Focus On

CIVIL PROCEDURE - Parties - Adding or substituting - Necessary or proper

Tuesday, July 27, 2021 @ 5:42 AM  

Lexis Advance® Quicklaw®
Appeal by the defendant insurer Insurance Corp. of British Columbia (ICBC) to add Paccar Financial as an additional plaintiff. The respondents sued ICBC for insurance proceeds after they lost several vehicles in a fire. One of the vehicles was leased to New Future by Paccar. The respondents were the sole directors and officers of New Future. ICBC was the insurer of all the vehicles. Paccar was named on the policy as a co‑insured of the leased vehicle. ICBC denied coverage for the claims without stating a reason. In its response to the action, ICBC alleged arson by, or with the knowledge and acquiescence of, the respondents and misrepresentations. In their response, the respondents identified Paccar as a co‑insured, noting that any wrongdoing alleged against them and New Future was no defence to the claim where there were innocent co‑insureds and applied to add Paccar as a plaintiff to the claim seeking recovery of the insurance proceeds. The judge found Paccar was a necessary party so that the legal question of innocent co‑insureds could be effectively adjudicated and that it was just and convenient to add Paccar. The judge noted that ICBC did not show any actual prejudice to its ability to defend itself, due to the passage of time. ICBC argued that if Paccar was added as a plaintiff, it would financially benefit the alleged arsonists, because Paccar’s recovery from ICBC would reduce their own debt to Paccar.

HELD: Appeals dismissed. ICBC’s argument was neither relevant to the judge’s exercise of discretion nor was it ignored by him. This argument also completely ignored the obvious benefit to Paccar of being named as a plaintiff, to be able to recover insurance proceeds that it claimed it was entitled to recover. Even where the addition of a party required consideration of what was just and convenient, it was not a relevant factor weighing against the application that the applicant might financially benefit if the new plaintiff were to succeed in the claim. The judge was being invited by ICBC to prematurely negatively assess the morals of the other plaintiffs as a reason to deny Paccar its legitimate claim. Paccar had a proper cause of action against ICBC, as co‑insured, to recover under the policy. In weighing what would be just and convenient, the judge well understood that ICBC’s position was seeking to deprive Paccar of its claim to the insurance proceeds. There was nothing unjust or contrary to the interests of justice about allowing Paccar to pursue this claim that ICBC was seeking to avoid.

Walter v. Insurance Corp. of British Columbia, [2021] B.C.J. No. 1403, British Columbia Court of Appeal, D.C. Harris, G.J. Fitch and S.A. Griffin JJ.A., June 22, 2021. Digest No. TLD-July262021004