2023 NBKB 026, 2023 NBKB 026

2023 NBKB 026 Court No.: FC-101-2020 IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF FREDERICTON B E T W E E N: Gordon Ward, Plaintiff, - and - Certas Home and Auto Insurance Company, Defendant, COUNSEL AT HEARING: Lara Greenough, and Kathleen Nash, Solicitors for the Defendant (Moving Party) Steven Barnett, K.C., Solicitor for the Plaintiff (Respondent) CORRIGENDUM WHEREAS the Decision signed by Mister Justice Terrence J. Morrison on February 28, 2023 contained an error on the cover page, at the line “Date of Decision”; NOW THEREFORE IT IS HEREBY ORDERED THAT: 1.

The Date of Decision is amended to read, “ February 28, 2023”. DATED at the Parish of Burton, Province of New Brunswick this ​​​​__ day of March, 2023. _____________________________ Terrence J. Morrison, J.C.K.B. Citation: 2023 NBKB 026 Date: 2023-02-28

COURT FILE NO: FC-101-2020 IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF FREDERICTON BETWEEN: GORDON WARD, Plaintiff, -and- CERTAS HOME AND AUTO INSURANCE COMPANY, Defendant. Date of Hearing: June 28, 2022 Date of Decision: February 28, 2013 Subject Matter:

Summary Judgment Before: Justice Terrence J. Morrison At: Burton, New Brunswick Appearances: Lara Greenough and Kathleen Nash for the Defendant (Moving Party) Steven Barnett, K.C. for the Plaintiff (Respondent) DECISION Morrison, J. I. INTRODUCTION [ 1 ] The Plaintiff, Gordon Ward, was and is the owner of properties identified by civic addresses 235 and 237 Ridge Road, in Red Bank, New Brunswick. On or about May 1, 2019, the garage owned by the Plaintiff (the “Garage”) was damaged by fire. The Plaintiff made a claim under his property insurance policy for the loss of the Garage.

The policy, issued by Certas Home and Auto Insurance Company (“Certas”) insured the Plaintiff’s home and detached structures located on the “premises”. The policy defines premises as “premises located within the lot lines of the dwelling described in the Coverage

Summary”. The dwelling described in the Coverage

Summary of policy is the Plaintiff’s house, located at 235 Ridge Road. The Garage damaged by the fire was located at 237 Ridge Road. Certas denied coverage for the loss of the Garage. [ 2 ] This is a motion by Certas, for

summary judgment of the Plaintiff’s action for indemnity. Certas claims that the Garage was not located on the insured premises, that the policy is clear and unambiguous, and that it was justified in denying coverage. [ 3 ] The Plaintiff alleges that the policy wording defining “premises” is ambiguous. Further, the Plaintiff says that he always considered the two contiguous properties as comprising his home and which he identified and described as 235 Ridge Road, for all purposes. The Plaintiff alleges that this factual matrix also raises an ambiguity.

Accordingly, this requires the Court to resort to general rules of contractual construction to determine the reasonable expectations of the parties. The Plaintiff submits that the evidence shows that the reasonable expectation of the parties was that the Garage was to be covered by the policy. If there remains any ambiguity, the Plaintiff submits that the policy has to be interpreted contra proferentem as against the insurer, thus favouring coverage. In the result, the Plaintiff submits that Certas’ motion for

summary judgment must fail.

II. FACTS [ 4 ] The property identifier number (“PID”) associated with civic address 235 Ridge Road is 45072956 (the “House Lot”). The parcel associated with 237 Ridge Road is PID 45138641 (the “Garage Lot”) (Record, p. 297-299). [ 5 ] Both lots share a common parent PID and were, therefore, once one parcel known as Lot 79-1. [ 6 ] According to the Plaintiff’s affidavit, his father, Robinson Ward, acquired the property in 1979. The Garage was built in 1985 and expanded in 1989.

The house was built in 1989 (Record, p. 542-543). [ 7 ] The original property, Lot 79-1, was subdivided in December 1993 (Record, p. 82) and Lot 93-3 was created. This lot is the Garage Lot and is associated with 237 Ridge Road. [ 8 ] The Garage Lot was sold to a third party in 2007 and remained in the hands of the third party until 2015.

The circumstances of that transaction are murky, but the Plaintiff maintains that he and his father used the Garage for their personal storage while it was in the hands of the third party (Record, p. 543). [ 9 ] Although not clear, it appears that sometime between 2012 and 2014, the Plaintiff’s father, Robinson Ward, and his wife separated. The Plaintiff returned to the Red Bank area in 2013 or 2014 and expressed an interest in acquiring the house.

Robinson described the nature of the transaction in an interview with claims adjuster Natasha Fougere as follows: No, I built the house originally in ’89 and my wife left me in 2000 and… about 2014, I’d say, maybe ’13 around there somewhere.

And I lived by myself for a few years and then my son got a job in Chipman, so he came to live with me and then he um, he wanted a house and I couldn’t really sell it to him because the wife is still on it and so we put it through a mortgage sale and then he purchased the mortgage sale and then we took it from there. [ 10 ] The Plaintiff acquired the Garage Lot (237 Ridge Road) from Charles Kingston on January 29, 2015 (Record, p. 391). [ 11 ] The Plaintiff acquired the House Lot through mortgage sale on February 15, 2017 (Record, p. 392). [ 12 ] According to his affidavit, when the Plaintiff became the owner of the Garage, he did not get separate insurance on it because he assumed it was insured through the house insurance, as it was an outbuilding to the main house (Record, p. 543). [ 13 ] The Plaintiff applied for insurance with Certas in February of 2017 through Kevin Burke Insurance and Financial Services, which took the application via telephone, which was passed along to Certas through its internal electronic application system called VENT. [ 14 ] Certas issued a property insurance policy to the Plaintiff, effective February 9, 2017.

There were several renewals of the policy, the most recent of which that is pertinent to this matter was a 2019 renewal. There were certain changes in wording between the 2017 policy and the 2019 policy which will be discussed in further detail later. [ 15 ] On or about May 1, 2019, a fire occurred, damaging the Garage, for which the Plaintiff submitted a claim.

[ 16 ] Certas engaged the services of insurances adjusters ClaimsPro to investigate the claim. The investigation revealed that the Garage was located at 237 Ridge Road, and not within the lot lines of the Plaintiff’s dwelling property, located at 235 Ridge Road. [ 17 ] Certas denied the claim on the basis that the Garage was not located on the ”premises” insured by the policy. III. ANALYSIS AND DECISION A. Rule 22 of the Rules of Court [ 18 ] The law with respect to the

interpretation and application of Rule 22 of the Rules of Court is now well settled. In Estephan v. Dykeman et al. , 2020 NBQB 65 , I summarized the law as outlined in Hryniak v. Mauldin , 2014 SCC 7 , O’ Toole v. Peterson , 2018 NBCA 8 , and Russell et al. v. Northumberland Cooperative Ltd. , as follows, at para. 14: In Russell et al v Northumberland Co-Operative Ltd. , 2019 NBCA 70 , the Court of Appeal expanded on the import of the 2017 amendments. The key points from O’Toole and Russell can be summarized as follows: 1. The only test for

summary judgment is whether there is a genuine issue requiring a trial; 2. The burden of proof is on the moving party to establish there is no genuine issue requiring a trial and it is on the balance of probabilities; 3. The importance of the parties putting their best foot forward and leading trump or risk losing is more significant under the new Rule 22; 4. The rule provides for a two-step process to determine whether there is a genuine issue requiring a trial; 5. In step one the judge must determine if the evidence presented reveals a genuine issue requiring a trial.

If, on the filed evidence alone, the judge can fairly and justly adjudicate the dispute there will be no genuine issue requiring a trial and the judge must grant

summary judgment; 6. If the judge cannot adjudicate the dispute on the filed evidence he will proceed to step two. A judge only proceeds to step two if the assessment of the filed evidence leads to the conclusion that there may be a genuine issue requiring a trial. The judge will then determine if a trial can be avoided by resorting to the fact-finding powers of Rules 22.04(2) and (3) (the “mini-trial”); 7. The guiding principle is that it will always be in the interest of justice for a judge to make use of the mini-trial where possible. B. The policy wording [ 19 ] The policy, under

Section A, provides property damage coverage for the Plaintiff’s dwelling.

Section B provides coverage for damage to detached private structures as follows: Coverage B – Detached Private Structures We insure detached private structures that are located on the premises. [ 20 ] A “Detached Private Structure” is defined as follows: Detached Private Structure means a permanent structure or building on the premises separated from the dwelling by a clear space or only connected to the dwelling by a fence, utility line or similar connection. [ 21 ] The term “Premises” is defined as follows: Premises means:

(

a) Premises located within the lot lines of the dwelling described on the Coverage

Summary. (

b) Premises used as a residence by students insured by this insurance policy. [22] Finally, the Coverage

Summary describes the principal residence of the insured as a one-unit, one-storey dwelling,located at 235 Ridge Road. C. Principles of

interpretation [23] The principles applicable to the

interpretation of an insurance policy have been firmly established by severalSupreme Court of Canada decisions. In Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, the courtheld that the primary interpretive principle is, where the language of the policy is unambiguous, the Court should give effect to that clearlanguage. These principles were again summarized in Sabean v. Portage La Prairie Mutual Insurance Co., 2017 SCC 7 ,[2017] 1 SCR 121, at paras. 12 and 13: [12] In Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23, this Court confirmed theprinciples of contract

interpretation applicable to standard form insurance contracts. The overriding principle is that where thelanguage of the disputed clause is unambiguous, reading the contract as a whole, effect should be given to that clear language:Ledcor, at para. 49; Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, [2010] 2 S.C.R. 245, at para.22; Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551, at para. 71.

Only where the disputedlanguage in the policy is found to be ambiguous, should general rules of contract construction be employed to resolve thatambiguity: Ledcor, at para. 50.

Finally, if these general rules of construction fail to resolve the ambiguity, courts will construe thecontract contra proferentem, and interpret coverage provisions broadly and exclusion clauses narrowly: Ledcor, at para. 51. [13] At the first step of the analysis for standard form contracts of insurance, the words used must be given their ordinary meaning,“as they would be understood by the average person applying for insurance, and not as they might be perceived by persons versed inthe niceties of insurance law”: Co-operators Life Insurance Co. v.

Gibbens, 2009 SCC 59, [2009] 3 S.C.R. 605, at para. 21; see alsoLedcor, at para. 27. [Emphasis added] [24] More recently, these principles were summarized by Justice Dysart in The Estate of Michael Burke v. Royal andSun Alliance Insurance Company of Canada, 2020 NBQB 74, at para. 256: [256] This, in my view, would not be consistent with the wording of the policy. Also, I am cognizant of the directions of the SupremeCourt of Canada in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, where that Court confirmed theprinciples of contract

interpretation applicable to standard form insurance contracts as follows: • Firstly, if the wording of the disputed clause is unambiguous when reading the contract as a whole, effect should be given to thatclear language; • If (and only if) there is ambiguity in the language should the general rules of contract construction be employed to resolve theambiguity; and • Finally, if those rules of construction fail to resolve the ambiguity, then the principle of contra proferentem should be used, i.e.coverage provisions should be interpreted broadly while exclusion clauses should be interpreted narrowly. [25] These principles were applied most recently by the New Brunswick Court of Appeal in the case of Lloyd’sUnderwriters v.

Jagoe, 2022 NBCA 7. After having found that an ambiguity existed, the Court then applied principles of

interpretationto resolve the issue. Relying on Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, the Court stated that the principles ofcontractual

interpretation are to be considered in light of the factual matrix to ascertain the objective intention of the parties and the scopeof their understanding. [26] It is clear from the above-noted cases that the threshold issue is whether the wording of the policy is ambiguous. If (and only if) there is ambiguity does the Court employ principles of contractual

interpretation, including a consideration of the factualmatrix, to ascertain the objective intention of the parties.

D. Was there a change in coverage? [ 27 ] The Plaintiff submits that the initial policy issued in 2017 contains wording different from that contained in the 2019 policy at issue in this case. The Plaintiff submits that under the 2017 policy the loss would have been covered. The Plaintiff further submits that Certas failed in its obligation to alert the Plaintiff to the change in policy wording in the 2019 policy, which resulted in a narrowing, reduction or loss of coverage. [ 28 ] The first aspect of this argument is that the 2017 policy would have covered the loss. The Plaintiff points out that in the 2017 policy the definition of “Detached Private Structures” (Record, P. 574,

section 1.2) under coverage B insures such structures on “your premises”. In the 2019 policy, the term “the premises” is used in the same context. The Plaintiff submits that the term “your premises” is broad enough so as to refer to all locations wherein the insured has any premises. As a result, the Garage would have been covered under the policy. [ 29 ] I reject this argument. To accept the Plaintiff’s argument would result in an absurdity. It would mean that any structure located on any property owned by the Plaintiff, anywhere, would be covered.

Surely, it is unreasonable to believe that an insurer would have accepted the risk for properties unknown to it, and for which no risk assessment (and resulting premium) could be made. [ 30 ] Alternatively, the Plaintiff argues that the policy refers to “the premises” in some places and “your premises” in others. He argues that the insurer must have intended that the two terms have different meanings, and thus, an ambiguity is created. The Plaintiff submits that the ambiguity must be resolved in favour of the Plaintiff.

In my view, any person reading the policy would not be misled or confused by the use of the term “your premises” as opposed to “the premises”. It is clear that where “your premises” is used, it relates to “the premises”, meaning the land contained within the lot lines of the lot upon the which the dwelling is situated. In this case, 235 Ridge Road. [ 31 ] Finally, it must be noted that there is no material change in the definition of “Premises” between the 2017 and 2019 policies (Record, p. 573 and 37). Both describe “premises” as being within the lot lines of the dwelling property.

While the 2017 policy refers to “lands” contained within the lot lines, and the 2019 policy refers to “premises” located within the lot lines, I do not consider this a material change. E. Is the policy wording ambiguous? [ 32 ] I turn now to the 2019 policy. As mentioned, the controversy in this case revolves around the

definitions of “Detached Private Structure” and “premises” in the policy. For convenience, I will again reproduce the relevant

definitions: Detached Private Structure means a permanent structure or building on the premises separated from the dwelling by a clear space or only connected to the dwelling by a fence, utility line or similar connection. …….. Premises means: (

a) Premises located within the lot lines of the dwelling described on the Coverage

Summary. (

b) Premises used as a residence by students insured by this insurance policy. [ 33 ] The Plaintiff raises several issues he submits demonstrate ambiguity in the policy wording. First, he submits that because it defines “premises” as “premises located…”, it is using the word premises as the definition of itself. I see no merit in this argument. Premises is a common term meaning lands and/or buildings. The phrase “premises located…” is simply a modifier to identify the location of the specific premises. In my view, there is no ambiguity.

[ 34 ] Second, the Plaintiff submits that a dwelling can have no lot lines, as it is a building. Again, I see no ambiguity. A dwelling is described and defined on the coverage

summary as a one-storey, one-unit dwelling located at 235 Ridge Road. The plain and ordinary meaning of “lot lines of the dwelling” must refer to the lot lines of the lot associated with the civic address upon which the dwelling is located. [ 35 ] Third, the Plaintiff submits that Certas’ failure to define “lot lines” creates an ambiguity. As will be discussed in more detail later, the Plaintiff’s evidence is that he considered all of his property, 235 and 237 Ridge Road, as one property with the property lines being the outside boundaries of the two lots.

While this may be a factual consideration, it does not speak to the policy wording itself. Not every word in a policy needs to be defined. In my view, an ordinary person would understand what is meant by the term “lot lines”, as set out in the policy. Generally, with respect to the arguments made by the Plaintiff, I refer to the admonition that the rules of

interpretation are intended to resolve ambiguities, not to create them where none exist ( Royal and Sun Alliance Insurance Company of Canada v. Snow , 2016 NSCA 7 , at para. 13 ). [ 36 ] It is also important to keep in mind, as also set out in Snow , that courts should strive to interpret similar policies consistently. [ 37 ] In that regard, several cases have considered policy wordings almost identical to that in issue in this case. In Snow , the relevant terms were defined as follows: [16] “Premises” is defined as “the land and building(

s) contained within the lot lines on which the dwelling is situated.” [17] “Dwelling” is defined as “the building described on the Coverage

Summary wholly or partially occupied by you as a private residence.” [ 38 ] The issue was whether contaminated soil located underneath the “dwelling” was insured property. The Nova Scotia Court of Appeal disagreed with the trial judge’s conclusion that the soil was covered. The Court stated, at para. 20, and paras. 24- 25: [20] I disagree with this conclusion. The “premises” is not the insured property.

The insured property is the dwelling, additional buildings, attached structures, and certain other objects (such as pools) that are located on the “premises.” The term “premises” serves to describe and qualify the location of items of insured property but it does not create an independent grant of coverage. . . . [24] The correct inquiry is whether or not soil or land is insured property. [25] Reduced to its essence, insured property is what is insured, and insured perils are what it is insured against. These are separate concepts.

What an item is insured against, for example fire, does not alter or inform the definition of what is insured… [ 39 ] In Keefe v. Canadian General Insurance Co. , 1991 Carswell Nfld. 313 , the Plaintiff owned three parcels of land. On the first was located an egg grading station, on the second was located a personal residence, and on the third, across the street from the residential lot, was a wooden storage shed. The Plaintiff had two policies of insurance, a commercial policy for the egg grading station, and a second policy for the personal residence.

The wooden storage shed located on the third lot was destroyed by fire, for which the Plaintiff submitted a claim under both the commercial policy and the residential policy. [ 40 ] The commercial policy defined “premises” as “the entire area within the boundary lines at the locations described in the Declarations Page and under adjoining sidewalks and driveways”. In concluding that the destroyed shed was not covered under the commercial policy, the Court stated, at paras. 14-16: 14 Premises is defined as being the entire area within the property lines at the locations described on the Declarations Page.

The Declarations Page describes the location as "Coley's Point, Conception Bay, Newfoundland". The Plaintiff submits that this general description is broad enough to cover not only the property on which the Plaintiff's egg-grading station is located but also the property on the other side of the road and on which the shed is located. He then submits the shed is covered because the definition of "building"

includes a fixed structure located on the premises. 15. I reject that submission. I n my view the Declarations Page is clear as to the identity of the property insured. That sheet refers to a one-storey frame building located at Coley's Point, Conception Bay, Newfoundland and occupied by the insured as an egg-grading station and sales. In my view that is clearly the egg-grading station which is situated to the rear of the property containing the Plaintiff's residence and cannot be interpreted as including a building situated across the road from this property and referred to by the parties as a storage shed.

I am unable to accept the Plaintiff's submission that the word "premises" includes all of the Plaintiff's property at Coley's Point, including the property on the other side of the road from the Plaintiff's residence. 16 In coming to that conclusion I find that the wooden shed which was damaged in the fire was not located on the premises covered by this policy and accordingly the Defendant is not liable to pay for the damages sustained to the same. [Emphasis added] [ 41 ] The residential policy contained a definition of premises remarkably similar to that in issue in this case. “Premises” was defined as “the dwelling and land contained within the lot lines on which the dwelling is located”.

The Court concluded there was no coverage for the shed, at paras. 30-31: 30 I reject that submission. In my view it cannot be said that the lot lines on which the residence is located extend across the road so as to include the property on which the shed is located. The history with regard to the acquisition of the properties shows they were acquired separately, the property on the north side of the road being acquired in 1985.

Further, the Plaintiff stated that the property on which the shed is located has always been treated as a separate piece of property for municipal tax purposes and that he has paid taxes accordingly . 31 In my view these are two separate parcels of land and the storage shed was not on the premises covered by the residential policy. It was across the street and not part of the property insured. It therefore does not come under the coverage for detached private structures. [Emphasis added] [ 42 ] In Osborne v.

Family Insurance Solutions Inc., 2021 BCCA 104 , the issue was whether soil located on the premises was insured property. In that case,” premises” was defined in the policy as “the land and buildings contained within the lot lines on which the insured Dwelling is situated”. The Court concluded that the term “premises” served to describe and qualify the location of items of insured property but did not create any independent grant of coverage.

The Court concluded that, “In this case, as in Snow , the policy language is clear and unambiguous.” [ 43 ] In response, the Plaintiffs argue that both Snow and Osborne are distinguishable. First, the Plaintiff submits that the wording of the pertinent

definitions are not identical to those in the present case. In particular, “dwelling” is defined in Snow but not in the present case. I see no merit to this argument. While the

definitions are not identical, they are substantially similar. While “dwelling” is specifically defined in Snow , it is essentially the same as the description of “dwelling” subsumed in the definition of “premises” in the present case (i.e., the building/dwelling described on the Coverage Page). [ 44 ] Second, the Plaintiff submits that both Osborne and Snow dealt with parcels that were not contiguous as is the case here.

In my view, that has no bearing on the analysis conducted by the courts in those cases. [ 45 ] The Plaintiff, in his brief and argument, referred to two cases in support of his position: Grand & Toy Ltd. v. Aviva Canada Inc. , 183 ACWS (3d) 1099 ; and Greer v. Personal Insurance Co. of Canada, 69 ACWS (3d) 453 . In Grand & Toy , a truck driver slipped and injured his back at the insured’s distribution centre. The issue was whether the policy covered only retail outlets, or did it also cover distribution centres. The judge noted six provisions of the policy which favoured an

interpretation that only retail stores were covered, but also found that there were other provisions that suggested that liability is not limited to retail stores. The judge found that there was an ambiguity in the scope of coverage and then went on to consider extrinsic evidence to determine the intention of the parties. Ultimately, the judge concluded that the parties intended that only retail stores be covered. In my view, Grand & Toy offers very little assistance to the Plaintiff.

It reinforces the legal principles outlined above: that only when an ambiguity in the policy wording is revealed does one consider the factual matrix to determine the intention of the parties. In addition, the policy wording in Grand & Toy is significantly different than the

definitions under consideration in Snow , Osborne , Keefe , and in the present case. [ 46 ] The decision in Greer is a very brief oral decision from which little of the facts can be gleaned. It was a motion by the insurer for

summary judgment. The motion judge determined that it was not a case for

summary judgment. In doing so, he

concluded that the following definition of premises was ambiguous: “The described residence premises covered hereunder allocated at the insured’s address”. The motions judge also found that the policy wording covering personal property moved to a new location was ambiguous. Ultimately, the motions judge found that the most valid basis for denying the motion was the insured’s claim for relief from forfeiture, which could only be decided after hearing evidence. [48] In my view, the Greer decision is of little assistance to the Plaintiff. The policy wording in issue is significantly different from the policy wording in this case. Furthermore, the motion judge’s decision to deny

summary judgment was based primarily on the insured’s claim for relief against forfeiture which required a factual determination. [49] In

summary, the above-noted cases reinforce my conclusion that, based on a consideration of the pertinent

definitions and the policy as a whole, the policy wording is clear and unambiguous. F. Plaintiff’s assertion that factual matrix exposes ambiguity in policy coverage [50] The Plaintiff points to evidence that he always considered both parcels (the House Lot and the Garage Lot) as one parcel which he described as 235 Ridge Road. His affidavit evidence is that the horseshoe driveway which services the residence is located on the Garage Lot. The Plaintiff’s evidence is that he and his father used the Garage Lot as part of the residential property, even when the Garage Lot was in the ownership of a third party.

The Plaintiff submits that when one considers this factual matrix an ambiguity in coverage is exposed. [51] I have difficulty with the Plaintiff’s proposed analysis. First, one does not consider the “factual matrix” in the first stage of the analysis – whether the language of the policy is ambiguous. Certainly, the factual matrix is a consideration in determining what were the reasonable expectations of the parties ( Jagoe ). However, it is only when there is an ambiguity in the policy that the reasonable expectations of the parties are to be considered.

In short, the factual matrix is not engaged unless and until the question of the ambiguity of the policy terms is determined (See Snow , at para. 63 ). [52] Even if one were able to consider the factual matrix in determining the question of ambiguity, the Plaintiff’s argument founders. Recall that the Garage Lot was created as a separate lot by the subdivision in December 1993. Further, the Garage Lot was sold separately to a third party in 2007 and remained in that third party’s hands until January 29, 2015, when the Plaintiff acquired it.

It wasn’t until two years later that the Plaintiff acquired the House Lot. In his affidavit, the Plaintiff stated that he did not get separate insurance on the Garage because he assumed it was insured through the house insurance (Record, p. 543). This makes no sense. He acquired the Garage Lot from a third party who had no interest in the house. Further, the House Lot and the Garage Lot were assessed separately for property tax purposes. They each bore a different assessed value and a different tax levy (Record, p. 66-79).

In short, the Plaintiff’s contention that the Garage Lot and the House Lot were always considered one parcel is not borne out by the evidence. In fact, quite the opposite appears from the Record. It is worth reiterating para. 30 from Keefe : 30 I reject that submission. In my view it cannot be said that the lot lines on which the residence is located extend across the road so as to include the property on which the shed is located. The history with regard to the acquisition of the properties shows they were acquired separately, the property on the north side of the road being acquired in 1985.

Further, the Plaintiff stated that the property on which the shed is located has always been treated as a separate piece of property for municipal tax purposes and that he has paid taxes accordingly . [Emphasis added] E. Certas should not benefit from its failure to make adequate inquiries [53] As an alternative argument, the Plaintiff submits that Certas should have asked the Plaintiff questions regarding the existence of a second address, or if the address given contained more than one PID, PAN, or lot.

The Plaintiff argues that it would be unfair to allow Certas to avoid the claim, where it failed in its duty of good faith to inform the Plaintiff that the existence of a separate PID was material to the policy/risk. In support of this position, the Plaintiff relied on Thomas v. Aviva Insurance Co. , 2011 NBCA 96 . [54] In Thomas , the insurer denied a claim for a fire loss on the basis that the insured failed to inform it of a material change in the risk, in breach of Statutory Condition 4.

In Thomas , when the insured applied for his policy, he was asked what his primary heating source was, and he advised that it was electric heat. He subsequently installed a wood stove as a secondary heat source. In subsequent annual renewals of the policy, the insurer asked the insured to disclose any changes to the information provided in the original application. Because the primary heating source (electric) did not change, the insured did not disclose the addition of the wood

stove. [55] The Court of Appeal determined that the insurer was not entitled to deny the claim or cancel the policy due to breach of Statutory Condition 4 because the non-disclosure resulted from the cumulative effect of its own acts and omissions, including its habitual failure to ask questions regarding non-electric heating. In the Court’s view, these failures also indicated that the insurer did not consider the installation of the secondary wood stove as material to the risk. [56] The Plaintiff refers specifically to the following

summary of the Court’s conclusions, outlined by then Chief Justice Drapeau, at para. 10: 10 That said, I prefer to dispose of the present appeal on the narrow ground that Aviva failed to make the appropriate enquiries, treated the matter of auxiliary heating sources as inconsequential and effectively advised Mr. Thomas in its various renewal notices that only the information provided in the original application was material to the risk. As that information did not touch upon auxiliary heating sources, in particular solid fuel heating, and was entirely accurate following the woodstove’s installation, Mr.

Thomas cannot be prejudiced by the nondisclosure invoked by Aviva. In my view, Aviva’s acts and omissions evince a failure to abide by its duty of good faith disentitling it from canceling the policy. That result also flows from s. 100(2), which preserves the contract’s validity where

an act or omission of the insurer results in non-compliance with any provision of the Insurance Act. [57] The Plaintiff submits that the reasoning in Thomas applies equally to this case. The Plaintiff points to the fact that Certas utilized a standardized electronic application form to obtain information necessary to the risk, and the fact that the system did not contain a question relating to the existence of a second address, location, PID, PAN, or lot.

The Plaintiff submits that it was not his fault that these questions were not asked, and it would be unfair for Certas to avoid the claim when it failed in its duty to inform the Plaintiff that the existence of a separate PID was material to the policy. [58] I disagree. First, the facts in Thomas bear no resemblance to the facts in this case. Thomas was a “material change” case. Here, there is no suggestion that the nature of the risk (e.g., the extent of the insured premises) changed, and that the Plaintiff failed to inform the insurer.

This case involves the Plaintiff’s initial description of the property to be insured – and that never changed. [59] In Thomas , the insured provided accurate information, that the primary heating source was electric heat (and that never changed). In this case, the Plaintiff told the agent completing the application that the property to be insured was civic address 235 Ridge Road. The VENT system confirms the address provided is the same listed by Canada Post and can link to Google Maps (Record, p.396).

At the time the Plaintiff identified the property to the agent, he knew (or ought to have known) that 235 and 237 Ridge Road were two separate properties. He acquired them separately, he knew they had been in separate ownership, and they had separate tax assessments and levies. In my view, the agent was acting reasonably in accepting the information from the Plaintiff, and had no obligation to inquire further with respect to other properties the Plaintiff may have owned.

Indeed, the Plaintiff knew the Garage was located on a separate lot and did not bother to raise the issue at the time of the application. [60] I digress to address the Plaintiff’s assertion that the insurer has a duty to inform the insured about what information is relevant to the risk. Thomas does not stand for that proposition. To the extent that the court’s comments at paragraphs 50-62, suggest otherwise, they are confined to the

interpretation of Statutory Condition 4, which is not an issue in this case. [61] Parenthetically, I note that the agent was not made a party in this action, and that nowhere in the Plaintiff’s Amended Statement of Claim does the Plaintiff allege that the agent or Certas acted negligently in taking the application, or in failing to ask appropriate questions in the application process. In fact, in the entire Amended Statement of Claim, neither the word “agent” or “application” appear. F.

Bad faith [62] An insurer owes a duty of good faith to the insured, to pay a claim in a timely fashion if there is no reason to contest it, and to treat the insured fairly throughout the process of investigating and assessing the claim (Craig Brown, Insurance Law in Canada (Toronto: Thomson Reuters, 2002) at 10:14). In determining whether an insurer has breached its duty of good faith, the threshold issue is whether the insurer breached the policy. It is only if that question is resolved in the insured’s favour that the Court then considers whether the insurer acted in bad faith ( Walsh v.

Nicholls and CGU Insurance Company of Canada , 2004 NBCA 59 ).

[63] For the reasons set out earlier, I have concluded that the Garage was not located on the insured “premises”, and therefore the fire loss was not covered by the policy. Accordingly, Certas did not breach the policy in denying the Plaintiff’s claim. While this is dispositive of the bad faith issue, I will nevertheless address the bad faith claim on its merits. [64] The Plaintiff alleges bad faith on the part of Certas. The entirety of the claim is set out in paragraoh 14 of the Amended Statement of Claim, as follows: 14.

Furthermore, there is an implied term of the Policy that the Defendant owed the Plaintiff a duty of utmost good faith and fair dealing. These obligations were in addition to, and independent of, the defendant’s contractual obligations to indemnify the plaintiff.

The duty of utmost good faith and fair dealing included a duty to: a. investigate all claims in a timely manner b. fairly assess whether claims were covered, in a balanced and reasonable manner; and c. not deny coverage unless there was a reasonable basis for doing so; not take advantage of the plaintiff’s financial vulnerability. [65] In my view, the Amended Statement of Claim does not plead material facts to establish a claim of breach of the duty of good faith. In Moran v.

Maritime Life Assurance Co. , 2003 NBQB 96 , the Court stated, at paras. 17-18: 17 Considering the authorities and the pleadings filed by the parties, I am of the view that a simple claim for punitive damages is insufficient. Something more must be contained in the pleadings to give enough particularity to permit a Defendant to know the case it must meet. The Plaintiff must, also, indicate in her pleadings, a particular conduct of the Defendant that is deserving of punishment.

This she has failed to do. 18 Boilerplate or bald assertions are insufficient pleadings unless sufficient particularity is also found in the pleadings, which support the boilerplate.

If no such support is provided then this type of pleading should be discouraged. [66] If I am wrong in this regard, then a generous reading of the pleading reveals a claim of bad faith based on three assertions: 1) Certas failed to investigate the claim in a timely manner; 2) Certas failed to fairly assess whether the claim was covered; and 3) denied coverage without a reasonable basis for doing so. [67] I have already addressed the third point. [68] With respect to the first two issues, the Record reveals that Certas conducted a timely investigation and fairly assessed the question of coverage.

The pertinent facts are set out in paragraph 94 of Certas’ Brief on Motion: (

a) On or about May 1, 2019, the fire occurred; (

b) On or about May 2, 2019, the Plaintiff submitted his Claim; (

c) On May 6, 2019, Natasha Fougere of ClaimsPro met with the Plaintiff and his father to interview them with respect to the Claim; (

d) On May 8, 2019, the Claim was assigned to Stephen LeBlanc; (

e) On May 13, 2019, Stephen LeBlanc met with the Plaintiff and his father to interview them with respect to the Claim; (

f) Stephen LeBlanc subsequently investigated the Claim and provided his recommendation to Certas; and (

g) On July 18, 2019, the denial was communicated to the Plaintiff. [69] The affidavit evidence of Stephen LeBlanc sets out the investigation he conducted, including the gathering of property maps, assessment records and aerial photographs of the two properties in question (Record, p. 66-82). There is no question that his investigation properly concluded that the Garage was situated on the Garage Lot associated with 237 Ridge Road, and not the House

Lot at 235 Ridge Road. The Plaintiff does not contest the fact that the Garage was located on PID 45138641. Mr. LeBlanc concluded the Garage was not located on the insured premises and was not covered by the policy. For the reasons already stated, this was a correct assessment of the situation. [70] Although not pleaded, the Plaintiff points to a document attached as Exhibit B to his affidavit of June 17, 2022. The document is simply identified as a copy of a page from a document identified from the Defendant’s Affidavit of Documents.

It appears to be an email communication between Michael Martin of Certas and the adjuster, Stephen LeBlanc. There is an inquiry by Mr. Martin, whether any commercial activity was being conducted on the properties. Mr. LeBlanc responds as follows: Hi Stephen, I chatted with the agent, and unfortunately the three staff members who previously worked on writing this policy no longer work there. The agent was inclined to chalk it up to an innocent oversight by both his office and the insured.

I think our challenge is that the outbuildings do appear to be used for commercial purposes, I think we can safely say “Ward’s Recreation” commercially operates out of them. Given this, even if the information would have been disclosed correctly we would not have written the policy. I sadly believe this is a void ab initio situation. Thoughts? [71] Counsel for the Plaintiff submits that this is evidence that Certas was looking for a way to deny the claim on the basis of commercial activity, and not for the Garage being on the wrong premises.

He also suggests that the failure to properly identify both properties was an oversight by the agent. In oral argument, the Plaintiff’s counsel submitted that this suggests bad faith. [72] I put little stock in the document. Untethered, as it is, to any affidavit explaining its significance, it is impossible to put it in context. The words are subject to more than one

interpretation. Furthermore, as mentioned earlier, the agent is not a party to this action, nor is there any allegations of wrongdoing by the agent in the Plaintiff’s pleadings. Finally, if the Plaintiff intended to rely on these “facts” to support a claim of bad faith, they should have been pleaded. They were not. [73] In my view, the Plaintiff’s claim for bad faith cannot be sustained. There is no genuine issue requiring a trial with respect to the bad faith claim. IV.

CONCLUSION [74] In its Brief on Motion, Certas concedes that the Plaintiff would be entitled, under the policy, to $2000.00 for loss of personal property located away from the residence, but the Plaintiff failed to provide the required proof of loss (see para. 10, Statement of Defence, Record, p. 286). The issue was not addressed by the Plaintiff in his brief or oral argument. [75] In light of the foregoing conclusions, there is no genuine issue requiring a trial and the Certas motion for

summary judgment is hereby granted. [76] The Defendant, having been completely successful, is entitled to costs. Counsel for Certas submits that the costs award should be increased on account of the plaintiff’s refusal to admit that the Garage was not located at 235 Ridge Road, pursuant to Rules 51.03, 59.02 (

i) and 59.02. This argument raises an interesting issue. It is correct that the Plaintiff refused to admit that the Garage was not located at 235 Ridge Road. However, the Plaintiff’s case was based on his

interpretation that 235 Ridge Road comprised both lots. To admit the fact would have been tantamount to capitulation. While I have concluded that 235 Ridge Road does not encompass the lot upon which the Garage was situated, the Plaintiff’s argument was not without some merit. Accordingly, I have not taken into account the Plaintiff’s refusal to admit the fact in fixing costs. [77] Certas is entitled to costs, in the amount of $3000.00. ______________________________

Terrence J. Morrison, J.C.K.B.