Definity Insurance Company, previously known as Economical Mutual Insurance Company v. 725360 NB INC., previously known as 11257463 Canada Inc, 2024 NBKB 153
Reading Time: 3 minutes (approx.)
By: Alexandre Doucet
On December 19, 2021, a fire damaged a Moncton property owned by the Respondent corporation. After the respondent submitted its claim to its insurer, Definity (the Applicant), a dispute regarding the assessed property loss and salvageable portions. The Respondent submitted its Proof of Loss to the Applicant on September 21, 2023, which triggered the appraisal process under the Insurance Act, RSNB 1973, c I-12 (“the Act”).
Under the Act, appraisers are hired by each party in an effort to assess the value of a property loss. Since the appraisers were hired, they have been unable to reach an agreement on the selection of an umpire, whose role is that of a neutral to resolve the issues should the parties reach an impasse.
After reviewing section 107 of the Act, which sets out the scope of the court’s power in circumstances where an impasse allows a judge of the court to appoint an umpire, Justice Bourque turned to Ontario jurisprudence to understand the purpose of the appraisal scheme: “to offer a swift and binding resolution to disputes concerning the valuation of losses” [para 18]. According to Ontario jurisprudence, the primary consideration for appraisers when selecting an umpire is to seek out an individual with adequate expertise in the field relevant to the unresolved issue. In Disante v. Meloche Monnex Financial Services Inc., 2023 ONSC 3663, the court considered the subject matter of the issue, the proposed umpires’ experience relevant to the issue and to dispute resolution in general, and the confidence in the proposed umpires’ neutrality.
Guided by the Ontario jurisprudence, Justice Bourque explained the selection process in this case ought to be based on two crucial qualifications: possessing relevant umpire experience and being able to perform the necessary valuation. Justice Bourque selected one of the umpires proposed by the Respondent because of the candidate’s extensive relevant experience and lack of employment affiliation with any insurers, which, Justice Bourque wrote, bolstered the candidate’s impartiality.
