Pomerleau Inc. v. 1702660 Ontario Inc., 2022 ONSC 6016

COURT FILE NO.: CV-17-71366

DATE: 2022/10/27

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: INTACT INSURANCE, Applicant (proposed intervenor)

and

POMERLEAU INC, Respondent (plaintiff)

BEFORE: Mr. Justice Robert L. Maranger

COUNSEL: W. Colin Empke and Taylor Horan, for the Applicant

Chris Afonso, for the Respondent

HEARD: October 13, 2022

ENDORSEMENT

1This was a motion by Intact Insurance company (Intact) for leave to intervene as an added party defendant to this action pursuant to rule 13.01 of the Rules of Civil Procedure. The plaintiff opposed the motion arguing that Intact should not be granted party status on the facts of this case because it will be taking a position that is adverse in interest to its own insured.

2The following are the relevant facts respecting this motion:

• The action arises out of alleged water damage that occurred at a condominium complex at 1000 Wellington Ave. in Ottawa which was constructed by the plaintiff.

• The plaintiff alleges that Lucas Roofing is responsible for the damages in that it entered a subcontract with the defendant to supply and install the roofing assembly, and that they were in breach of contract and negligent with respect to the work done which was the cause of the extensive water damage.

• Intact issued a policy of commercial general liability insurance to Lucas Roofing. Intact had been defending the matter since 2017 pursuant to a reservation of rights, as it took the position that some aspects of the claim were outside of coverage.

• One of the conditions of insurance was that the defendant in the underlying action must cooperate with Intact in the investigation of the claim or defence against the action.

• Following the multiple rescheduling of examinations for discovery and warnings to Lucas Roofing concerning a breach of the policy for non-cooperation, Intact ultimately took the position that Lucas roofing failed to comply with that policy condition and thereby forfeited their coverage.

• Intact seeks intervenor status which would include conducting itself with its own interests in mind.

3The fundamental issue here is should the court grant intervenor status in the circumstances of this case where the insurance company, in addition to defending on the issues of liability and damages, will also protect/pursue issues regarding coverage, which may be adverse to the interests of Lucas Roofing.

4After taking into consideration, the moving party’s factum, the plaintiff’s factum, and the moving party’s factum in reply as well as the oral arguments presented by counsel, I would grant the relief requested by the moving party and for the following reasons:

• The thrust of the plaintiff’s argument is that since Intact was once defending under a reservation of rights; they should not now be allowed to come forward and be added as a party to defend against damages and liability as well as represent their own interests respecting the issue of coverage. Citing and relying upon the decision of Waterloo insurance Co. v. Zurbrigg [1983] O.J. No. 148.

• Section 132 (1) of the Insurance Act provides:

Where a person incurs a liability for injury or damage to the person or property of another, and is insured against such liability, and fails to satisfy a judgment awarding damages against the person in respect of the person’s liability, and an execution against the person in respect thereof is returned unsatisfied, the person entitled to the damages may recover by action against the insurer the amount of the judgment up to the face value of the policy, but subject to the same equities as the insurer would have if the judgment had been satisfied.

• Intact clearly has an interest in the outcome of the proceedings as it may be adversely affected by a judgement in favour of the plaintiff. Pursuant to Rule 13.01 (a) and (b) of the Rules of Civil Procedure they may be added as a party.

• There is no true prejudice to the defendant nor the plaintiff that would result by allowing intact intervenor status in the present case.

• On the face of it the defendant Lucas Roofing’s actions or inaction support the proposition that there’s been a breach of the policy and the position taken by Intact to deny coverage and discontinue its representation of them seems warranted and justified. It is these circumstances that necessitated Intact having to seek intervenor status. This in my view distinguishes this case from Waterloo Insurance.

• The proposition that Intact be granted intervenor status and added as a party defendant while at one and the same time representing its own interests (specifically the issue of denying coverage) is generally supported by decisions governing Rule 13.01 and s.132 that came after the Waterloo Insurance decision: see World’s Finest Chocolate Canada Ltd. V. Quinte Warehousing Ltd, 1998 Carswell Ont 1414 (Gen. Div.), Amondsen v. Hunter 1995 CarswellOnt 131, and Azad v. Dekran, 2013 ONSC 1830.

5Therefore, the following is hereby ordered: that Intact Insurance Company be granted intervenor status, and that the style of cause of the within proceedings be amended to reflect the fact that Intact Insurance Company has been added as a party defendant.

6Counsel have indicated that should intervenor status be granted, that they have agreed upon a timetable to move the matter forward, the said timetable will form part of this court order, and can be added hereto as schedule A.

7With respect to the issue of costs, if the parties cannot agree, I will allow counsel 15 days of the date of this decision to provide two pages of written argument on the issue of costs. Failing which there will be a no cost order.

October 27, 2022