ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 06-CV-306061CP
DATE: April 18, 2013
BETWEEN:
JOSEPH FANTL
Plaintiff
– and –
TRANSAMERICA LIFE CANADA
Defendant
David F. O’Connor, J. Adam Dewar and Derek M. McKay for the Plaintiff
Mary Jane Stitt and Doug McLeod for the Defendant
HEARD: April 9 and 10, 2013
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION AND OVERVIEW
[1] Pursuant to the Class Proceedings Act, 1992, S.O. 1992, c. 6, the Plaintiff Joseph Fantl moves for certification of this action against Transamerica Life Canada (“Transamerica”) as a class proceeding.
[2] Mr. Fantl’s action is about an investment instrument known as the Can-Am Fund that was available in 53 Transamerica insurance contracts, and which investment was selected by over 90,000 Transamerica policyholders.
[3] Mr. Fantl alleges that Transamerica breached an express or implied term of the insurance contract or that Transamerica breached a collateral contract that it would apply “Best-Efforts” to ensure that the Can-Am Fund replicated the performance of the Standard & Poor’s 500 Total Return Index (the “S&P 500”) in Canadian dollars.
[4] In the alternative, Mr. Fantl alleges that Transamerica negligently misrepresented that replication of the S&P 500 on a Best-Efforts basis was a material term of the insurance contracts.
[5] In the further alternative, he alleges that Transamerica negligently misrepresented that it had an objectively reasonable, reliable, considered and sufficient basis for stating that the Can-Am Fund would replicate the S&P 500 on a Best-Efforts basis and an honest and reasonable intent to use Best-Efforts to achieve replication of the S&P 500.
[6] Thus, Mr. Fantl’s claim in contract (be it based on an express, implied, or collateral promise) is that Transamerica failed to ensure that the Can-Am Fund performed as well as the S&P 500, and Mr. Fantl’s claim in tort is that Transamerica misrepresented that: (a) it had promised to ensure that the Can-Am Fund performed as well as the S&P 500; (b) it had a basis for representing that the Can-Am Fund would replicate the performance of the S&P 500; and (c) it had a basis for representing that Transamerica would use Best-Efforts to make that happen.
[7] It shall prove important for understanding the discussion that follows about whether Mr. Fantl’s action should be certified as a class action to note that Mr. Fantl’s alternative claims in contract and in tort involve: (1) different constituent elements; (2) different expressions of meaning; i.e. different statements; (3) different injuries; (4) different damages; and (5) different limitation periods.
[8] Transamerica does not oppose certification for the breach of an express term of five insurance contracts that permitted investments in the Can-Am Fund. This concession applies to only 5 of the 53 contracts. Transamerica opposes certification of the claims based on breach of implied terms, collateral warranties, and negligent misrepresentation.
[9] Apart from the five insurance policies for which it concedes that there is a breach of contract class action, and apart from some concessions about some common issues and about the suitability of Mr. Fantl as a representative plaintiff, Transamerica disputes that Mr. Fantl’s action satisfies the test for certification found in s. 5 (1) of the Class Proceedings Act, 1992. By way of metaphor, Transamerica’s argument against certification is that Mr. Fantl’s action does not get over the legal equestrian jumping contest that is s. 5 (1) of the Class Proceedings Act, 1992.
[10] Thus, Transamerica argues that there are some insurance policies for which there is no express best-effort’s provision and no representations about a best-efforts provision, so, Transamerica argues that the claimants under these polices cannot be members of the class, and therefore, they are disqualified from the certification contest. I did not hear Mr. Fantl to have an answer to this argument.
[11] For those policyholders still on their mounts for the certification contest, Transamerica argues for reasons that I will describe later, that it is plain and obvious that these proposed class members do not have claims for implied terms or collateral contract and, therefore, they advance to the next barrier with only a tort claim.
[12] For his part, Mr. Fantl submits that it is not plain and obvious that there are no implied terms or collateral contracts, and, thus, the cause of action criterion is satisfied for both the claims in contract and in tort.
[13] Next, Transamerica argues that some of the claimants have statute-barred claims, and so these proposed class members are also disqualified from membership in the class.
[14] Mr. Fantl submits, however, that the application of limitation periods is a matter for the defence of the action and not the certification motion and that because of discoverability issues, it is not plain and obvious that there are any statute-barred claims. He also submits that the class members’ claims are for damages and not for insurance proceeds and, therefore, the limitation periods in various insurance statutes are not applicable as submitted by Transamerica.
[15] In any event, Transamerica accepts that the tort claimants pass over the cause of action and identifiable class criteria for their tort claims, and it accepts that there are some common issues for the tort claim and for the express contract claimants.
[16] Transamerica, however, disputes that there is a common issue about aggregate damages for the claims in contract or for the claims in tort. Thus, according to Transamerica, this leaves in the arena for certification the express contract claims and the tort claimants with some common issues and some need for individual trials, but then Transamerica argues that the tort claimants cannot get over the preferable procedure barrier, and, thus, Transamerica submits that the only s. 5 (1) contest winners are the class members with an express contract claim.
[17] Mr. Fantl submits that the preferable procedure criterion is satisfied and since he is a suitable representative plaintiff for the contract and tort claims, he succeeds in satisfying all the criteria for certification.
[18] For the reasons that follow, my own conclusions are as follows:
• It is plain and obvious that the policyholders with insurance policies for which there is no express best-effort’s provision and for which there are no representations about best-efforts in the accompanying information folders should be excluded from class membership because they do not have claims in either contract or tort.
• Unless their individual contract claims are statute-barred, Transamerica policyholders with a claim based on an express contract term have a certifiable class action for breach of contract but not also for negligent misrepresentation.
• A policyholder’s claims in contract are claims for payment of insurance benefits and are subject to the limitation periods in the various provincial insurance statutes.
• It is plain and obvious that there are no implied contract or collateral contract claims for any policyholders.
• Policyholders who received information folders have claims for negligent misrepresentation. The policyholders have a cause of action for negligent misrepresentation, and it is not plain and obvious that the tort claim is statute-barred for any class members with tort claims. The tort claim is subject to a different limitation period that the contract law claim.
• There are common issues for the contract claim and for the tort claim.
• There is no common issue about aggregate damages. The quantification of the claim in contract and the quantification of the claim in tort are idiosyncratic to each class member.
• A class action is the preferable procedure for the contract claim.
• A class action is not the preferable procedure for the tort claim.
• Although his litigation plan may have to be updated, Mr. Fantl is a suitable representative plaintiff.
[19] Thus for the reasons that follow, I shall certify Mr. Fantl`s class action for a class of the policyholders of the 5 insurance policies that contained an express Best-Efforts provision to advance claims of breach of contract. This class will exclude any policyholders with statute-barred claims as described below. I shall not certify the claims for negligent misrepresentation.
[20] The class shall not include (a) policyholders, if any, whose beneficiaries received a death benefit before December 29, 2002; (b) policyholders, if any, in Québec whose contracts of insurance were fully surrendered before December 29, 2000; and (c) policyholders, if any, in Newfoundland and Labrador whose contracts of insurance were fully surrendered before December 29, 2001.
... (continues verbatim through the remainder of the judgment) ...
Perell, J.
Released: April 18, 2013
COURT FILE NO.: 06-CV-306061CP
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOSEPH FANTL
Plaintiff
‑ and ‑
TRANSAMERICA LIFE CANADA
Defendants
REASONS FOR DECISION
Perell, J.
Released: April 18, 2013.