Pembridge Insurance Company v. Parlee, (2005) 283 N.B.R.(2d) 75 (CA)

• Jurisdiction: New Brunswick
• Judge: Ryan, Deschênes and Richard, JJ.A.
• Neutral Citation: 2005 NBCA 49
• Citation: (2005), 283 N.B.R.(2d) 75 (CA),2005 NBCA 49,283 NBR (2d) 75,253 DLR (4th) 182,22 CCLI (4th) 223,[2005] NBJ No 174 (QL),283 NBR(2d) 75,(2005), 283 NBR(2d) 75 (CA),253 D.L.R. (4th) 182,283 N.B.R.(2d) 75,[2005] N.B.J. No 174 (QL)
• Date: 17 November 2004
• Court: Court of Appeal (New Brunswick)

Parlee v. Pembridge Ins. (2005), 283 N.B.R.(2d) 75 (CA);

    283 R.N.-B.(2e) 75; 740 A.P.R. 75

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2005] N.B.R.(2d) TBEd. MY.007

Pembridge Insurance Company (respondent/appellant) v. Mark Parlee (applicant/respondent)

(33/04/CA; 2005 NBCA 49)

Indexed As: Parlee v. Pembridge Insurance Co.

New Brunswick Court of Appeal

Ryan, Deschênes and Richard, JJ.A.

April 28, 2005.

Summary:

An insured, Parlee, applied for an order requiring his automobile insurance company, the insurer, to pay the costs of defending an action brought against him.

The New Brunswick Court of Queen's Bench, Trial Division, 272 N.B.R.(2d) 327; 715 A.P.R. 327, ordered, inter alia, the insurer to defend Parlee, allowed the insured to appoint solicitors and have conduct of the defence and ordered the insurer to pay all reasonable fees and disbursements of the solicitors appointed by the insured. The court also ordered that the solicitors for the insurer could defend under s. 250, but could not advance any defence contrary to the interests of the insured. The insurance company appealed, arguing that the trial judge erred in law in finding that it could not advance any defence as a third party contrary to the interests of Parlee.

The New Brunswick Court of Appeal dismissed the appeal.

Insurance - Topic 725

Insurers - Duties - Duty to defend - Parlee and Coté were occupants in a vehicle owned by Smith and insured by Pembridge - The vehicle was involved in a single vehicle accident, wherein Parlee was in­jured and Coté was killed - Parlee was a named insured on Smith's policy - Coté's parents sued Parlee and Smith - An issue arose as to who was driving the vehicle - Pembridge denied liability and became a third party under s. 250 of the Insurance Act - Section 250 permitted the insurer to contest the claim against Parlee, while at the same time denying coverage - Parlee sought an order requiring Pembridge to, inter alia, pay the costs of defending the Coté action - The application judge granted the order - The application judge stated that in circumstances like this where the insurer and insured took opposite positions with respect to the events giving rise to the loss and their interests in findings of fact diverged, the insurer was obliged to pro­vide a separate defence to the insured even if it had joined itself as a third party - Further, this was one of those situations in which the insured should be permitted to appoint and instruct counsel - The insur­ance company appealed, arguing that the application judge erred in law in finding that it could not advance any defence as a third party contrary to the interests of Parlee - The New Brunswick Court of Appeal dismissed the appeal, holding that the application judge did not commit any error of law when she ordered that the insurance company could not advance any defence contrary to the interest of Parlee - See paragraphs 1 to 25.

Insurance - Topic 725.1

Insurers - Duties - Duty to defend - Costs of defence and other expenses - [See In­surance - Topic 725].

Insurance - Topic 3263

Payment of insurance proceeds - Actions - Parties - Insurer - As third party - [See Insurance - Topic 725].

Insurance - Topic 3263

Payment of insurance proceeds - Actions - Parties - Insurer - As third party - The New Brunswick Court of Appeal discussed the right of an insurer who denies liability under an insurance contract and chooses to be added as a third party under ss. 250(14) and 250(15) of the Insurance Act, includ­ing the meaning and interpretation of these provisions - See paragraphs 17 to 23.

Insurance - Topic 4509

Automobile insurance - Actions - Defence by insurer - Adding insurer as third party - General - [See Insurance - Topic 725 and Insurance - Topic 3263].

Cases Noticed:

Drane v. Optimum Frontier Insurance Co. (2004), 272 N.B.R.(2d) 241; 715 A.P.R. 241; 241 D.L.R.(4th) 748 (C.A.), refd to. [para. 10].

McGlynn v. Ducker et al., [1952] O.R. 40 (H.C.), refd to. [para. 12].

England v. Dominion of Canada General Insurance Co., [1931] O.R. 264 (H.C.), affd. (1931), 40 O.W.N. 508 (C.A.), refd to. [para. 12].

Merchants Casualty Insurance Co. v. Waterloo Trust & Savings Co., [1936] O.R. 67 (H.C.), refd to. [para. 12].

Hassan v. Toronto General Insurance Co., [1960] O.W.N. 108 (H.C.), refd to. [para. 12].

Heads v. Brownlee and McAlpine, [1943] 3 W.W.R. 257 (B.C.C.A.), refd to. [para. 12].

Marshall v. Adamson, [1936] O.R. 103 (C.A.), refd to. [para. 15].

Renaud & Jacob, Re, [1996] Q.J. No. 2670 (C.A.), refd to. [para. 17].

Brockton (Municipality) v. Cowan (Frank) Co. et al. (2002), 154 O.A.C. 125; 57 O.R.(3d) 447 (C.A.), refd to. [para. 17].

Morrison v. Co-operators General In­surance Co. (2004), 273 N.B.R.(2d) 361; 717 A.P.R. 361; 4 M.V.R.(5th) 33 (C.A.), refd to. [para. 18].

Comeau v. Roy et al. (1998), 207 N.B.R.(2d) 313; 529 A.P.R. 313 (T.D.), revd. (1999), 217 N.B.R.(2d) 242; 555 A.P.R. 242 (C.A.), refd to. [paras. 21, 22].

Bortuzzo et al. v. Barna et al. (1986), 54 O.R.(2d) 598 (S.C.), refd to. [para. 23].

Dyk v. Protec Automotive Repairs et al., [1997] B.C.T.C. Uned. C10; 46 C.C.L.I.(2d) 107 (S.C.), refd to. [para. 23].

Cameron v. Service (1993), 77 B.C.L.R.(2d) 317 (S.C.), refd to. [para. 23].

Statutes Noticed:

Insurance Act, R.S.N.B. 1973, c. I-12, sect. 250(14), sect. 250(15) [para. 2].

Authors and Works Noticed:

Bell, J. Donald, The Non-Waiver Dilemma (1968), 11 Can. Bar J. 324, p. 326 [para. 13].

Griffiths, W.D., Action Against the Insur­er, in Special Lectures of the Law Socie­ty of Upper Canada: Claims under Insur­ance Policies (1962), pp. 67 [para. 12]; 68 [paras. 12, 14]; 69, 70, 71, 72 [para. 14]; 73 [para. 16]; 74 [para. 20].

Hilliker, Gordon, Liability Insurance Law in Canada (2nd Ed. 1996), p. 108 [para. 20].

Counsel:

Nathan J. Weinman, for the appellant;

Jade A. Spalding and Michael J. Hynes, for the respondent.

This appeal was heard on November 17, 2004, by Ryan, Deschênes and Richard, JJ.A., of the New Brunswick Court of Ap­peal. The following decision of the court was delivered on April 28, 2005, by Deschênes, J.A.