Payne v. Pafco Insurance Co., (2000) 190 Sask.R. 181 (ProvCt)

• Judge: Deshaye, P.C.J.
• Court: Provincial Court of Saskatchewan (Canada)
• Case Date: January 20, 2000
• Jurisdiction: Saskatchewan
• Citations: (2000), 190 Sask.R. 181 (ProvCt)

Payne v. Pafco Ins. Co. (2000), 190 Sask.R. 181 (ProvCt)

MLB headnote and full text

Temp. Cite: [2000] Sask.R. TBEd. FE.013

Rocky Payne v. Pafco Insurance Company

Windy Hill Farms and Constantine Yorga v. Pafco Insurance Company

Walter LaClare v. Pafco Insurance Company

Wawedash Farms Ltd. v. Pafco Insurance Company

Indexed As: Payne v. Pafco Insurance Co.

Saskatchewan Provincial Court

Deshaye, P.C.J.

January 20, 2000.

Summary:

Four insureds sued the same insurer sepa­rately after it denied coverage under insur­ance policies insuring their bulls. The insurer raised various defences against the insureds.

The Saskatchewan Provincial Court allowed one action and dismissed the other three.

Courts - Topic 8145

Provincial courts - Saskatchewan - Small Claims - Jurisdiction - General - Section 2(o) of the Insurance Act defined "court" as meaning "Her Majesty's Court of Queen's Bench for Saskatchewan" - Sec­tion 3(2) of the Small Claims Act stated that, notwithstanding s. 2(o) of the Insur­ance Act, actions by and against an insurer could be brought in the Provincial Court under the Small Claims Act - Section 109 of the Insurance Act permitted "the court" to relieve against forfeiture - The Saskatchewan Provincial Court held that it had jurisdiction to apply s. 109 of the Insurance Act - To hold that although actions were permitted, the court's power to grant "equitable" relief was restricted and could only be granted by the superior court, was an overly restricted interpreta­tion of s. 3(2) of the Small Claims Act - See paragraphs 6 to 11.

Insurance - Topic 3139

Payment of insurance proceeds - Actions - Relief against forfeiture - Imperfect com­pliance with statutory conditions - Notice -[See first and third Insurance - Topic 7968 ].

Insurance - Topic 7903

Livestock insurance - General - Validity of policy - Section 267 of the Insurance Act which provided that a livestock insurer "... may insure against loss of livestock, ... except that of design on the part of the insured ..." - The Saskatchewan Provincial Court rejected an argument that s. 267 rendered a policy illegal if destruc­tion by the insured was of necessity con­templated -Section 267 was intended to prohibit the sale of insurance on livestock where the insured intended from the pol­icy's incep­tion to have the animal killed, for example as part of a commercial enter­prise - It was not intended to cover a situation where the insured owner of a diseased or injured animal decided that the animal had to be destroyed for humane reasons - See para­graph 35.

Insurance - Topic 7938

Livestock insurance - Risk or perils - Exclusions - Termination of ownership - Yorga sued an insurer after it denied cov­er­­age under a mortality insurance pol­icy insuring his breeding bull - Yorga's vet­erinarian recommended that his bull be slaughtered for humane reasons - Yorga sold the bull at auction knowing it would be bought for slaughter - The policy pro­vided that insurance would cease on any animal which the insured had given up their ownership rights by, inter alia, sale - The Saskatchewan Provincial Court held that the insurer could not rely on the ter­mi­na­tion of ownership by sale provision in the policy conditions - Reading all the policy provisions together, it appeared that the condition was intended to relate to divestiture for reasons other than the need for destruction - See paragraph 31.

Insurance - Topic 7968

Livestock insurance - Payment of insur­ance proceeds - Condition precedent - Notice of injury, disease, death or accident - LaClare sued an insurer after it denied coverage under a mortality insurance pol­icy insuring his bull - It was noticed that the bull was not walking right in July, 1998 and again in August - In November, 1998, LaClare observed that the bull was limping even more - He took it to his veterinarian who recommended that it be slaughtered - The Saskatchewan Provincial Court dismissed LaClare's action - The insurer was entitled to rely on clauses in the policy requiring immediate notification of illness or injury and requiring an as­sess­ment of the bull by the insurer's own veterinarian - The court declined to grant relief from forfeiture - See paragraphs 14 to 22.

Insurance - Topic 7968

Livestock insurance - Payment of insur­ance proceeds - Condition precedent - Notice of injury, disease, death or accident - Wawedash Farms Ltd. sued an insurer after it denied coverage under a mortality insurance policy insuring his breeding bull - In May, 1998, Wawedash took the bull to a veterinarian who recommended the bull's destruction - Wawedash immediately notified the insurer's agent and sent written notice to the insurer on June 11, 1998 - There was no evidence that the insurer responded to the notice by either seeking another opinion or authorizing destruction -On June 26, 1998, Wawedash sold the bull for slaughter - The Saskatchewan Provin­cial Court held that Wawedash complied with the policy's notice require­ments - Further, if the insurer failed to act on this notice by employing a veterinarian to confirm the need for destruction, it was unreasonable to hold Wawedash to a pol­icy condition that the insurer's veterinarian certify the need for destruction - See para­graphs 23 to 28.

Insurance - Topic 7968

Livestock insurance - Payment of insur­ance proceeds - Condition precedent - No­tice of injury, disease, death or accident - Yorga sued an insurer after it denied cov­erage under a mortality insurance pol­icy insuring his breeding bull - In July 1998, it was noticed that the bull was lame in a front leg - The lameness got worse - On September 7, 1998, Yorga's veterinar­ian was contacted and the insurer's agent notified - On September 8, 1998, the veter­inarian examined the bull and recom­mend­ed that it be slaughtered for humane rea­sons - A written notice of claim was sent to the insurer the same day - The bull was sold at auction on October 14, 1998 - The Saskatchewan Provincial Court allowed the action - The court agreed that insurer was not immediately notified of the bull's injury or illness as required under the policy - However, the insurer was not prejudiced by granting relief from forfei­ture where earlier veterinary inter­vention would not have changed the prog­nosis - See paragraphs 29 to 35.

Insurance - Topic 7969

Livestock insurance - Payment of insur­ance proceeds - Condition precedent - Assessment by insurer's appointed veteri­narian - Yorga sued an insurer after it denied coverage under a mortality insur­ance policy insuring his breeding bull - In July 1998, it was noticed that the bull was lame in a front leg - The lameness got worse - On September 7, 1998, Yorga's veterinarian was contacted and the insur­er's agent notified - On September 8, 1998, the veterinarian examined the bull and recommended that it be slaughtered for humane reasons - A written notice of claim was sent to the insurer the same day - The bull was sold at auction on October 14, 1998 - The Saskatchewan Provincial Court held that it was unreasonable for the insurer to deny coverage on the basis that Yorga failed to comply with a policy condition that the insurer's veterinarian certify the need for destruction - The need for destruction was communicated with adequate notice - The insurer's failure to employ its own veterinary surgeon amounted to a waiver of the condition - See paragraph 32.

Insurance - Topic 7969

Livestock insurance - Payment of insur­ance proceeds - Condition precedent - Assessment by insurer's appointed veteri­narian - [See first and second Insurance - Topic 7968 ].

Waiver - Topic 1002

Contracts - Acts constituting waiver - [See first Insurance - Topic 7969 ].

Cases Noticed:

Dashchuk Lumber Ltd. v. Proman Projects Ltd. and Continental Insurance Co., [1987] 6 W.W.R. 673; 59 Sask.R. 193 (C.A.), refd to. [para. 12].

Junet Estate and Kallos v. Saskatchewan Government Insurance, [1984] 2 W.W.R. 183; 30 Sask.R. 185 (Q.B.), refd to. [para. 12].

Elance Steel Fabricating Co. v. Falk Bros. Industries Ltd. et al., [1989] 2 S.C.R. 778; 99 N.R. 228; 80 Sask.R. 29; [1990] 1 W.W.R. 29, refd to. [para. 13].

Statutes Noticed:

Interpretation Act, S.S. 1995, c. I-11.2, sect. 10 [para. 11].

Saskatchewan Insurance Act, R.S.S. 1978, c. S-26, sect. 2(o), sect. 109 [para. 6]; sect. 267 [para. 35].

Small Claims Act, S.S. 1998, c. S-50.11, sect. 3(2) [para. 7].

Counsel:

R. Payne appeared in person;

C. Yorga appeared in person;

Linnea Goodhand, for Walter LaClare;

W. Hislop, for Wawedash Farms Ltd.;

Laurie Meunier, for Pafco Insurance Co.

These actions were heard before Deshaye, P.C.J., of the Saskatchewan Provincial Court, who delivered the following judgment at North Battleford, Saskatchewan, on January 20, 2000.