Jordan Cross - v. -, 2013 SKPC 142

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2013 SKPC 142 Date: August 16, 2013 File: 12-0503 Location: La Ronge _____________________________________________________________________________ Between: Jordan Cross - and - Claims Pro Inc. and Clarence Mechor Wayne Buckle For the Plaintiff Unrepresented For the Defendants _____________________________________________________________________________ JUDGMENT R. J.

LANE , J _____________________________________________________________________________ [ 1 ] The Plaintiff is a contractor in La Ronge, Saskatchewan, and claims that he performed and supplied $7,900.00 worth of work and materials on a cabin belonging to the Defendant, Clarence Mechor. The Defendant Clarence Mechor is the owner of that cabin on Lac La Ronge. The Defendant, Mr. Mechor, failed to appear and while I could grant a default judgment against him in favour of Mr.

Cross, I shall render a judgment based on the evidence I heard at trial. [ 2 ] The second Defendant, Claims Pro Inc., is an insurance adjusting firm out of Prince Albert, Saskatchewan. This Defendant

[ 2 ] The second Defendant, Claims Pro Inc., is an insurance adjusting firm out of Prince Albert, Saskatchewan. This Defendant appeared through its employee, Doug Odnokon, who is an actual insurance adjuster working for this Defendant. The main issue in this case is whether the Defendant, Claims Pro Inc., had actual or apparent authority to bind the Defendant, Mr. Mechor, in a contract with the Plaintiff, Mr. Cross, and did the Plaintiff, Mr. Cross, act with reasonable reliance on that authority.

If the answer to this is yes, the next question would be, is the Defendant, Claims Pro, also liable to pay the bill of Mr. Cross, for the work he performed. THE EVIDENCE -TRIAL CONDUCTED MAY 27/13 AT LA RONGE, SASKATCHEWAN [ 3 ] Mr. Cross was contacted by the Defendant, Mr. Mechor, to provide a price quote for an insurance claim Mr. Mechor had as a result of damage sustained in a storm to his cabin which is located on Abrahms Bay on Lac La Ronge, Saskatchewan. Mr. Cross provided a quote of $7,900.00 and sent it by email to Mr. Mechor. Mr.

Mechor subsequently forwarded this quote to Claims Pro and thereafter, the Plaintiff, Mr. Cross, virtually had no contact again with Mr. Mechor. [ 4 ] Exhibit P1 includes, among other things, what appears to be Mr. Mechor pleading with Claims Pro that they get this repair work moving as soon as possible. It included a quote provided by Mr. Cross which Mr. Mechor forwarded to Claims Pro. It also includes an email from the adjuster, Doug Odnokon, of Claims Pro, to Mavis Cross asking for Mr. Cross to provide a detailed breakdown “So I can get it approved and we can move forward with repair”.

The use of this wording would, in my view, provide Mr. Cross with assurance that Claims Pro had the ostensible authority to enter a contract with Mr. Cross on behalf of the owner, Mr. Mechor, and Mr. Odnokon would also be acting in the best interests of the insurance company. Mr. Cross dealt with Claims Pro after that, particularly when asked by Claims Pro for clarification on the quote, which Mr. Cross had provided. [ 5 ] Exhibit P2 in the trial is a document entitled “Quote for Clarence Mechor”. This was prepared by Mr.

Cross at the behest of Claims Pro in order to have the work and materials provided by the Plaintiff proceed as soon as possible. I don’t feel that the use of “Quote for Clarence Mechor” is determinative of anything, other than identifying which job Mr. Cross was providing a quote for. In other words, I don ’ t think this wording alters Mr. Cross ’ reasonable perception that Claims Pro was acting as an agent for Mr. Mechor. [ 6 ] In the meanwhile, Doug Odnokon of Claims Pro unilaterally obtained a quote from a Restoration Company called First General Services (P.A.) Ltd.

This is a company/contractor who is known as a “Preferred Contractor” for jobs like this, at least insofar as Claims Pro was concerned. Mr. Odnokon maintained that he did not hire Mr. Cross. However, Mr. Odnokon obtained a quote from First General without Mr. Mechor’s knowledge or approval. Mr. Odnokon testified that the quote of First General was, as set out in Exhibit D5, almost $1,900.00 more than the quote of Mr. Cross, so that Mr. Odnokon did not even provide the quote from First General Services (P.A.) Ltd. to Mr. Mechor. Mr. Odnokon testified that Mr.

Mechor could have hired First General Services (P.A.) Ltd. if he wanted, but the insurance company would only pay the amount of the lowest quote, which of course was that of Mr. Cross. If indeed, it was Mr. Mechor who was hiring the contractor and not Claims Pro, one would think that Claims Pro would have put both quotes to Mr. Mechor, allow him to decide, and take direction from him as to who they should hire on his behalf. [ 7 ] The next that Mr. Cross heard from Mr. Odnokon was that his quote had been approved and that he should proceed with the work as soon as possible. Mr.

Cross had to hire other people to help him as the fall weather was setting in and he was able to get the job finished within five days. In this instance, it was Claims Pro that told Mr. Cross to do the job. When the job was finished, Mr. Cross sent the invoice, known as P3 in this trial, not to the Defendant, Mr. Mechor, but to Claims Pro. When Mr. Cross never got paid he started calling Mr. Odnokon, not Mr. Mechor, and Mr. Odnokon eventually advised Mr. Cross that Mr. Odnokon had a cheque for the full amount payable to Mr. Cross but that the cheque was not releasable until Mr.

Mechor signed a release form. [ 8 ] In fairness to Mr. Odnokon it looks like he made numerous efforts to persuade the insurance company to authorize the release of the cheque to Mr. Cross. He even had Mr. Cross take photographs of the work done, so that he, Mr. Odnokon, could provide them to the Preferred Contractor, First General Services (P.A.) Ltd., for their opinion on the adequacy of Mr. Cross’ work. Once the ice on Lac La Ronge was solid enough, Mr. Cross travelled across the ice to the cabin belonging to Mr.

Mechor and took photos of his work and sent them to the adjuster who had, as previously indicated, First General Services (P.A.) Ltd. review them. It is obvious from all the evidence that the work and materials provided by Mr. Cross were adequate. Exhibit D3 sets out the opinion of First General Services (P.A.) Ltd. and it is clear that they viewed the quality of work and materials supplied by Mr. Cross as acceptable. Exhibit D4 also provides some insight as to how these matters are handled as between the insurance adjuster and the insurance company. In Exhibit D4, Mr.

Odnokon foresees legal action against Claims Pro and possibly against the insurance company, Red River Mutual Insurance Company, and states “ If First General Services (P.A.) Ltd. had gone up and did the work as per their estimate, I do not think that their payment would be sent to the insured, if the insured was being this way regarding quality ” . He also laments the possible loss of “ One of the few contractors that will work for insurance claims in the La Ronge area ” .

[ 9 ] Mr. Odnokon testified on behalf of the Defendant, Claims Pro. He indicated that he has never, as an insurance adjuster, hired a contractor on behalf of an insured. He indicated he also got a quote from the Preferred Contractor, but the Preferred Contractor, First General Services (P.A.) Ltd., quote was high. He testified that the owner picks the contractor who does the work, but he acknowledged that Mr. Mechor never told him to get a quote from First General Services (P.A.) Ltd. He testified that he did that on his own. He testified that Mr.

Mechor never saw the quote from First General Services (P.A.) Ltd. and that he recommended to the insurance company that they accept the quote of Mr. Cross. He testified the insurance company told him that he could not release the money to Mr. Cross until Mr. Mechor had signed the insurance release form. He testified that First General Services (P.A.) Ltd. reviewed the photographs that Mr. Cross had taken and said that the Plaintiff had done the job properly and that they would not likely have done anything differently. [ 10 ] He testified that the insurance company cheque payable to Mr.

Cross in the invoice amount was sent back to the insurance company upon their request. He testified that had he released it to Mr. Cross without the authority of the insurance company “I would never be hired by that insurance company again, so I returned the cheque”. [ 11 ] The Defendant, Claims Pro, was served with a copy of the Statement of Claim in this matter on April 15, 2013. It would appear that Mr. Mechor signed the release form on April 16, 2013, that resulted in him being paid $22,837.83, as per Exhibit P5. That payment was sent by Mr. Odnokon on behalf of the insurance company, to Mr.

Mechor, and that figure included the $7,900.00 that Mr. Cross was claiming. [ 12 ] So, as was stated in the introduction, the issue here seems to me to be whether Claims Pro had actual or ostensible authority, reasonably relied upon by Mr. Cross, that Claims Pro was acting as agent for the owner. In other words did Claims Pro have actual or ostensible authority to bind Mr. Mechor. [ 13 ] In the circumstances I find Claims Pro did have ostensible authority to bind Mr. Mechor and that Mr.

Cross placed reasonable reliance on what he perceived to be Claims Pro’s ostensible authority to act as agent for the owner, and at the same time, Claims Pro was acting in the best interests of the insurance company. [ 14 ] While I have reviewed the evidence fairly extensively, I repeat the factors that led me to this conclusion: 1) Mr. Cross had no dealings with Mr. Mechor after Mr. Mechor requested the first quote. 2) Claims Pro, without the knowledge or approval of Mr. Mechor, got a second quote from First General Services (P.A.) Ltd., and without the knowledge of Mr.

Mechor, declined to recommend that quote and instead recommended Mr. Cross’ quote. 3) There is no evidence that Claims Pro communicated directly with Mr. Mechor until they sent the cheque to Mr. Mechor in their letter of May 1, 2013, as set out in Exhibit D5. In other words, Claims Pro did not seek instructions from Mr. Mechor on the issue of payment. 4) Mr. Odnokon, on behalf of Claims Pro, was the person who instructed Mr. Cross to go and do the work. Mr. Cross sent the invoice to Claims Pro, and more particularly Mr. Odnokon, not to Mr.

Mechor. [ 15 ] All of these factors establish on a balance of probabilities, that Claims Pro had ostensible authority to bind Mr. Mechor and that Mr. Cross placed reasonable reliance on that when he followed the instructions/approval of Claims Pro to complete the work on Mr. Mechor’s cabin. I find that the Defendant Clarence Mechor is liable to the Plaintiff Jordan Cross for the full amount of the claim. [ 16 ] The question now is whether Mr. Cross can have judgment against Claims Pro. Law and Application:

(

a) Legislation and Legal Principles: [ 17 ] The Saskatchewan Insurance Act at

section 184 has a presumption against a finding of agency: 184 No officer, agent or employee of an insurer and no person soliciting insurance, whether or not he is an agent of the insurer shall, to the prejudice of the insured, be deemed to be the agent of the insured in respect of any question arising out of a contract. [1] [ 18 ] This presumption, however, may be rebutted using the law of agency, if a relationship of agency is deemed to exist. [ 19 ] “Actual authority” is a legal relationship that is created between a principal and agent by consent, and to which only the principal and agent are parties. [2] Actual authority may be express or implied: Express authority is given by express words or instructions.

Implied authority is actual authority to perform all subordinate acts which are necessary or ordinarily incidental to the exercise of express authority. [3] [ 20 ] If actual authority is deemed to exist, whether it is express or implied, the law of agency can also overcome the barrier created by privity of contract: If the “promisee” is actually contracting as agent on behalf of the third party, the doctrine of privity simply has no application. The promisor and third party are the contracting parties.

They are in a direct contractual relationship. [4] [ 21 ] As such, it appears that the law in Saskatchewan creates a statutory presumption against agency in insurance relationships when the insurer enters into a contract on behalf of the insured and the contract will “prejudice the accused”. Here the insured’s interests may be harmed by a finding that the insurer is an agent and not a party to the contract as the insured would be held solely liable for the default judgment.

However, the presumption is rebuttable when the insurer is clearly acting as an agent for the insured and case law provides unwavering support for such a finding in the present circumstances. Furthermore, in these situations, there is no purported prejudice to the insured from which the legislation strives to protect. (

b) Case Law : [ 22 ] All of the on-point case law that was found in the course of my research found that a relationship of agency did exist between the insurer and insured, such that the insurer was not bound to a contract with a third party performing remedial work. (

A) Hoelzler Construction Ltd. v. Seidler In Hoelzler Construction Ltd. v. Seidler , the Defendants ’ commercial building suffered fire damage and the Plaintiff building contractor succeeded at trial for the payment of over $34,000.00 in outstanding bills.

In this case, BCAC Adjusting Ltd. was retained by the Federation Insurance Company of Canada to administer the claim. [5] BCAC sought bids from contractors after preparing a detailed outline of the project, and BCAC invited the Defendants to provide the names of additional companies that could be invited to bid. [6] The Defendant provided two names, including the Plaintiff ’ s name. [7] Due to the Defendant ’ s concern about the quality of work performed by Hoelzler Construction Ltd., the Defendant terminated the contract after partial performance. [8] Prior to the termination, BCAC issued two cheques to the Plaintiff for $50,000.00 each: the first cheque was endorsed by the Defendants but the second was deposited by the Plaintiff without the Defendants ’ endorsement, and it was later debited against the Plaintiff ’ s account. [9] It was alleged by the Defendants on appeal that they were not a party to the contract as the insurance adjuster, BCAC Adjusting Ltd., “ did not act as their agent in hiring the plaintiff to do the work, and … BCAC had no authority to hire the plaintiff ” . [10] The Defendants also alleged that the trial judge erred by focusing on the terms of the insurance contract rather than exploring the substance of the relationship between the parties. [11] However, the Court of Appeal agreed with the trial judge and found that a relationship of agency existed between the parties, because:

i) There was no legal grounds for the insurer to authorize BCAC to contract with the Plaintiff; [12]

ii) The Defendants participated without protest throughout the process, which indicates implied authorization for BCAC to engage a contractor on the Defendants ’ behalf; [13] iii) The Defendants, as owners of the building, had ultimate control over the selection of contractors and the performance of the repairs; [14] iv) The Defendants exercised control over the construction contract with the Plaintiff by attending the site and monitoring the Plaintiff ’ s work, which ultimately led to the Defendants terminating the contract with the Plaintiff; [15] and

v) The insurer and the adjuster had no ability to override the owner ’ s decision to terminate as it could not authorize any work unless it was approved by the owner. [16] The Court of Appeal also made reference to some of the trial judge ’ s decision in finding that the insurer was not a party to the contract: On a literal reading of the policy, the defendants were required to engage a contractor, instruct the contractor on what constituted proper replacement, pay for the work, then seek reimbursement from the insurer.

In practice, it would be a rare case where the insured had either the cash flow or the expertise to proceed on that basis. That is why adjusters become involved in managing such projects, as BCAC did in this case. [17] And furthermore: I conclude that this is a case where implied actual authority arose from the relationship set out in the insurance contract. The defendants, not the insurer, had the obligation to repair the building. The insurer ’ s obligation was to provide indemnity, but no more.

In retaining the plaintiff, BCAC could only be acting as agent for the defendants, who would benefit from the repair of their property. [18] And, finally: The reason why that relationship must be found to exist can be best illustrated by considering the circumstances that would have existed if the work had been completed without dispute. If the defendant ’ s argument that they had no obligation to the plaintiff is accepted, they could still have refused to sign over the cheques from the insurer and the plaintiff would have no recourse against them.

The plaintiff would also have no recourse against the insurer, which would have in fact issued payment. That is obviously an absurd result. [19] (

B) Brandiferri v. Wawanesa Mutual Insurance Co. Brandiferri v. Wawanesa Mutual Insurance Co. involved a similar action for recovery.

The Plaintiff homeowners had homeowners ’ insurance with Wawanesa when their garage and its contents were destroyed in a fire. [20] Wawanesa arranged for two contractors to attend the Brandiferri home and provide estimates. [21] The Brandiferris chose Strone Construction, one of those two contractors, but it was open to them to hire the other company or find another contractor of their choosing. [22] The Brandiferris were unhappy with Strone ’ s work and brought two actions in Court: one against Strone Construction for deficient construction work and the other one claiming that Wawanesa is responsible for Strone ’ s poor work. [23] The relevant action for the purpose of Cross v.

Mechor and Claims Pro is the second action, which relies on the allegation that Wawanesa and Strone entered into a contract for repair, rather than the Plaintiff hiring Strone as a contractor. [24] The Court found that the Brandiferris were in a contractual relationship with Strone, and that Wawanesa was not a party to the contract. This finding was largely based on the customer authorization signed by Mr. Brandiferri, authorizing Strone to proceed with work and authorizing the cost of the work to be paid directly to Strone Construction from the insurance proceeds. [25] The

Court acknowledged that Wawanesa built itself into a “ middle position ” with control over cash flow and reconstruction, but found that Wawanesa ’ s day-to-day involvement was insufficient to find that Wawanesa was a party to the action. [26] Instead, Wawanesa was found to be an agent for the Brandiferris for the purpose of paying Strone and this finding was supported by an admission made in Wawanesa ’ s own Statement of Law: the Brandiferris “ even directed Wawanesa not to pay Strone in January 2001 suggesting in their minds they had the control to stop the payment, which Wawanesa concedes they did ” . [27] However, given Wawanesa ’ s position as agent and the Brandiferris ’ instruction to not make final payment to Strone, Wawanesa breached its obligation as the Brandiferris ’ agent by issuing $149,542.01 of the Brandiferris ’ money to Strone. [28] The Court found that this money could have been used to remedy the work and further found that “ in the event that the Brandiferris are unable to make full recovery from Strone for any amount owing by Strone under this decision, Wawanesa is obligated to make up any deficiency in Strone ’ s payment up to the amount of $149,542.01 ” . [29] (

C) Lozada v. Gold River Carpet & Upholstery Cleaning The Appellant in Lozada v.

Gold River Carpet & Upholstery Cleaning appealed the lower court ’ s decision requiring her to pay the cost of the Respondent ’ s labour and materials in re-roofing the Appellant ’ s house. [30] The appeal was based on the Appellant ’ s allegation that “ there was no contract or agreement with the Respondent who was hired by the insurance company to do the work, and secondly because it was done very poorly ” . [31] The Court acknowledged that, if it was the Appellant ’ s insurance company, and not the Appellant, who made the contract with the Respondent, this would be a good defence to the claim. [32] The Court noted that “ it is a fundamental principle of contract law that a person who is not a party to a contract cannot sue, or be sued, on that contract ” , but quickly noted the exception to this rule that emerges from the law of agency [33] : Where the relationship of principal and agent exists, an agent may, on behalf of his or her principal, negotiate a contract with a third party.

In such cases, the agent is not a party to the contract, which is solely between the principal and the third party.

That will be the general result, even where the agent, not the principal, signs the contract, so long as the contract is not made under seal, and the agent has not exceeded the scope of his or her authority. [34] Although the insurance company did not send a representative to Court as a witness, the Court found that the insurance company was acting as an authorized agent of the Appellant: “ the evidence does not support the inference that the insurance company was acting independently, and on its own, in contracting with the Respondent for the repair of the Appellant ’ s roof ” and “ the evidence indicates that the Appellant exercised control over the insurance company, in directing it not to pay the Respondent for the roofing work ” . [35] These acts, according to the Court, are consistent with a relationship of principal and agent. [36] Given the evidence as well as the high threshold to meet in order to overturn an appeal based on mixed law and fact, namely the finding of a palpable and overriding error, the Court did not overturn the trial judge ’ s finding that the Appellant – and not her insurance company – was a party to the contract. [37] (

D) N & H Contracting Ltd. v. Gordon In N & H Contracting Ltd. v. Gordon , the Court also found that the construction contract was between the property owner and the contractor.

In this situation, the Defendant homeowner ’ s property was significantly damaged by fire, and the insurance adjusters prepared an outline of the project upon which contractors could submit fixed price estimates for the project. [38] Unfortunately, the homeowner was suspicious of this process and viewed it as an attempt by the insurer to limit its liability. [39] As a result, the homeowner would not sign a Proof of Loss form and the insurance adjuster reluctantly agreed to allow a cost plus contract with N & H Contracting, as demonstrated by the following correspondence: As you have learned, throughout this file, Mr.

Gordon is a very stubborn man, and we could see no reason to prolong the discussion or antagonize him by insisting that he sign the Proof. The fact remains that he has not made a claim until a Proof of Loss is signed. Therefore, we will await the repairs, and I see no harm in recommending payment of the $50,000 … when we receive the bill from Mr. Hank of N & H Contracting. [40] Once the contractor accumulated a bill of $50,000.00, an invoice was sent from the contractor to the homeowner, and the insurer issued a

cheque that was made payable to the contractor and owner; however, the cheque was not released until after an interim proof of loss was signed by the homeowner. [41] The final bill from the contractor totalled $106,085.47, despite quotes for $75,000.00 on fixed price contracts and receiving assurances from N & H Contractors that they were ‘ relatively certain ’ money could be saved by entering into the cost plus contract. [42] Given the difficult factual context of the claim, it is understandable that the trial judge found a direct contractual arrangement between the contractor and the insurer, but the Court of Appeal overturned this ruling. [43] In declaring that there was no contractual relationship between the parties, the Court considered the following factors: Mr.

Gordon ’ s insistence that the contract be performed on a cost plus basis [44] ; Mr. Gordon authorized the contractor to proceed with the work on a cost plus basis in a meeting between the parties [45] ; the insurance adjuster condoned the cost plus arrangement, indicating that a partial completion payment of $50,000.00 would be forthcoming [46] ; and Mr. Gordon was told the insurer would make the cheque jointly payable to him and the contractor, pending the owner ’ s signing of an interim proof of loss [47] .

The conditions surrounding the cheque were deemed particularly important by the Court, which found that this arrangement “ was the protection the contractor acted on and it is the protection he received. It falls short of establishing there was a contractual arrangement whereby the insurer became directly liable for the contractor ’ s account ” . [48] As such, the Defendant ’ s claim that he was not a party to the contract failed.

Conclusion: [ 23 ] Based on the above case law, it appears that the statutory presumption against agency can be rebutted in the circumstances of Cross, Claims Pro and Mechor. [ 24 ] As a primary consideration, the issue of implied and express actual authority should be explored.

Express authority is achieved by express words and instructions between the principal and agent; on the other hand, implied authority is established when the agent performs acts that are “necessary or ordinarily incidental to the exercise of express authority”. [49] Implied, and perhaps even express, actual authority are evident through Mr. Mechor ’ s emails which indicate: (

a) that he would like Mr. Cross to work as the contractor; (

b) that he would like Mr. Cross to proceed with the work on an urgent basis; (

c) that he would like Claims Pro to make arrangements to ensure that Mr. Cross is retained and paid under his insurance policy; and (

d) the fact that Mr. Mechor sought only one estimate and brought it to Claims Pro for approval and processing. Based on these emails, it is therefore evident that Mr. Mechor authorized Claims Pro to operate as his agent and that he expressly, or at least implicitly, permitted Claims Pro to communicate with Mr. Cross in order to facilitate the commencement of the construction project. [ 25 ] Another consideration is the benefit accrued from the contract. The contract was solely for the benefit of Mr.

Mechor and not the insurer - an issue that was explored by the trial judge in Hoelzler and referred to at the Court of Appeal when it was said: “in retaining the plaintiff, BCAC could only be acting as agent for the defendant, who would benefit from the repair of their property”. [50] [ 26 ] In addition, Mr. Mechor played a far more active role in the selection of the contractor than some of the above cases, including Hoelzer, Brandiferri, and N & H Contractors, where the insurer took a far more active role in finding and/or selecting a contractor.

Unlike Hoelzer, Brandiferri, and N & H Contractors , where bids were sought from contractors or a list of contractors was presented to the insured, Mr. Mechor sought an estimate from only one contractor and requested that Claims Pro arrange for this contractor to be paid under his policy. Mr. Mechor’s involvement in independently selecting Mr. Cross as a contractor is therefore evident.

In any event, it seems that the consideration of who selected the contractor and how it was done is not critical for identifying the parties of an insurance contract, given that the above cases with significant insurer involvement found that the insurer was nevertheless only an agent to the contract. [ 27 ] Mr. Mechor exercised control over the contract, as demonstrated by his role in seeking out Mr. Cross and emailing

instructions to Claims Pro, as well as his facilitation of Mr. Cross’ visit to the site in order to provide an estimate. Evidence of Mr. Mechor supervising, or failing to supervise, the performance of Mr. Cross’ work has not been provided. However, even in situations like Brandiferri v. Wawanesa, where the insurer was said to exercise a high degree of control by supervising and overseeing the daily operations of the project, the insurer was not deemed to be a party to the contract.

Thus the level of control exercised by the insurance company may not be relevant for the assessment of which individuals and/or corporations are a party to the insurance contract. As such, the extensive work done by Claims Pro to authorize the payment of Mr. Cross’ estimate and the direct communication between Claims Pro and Mr. Cross may not rebut the finding that Claims Pro was only operating as an agent for Mr. Mechor. On the other hand, any evidence of Mr.

Mechor’s exercise of control will help to demonstrate the authority that he held under the contract and will help demonstrate that he was in fact a party to the contract. Similarly, in N & H Contracting, where the insured homeowner refused to enter into any formal agreement by signing a Proof of Loss, the insurer was not deemed to be a party to the contract, even though it was the insurer who authorized the contractor to proceed on a cost plus basis. [ 28 ] Lastly, the practical implication of finding that the insurance company is a party to the contract must be considered.

Practical implications were measured in Hoelzler at the trial level and the excerpt was reproduced on appeal. As already outlined above, the Court, in finding that the relationship was one of agency and that the insurer was therefore not a party to the contract, stated: The reason why that relationship must be found to exist can be best illustrated by considering the circumstances that would have existed if the work had been completed without dispute.

If the defendant’s argument that they had no obligation to the plaintiff is accepted, they could still have refused to sign over the cheques from the insurer and the plaintiff would have no recourse against them. The plaintiff would also have no recourse against the insurer, which would have in fact issued payment.

That is obviously an absurd result. [51] [ 29 ] The practical implications are therefore significant if the Court finds that the insurer is a party to the contract: the insured would be unjustly enriched without the prospect of recovery from the contractor and the insurer would be found to have fulfilled its duties, which would also prevent recovery from the contractor. [ 30 ] The above analysis demonstrates that Claims Pro was an agent and not a party to the contract.

Case law explored several scenarios where the insurer either played a more significant role or an equal role to that performed by Claims Pro, yet these cases provide unwavering support for a finding that the insurer is only acting as an agent for the insured. Furthermore, if the Court decides that the insurer is acting only as an agent under the contract, it would be inappropriate for the insurer to release funds directly to the contractor. This scenario was raised in Brandiferri v.

Wawanesa, where the Court found that Wawanesa breached its duties as agent for the Brandiferris when it made payment to Strone, contrary to the wishes of the Brandiferris, and the Court found that Wawanesa would be responsible for payment to the Brandiferris in any sum that is not successfully recovered from Strone. [52] Therefore, there appears to be no legal wrongdoing on the part of Claims Pro and Mr. Cross should not be able to recover from Claims Pro for Mr.

Mechor ’ s wrongdoings. [ 31 ] Therefore the Plaintiff Jordan Cross shall have judgment against the Defendant Clarence Mechor in the following amounts: 1) $7,900.00 as claimed 2) Pre-judgment interest from October 1, 2012 to the date of this judgment 3) Costs of issuing the summons in the amount of $37.00. ___________________________________ R. J. Lane, J [1] The Saskatchewan Insurance Act , RSS 1978, c S-26s, s 184. [2] CED (Ont 4th), vol 33-33A, title 86 at § 89, citing Landreville v. Pacaud (1952), [1953] C.S. 56 (Que. Mag. Ct.) .

[3] Ibid, citing Monachino v. Liberty Mutual Fire Insurance Co. (2000), (ON CA), 47 O.R. (3d) 481 (Ont. C.A.) andciting Schwartz v. Maritime Life Assurance Co. (1997), 1997 CarswellNfld 278 (Nfld. C.A.). [4] Stephanie Ben-Ishai and David Percy, Contracts: Cases and Commentaries, 8th Ed (Toronto: Thomson Reuters Canada Limited,2009) at pages 290-291. [5] Hoelzler Construction Ltd. v.

Seidler, 2008 BCCA 77 at para. 9, [2008] 5 W.W.R. 614. [6] Ibid. [7] Ibid. [8] Ibid. [9] Ibid. [10] Ibid at para. 4. [11] Ibid at para. 13. [12] Ibid at para. 21. [13] Ibid. [14] Ibid. [15] Ibid at para. 23. [16] Ibid at para. 24. [17] Ibid at para. 12. [18] Ibid. [19] Ibid. [20] Brandiferri v. Wawanesa Mutual Insurance Co., 2012 ONSC 2206 at para. 1, 16 C.L.R. (4th) 44. [21] Ibid at para. 74. [22] Ibid. [23] Ibid at para. 1. [24] Ibid at para. 64. [25] Ibid at para. 79. [26] Ibid at para. 89. [27] Ibid at para. 90. [28] Ibid at para. 91. [29] Ibid. [30] Lozada v.

Gold River Carpet & Upholstery Cleaning, 2006 BCSC 1317 at para. 1. [31] Ibid at para. 2. [32] Ibid at para. 5. [33] Ibid at para. 14

[34] Ibid. [35] Ibid at para. 15. [36] Ibid. [37] Ibid at paras. 16-17. [38] N & H Contracting Ltd. v. Royal Insurance Co., (BC CA), 1993 CarswellBC 5 at paras. 17 and 20, [1993] 3WWR 674 (B.C. C.A.). [39] Ibid at para. 21. [40] Ibid at paras. 27 and 30. [41] Ibid at para. 32. [42] Ibid at paras. 27, 32, and 33. [43] Ibid at para. 40. [44] Ibid at para. 51. [45] Ibid at para. 63. [46] Ibid at para. 64. [47] Ibid at para. 65. [48] Ibid at para. 66. [49] Supra, note 2 at § 89. [50] Supra, note 5 at para. 12. [51] Ibid. [52] Supra, note 20 at para. 91.