Northern Union Insurance Co. et al. v. Roynat Ltd. et al., (1983) 21 Man.R.(2d) 39 (QB)

• Judge: Kroft, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: February 10, 1983
• Jurisdiction: Manitoba
• Citations: (1983), 21 Man.R.(2d) 39 (QB)

Northern Union Ins. v. Roynat Ltd. (1983), 21 Man.R.(2d) 39 (QB)

MLB headnote and full text

Northern Union Insurance Company and Manitoba Public Insurance Corporation v. Roynat Ltd. and Eriksdale, Rural Municipality of; Roynat Inc. v. Northern Union Insurance Company and Manitoba Public Insurance Corporation

(Suit Nos. 2793/82 and 308/83)

Indexed As: Northern Union Insurance Co. et al. v. Roynat Ltd. et al.

Manitoba Court of Queen's Bench

Kroft, J.

February 10, 1983.

Summary:

A fire damaged insured property. The insurers admitted liability to the mortgagee pursuant to the standard mortgage clause contained in the fire insurance policy. The insurers applied by notice of motion for a determination of whether they were liable to pay the tax arrears on the property out of, or in addition to, the amount owing to the mortgagee. In a second application, the mortgagee applied by notice of motion for a declaration that it was entitled to interest on the insurance proceeds. The two applications were heard together.

The Manitoba Court of Queen's Bench held that the insurers must pay the amount of unpaid taxes from the proceeds otherwise payable to the mortgagee. The court also held that the mortgagee was entitled to interest on the proceeds from the 6lst day after the filing of proofs of loss.

Insurance - Topic 5975

Fire insurance - Loss payable to mortgagee - Effect of tax arrears - Fire destroyed insured property - Although the insurers claimed arson by the insured, they admitted liability to the mortgagee under the standard mortgage clause - Municipal realty and business taxes were owed on the property - The Manitoba Court of Queen's Bench held that pursuant to s. 785(6) of the Municipal Act, the municipality could claim payment of the tax arrears from the insurer out of the insurance proceeds payable to the mortgagee - The court stated that the mortgagee, to protect itself, should have paid the tax arrears and added them to the balance owing under the mortgage - See paragraphs 6 to 18.

Interest - Topic 5304

Interest as damages - Interest on payment of money or debt withheld - Amount due under an insurance contract - Fire destroyed mortgaged property - The mortgagee filed proof of loss - The insurers had an obligation to pay the proceeds within 60 days from the date of filing - The Manitoba Court of Queen's Bench held that the insurer must pay interest on the proceeds if they are wrongfully withheld beyond the 60 days, regardless that the mortgagee, not the insured, claimed the proceeds and filed the proof of loss - The court ordered interest at the rate stipulated in the mortgage - See paragraphs 19 to 26.

Cases Noticed:

Bank of Toronto v. Rural Municipality of West Kildonan, [1937] 1 W.W.R. 216, refd to. [para. 10].

Omnium Securities Company v. Canada Fire and Mutual Insurance Company (1882), 1 O.R. 494, refd to. [para. 15].

Green v. Manitoba Assurance Company (1901), 13 Man. R. 395, refd to. [para. 22].

Harrand v. Saskatchewan Government Insurance Office, [1979] 4 W.W.R. 478; 7 Sask.R. 188, refd to. [para. 22].

Granpac Limited v. American Home Assurance Company, [1982] I.L.R. 5637, refd to. [para. 22].

Statutes Noticed:

Municipal Act, S.M. 1970, c. 100; C.C.S.M., c. M-225, sect. 785(1) [para. 8]; sect. 785(3) [para. 8]; sect. 785(6) [para. 8; 12].

Assessment Act, S.M. 1934, c. 49, sect. 123 [paras. 10 to 11].

Insurance Act, R.S.M. 1970, c. I-40; C.C.S.M., c. I-40, sect. 133(5) [para. 14]; sect. 142(1) [para. 21]; stat. cond. 12 [para. 21].

Mortgage Act, R.S.M. 1970, c. M-200; C.C.S.M., c. M-200, sect. 8(2) [para. 21].

Queen's Bench Act, R.S.M. 1970, c. C-280; C.C.S.M., c. C-280, sect. 72(3) [para. 21].

Counsel:

D.G. Hill, for the Insurers;

G.A. Cudney, for R.M. of Eriksdale;

D.W. Leslie, for RoyNat Ltd.

      These applications were heard before KROFT, J., of the Manitoba Court of Queen's Bench, whose decision was delivered on February 10, 1983.