Case Overview:

• The dispute involved appointing an umpire under Section 107(5) of the New Brunswick Insurance Act to proceed with an appraisal after a fire caused partial damage to a property insured by the applicant (Definity Insurance Company) and owned by the respondent (725360 NB Inc.).
• The parties' appraisers could not agree on an umpire, prompting court intervention.

Key Issues:

1. Who should be appointed as the umpire?
2. Should costs be awarded, and if so, to whom?

Court’s Decision:

1. Umpire Appointment:

   • The court evaluated the candidates proposed by both parties based on expertise, experience, and impartiality.
   • Susan Delaney was chosen as the umpire due to her extensive experience in property valuation and her impartiality, demonstrated by her retirement and lack of affiliation with insurers.

2. Costs Awarded:

   • The court ordered the applicant (Definity) to pay $3,000 plus HST in costs to the respondent because:
     • Definity failed to engage meaningfully with the respondent's proposed candidates before the hearing.
     • This lack of cooperation undermined the intended collaborative spirit of the appraisal process.

Key Legal Principles Highlighted:

• The appraisal process under the Insurance Act aims to facilitate an impartial and expedient resolution of valuation disputes, avoiding adversarial litigation.
• Appraisers must work collaboratively to select an umpire. Repeated refusals to cooperate may result in higher cost awards, including solicitor-client costs in cases of bad faith.