The appellants appealed the dismissal of their action against an insurer (Ivari) for failure to disclose a reasonable cause of action under Rule 21.01(1)(b).
The original action alleged breach of contract, breach of fiduciary duty, and negligence related to an unsuitable financial retirement plan involving life insurance.
The motion judge dismissed the claim, finding no duty owed by the insurer regarding product suitability and refusing leave to amend.
The Court of Appeal found the motion judge erred by treating the Rule 21 motion as a summary judgment, and by concluding there was a general principle that insurers never owe a duty regarding product suitability.
While agreeing the pleadings were deficient in distinguishing duties among defendants, the Court found no reason to deny leave to amend, as the proposed claims were tenable and there was no prejudice.
The appeal was allowed in part, restoring the action against the respondent and granting leave to amend the statement of claim.