Ville de Dieppe v. Monette Diane Jaillet & Gaston Honoré Caissie, 2025 NBKB 266 (CanLII)
Reading time: 4 minutes (approx.)
By: Fiona Costello (Articled Clerk)
This case arose from a motor vehicle accident in which the defendant driver struck a traffic light pole and control cabinet owned by the plaintiff. Passengers in the defendants’ vehicle also sustained personal injuries; although no personal injury claim had been advanced at the time of this proceeding, the defendants anticipated that such claims could arise. With policy limits of only $1,000,000, the defendants were concerned about the availability of insurance coverage for both the plaintiff’s claim and any future personal injury claims. The parties therefore sought a ruling on the proper interpretation of section 243(2) of New Brunswick’s Insurance Act.
The Act requires every motor vehicle liability policy issued in New Brunswick to provide at least $200,000 in coverage for any single accident. This coverage must account for liability resulting from bodily injury, death, and property damage. Section 243(2) applies where a single accident results in bodily injury or death as well as property damage, and the sum of the claims exceeds available policy limits. In such instances, claims arising from bodily injury or death take priority up to $180,000, while claims for property damage take priority up to $20,000. The issue before the Court was whether these amounts remain fixed or scale proportionally as policy limits increase. The plaintiffs argued for the proportional approach, under which the $180,000 and $20,000 priorities would scale to $900,000 and $100,000 under a $1,000,000 policy.
The court observed that most provinces and territories establish priorities using fixed dollar amounts, with only British Columbia and the Northwest Territories specifying the priorities as percentages of the total policy limit. It was also noted that the New Brunswick legislature, through the Insurance Act, expressly contemplated limits above the statutory minimum, yet deliberately fixed priority amounts in dollars rather than percentages. This, in conjunction with the absence of any language indicating that the priorities were intended to scale proportionally, led the court to conclude that the amounts in section 243(2) remain constant regardless of policy limit. The Act thereby establishes minimum priority “pots” for each category of damages, to be applied as fixed sums. In its reasons, the Court discerned that the Legislative Assembly, in enacting section 243(2), intended that plaintiffs suffering bodily injury would not be deprived of a meaningful recovery where the same accident causes substantial property damage.
The decision clarifies the method for distributing insurance proceeds when combined claims for bodily injury or death and property damage exceed the policy limits. Under section 243(2), the fixed priorities of $180,000 for bodily injury or death and $20,000 for property damage are applied first, with any remaining coverage distributed pro rata, i.e., in proportion to the size of the outstanding claims.
