Dube v. RBC Life Insurance Company

[Indexed as: Dube v. RBC Life Insurance Co.]

Ontario Reports

Court of Appeal for Ontario,

Laskin, MacPherson and MacFarland JJ.A.

September 21, 2015

127 O.R. (3d) 161 | 2015 ONCA 641

Case Summary

Insurance — Relief from forfeiture — Insured giving notice and proof of claim for long-term disability benefits well outside time limits under policy — Abundance of medical information on insured available to insurer — Insurer making no requests to examine insured or to have him assessed after insured gave notice of claim — Motion judge not erring in finding that insurer suffered minimal prejudice as result of insured's failure to give timely notice and proof of claim and that insured was entitled to relief from forfeiture under s. 98 of Courts of Justice Act — Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98.

The plaintiff was injured in a car accident in May 2010. He did not give notice of his claim for long-term disability benefits under his employer's group insurance policy until March 2012, and did not give proof of his claim until June 2013. When the defendant insurer denied his claim, he sued. The defendant brought a motion for summary judgment dismissing the action on the ground that the claim was made beyond the policy's time limits. The motion judge noted that the plaintiff's employer had incorrectly told him that he did not have coverage for long-term disability benefits and found that the plaintiff's conduct was not unreasonable. The motion judge found that the defendant had suffered minimal or no actual prejudice because of the plaintiff's breach and that the disparity between the value of the property forfeited and the damage caused by the breach was significant. The motion judge determined that the plaintiff was entitled to relief from forfeiture under s. 98 of the Courts of Justice Act. The defendant appealed.

Held, the appeal should be dismissed.

The motion judge did not err in finding that the plaintiff was entitled to relief from forfeiture. When the plaintiff gave notice of his claim and asked the defendant for information concerning his claim, including an application for long-term disability benefits, the defendant took over a year to provide that information. The defendant had available to it an abundance of medical information on the plaintiff from the date of the accident. In the two and a half years after the plaintiff gave notice of his claim, the defendant made no requests to examine the plaintiff or to have him assessed. The defendant could not realistically claim that it was prejudiced by the plaintiff's failure to give timely notice and proof of his claim.

Cases referred to

Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 100 (SCC), [1994] 2 S.C.R. 490, [1994] S.C.J. No. 59, 115 D.L.R. (4th) 478, 168 N.R. 381, [1994] 7 W.W.R. 37, J.E. 94-1053, 20 Alta. L.R. (3d) 296, 155 A.R. 321, 23 C.C.L.I. (2d) 161, [1994] I.L.R. Â1-3077 at 2913, 48 A.C.W.S. (3d) 1240

Statutes referred to

Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98 [page162]

APPEAL from the order of Garson J., [2015] O.J. No. 42, 2015 ONSC 77 (S.C.J.) dismissing a motion for summary judgment dismissing an action.

Donna M. Kraft, for appellant.

Ryan Steiner, for respondent.

BY THE COURT: --

A. Introduction

[1] The respondent, Dube, worked for Windsor Essex Community Housing Corporation. In May 2010, he was injured in a car accident, and since then has not returned to work. His employer had a group insurance policy with the appellant, RBC Life Insurance, which provided employees with long-term disability benefits.

[2] Dube, however, did not give notice or proof of his claim for these benefits within the time limits under the policy. When RBC denied his claim, Dube started this action.

[3] RBC then brought a motion for summary judgment to dismiss the action on the ground that Dube's claim was made beyond the policy's time limits. The motion judge refused to dismiss the action. Instead, he exercised his discretion by making a binding determination that Dube was entitled to relief from the forfeiture of his claim under s. 98 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[4] RBC appeals that determination. It concedes that the motion judge could determine on summary judgment whether Dube was entitled to this relief, but contends that the motion judge erred in granting it. RBC's appeal thus raises a single issue: did the motion judge exercise his discretion unreasonably in his application of the three-part test for relief from forfeiture under s. 98? In oral argument, RBC focused on the second component of the test, the gravity of Dube's breach of the policy time limits.

B. Discussion

(1) The test for relief from forfeiture

[5] Under the policy, Dube ought to have given notice of his claim within 30 days of his alleged disability (the date of the accident) and proof of his claim no later than one year and 90 days after his disability arose. Dube did not give any notice of his claim until March 2012, and did not give proof of his claim until June 2013. [page163]

[6] Thus, the central issue on the motion was whether Dube was entitled to relief from forfeiture under s. 98 of the Courts of Justice Act, which states: "A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just." The relief under s. 98 is both equitable and discretionary. The test for relief is well established. It has three components. The court must consider:

-- the conduct of the insured applicant;

-- the gravity of the breach;

-- the disparity between the value of the property forfeited and the damage caused by the breach (see Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 100 (SCC), [1994] 2 S.C.R. 490, [1994] S.C.J. No. 59).

(2) The motion judge's decision

[7] On the first component of the test, the motion judge found that Dube's conduct was "not unreasonable". In support of that finding, the motion judge noted that Dube's employer had incorrectly told him he did not have coverage for long-term disability benefits; that Dube was confused or uncertain whether he had this coverage; and that he had complied with numerous requests to provide medical information.

[8] On the second component of the test, the motion judge found that RBC suffered minimal or no actual prejudice because of the breach.

[9] On the third component of the test, the motion judge found that because Dube was 43 years old when the accident occurred and long-term disability benefits were payable to age 65, the disparity between the value of the property forfeited and the damage caused by the breach was significant.

(3) Did the motion judge misapply the second component of the test for relief from forfeiture -- the gravity of the breach

[10] RBC accepts that the motion judge stated the test for relief correctly. But it submits that he misapplied the second component of the test, in that he failed to properly assess the gravity of the breach. RBC's submission has two branches: the motion judge erred by finding that the length of the breach was only six months and 17 days; and he erred in finding that the actual prejudice to RBC flowing from the breach was minimal or non-existent. RBC maintains that it was prejudiced because of [page164] its inability to intervene and make its own assessment of Dube's condition and his prospects for rehabilitation.

[11] We agree that the motion judge misstated the length of the breach. His figure of six months and 17 days refers to the period between the last possible date proof of claim could be given (August 2011) and the date Dube first gave notice of his claim (March 2012). As RBC points out, the length of the breach for giving proof of claim was about 22 months (August 2011 to June 2013).

[12] But the critical question on this component of the test is whether RBC was prejudiced by the length of the breach. We are satisfied that the motion judge did not err in finding that the prejudice to RBC was minimal. Or, as he found later in his reasons, even if RBC incurred some prejudice because it could not conduct its own investigations and medical examinations at an early date, that prejudice was outweighed by the harm to Dube from his being unable to pursue his claim.

[13] The following evidence supports the motion judge's findings:

(a) In March 2012, when Dube gave notice of his claim, he asked RBC for information concerning his claim, including the application form for long-term disability benefits. RBC took over one year to provide this information.

(b) RBC had available to it "an abundance of medical information" on Dube from the date of his accident. This information included a comprehensive list of the many medical files and reports on Dube, all of which were available for RBC's review. And it included an extensive medical brief containing reports from two physiatrists, one retained by Dube's accident benefit insurer, and the other retained by Dube's family doctor, and a report from an occupational therapist.

(c) After RBC was given notice of the claim in March 2012, in the following two and a half years it made no requests -- none -- to examine Dube or to have him assessed.

[14] In the light of this evidence, RBC cannot realistically claim it was prejudiced by Dube's failure to give timely notice and proof of his claim. We therefore conclude that the motion judge exercised his discretion reasonably in granting Dube relief from forfeiture. The appeal is dismissed with costs fixed at $12,000, inclusive of disbursements and applicable taxes.

Appeal dismissed.

End of Document