The appellants, representing former Barbados participating policyholders of Manulife, brought a class action for negligence.
They claimed Manulife owed them a duty of care to protect their interests when it transferred their policies to another insurer in 1996, three years before Manulife demutualized and distributed $9 billion to its participating policyholders.
The trial judge dismissed the action, finding that while harm was foreseeable, policy reasons negated a duty of care.
The Court of Appeal dismissed the appeal, holding that the claim was for pure economic loss and did not fall within established categories.
The Court found no prima facie duty of care because the relationship lacked sufficient proximity, as the policyholders had no legally recognized right to share in a future demutualization at the time of the transfer, and the governing legislation permitted Manulife to terminate the relationship.