COURT OF APPEAL FOR ONTARIO

CITATION: Pagliaroli v. Industrial Alliance Insurance and Financial Services Inc., 2014 ONCA 16

DATE: 20140109

DOCKET: C56447

Rosenberg, MacPherson and LaForme JJ.A.

BETWEEN

Barbara Pagliaroli

Plaintiff (Respondent)

and

Industrial Alliance Insurance and Financial Services Inc.

Defendant (Appellant)

Amelia M. Leckey, for the appellant

Eric Gionet, for the respondent

Heard: January 6, 2014

On appeal from the judgment of Justice Susan E. Healey of the Superior Court of Justice, sitting with a jury, dated December 5, 2012.

ENDORSEMENT

[1] The appellant, Industrial Alliance Insurance and Financial Services Inc., appeals from the judgment of Healey J. of the Superior Court of Justice, sitting with a jury, dated December 5, 2012. In that judgment, the trial judge awarded the respondent (plaintiff), Barbara Pagliaroli, damages of $280,000, in accordance with the jury verdict, under a contract of life insurance between her deceased husband and the appellant.

[2] The appellant contends that the trial judge erred in her instructions to the jury on how to interpret s. 180(1)(c) of the Insurance Act, R.S.O. 1990, c. I. 8, which provides:

180(1) Subject to any provision to the contrary in the application or the policy, a contract does not take effect unless,

(c) no change has taken place in the insurability of the life to be insured between the time the application was completed and the time the policy was delivered.

[3] The trial judge instructed the jury:

The first question that you must ask yourselves is: looking at the objective facts that you know about Frank Pagliaroli’s health, was there a change in his health that affected his insurability between January 16 and February 17, 2009? You are to ask, what was the state of Frank Pagliaroli’s health on January 16, 2009 and what was the state of his health on February 17, 2009? If you find that objectively there has been no change in the health of Frank Pagliaroli between these two dates, then there has been no change in insurability.

[4] The appellant contends that the trial judge erred by linking the word “insurability” in s. 180(1)(c) of the Insurance Act to the insured’s state of health. The appellant submits that these are different factors so that the insured’s health might not have changed at all between the two relevant dates but his insurability could have radically changed because of emerging medical information between the same dates.

[5] We do not accept this submission. It is common ground that the insured answered all questions about his health honestly when he completed the application form on January 16, 2009. When the policy was delivered to him on February 17, 2009, the insured signed a “Receipt for Delivery of Contract” form, which included this section:

CHANGE OF INSURABILITY

Notice to agent: Has the state of health or occupation of any of the insureds changed since the application was signed?

þ No

□ Yes (if yes, send the contract, with duly completed form F3A and authorization to your service team.) [Emphasis added.]

[6] While this receipt is not part of the policy neither the Act nor the policy define insurability. As Ish Singh, the appellant’s Director of Underwriting, testified:

Q. …is there anywhere else in the insurance contract that refers to the phrase, ‘Change of Insurability’?

A. No, I don’t think so.

Q. And you’ll agree with me that that phrase is not defined anywhere in the insurance contract, is that correct?

A. Correct.

Q. So, when we speak of change of insurability as it pertains to Mr. Pagliaroli, what we are looking at is the state of health of Mr. Pagliaroli, is that correct?

A. Correct.

Q. Okay. We are not looking at anything else, it’s his state of health that we are looking at when we deal with change of insurability.

A. Correct.

Q. And you’ll agree with me that in fact there was no change in Frank’s health between the time of the application and the time of delivery, that Frank’s health was the same in that period of time, would you agree with me on that?

A. I will agree.

[7] In our view, the appellant’s core argument founders on the wording of its own documents and the testimony of one of its principal witnesses. The factual reality in this case is a simple one: in its contractual document, the appellant does not define “change of insurability”; in the document it requires an insured to sign, it directly links “change of insurability” to a potential insured’s “state of health” and “occupation”; and, in this case, the appellant concedes that the insured’s state of health did not change in the relevant time period. In these circumstances, the trial judge’s charge was correct and the jury’s verdict was reasonable.

[8] The appeal is dismissed. The respondent is entitled to her costs of the appeal fixed at $10,500, inclusive of disbursements and HST.

“M. Rosenberg J.A.”

“J.C. MacPherson J.A.”

“H.S. LaForme J.A.”