Stomp Pork Farm Ltd. v. Lombard General Insurance Co. of Canada et al., 2008 SKQB 405

• Judge: Ottenbreit, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: October 07, 2008
• Jurisdiction: Saskatchewan
• Citations: 2008 SKQB 405;(2008), 316 Sask.R. 262 (QB)

Stomp Pork Farm v. Lombard General (2008), 316 Sask.R. 262 (QB)

MLB headnote and full text

Temp. Cite: [2008] Sask.R. TBEd. OC.040

Stomp Pork Farm Ltd. (plaintiff) v. Lombard General Insurance Company of Canada, Lloyd's Underwriters, Hartford Fire Insurance Company and ING Insurance Company of Canada (defendants)

(2007 Q.B.G. No. 296; 2008 SKQB 405)

Indexed As: Stomp Pork Farm Ltd. v. Lombard General Insurance Co. of Canada et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Ottenbreit, J.

October 7, 2008.

Summary:

On December 12, 2005, a barn owned by the plaintiff was totally destroyed by fire. The plaintiff was insured against all risks of a direct loss or damage to the barn. The plaintiff sued the insurers alleging that they had refused to indemnify it under the policy. Farm Credit Canada (FCC) had advanced certain loans to the plaintiff prior to the fire. FCC had required that insurance be placed on the barn, that FCC be named as a first loss payee under those policies and that there be a standard mortgage clause to the policy added to protect FCC. FCC was aware of the fire by January 10, 2006. FCC filed a proof of loss dated June 20, 2006. In October 2006, FCC was advised that the insurers had declined the plaintiff's claim. FCC was content to allow the plaintiff to proceed with the action with the expectation that FCC would receive the proceeds of the insurance claim to apply towards the loans that it had made to the plaintiff. The plaintiff was placed under creditor protection under the Companies' Creditors Arrangements Act. FCC applied for an order under Queen's Bench Rule 39 and s. 20 of the Limitations Act to be added as a plaintiff to the action and amend the statement of claim by grafting its claim (in contract) to the original action.

The Saskatchewan Court of Queen's Bench allowed the application.

Limitation of Actions - Topic 2324

Actions in contract - Insurance contracts - When time begins to run - On December 12, 2005, a barn owned by the plaintiff was totally destroyed by fire - The plaintiff was insured against all risks of a direct loss or damage to the barn - The plaintiff sued the insurers alleging that they had refused to indemnify it under the policy - Farm Credit Canada (FCC) had advanced certain loans to the plaintiff prior to the fire - FCC had required that insurance be placed on the barn, that FCC be named as a first loss payee under those policies and that there be a standard mortgage clause to the policy added to protect FCC - FCC was aware of the fire by January 10, 2006 - FCC filed a proof of loss dated June 20, 2006 - In October 2006, FCC was advised that the insurers had declined the plaintiff's claim - FCC was content to allow the plaintiff to proceed with the action with the expectation that FCC would receive the proceeds of the insurance claim to apply towards the loans that it had made to the plaintiff - The plaintiff was placed under creditor protection under the Companies' Creditors Arrangements Act - FCC applied for an order adding it as a plaintiff to the action and adding a new claim (in contract) - The insurers argued that FCC was barred from commencing an action under the policy because the two year limitation had long expired (the date of the fire) - The Saskatchewan Court of Queen's Bench allowed the application - There had not been a formal denial by the insurers of FCC's claim - Assuming however that FCC had provided all the information needed by the insurers to assess the claim on the filing of the proof of loss in accordance with statutory condition 6, the insurers' obligation to pay would arise 60 days after the filing of the proof of loss at the earliest - Failure to pay would therefore occur pursuant to statutory condition 12 on August 19, 2006 - The limitation commenced on that date - It was on this day that all of the four criteria set forth in s. 6(1) of the Limitations Act would be met - "FCC would have suffered injury, loss or damage to its security i.e. the indemnity, which was caused or contributed to by the failure to honor or pay the indemnity (the act or omission), which failure was that of the insurers and having regard to the foregoing FCC knew or ought to have known that the appropriate remedy would be an action" - Accordingly, FCC's application was not statute barred - See paragraphs 24 to 53.

Practice - Topic 651

Parties - Adding or substituting parties - Adding or substituting plaintiffs - Circumstances when allowed - [See Limitation of Actions - Topic 2324 and Practice - Topic 712 ].

Practice - Topic 653

Parties - Adding or substituting parties - Adding or substituting plaintiffs - Application of limitation periods - [See Limitation of Actions - Topic 2324 and Practice - Topic 712 ].

Practice - Topic 712

Parties - Adding or substituting parties - Notwithstanding limitation period - Statutory authorization - On December 12, 2005, a barn owned by the plaintiff was totally destroyed by fire - The plaintiff was insured against all risks of a direct loss or damage to the barn - The plaintiff sued the insurers alleging that they had refused to indemnify it under the policy - Farm Credit Canada (FCC) had advanced certain loans to the plaintiff prior to the fire - FCC had required that insurance be placed on the barn, that FCC be named as a first loss payee under those policies and that there be a standard mortgage clause to the policy added to protect FCC - FCC was aware of the fire by January 10, 2006 - FCC filed a proof of loss dated June 20, 2006 - In October 2006, FCC was advised that the insurers had declined the plaintiff's claim - FCC was content to allow the plaintiff to proceed with the action with the expectation that FCC would receive the proceeds of the insurance claim to apply towards the loans that it had made to the plaintiff - The plaintiff was placed under creditor protection under the Companies' Creditors Arrangements Act - FCC applied for an order adding it as a plaintiff to the action and adding a new claim (in contract) - The insurers argued that FCC was barred from commencing an action under the policy because the two year limitation had long expired (the date of the fire) - The Saskatchewan Court of Queen's Bench allowed the application - The application was not statute-barred - In any event, the court allowed the application under s. 20 of the Limitations Act - Section 20 allowed new claims and a new party if the new claim arose out of the same transaction or occurrence as the original claim and there was no prejudice - Although FCC's claim was a different breach of contract claim than that of the plaintiff, it arose out of the same transaction or occurrence, the fire - Further, no party would suffer actual prejudice as a result of the amendment - Finally, the proposed amendment was not a radical change to the statement of claim - See paragraphs 54 to 71.

Practice - Topic 2111

Pleadings - Amendment of pleadings - Prohibition against adding new action or "claim" which is statute barred - [See Limitation of Actions - Topic 2324 and Practice - Topic 712 ].

Cases Noticed:

Cameco Corp. v. Insurance Co. of the State of Pennsylvania et al., [2008] 6 W.W.R. 626; 310 Sask.R. 89; 423 W.A.C. 89; 2008 SKCA 54, dist. [para. 12].

Mah v. Zurich Insurance Co. (1975), 57 D.L.R.(3d) 625 (Sask. Q.B.), refd to. [para. 20].

Battersby v. Lenhoco Enterprises Ltd. and Leniczek (1980), 3 Sask.R. 112; 109 D.L.R.(3d) 330 (C.A.), refd to. [para. 27].

Fritz v. Knorr et al. (1994), 111 Sask.R. 142 (Q.B.), refd to. [para. 30].

Pusch v. Freshair Enterprises Ltd. et al. (2007), 293 Sask.R. 289; 397 W.A.C. 289; 2007 SKCA 60, refd to. [para. 31].

Dusterbeck v. Beitel, [1988] 6 W.W.R. 669 (Sask. C.A.), refd to. [para. 62].

Duke et al. v. Vervaeck (2000), 197 Sask.R. 253; 2000 SKQB 414, refd to. [para. 63].

287993 B.C. Ltd. et al. v. Nanaimo (Regional District), [2006] B.C.A.C. Uned. 125; 2006 BCCA 507, refd to. [para. 67].

Carley Estate v. Allied Signal Inc., [1997] B.C.J. No. 1097 (C.A.), refd to. [para. 67].

Authors and Works Noticed:

Alberta, Law Reform Institute, Limitations Act: Standardizing Limitation Periods for Actions on Insurance Contracts (2003), online: http://www.law.ualberta.ca/alri/ docs/FR90.pdf , generally [para. 49]; p. 31 [para. 45].

Counsel:

Brian J. Scherman, Q.C., for the plaintiff;

Gary G.W. Semenchuck, Q.C., for the defendants.

This application was heard by Ottenbreit, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following fiat on October 7, 2008.