Date Issued: February 8, 2023

File: SC-2022-003224

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Intact Insurance Company v. Proline Roofing Ltd., 2023 BCCRT 116

Between:

INTACT INSURANCE COMPANY

Applicant

And:

PROLINE ROOFING LTD.

Respondent

REASONS FOR DECISION
Tribunal Member:	Micah Carmody

INTRODUCTION

1.      The applicant, Intact Insurance Company (Intact), says it insured IS, a tenant in a building that experienced water damage. IS is not a party to this dispute. The respondent, Proline Roofing Ltd. (Proline), undisputedly caused the water damage when it was replacing the building’s roof for the owner, Redwood Manor Ltd. (Redwood). Redwood is not a party to this dispute.

2.      Intact claims $5,000 for payments it says it made to IS to move their belongings and cover additional living expenses, such as hotel costs. Intact is represented by an employee.

3.      Proline says it settled Redwood’s claims related to the water damage and it is not liable to anyone else. Proline is represented by its owner, Mauricio Reyes.

JURISDICTION AND PROCEDURE

4.      These are the formal written reasons of the Civil Resolution Tribunal (CRT). The CRT has jurisdiction over small claims brought under section 118 of the Civil Resolution Tribunal Act (CRTA). Section 2 of the CRTA states that the CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the CRT must apply principles of law and fairness, and recognize any relationships between the dispute’s parties that will likely continue after the CRT process has ended.

5.      Section 39 of the CRTA says the CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Here, I find that I am properly able to assess and weigh the documentary evidence and submissions before me. Further, bearing in mind the CRT’s mandate that includes proportionality and a speedy resolution of disputes, I find that an oral hearing is not necessary in the interests of justice.

6.      Section 42 of the CRTA says the CRT may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in a court of law. The CRT may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

7.      Where permitted by section 118 of the CRTA, in resolving this dispute the CRT may order a party to do or stop doing something, pay money or make an order that includes any terms or conditions the CRT considers appropriate.

ISSUES

8.      The issues in this dispute are:

a.    Does Intact have standing to bring this claim?

b.    If so, must Proline pay Intact for contents manipulation and additional living expenses, and how much?

EVIDENCE AND ANALYSIS

9.      As the applicant in this civil proceeding, Intact must prove its claims on a balance of probabilities, meaning more likely than not. While I have considered all the parties’ evidence and submissions, I only refer to what is necessary to explain my decision.

10.   In July 2020, Redwood hired Proline to replace a building’s roof. During construction, rainwater damaged multiple dwelling units in the building. None of this is disputed, and Proline does not dispute the allegation that it was negligent.

11.   Instead, Proline argues the warranty on its work applied strictly to Redwood and not the building tenants. It says it settled Redwood’s claim and paid Redwood’s $5,000 insurance deductible and a further $5,000 for Redwood to distribute to the tenants in the 4 affected units for their inconvenience. Proline says Redwood paid $1,250 to each tenant, including IS.

12.   Intact does not dispute any of this but says the $1,250 payment was not directed to any particular loss and even accounting for it, IS still had losses over $5,000.

Does Intact have standing to bring this claim?

13.   Intact says its claim is a subrogated claim. Subrogation is the substitution of one person for another in a claim or legal right (see McRae v. Canada (Attorney-General), 1997 CanLII 4121 (BCCA), at paragraph 25). In the context of this dispute, subrogation is where the insurer (Intact) takes the place of the insured (IS) and claims against someone (Proline) who caused or contributed to the loss.

14.   Section 36 of the Insurance Act (IA) says that an insurer, on making a payment or assuming liability under a contract of insurance, is subrogated to the insured’s rights of recovery against any person, and may bring an action in the insured’s name to enforce those rights.

15.   Although Intact did not provide the insurance contract in its evidence, I accept based on Intact’s payment records that it paid IS over $5,000 under an insurance contract. So, under IA section 36, Intact may bring subrogated claim in IA’s name to enforce those rights.

16.   However, Intact has not done so here, and instead has filed this dispute in its own name. As noted by the BC Court of Appeal, absent any express statutory right of subrogation, the insurer’s right of subrogation is a “derivative right only”. This means it depends entirely on the insured’s rights, and therefore must be advanced in the insured’s name. A subrogated insurer has no status to advance a claim in its own name (see Matilda v. MacLeod, 2000 BCCA 1, at paragraph 7).

17.   IA section 36 does not provide a right to bring a claim in the insurer’s name, and Intact does not point to any other statutory right of subrogation. Therefore, I find Intact may only bring a subrogated claim in IA’s name. I find Intact does not have standing to make its claims in this dispute. I therefore dismiss Intact’s claims.

18.   Nothing in this decision prevents Intact from starting a claim in IS’s name, subject to any applicable limitation period.

19.   Although other CRT decisions are not binding on me, my conclusion is consistent with those expressed in Economical Insurance v. Pedre Contractors Ltd., 2020 BCCRT 961 and Economical Mutual Insurance Company v. Kone Inc. dba Kone Elevators, 2021 BCCRT 161.

20.   Under section 49 of the CRTA and CRT rules, a successful party is generally entitled to recover their CRT fees and reasonable dispute-related expenses. Proline was successful but did not pay CRT fees or claim expenses. I dismiss Intact’s claim for reimbursement of CRT fees.

ORDER

21.   I dismiss Intact’s claim and this dispute.