Avon M. Mersey

The respondent's long-term disability benefits were terminated by her insurer based on video surveillance, despite a lack of medical evidence indicating she could return to work.

After five years of denied benefits, the insurer reinstated them shortly before trial.

The trial judge awarded $20,000 in damages for mental distress but denied punitive damages, finding no bad faith.

The Court of Appeal upheld the mental distress award and added $100,000 in punitive damages.

The Supreme Court of Canada allowed the insurer's appeal in part, setting aside the punitive damages but upholding the mental distress award.

The Court held that damages for mental distress for breach of contract are recoverable under the Hadley v. Baxendale principle if they were within the reasonable contemplation of the parties, which is the case for disability insurance contracts.

The parties were involved in a motor vehicle accident in California.

The appellant brought an action in Alberta after the one-year California limitation period had expired, but within the two-year Alberta limitation period.

The appellant argued that s. 12 of the Alberta Limitations Act applied the Alberta limitation period to the exclusion of the California one.

The Supreme Court of Canada dismissed the appeal, holding that the substantive law of California, including its limitations law, governed the action.

Section 12 does not revive an action that is already time-barred by the substantive law of the place where the tort occurred.

The deceased, a Quebec resident, was killed in a motor vehicle accident in British Columbia.

His spouse and children received statutory death and dependants' benefits under the Quebec no-fault insurance scheme.

They also brought a tort action in British Columbia.

The appellants sought to deduct the Quebec benefits from the tort settlement under s. 25 of the British Columbia Insurance (Motor Vehicle) Act.

The Supreme Court of Canada held that the Quebec benefits were 'similar' to those under the British Columbia Insurance Act and must be deducted from the overall tort award to prevent double recovery, rejecting the requirement for a specific 'match' between heads of damage.

The respondent, an Ontario insurer, paid statutory accident benefits to Ontario residents injured in a motor vehicle accident in British Columbia.

The respondent sought indemnification from the appellant, a British Columbia insurer, under section 275 of the Ontario Insurance Act.

The appellant argued the Ontario legislation could not constitutionally apply to it.

The Supreme Court of Canada held that the superior court, not an arbitrator, should determine the constitutional applicability of the statute.

The Court further held that the Ontario Insurance Act was constitutionally inapplicable to the out-of-province appellant because there was an insufficient connection between Ontario and the appellant to justify the extraterritorial application of the provincial regulatory scheme.