Ruling says $180,000 is prioritized or preferred for damages arising from bodily injury or death
The New Brunswick Court of King’s Bench found that damages arising from property loss or damage should have priority to the extent of $20,000 over claims concerning bodily injury or death, given the fixed priorities in s. 243(2) of the province’s Insurance Act.
In Ville de Dieppe v. Jaillet & Caissie, 2025 NBKB 266, the first defendant was driving a vehicle belonging to the second defendant on Jan. 21, 2017. The driver hit a traffic light pole and control cabinet owned by the plaintiff city at the intersection of Acadie Avenue and Allain-Gillette Street.
The accident caused damage to the city’s pole and cabinet, as well as personal injuries to passengers in the vehicle. The defendants expected the passengers to bring personal injury claims. The insurance policy involved had limits of $1 million.
The parties settled the city’s claim, conditional upon the court’s interpretation of s. 243(2) of NB’s Insurance Act, 1973, considering the defendants’ concerns about the available insurance policy limits for the city’s claim and any future personal injury claims.
The parties sought the court’s opinion regarding the question of whether, under s. 243(2), claims against an insured arising out of property loss or damage would have priority to the extent of $100,000 over claims arising out of bodily injury or death where the insured’s policy limits were $1 million.
The parties highlighted that this was a matter of first impression for the courts in New Brunswick and all Canadian provinces whose insurance legislation mirrored the wording in NB’s Insurance Act, given that no reported jurisprudence addressed this issue.
Court’s interpretation
The Court of King’s Bench of New Brunswick answered the question, as stated by the parties, in the negative.
According to the court, under s. 243(2) of NB’s Insurance Act, property loss or damage claims against an insured would not have priority to the extent of $100,000 over bodily injury or death claims where the insured’s policy limits were $1,000,000.
The court ruled that, for an insurance policy with limits of $1 million:
- $180,000 would have priority or preference for damages due to bodily injury or death
- $20,000 would have priority or preference for property loss or damage
- If the aggregate of all claims relating to the accident exceeded the remaining insurance coverage, the remainder of the limits would apply pro rata, with no priority as between the two types of damages
The court emphasized that the priorities of $180,000 and $20,000 in s. 243(2) were fixed. The court explained that the provincial legislature did not intend each minimum to create a proportion or percentage for extrapolation to fit a higher policy limit exceeding the statutory minimum.
Regarding the object of s. 243(2), the court held that the Legislative Assembly strongly favoured damages due to bodily injury or death over those arising from property damage or loss and intended to:
- Protect a portion of the available insurance proceeds from any single accident for a particular kind of damages
- Refrain from depriving plaintiffs with injuries or losses due to someone’s death of meaningful recovery, where the physical property damages might exceed the available limits
The court considered the words’ normal and grammatical meaning and the provision’s text, context, and purpose, as well as afforded the subsection a fair, large, and liberal construction and interpretation.
The court concluded that the provision fixed minimum priorities for both types of damages and created the following priority “pots” for any one motor vehicle accident:
- The first pot had priority exclusively for damages due to bodily injuries or death up to $180,000
- The second pot has priority exclusively for property damage or loss up to $20,000
The court noted that the Legislative Assembly could have stated the priorities as percentages, given that the Insurance Act expressly contemplated automobile policies with limits exceeding the minimum $200,000. However, the court pointed out that the Legislative Assembly did not do so.
The court saw no absurdity or internal inconsistency in interpreting s. 243(2) as establishing two fixed priorities with minimum dollar amounts, which together might not cover the entire available policy limits.
