Justin Gushue Plaintiff And: South Coast Insurance Agency Limited Defendant, 2021 NLSC 124

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Gushue v. South Coast Insurance Agency Limited , 2021 NLSC 124 Date : October 6, 2021 Docket : 201904G0055 Between: Justin Gushue Plaintiff And: South Coast Insurance Agency Limited Defendant Before: Justice George L. Murphy Place of Hearing: Corner Brook, Newfoundland and Labrador Date of Hearing: August 11, 2021

Summary: The Defendant sought dismissal of the claim of the Plaintiff pursuant to Rules 14.24(1) (

b) and 17A of the Rules of the Supreme Court, 1986 . The Court determined in respect of the Rule 17A claim that there was no genuine issue for trial based on the pleadings. However, the Court also determined based on an Affidavit of the Plaintiff filed in response to the application of the Defendant that there may be a triable issue on a claim which had not been pleaded. As a result, the Court determined that the appropriate course of action was to allow an opportunity for the Plaintiff to apply to amend the Statement of Claim. If the Plaintiff did not apply within 30 days or applied but was unsuccessful, the relief under Rule 17A would be granted. A decision on the Rule 14.24(1) (

b) claim was deferred. Appearances:

Robert M. Matthews, Q.C. Appearing on behalf of the Plaintiff Gregory A. C. Moores Appearing on behalf of the Defendant Authorities Cited: CASES CONSIDERED: Brook Construction

(2007) Inc. v. North Atlantic Cement and Construction Ltd. , 2020 NLCA 42 ; Bank of Nova Scotia v. Atlantic Ocean Dinner Cruises Ltd. , 2010 NLTD(G) 132; and Alberta Mortgage and Housing Corporation v. Delisle Holdings Ltd. , 1999 ABQB 721 RULES CONSIDERED: Rules of the Supreme Court , 1986 , S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Murphy, J. : INTRODUCTION [ 1 ] The Defendant applied to this Court seeking dismissal of the claim of the Plaintiff pursuant to Rule 17A of the Rules of the Supreme Court , 1986 , S.N.L. 1986, c. 42, Sch.

D or alternatively Rule 14.24(1) (b). [ 2 ] The factual underpinning of the application is that the Plaintiff in the Statement of Claim alleged that it had a homeowners’ policy of insurance with the Defendant and that the Defendant had breached that policy by failing to pay certain losses suffered by the Plaintiff. In fact, the Defendant is merely an insurance broker through which the Plaintiff had obtained his insurance policy.

The policy was actually effected with certain underwriters at Lloyd’s, London (“Lloyd’s”). [ 3 ] Counsel for the Plaintiff at the hearing of the application admitted that Lloyd’s was the insurer and that the Defendant was merely a broker. It was not entirely clear to me that counsel for the Plaintiff understood the distinction.

In any event, it is abundantly clear that there was no policy of insurance in place with the Plaintiff as the insured and the Defendant as the insurer. [ 4 ] The Plaintiff filed an Affidavit in response to the application of the Defendant and it is evident from that Affidavit and the submissions of counsel for the Plaintiff that the true factual basis of his claim against the Defendant is that he asked the Defendant to make or effect a change to his insurance policy to reflect the fact he began living in the insured house as opposed to renting it and the requested change to the policy was not made prior to a fire loss occurring. [ 5 ] The Plaintiff alleges in his Affidavit that the Defendant breached a duty it had to him with respect to the change he requested to his insurance policy.

I will set forth certain pertinent parts of his Affidavit: 1. That I was a customer of the Defendant for over 20 years. 2. That I had insurance on my home through them for 8 years. 3. That I contacted South Coast Insurance on May 1st & indicated I was moving back into my house (which was rented) & I wanted to change my coverage to a home owners policy. Jenny Hall an employee of the Defendant said to visit their office on Friday on May 4th & she would take care of it. 4. That on Friday I visited their office in Corner Brook, I signed what I had to sign & believed the policy was changed. 5.

That a fire occurred & destroyed my house that night. . . .

7. That the office in Corner Brook did not change the coverage as promised. . . . 9. That the Defendant owed me a duty to change the insurance. I relied on them to make (effect) that change which was not done before the fire. . . . 11. That I relied on the Defendant to my detriment. 12. That I signed a form in the office of the Defendant . . . on May 4th, 2018 which was provided to me by the Defendant. 13.

That the Defendant breached its duty to me and denied coverage for the home contents & other coverages. . . . [ 6 ] While there are references in the Affidavit which are consistent with the claim as set forth in the Statement of Claim, the primary claim set forth in the Affidavit of the Plaintiff is significantly different. The Statement of Claim essentially alleges a breach of an insurance policy whereas the primary claim put forward in the Affidavit of the Plaintiff is the allegation that the Defendant breached a duty it owed to the Plaintiff by failing to effect a requested change to his insurance policy.

These are significantly different claims. The former is a claim in contract and the latter a claim in tort, specifically negligence. [ 7 ] With respect to the Defendant’s reliance on Rule 17A , the question in this case is whether there exists a genuine issue for trial. In examining that question, a judge must generally do so within the parameters of the pleadings as they exist at the time the application is decided (see Brook Construction

(2007) Inc. v. North Atlantic Cement and Construction Ltd. , 2020 NLCA 42 ; Bank of Nova Scotia v. Atlantic Ocean Dinner Cruises Ltd. , 2010 NLTD(G) 132; and Alberta Mortgage and Housing Corporation v. Delisle Holdings Ltd. , 1999 ABQB 721 ). [ 8 ] As I indicated to counsel at the hearing of the application, there is no genuine issue for trial on the pleadings as currently before the Court. That is because no matter how liberally one would interpret the Statement of Claim, the allegation is that the Plaintiff had a contract of insurance with the Defendant which the Defendant breached.

The evidenced filed in support of the application establishes that there was no contract of insurance between the Plaintiff and the Defendant and that the Defendant was in fact a broker. As mentioned earlier, counsel for the Plaintiff conceded these facts at the hearing of the application.

Because there is no genuine issue for trial, ordinarily the Defendant would be entitled to the relief claimed, namely dismissal of the Plaintiff’s action. [ 9 ] The complicating issue here is that the Plaintiff in his Affidavit in reply to the application sets forth facts which potentially demonstrate that he has a claim in negligence against the Defendant. The problem is that no such claim was put forward by the Plaintiff in his Statement of Claim. [ 10 ] At the hearing of the application I asked both counsel what a court should do in such a situation.

I went on to ask whether a court should proceed to decide the application on the basis of the pleadings as then before the Court or should the Court consider a request to amend the pleadings prior to deciding the application. To my great surprise, counsel for the Plaintiff took the position that there was no need to amend the pleadings. He submitted that paragraph 6 of the Statement of Claim could be read broadly enough to demonstrate there was a genuine issue for trial and that accordingly the application should be dismissed.

Not surprisingly, counsel for the Defendant submitted that the application should be considered within the scope of the pleadings then before the Court and that the Court should only deal with requests that were before the Court pointing out that counsel for the Plaintiff had taken the position that an amendment was unnecessary. [ 11 ] I understand completely why the Defendant brought this application before the Court given the Statement of Claim filed against it.

I can also completely understand the position taken by counsel for the Defendant in response to my question regarding whether I should consider the application based on the pleadings as drafted or whether I should first consider a request to amend the Statement of Claim. However, I do not feel it would be just to penalize the Plaintiff with the dismissal of his claim as a result of his counsel’s cavalier approach to pleadings when there are facts before the Court which may amount to a good cause of action against the Defendant.

I emphasize the word “may” because I want it to be clear that I am not saying the Plaintiff does have a good cause of action against the Defendant. It would be inappropriate at present to make such a determination for many reasons, including, most importantly, that the Defendant has not had an opportunity to respond to the allegations contained in the Affidavit of the Plaintiff. I note that there was no need for the Defendant to respond to such allegations given the wording of the Statement of Claim.

[ 12 ] In the circumstances, while I am satisfied that there is no genuine issue for trial based on the pleadings as currently before the Court, there may be a triable issue relating to whether the Defendant breached a duty owed to the Plaintiff which has not been pleaded. The appropriate course of action is to allow an opportunity for the Plaintiff to apply for leave to amend the Statement of Claim.

If the Plaintiff does not apply within 30 days of the date hereof for leave to amend the Statement of Claim or if he applies and is unsuccessful on his application the Defendant will be granted the relief claimed under Rule 17A. [ 13 ] As I outlined at the beginning of this decision, the application of the Defendant in the alternative claimed under Rule 14.24(1) (

b) on the basis that the claim of the Plaintiff as set forth in the Statement of Claim is demonstrably false. My rationale for not allowing the application of the Defendant under Rule 17A at this time applies equally to the claim for relief under Rule 14.24(1) (b). Accordingly, a decision on that claim is deferred.

If the Plaintiff does not apply within 30 days of the date hereof for leave to amend the Statement of Claim or if he applies and is unsuccessful on his application the Defendant may request the Court to render a decision on its claim for relief under Rule 14.24(1) (b). [ 14 ] I will now deal with the issue of costs on this application. The Statement of Claim in this proceeding was filed on February 20, 2019 and the Statement of Defence filed on June 7, 2019. The application of the Defendant under Rule 17A and 14.24(1) (

b) was filed on November 4, 2020. [ 15 ] Counsel for the Plaintiff should have known of the problem with the Statement of Claim he drafted by the time of the filing of the Statement of Defence in June of 2019. Further, since the application was filed on November 4, 2020 he has or should have known of the potential consequences of a poorly or improperly drafted Statement of Claim.

Despite the foregoing, he made no application to Court seeking leave to amend the Statement of Claim so as to put forward a properly drafted Statement of Claim based on the facts regarding the alleged breach of duty as set forth in the Affidavit of the Plaintiff referred to earlier. If he had done so once the Statement of Defence was filed, the Defendant would not have had to incur the expense of drafting and filing the application and supporting Affidavit or the Memorandum of Fact and Law which was filed in support of the application.

Even if he did not realize the error until the application was filed, he could have then quickly moved to seek permission to amend the Statement of Claim and at least saved the Defendant from having to incur the expense of preparing the Memorandum of Fact and Law. In either case, the Defendant would not have had to incur the expense of preparing for and attending on the hearing of the application. Given these facts, it is my decision that the Defendant shall be entitled to its costs on this application in any event of the cause.

Those costs shall be on the basis of Column 5 of the Rules of the Supreme Court , 1986 , S.N.L. 1986, c. 42, Sch. D . _____________________________ George L. Murphy Justice