 by the Honourable Justice Daniel Dortélus from the Court of Quebec, district of Montreal. (Art. 26, 29 & 511 Code of civil procedure) Clerk: Asma Berrak Courtroom: RC-18 HEARING Continuation of the hearing of August 26, 2015. The parties were excused from appearing in Court this morning.

BY THE JUDGE : Judgment-see page 5. Asma Berrak Clerk BY THE JUDGE JUDGMENT [ 1 ] Petitioners ask for leave to appeal from the two following interlocutory judgments rendered by the Court of Québec : ➢ A judgment rendered orally, on May 14, 2015, by Mr. Justice Sylvain Coutlée striking paragraphs 9, 10, 13 and 17 of their «Wellington motion»; ➢ A judgment rendered in writing, on June 17, 2015, by Mr.

Justice Daniel Dortelus striking paragraphs 9, 10, 13, 14, 15, 17 and 18 of their claim in warranty against the insurers ( 2015 QCCQ 5571 ). [ 2 ] Allegations 9, 10, 13 and 17 of the “Wellington motion” that were stroked read as follows (reproduced from petitioners motion for leave to appeal) : 9. Defendants had an Environmental Site Remediation Report prepared by D & G Enviro-Group inc. in December 2012 as appears from that Report, Exhibit D-6; 10.

On September 27, 2012 Defendants advised their then current insurance broker, Bentivengna and Labasi, and their insurer, La Capitale of the audit and cleanup, and the Insurer denied coverage, despite clear language in the then current policy which affords coverage for said contamination as appears from the correspondence, Exhibit D-7; 13.

Defendants claim from Defendants in Warranty the amount of $67,984.45 in compensation of their environmental audit and decontamination expenses, as indicated in the invoices attached herewith en liasse as Exhibit D-9, and an additional $2,000 being the estimated cost of reconstruction of a small room under their balcony which was removed during oil remediation works; 17.

The Defendants first learned of the oil contamination on their property in September 2012 and as such their claim is manifestly not prescribed; Whereas Petitioners’ claim in warranty reads as follows (reproduced from paragraph 18 of the judgment of Justice Dortelus): « B. DESCRIPTION OF THE CLAIMS IN DISPUTE 7. Defendants are sued for oil contamination purportedly emanating from their property, allegedly from an unknown underground storage tank which was undisclosed to them when they purchased the property on February 24, 1981; 8.

Defendants were insured by Defendants in Warranty during the policy periods set out in

section A herein; 9. Defendants had an Environmental Site Remediation Report prepared by D & G Enviro-Group inc. in December 2012 as appears from that Report attached herewith as Exhibit D-6. That Report is unable to identify when the oil contamination began; 10.

On September 27, 2012 Defendants advised their then current insurance broker, Bentivengna and Labasi, and their insurer, La Capitale of the audit and cleanup, and the Insurer denied coverage, despite clear language in the then current policy which affords coverage for said contamination as appears from that correspondence, produced herewith en liasse as Exhibit D-7; 11. Plaintiff filed the present proceedings, alleging that oil contamination on their property emanated from Defendants' property, which allegation is denied; 12.

Defendants again contacted their Insurer, La Capitale and Broker, Bentivengna and Labasi, to have La Capitale take up their defense in the present matter, as appears from that correspondence, produced herewith en liasse as Exhibit D-8; C. PUNITIVE AND EXEMPLARY DAMAGES SOUGHT AND CLAIM FOR PROFESSIONAL FEES AND DISBURSEMENTS INCLUDING ALL EXTRAJUDICIAL 13. Defendants claim from Defendants in Warranty the amount of $67,984.45 in compensation of their environmental audit and decontamination expenses, as indicated in the invoices attached herewith en liasse as Exhibit D-9, and an additional $2,000 being the

estimated cost of reconstruction of a small room under their balcony which was removed during oil remediation works; 14. They further claim legal fees, costs and expenses on a solicitor and client basis and including all extrajudicial fees and disbursements from the Insurer and Broker Defendants in Warranty, as those Insurers and Brokers should have compensated their loss as well as taken up the Defense to the present proceedings; 15. The Defendants first learned their property was contaminated with oil in September 2012 and as such their claim is manifestly not prescribed; 16. Defendants' fees are justified and should be paid by the Defendants in Warranty: (

a) Defendants in Warranty failed to act honestly and in the Insured's best interest when they denied coverage; (

b) Defendants in Warranty failed to act faithfully, prudently and diligently when they decided collectively not to inform Insureds of their reduction in coverage for LUST and other oil contamination, did not advise Insureds in writing of said reduction in coverage, despite a statutory duty to do so; (

c) Defendants in Warranty thereby breached their duty to act honestly, impartially, unanimously, diligently, faithfully, prudently and in the Insured's best and complete interest, and conducted a faulty investigation; (

d) But for Defendant La Capitale's wrongful actions these proceedings would be unnecessary, and as such extrajudicial fees and disbursements are due; 17. As a result of Defendant La Capitale's failure to act in good faith and for Defendants' benefit, and the La Capitale's breach of its duties, the Defendants had to retain the undersigned attorney and pay legal, judicial and extrajudicial fees and disbursements, which are claimed herein by the Defendants, the whole as more fully appears from the Notices of Suit dated October 15, 2013 and February 4, 2015 en liasse as Exhibit D-8; 18.

In breach of his duty to act honestly, prudently and in a manner consistent with the fiduciary duty owed by the insurer, Defendant in Warranty La Capitale without any reason whatsoever refused to compensate Defendants for their insurance loss; The Defense and Warranty Actions are well founded in fact and in law; D.

CONCLUSIONS For the abovementioned reasons, the Defendants are well founded to ask that the Defendants in Warranty be condemned to pay them the sum of $69,984.45; Defendants hereby formally reserve the right to claim an additional amount for judicial and extra-judicial costs and fees of any kind and nature incurred in the Defense of these proceedings; WHEREFORE, BY JUDGMENT TO BE RENDERED, DEFENDANTS PRAY THIS HONORABLE COURT TO: A. DENY Plaintiff s, action; B. GRANT Defendants' Defense and Warranty Actions; C.

CONDEMN the Insurers, jointly and severally, to pay Defendants the sum of $69,984.45 together with legal interest and the additional indemnity provided by

Article 1619 C.C.Q. to be calculated from September 27, 2012, with the accrued interest also bearing interest at the same rate plus the same additional indemnity, the whole as provided for in

Article 1620 C.C.Q.; D.

THE WHOLE with all legal costs, including the cost of Defendants's Expert, and all fees and disbursements of any kind, including extra-judicial fees and disbursements against the Insurer and Broker Defendants in Warranty. » […] [Emphasis omitted.] [ 3 ] In his judgment, Justice Dortelus describes the context : [9] Il est utile de reproduire ici le contexte factuel et procédural, qui est bien décrit dans la requête de la Capitale en ces termes : « 1) Elle est défenderesse en garantie en la présente cause, tel qu'il appert du dossier de la Cour; 2) En date du 11 décembre 2014, la demanderesse principale, Sylvie Corbeil, poursuivait les défendeurs principaux/demandeurs en garantie Ladislav et Krystyna Srsa en dommages-intérêts pour un montant de 42 998,07 $, alléguant que son terrain aurait été contamine par un ancien réservoir d'huile enfoui sous la propriété des défendeurs principaux, […]; 3) Le 3 mars 2015, les défendeurs principaux/demandeurs en garantie Ladislav et Krystyna Srsa ont introduit un recours en garantie contre la Requérante […]; 4) […]; 5) […];

6) Les conclusions de la Amended Defence and Actions in Warranty des demandeurs en garantie visent a obtenir la condamnation de l'ensemble des défenderesses en garantie, incluant la Requérante, a leur verser une somme de 69 984,45 $, représentant les dommages qu'ils auraient subis en raison de la prétendue fuite d'un ancien réservoir d'huile a chauffage enfoui sous la propriété de ceux-ci, […]; 7) […]; 8) […] la procédure intentée par les demandeurs en garantie n'est pas de la nature d'une action en garantie; 9) L'action en garantie des demandeurs en garantie constitue plutôt une réclamation distincte de ces derniers, laquelle n'est pas admise, mais expressément niée, soit une réclamation pour une indemnité en dommages directs a l'encontre des défenderesses en garantie pour (l'ensemble des frais prétendument occasionnes par les demandeurs en garantie pour procéder a une étude environnementale et a la décontamination de leur propre terrain; 10) Une telle réclamation ne peut être introduite de la manière suggérée par les défendeurs/demandeurs en garantie; 11) L'appel en garantie a pour objet de faire condamner une

partie défenderesse en garantie à indemniser la

partie demanderesse en garantie de la condamnation qui pourrait être prononcée contre elle par jugement final sur la demande principale; 12) La réclamation des demandeurs en garantie au montant de 69 984,45 $ n'est aucunement connexe à la demande principale de Mme Corbeil; 13) […]; […] [ 4 ] Justices Coutlée and Dortelus concluded that the petitioners could not pursue their own claim through a “Wellington motion” or a “warranty claim” and that the contested allegations, being therefore irrelevant, had to be stroked.

As counsels for the respondents acknowledged during oral representations, those judgments do not prevent petitioners from soliciting and obtaining permission to amend their proceedings (Wellington motion and warranty claim) to add relevant facts to those matters. [ 5 ] Justice Dortelus writes : [28] Vu le sort des requêtes en irrecevabilité, il y a lieu de disposer de la conclusion subsidiaire de la requête de la défenderesse en garantie, 9099-0383 Québec Inc., pour la radiation des paragraphes 13, 14, 15, 17 et 18 de la défense et appel en garantie, auxquelles elle a ajouté par voie d’amendement les paragraphes 9 et 10. [29] En effet, les paragraphes 9, 10,13, 14, 15, 17 et 18 de la défense et appel en garantie ne sont reliés qu’aux dommages couverts dans le montant de 69 984,45 $, qui ne sont pas visés dans la demande principale telle que mentionnée précédemment. [30] Le corollaire du principe, voulant qu’un demandeur en garantie ne puisse pas présenter à un défendeur en garantie une réclamation distincte , qui va au-delà du paiement d'une condamnation éventuelle dans l'action principale, s’applique aux paragraphes de la requête introductive d'instance en garantie visant la réclamation distincte qui n'est pas recevable .

Le Tribunal suit le raisonnement du juge Rolland dans la cause Services financiers Daimler Chrysler (DEBIS) Canada Inc . c. Legault cité précédemment, qu'il applique en l'espèce. [31] Pour ces motifs , les allégations des paragraphes 9, 10,13, 14, 15, 17 et 18 de la défense et appel en garantie doivent être radiées. [Emphasis added.] [ 6 ] The motions are governed by articles 29 and 511 C.C.P. [ 7 ] It is not necessary to decide the matter under

article 29 C.C.P. here.

Even if one were to assume, for the purpose of argument, that the judgments ordered something that could not be remedied (as they strike allegations and thus prevent the presentation of evidence), it remains that petitioners have failed to demonstrate that the “pursuit of justice” ("les fins de la justice") require that leave be granted in this matter (article 511 C.C.P.). [ 8 ] It is my view that neither justice Coutlée nor justice Dortelus erred in any manner that would allow the Court to intervene. [ 9 ] As Justice Gascon wrote, as he then was, in Saudi Arabian General Investment Authority v.

Dorais , 2013 QCCA 941 : [10] In deciding whether the pursuit of justice criteria set forth in

Article 511 C.C.P. is met, the motion judge exercises a discretionary power and enjoys large latitude. In this regard, the role of the motion judge is, amongst others, to filter to some extent the requests for leave to appeal. In that exercise, the motion judge must assess whether or not a petitioner has a reasonable chance of convincing the Court to reverse the trial judgment with respect to which leave is being sought. [ 10 ] The pursuit of justice does not require leave to be granted since an appeal would have no reasonable chance of success, in both instances, if leave was granted. THEREFORE, THE UNDERSIGNED: [ 11 ] DISMISSES the motions for leave to appeal; [ 12 ] With costs .

MARIE ST-PIERRE , J.A. Mtre Charles O’brien (Charles O’brien) For the Petitioners Mtre Julia De Rose (Lapointe Rosenstein Marchand Melançon, s.e.n.c.r.

l) Mtre Isabelle Gauthier- Brancoli (Robinson Sheppard Shapiro sencrl) Mtre Matthew Angelus (Stikeman Elliott s.e.n.c.r.l., s.r.

l) Mtre Stephanie Beauchamp (Donati Maisonneuve) Mtre Mélissa Talbot (Weidenbach, Leduc, Pichette) For the Respondents Mtre Regis Nivoix (Doyon Izziz Nivoix) For the Impleaded party Hearing on: August 26 th , 2015