Executive Summary: Key Legal and Evidentiary Issues

• Plaintiff sought to replace the Estate of Thérèse Gallant with Stéphane Gallant as the named plaintiff in an insurance claim.

• Issue turned on whether procedural rules permitted substitution of parties in light of a transfer of interest by succession.

• The insurer challenged the request, arguing improper use of procedural mechanisms and potential prejudice.

• Court applied Rule 5.04(2) and statutory condition 3 of the Insurance Act, affirming liability survives transfer of title through death.

• Evidence showed the Estate had no remaining financial interest and the insurer was always aware of the underlying claim.

• Motion was granted, with the court ordering substitution of the plaintiff and awarding costs to the Estate.

Background and property succession

Thérèse Gallant passed away in April 2021, leaving a house in Boudreau West, New Brunswick, to her grandson, Stéphane Gallant, with a life interest reserved for her son, Alderice. The property was insured under a policy issued by Wawanesa Mutual Insurance Company, which named the “Estate of Thérèse Gallant” as the insured party and Stéphane Gallant as an additional insured for contents and liability only. The property was destroyed by fire in July 2021. Stéphane Gallant was later registered as the owner by succession, though the will was never probated.

Procedural conflict over party substitution

Initially, both Stéphane and the Estate’s executrix, Jeanne Gallant, interacted with Wawanesa and its insurance adjuster. However, in early 2023, it became clear that Jeanne no longer wished to act, stating she had no financial interest in the claim. Stéphane, as the beneficiary with a direct interest in the outcome, brought a motion under Rule 5.04(2) of the New Brunswick Rules of Court to substitute himself for the Estate as plaintiff in the lawsuit. The defendant, Wawanesa, opposed the motion, arguing that other rules—such as Rule 10.03 or Rule 16.04—provided the appropriate mechanism and that the substitution was procedurally flawed.

Legal analysis and statutory interpretation

Justice Maya Hamou reviewed the relevant procedural rules and statutory provisions. She focused on Rule 5.04(2), which permits substitution of parties where no unresolvable prejudice arises. The Court also considered section 127 of the Insurance Act, particularly statutory condition 3, which provides that an insurer remains liable for loss following a change of title due to death or succession. The Court emphasized that the insurable interest passed naturally from Thérèse to her Estate and then to Stéphane, making him the proper party to pursue the claim.

Court's conclusion and ruling

The Court found that the procedural requirements for substitution were satisfied and that there was no material prejudice to Wawanesa, which had always been aware of the nature of the insured interest. The Court rejected the insurer’s reliance on other procedural rules related to executor replacement, finding them inapplicable to the specific relief sought. Justice Hamou concluded that allowing Stéphane Gallant to replace the Estate as plaintiff was both fair and efficient, aligned with the principles of procedural justice under Rule 1.03.

Judgment and outcome

The Court granted the motion, allowing the substitution of Stéphane Gallant as plaintiff in place of the Estate of Thérèse Gallant. The style of proceeding was ordered to be amended accordingly. Wawanesa was ordered to pay $1,500 in costs to the plaintiff. The ruling ensures that the insurance claim can continue with the correct legal party now named, advancing the litigation on its merits.