There is no general statutory relief from forfeiture under the relevant Insurance Act for policies of “disability” insurance.
Statutory conditions are subject to a remedy in the case of “imperfect compliance”. This applies by statute only to individual and not group policies.
For reasons to be discussed, it is still possible to seek such relief under the Courts of Justice Act.
The Supreme Court of Canada dealt with the issue of relief from imperfect compliance of the requirement to give notice of claim under the terms of a surety bond.[1] In that case, notice of claim had been delivered 28 days after the expiry of the stated 120 day period as set out in the bond.
The trial judge found that s. 109 of the Saskatchewan Insurance Act applied and allowed him to grant relief from forfeiture, which followed. The Court of Appeal allowed the appeal as to the remedy granted, but also agreed that the statute which empowered the relief did apply. The issue of the remedy was not controversial in the Supreme Court.
The issues on appeal to the Supreme Court were whether (1) the Insurance Act allowing relief from forfeiture applied to statutory conditions only or to contractual terms and (2) if so applicable to statutory terms, whether the failure to give notice as required was imperfect compliance within the terms of the statute or non-compliance, the distinction being of vital significance.
The relevant section of the Insurance Act read in a manner consistent with the modern insurance acts. The available relief applies to “imperfect compliance with a statutory condition”;
- Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just.
As noted by Madam Justice McLachlin, similar provisions are found in Insurance Acts throughout Canada.
The Court agreed that the section was ambiguous and should also be read liberally, given that it was remedial in nature. It was hence agreed that the purview of the provision was not limited solely to statutory conditions but also applied to contractual terms.
The court noted that the failure to give notice of claim within a prescribed time is typically considered imperfect compliance, against which relief may be ordered. This is to be contrasted with non-compliance, which consists of the failure to adhere to a limitation period, akin to a condition precedent, to which no relief from forfeiture will follow.
Subsequent decisions have clearly decided that the powers of the court under this provision are limited to policy conditions, be they statutory or contractual that relate to this issue of proof of loss. Such was confirmed by the recent Ontario Court of Appeal decision in January of 2016.[2]
Prior to this decision, the Queen’s Bench of Alberta[3] considered the issue of whether the plaintiff had satisfied the claims requirements of the group policy offered to her as an employment term with the insurer itself.
The plaintiff was provided a “Blue Book” which described her entitlement to disability benefits, which was the only document she had received of this nature dealing with benefits. It did not speak to any time period to submit a claim.
She resigned her employment due to health problems. One year later she received a diagnosis of Chronic Fatigue Syndrome. She requested the documents to complete a disability application to which no response was received. She later wrote to the company outlining the basis of her claim. The employer insurer requested certain information without raising notice requirements. The claim was denied while the plaintiff was preparing her reply materials.
The defendant argued that as of the date of termination of employment, she was not eligible to claim under the LTD policy, and that she did not show she was totally disabled on May 1990, and that she had not notified the employer insurer of her claim within the 6 month notice period as set out in the policy.
As to the argument of relief from forfeiture, the court considered the argument of the defence, the plea of which was that long term “disability” policies were governed by the life insurance section of the Insurance Act, from which was absent a relief from forfeiture provision, unlike other parts of the Act which offered such relief dealing with other forms of insurance.[4]
The court examined differing decisions and concluded that the court maintained jurisdiction to consider relief from forfeiture under s. 10 of the Judicature Act.
The court applied the traditional threefold test.[5] The court acknowledged that the plaintiff bore and met this onus.
The test for the granting of such equitable relief was determined to be, firstly, was the conduct of the plaintiff reasonable in the circumstances. The court also looked to the Blue Book which did not state whether it had contractual effect or not, and which said nothing about time limits, as being persuasive on this issue.
Secondly, was the question posed the object of the right of forfeiture essentially to secure the payment of money? This was not in dispute.
Thirdly, was there a substantial disparity between the value of the property forfeited and the damage caused by the breach? To this issue, the defence argued the lack of a timely medical review. This was considered and rejected as the insurer at no time made such a request.
The court accepted that the evidence on the merits proved total disabilityand the claim succeeded.
The Supreme Court of Canada also dealt with the issue of estoppel and waiver and the issue of the remedy of relief from forfeiture in its June 1994 decision.[6]
In that decision, the court declined to allow the remedy in relief from forfeiture but did express its tentative view as to the application of the Judicature Act where the Insurance Act provided no remedy.
The question reviewed by the Supreme Court of Canada included: presuming no waiver, is this a case for relief from forfeiture under the Judicature Act?
As to the claim for relief from forfeiture, the initial hurdle presented was whether the equitable relief contemplated in the Judicature Act was trumped by the scheme of the Insurance Act, which did not allow for such relief for life policies.
The Supreme Court looked to the test for equitable relief generally as purely discretionary:
The power to grant relief against forfeiture is an equitable remedy and is purely discretionary. The factors to be considered by the Court in the exercise of its discretion are the conduct of the applicant, the gravity of the breaches, and the disparity between the value of the property forfeited and the damage caused by the breach: (citation omitted)
The Court determined that the plaintiffs could not satisfy the first test of reasonable conduct as the plaintiffs were aware that the insured was terminally ill and insurable, yet chose to have their mail sent to a closed office in Lake Louise and collected it intermittently. In addition, the three month delay from April to July was unacceptable.
The Court deferred from deciding the threshold issue. It did, however, offer the view that quite likely the Judicature Act relief was open.
This test was again referenced with approval in a recent Ontario Court of Appeal decision.[7]
The plaintiff sued to obtain relief from forfeiture for missing insurance payments due on the life insurance policy covering the life of her spouse. Both spouses were owners of the policy which provided for each spouse as the beneficiary in the event of the other’s death.
In 1992 the couple separated. The husband agreed to make the premium payments. A consent order in the matrimonial proceedings did not reference this obligation. The wife left the family home, instructed Canada Post to redirect her mail, yet failed to notify the insurer of her new mailing address.
In the summer and fall of 1992, the insurer sent three letters addressed to both spouses advising that the premium due on July 25, 1992 had been missed. No reply was received and no further payments were made.
In December of 1992, the husband died in a car accident. The plaintiff was first advised of the lapse of the policy in early 1993 when her lawyer sought the proceeds.
The relief from forfeiture provision of s. 129 of the Insurance Act does not apply to life insurance, accident and sickness insurance and marine insurance by s. 122.
The plaintiff sued under s. 98 of the Courts of Justice Act.[8] At trial before Mr. Justice Ferrier, the court found s. 129 of the Insurance Act did not preclude the application of s. 98 as above. The Court of Appeal agreed with this conclusion.
The appellate court, however, took issue with respect to the application of s. 98 as a basis for the revival of a lapsed insurance policy. The court examined the wording and the purpose of s. 98 and concluded that it was not an appropriate application of this relief in this circumstance as the section was intended to offer relief in the broad context akin to an improper seizure of goods.
The relief envisioned in the Courts of Justice Act hence was inappropriate in this instance as the insurer had not “pocketed” an asset to which it was not entitled.
The Court concluded that there was no basis for the use of this equitable remedy to term life policies after death and accordingly reversed the decision of the trial judge and disallowed the relief from forfeiture.
A decision of the Supreme Court of British Columbia[9] considered the release of a member of the Canadian Forces from duty on February 11, 1988 as “an administrative release”. The plaintiff took a contrary view, asserting he was medically disabled from such date forward and on May 11, 1989 claimed that he had completed a disability application.
The plaintiff did obtain success in amending his discharge to that of a medical release in June of 1991. As a consequence of his event, the court found that the disability application was sent and received by Maritime Life in November of 1991, which then denied the claim as out of time.
The policy required a proof of claim be submitted within 120 days of the benefit date. The policy required, as did the statute, the action be commenced within 12 months after the proof of claim had been provided or within six years from the first payment event, whichever period expires first.
As the action was commenced on December 13, 1995, more than 6 years after the plaintiff was released from the Canadian Forces and more than four years after the application for benefits was made, it was hopelessly out of time. The action was dismissed.
Accordingly the passage on the relief from the forfeiture submission was obiter. The court noted that the plaintiff was released in February of 1988 and there was no explanation for the delay to May of 1989 when the first application was made. The second delay from May 1989 to November 1991 was partly explained by advice from the plaintiff’s first lawyer, which had no bearing on the insurer’s position. In addition, the court found that the insurer was prejudiced due to its inability to carry out a timely investigation into the plaintiff’s condition, including an intervening car accident in January of 1989 and would not have granted the relief.
A similar issue arose in a decision of the Manitoba Queen’s Bench in December of 2002.[10]
The defendant admitted that the plaintiff was totally disabled from April 29, 1994 to April 29, 1996 and from August 1, 1996 to November 13, 1996. It denied entitlement beyond that date and also asserted a limitation defence due to a term in the policy which allegedly required the action to be commenced within 12 months of the application for benefits. The second argument was that S. 180 and s. 184 required the action to be commenced with 12 months following submission of the proof of claim or within six years after funds are payable, whichever period expires first.
The insurer gave notice that the claim would terminate April 29, 1996 by letter dated April 18, 1996. Following this communication, in July of 1996, counsel for the plaintiff advised that surgery would be required and requested reinstatement of benefits. A further medical report was provided and benefits were paid from August 1 to November 13, 1996. An additional medical report followed in early February 1997 as a result of which the insurer denied benefits by its letter dated March 6, 1997.
Nothing further followed until the plaintiff’s disability claim statement which was provided on October 20, 1998. Further medical reports were included. The insurer advised that based on the medical information received, “we are maintaining our decision to terminate your claim” by letter dated March 13, 1999.
The statement of claim was issued April 17, 2001.
The Court accepted that the limitation imposed was 12 months. It, however, concluded that a new cause of action commenced at the end of each monthly payment period. The court also stated that there was no real prejudice to the insurer when the insurer is called on to pay legitimate claims “perhaps years after an initial disability if the current disability can be proven to be a consequence of the prior event and a renewal or reoccurrence of disability arising from that event”.
The court also concluded that in the absence of a definition of the term “application for claim” in the policy, the statement of claim sufficed. The claim was allowed to stand for benefits up to 12 months prior to the issuance of the claim.
The same issue arose in the 2003 decision of the Supreme Court of Nova Scotia.[11]
The defence raised that the plaintiff had failed to comply with a request for a psychological assessment, which had been recommended by a vocational assessment. The vocational counselor had suggested that he was depressed. The plaintiff had objected to this as his family doctor never suggested any depressive conditions. His benefits were terminated due to this refusal. The court upheld the decision as reasonable in the circumstances and dismissed the claim.
The court, however, did state that had the requirement for the psychological assessment been unreasonable or unfair, it could have granted relief from forfeiture under section 33 of the Insurance Act which repeated the same wording of the modern statutory condition.
The Supreme Court of B.C. also considered this issue.[12]
The Insurance Act in British Columbia then required that a claim be issued within one year after furnishing proof of claim. Section 10 allowed for relief from forfeiture. The policy allowed for a two year limitation period.
The plaintiff, suffering from what was believed to be laryngitis, took a sick leave for eight weeks. She applied for long term benefits due to what was then diagnosed as muscular tension dysphonia. She was advised that benefits for own occupation were approved effective August 2005 and might be paid until April 2007 at which time the any occupation test would apply.
On October 16, 2006 she gave birth which allowed her to receive EI benefits and disallowed disability benefits. She received EI maternity benefits until August 26, 2007.
On January 11, 2007, the insurer advised the plaintiff that her claim would be closed on April 19, 2007. In the fall of 2007, the plaintiff received a new diagnosis of Conversion Disorder and advised the insurer of this in three letters.
On June 6, 2008, the insurer rejected the claim for benefits based on the new diagnosis. The claim was then issued on July 31, 2008.
The insurer argued the claim must have been issued by July 14, 2006 as the proof of claim was submitted on July 14, 2005.
The court determined that this argument made no sense as it would require the insured to sue even when disability benefits were being paid without visible objection. It was determined that if the Insurance Act applied, the limitation period would not commence until an unequivocal denial of benefits was received.
The issue was then presented as when the plaintiff had received such a denial of benefits. Given the letter dated January 11, 2007 stated that her file would be closed on April 19, 2007, this started the time clock. The policy provided for a two year limitation period. A policy cannot abbreviate the limitation period as set out in the statute, but it can extend it.
The claim was accordingly in time; however, the proof of claim was not filed within the two years which followed from the denial of benefits and even as of the date of trial, which was a further two years. To this issue, the court applied relief from forfeiture as there was no prejudice to the defendant.
Many policies contain a provision which requires a time period such as 60 days to pass following the submission of a proof of claim prior to the commencement of proceedings. Such was the case in a decision of Hoilett, J. of the Ontario Superior Court in July of 2007.[13]
The plaintiff had been injured in an accident on December 12, 1996. The policy was terminated by the policy definition on January 12, 2000 when her employment was terminated the same day. The employer also terminated the policy on March 1, 2000.
The policy required that notice of claim be submitted within 30 days following the commencement of disability and proof of disability be given no later than 90 days after the end of the elimination period. A law suit was required to be commenced, by the policy, not until 60 days following the submission of the proof of claim nor more than 3 years following this event.
In 2004, roughly eight years following the accident, she submitted a claimant’s proof of disability. The insurer denied the claim as proof of claim had not been received on a timely basis. On June 16, 2004, an action was commenced.
The trial judge noted that the Insurance Act in section 328 provided for relief from forfeiture in these terms, which again contained the same wording as referenced above.
On these facts, the court, on a summary judgment motion, determined that due to the inordinate delay, the prejudice suffered by the insurer was real as almost a decade had passed within which it was unable to conduct a reasonable medical investigation and to obtain timely expert opinions.
The case did not deal with the issue that s. 328 of the Insurance Act gave authority to grant relief from solely a statutory condition, not a policy term, and further that the statutory conditions of S. 300 are not applicable to group policies.
Relief from forfeiture was granted in a 2002 decision of the Alberta Queen’s Bench case.[14] The plaintiff had failed to submit evidence of disability within the time period set by the policy terms. It was determined that this was due to the failure of the employer, determined to be the agent of the insurer for this purpose. Further the delay was of no prejudice to the defence.
The Court of Appeal considered this issue in its November 2000 decision.[15]
The plaintiff was the estate of the deceased insured, who suffered from cancer which required surgery, this being found to be the commencement date of his disability. He delayed filing the LTD notice of claim until twenty months later. He died one month later.
The policy required timely notice for which relief from forfeiture was granted. The Court of Appeal took no issue with the trial judge’s granting of such relief:
The trial judge further held that the circumstances justified relieving against forfeiture of benefits on account of the late notice of claim and proof of loss. She applied s. 10 of the Insurance Act which authorizes relief against forfeiture for “imperfect compliance” with the policy requirement for proof of loss (as distinct from noncompliance with a limitation period) and she considered the leading case of Falk Bros. Industries Ltd. v. Elance Steel Fabricating Co., 1989 CanLII 38 (SCC), [1989] 2 S.C.R. 778 which interpreted a similar provision.
[11] The trial judge granted relief for reasons expressed at paras. [18] and [19] of her judgment:
The evidence indicated some confusion with regard to when notice should be given, and genuine confusion in interpreting the policy, which confusion has no doubt led to this action.
I find that the failure to provide notice and proof of claim in a timely matter is “imperfect compliance” in this instance, and relief against forfeiture is appropriate and just under the circumstances of this case.
In addition, it was noted by the trial judge that the insurer suffered no prejudice as a consequence of this relief being granted.
Waiver & Estoppel
Justice Dillon noted that a waiver under the Insurance Act in B.C. must be in writing and signed by the party to be charged, as set out in s. 11 of the Act, in addition to the other requirements as set out above.[16] This is true for all other Canadian jurisdictions.
In the same case, it was noted that estoppel may arise where a defence will not succeed due to this statutory requirement. The facts of this case did not support either defence, in any event.
The Supreme Court of Canada released two decisions concurrently in June of 1991 dealing with the defence of estoppel with respect to the limitation period defence pleaded by the insurer.
In one case, the commercial building owned by the insured had been destroyed by fire. The policy covered three separate categories of assets, which were (1) fixtures, equipment and tenant improvements, (2) stock in trade and (3) the building.[17]
The plaintiff was underinsured for the first two categories and the insurer admitted liability for the full coverage in the sum of $70,000. No agreement was made for the building, the maximum coverage for which was $100,000. The adjuster had set the depreciated value at $84,000. The insurer offered $75,000 which was rejected.
An issue arose with respect to a competing claim for the insurance proceeds. The insurer sought and obtained an order to pay the $70,000 sum for what was then a settled claim into court. The affidavit material included an admission of liability with respect to this sum. The insurer also advised that it was prepared to settle the building claim for $84,000 and also to pay this sum into court. A proof of loss for this sum was attached and also a blank form, should the insured wish to decline and claim more. This communication was dated February 23, 1983.
In August of 1983, the plaintiff retained legal counsel. The limitation period expired on November 10, 1983. There had been no communication following the February 23, 1983 letter. The claim was issued on November 23, 1983 with respect to the building coverage.
The defence raised the limitation period and the failure to file the proof of loss. The plaintiff replied by estoppel, arguing that the defence had admitted liability and hence became a debtor with the issue of quantum outstanding. In the event of this plea succeeding, the claim arguably would be one in contract external to the Act for which the limitation period would be six years. It also argued waiver of the limitation period. As to the proof of loss, it sought relief from forfeiture under s. 106 of the Insurance Act.
At trial, Sirois, J. concluded that there are two essential elements to the defence of promissory estoppel. Firstly, there must be an express or implied admission of liability and secondly, there must be an express or implied promise not to rely on the limitation period.
The trial judge concluded that only the first test was met and dismissed the claim.
The Court of Appeal saw that there was a clear admission of liability to the court itself by the application to pay into court the proceeds of the policy. The court determined that promissory estoppel is in play when (1) there is an express or implied admission of liability or (2) an implied promise not to rely on the limitation period (3) as long as there is some evidence that one of the parties entered into negotiations which had the effect of leading the other to believe that the strict rights under the contract would not be enforced. The majority saw this test as met and reversed the trial judge.
The Supreme Court stated that to successfully raise an equitable estoppel, the representation made by the insurer must be intended to affect the legal relationship and was intended to be acted upon, referring to an earlier Supreme Court of Canada decision. [18]
It seems clear to me that this type of equitable defence cannot be invoked unless there is some evidence that one of the parties entered into a course of negotiation which had the effect of leading the other to suppose that the strict rights under the contract would not be enforced, and I think that this implies that there must be evidence from which it can be inferred that the first party intended that the legal relations created by the contract would be altered as a result of the negotiations.
An admission of liability, the Court concluded, is not enough to create an estoppel to extend a limitation period. The principle requires that the promisor intend to affect legal relations. The facts must show this or the basis on which this may be inferred. Should this admission be found and its impact on the plaintiff is to miss the limitation period, the plea is made.
The facts as found by the trial judge did not support the analysis and the appeal accordingly was set aside and the trial judgment restored.
As to the argument that the admission made the sum due to debt, the argument failed for want of consideration.
The companion decision[19] came to the same conclusion on its facts as to the estoppel defence. It is instructive as the trial judge also dealt with the defence of waiver, to which the Supreme Court confirmed its acceptance.
The plaintiff was injured in a car accident. Negotiations ensued without success. The claim was issued on July 3, 1986, after the expiry of the limitation period on February 8, 1986. The plaintiff asserted that the conduct of ICBC amounted to an estoppel or waiver of the limitation defence. The factual history of the communications between the plaintiff and the insurer were hence relevant.
The plaintiff retained counsel who was advised by the adjuster that liability was not in issue. Discussion ensued. An offer to settle was sent with a release.
New counsel received a bank draft with a settlement sum offered. The limitation period expired, after which the adjuster requested the draft be returned. A counter-offer was made. The action was commenced and defended by the passing of the limitation period.
At trial before the Manitoba Queen’s Bench, Kennedy, J. noted the distinction between estoppel and waiver. Estoppel follows where a representation is made by one party and relied upon the other to his detriment and hence the first party is estopped from denying the representation.
The trial judge determined that waiver is effective when a party knowingly waives or foregoes reliance upon some known right or defect, of which the waiving party has full awareness.
In this case, there was no knowledge of the insurer that a claim had not been issued, which was a required fact to show full awareness to support the waiver defence. Had the insurer stated it was fully knowledgeable that a claim had not been issued and the insurer continued to negotiate, a waiver may have resulted.
The Court of Appeal affirmed the trial judgment.
The Supreme Court confirmed that both the trial judge and the Court of Appeal were satisfied that there was no evidence from which a promise not to rely on the limitation period could be inferred. The court noted that in certain instances an admission of liability might be taken to extend the limitation period, but the trial judge here was unable to do so on the facts before him. This finding of fact was not reviewable. The trial judgment was upheld.
The Supreme Court of Canada also dealt with the issue of estoppel and waiver in its June 1994 decision.[20]
The relevant policy was a term policy, renewable every five years, with an expiry date of July 26, 2000, coinciding with the insured’s 70th birthday. Prior to July 26, 1988, the policyholder had the right to convert the policy to a new life or endowment policy.
The policy contained a 31 day grace period and also a right of reinstatement within 3 years from the date of lapse, subject to insurability and payment of the arrears.
On July 24, 1984 the company mailed a cheque in the sum of $1,316 to pay the annual premium due on July 26, 1984. On August 13, 1984, it received a notice of premium due for the sum of $1,361. A further cheque was sent for the difference of $45. The second payment was received. The first was not.
Following the expiry of the grace period of August 26, 1984 , Maritime sent a late payment offer to the company, by which it agreed to accept late payment if it was “postmarked or, if not mailed, received in the Head Office at Halifax, N.S.” on or before September 8, 1984. It also reserved its right to request an updated medical. No reply was received to this request by Maritime.
On November 28, 1984 Maritime wrote to the owner advising of the unpaid July premium which stated that “unfortunately this policy is technically out of force” and requested payment.
On February 2, 1985 Maritime sent a notice of policy lapse to the company and the spouse. The company had closed its hotel business at Lake Louise for the winter season in mid-November. The company was not aware of the late payment offer, the November letter or the lapse notice until April 1985. It searched for the lost premium cheque and in July 1985 sent a replacement and a cheque for the 1985 premium, both of which were refused.
On July 9, 1985 the company’s agent informed the insurer that the insured person was terminally ill and uninsurable. He died on August 10, 1985.
At trial the claim for relief from forfeiture failed.
On appeal, the claim succeeded.[21] Hardance, J.A. ruled on the basis of estoppel, while Hetherington, J.A. relied on waiver. Both agreed that until the respondents were notified that the 1984 cheque had not been received and were given a reasonable time to remedy this by payment,
Maritime could not terminate.
The issues on further appeal were (1) did the insurer waive its right to compel a timely payment? and (2) presuming no waiver, is this a case for relief from forfeiture under the Judicature Act?
As a preliminary matter, the court spoke to the distinction between waiver and estoppel and concluded that they are closely related, both relying upon the principle that it would be unfair to allow one party to retract its choice when it would be unfair to the other party. As submissions were made in waiver, there was no need to offer any further distinction.
Waiver requires full awareness of that which is waived and an unequivocal and conscious intention to abandon such rights. A narrow stringent test is to be imposed:
Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. The creation of such a stringent test is justified since no consideration moves from the party in whose favour a waiver operates. An overly broad interpretation of waiver would undermine the requirement of contractual consideration.
The Court concluded that there was little doubt that Maritime was fully aware of its rights under the policy, hence satisfying the first step.
As to the second issue, the November letter was determined to constitute a waiver of its right to receive a timely payment. It read as follows:
Unfortunately this policy is now technically out of force, and we will require immediate payment of $1,361.00 to pay the July 1984-85 premium.
This letter, the court determined, clearly waived the payment default. It did, however, speak to a demand for payment.
The subordinate issue became whether the waiver remained in effect as of July 1985 when the missing payment was tendered.
Once a waiver is in place, the court determined that it can be retracted on reasonable notice. However, to be entitled to notice of such recantation, there must be initial reliance upon the waiver. On these facts, the plaintiffs were not aware of the November letter and the remaining communications until April 1985 and hence there was no detrimental reliance. Hence there was no need to recant the waiver on fair notice. The February statement advising of the lapse of the policy was hence effective.
Further, as obiter, even once apprised of the default in April, the replacement cheque was not tendered until July, some three months later. Even if notice were imposed, it would have been met by the failure of the plaintiffs to act between April and July. The case on waiver failed.
The defence of waiver was also considered by the Queen’s Bench of Alberta.[22]
The issue came before the court as a defence motion for summary judgment to dismiss the claim as out of time.
The insurer had written to the plaintiff as follows:
We have reviewed this gentleman’s claim and have waived the time limits for claim submission as Mr. Desgagne was on WCB benefits. We therefore require the claim forms for Long Term Disability and we ask for the Employer’s and the Employee’s portion of the form to be completed.
The court reviewed other correspondence between the parties, the essence of which was requests for further medical information to enable an adjudication of the claim. The insurer did not specifically waive the limitation period, but the Court concluded thatthe totality of the correspondence and the exhibited actions of the Defendant waived the limitation period.
The court also considered that the apparent co-operation in providing additional medical reports led the plaintiff to believe that the limitation period was, by inference, not to be imposed. The Court cited Dachner Investments Ltd. v. Laurentian Pacific Insurance Co. 1989 CanLII 2723 (BC CA), (1989), 59 D.L.R. (4th) 123 (B.C.C.A.) which held:
That the limitation period should start to run on a clear and unequivocal denial of liability (whether or not proof of loss had been made). There it was held that the insurer’s undertaking to co-operate with the Plaintiff’s surveyor led the Plaintiff to believe that time was not running, and prevented the denial of liability from being unequivocal. I agree with those principles, and I hold that they are applicable here.
The Ontario Court of Appeal in its May 2003 decision[23] also spoke to the issue of estoppel, however, in strictly obiter terms.
The plaintiff had sued for a dismemberment insurance benefit under Part V of the Ontario Insurance Act, which required a notice of “sufficient evidence” be given to the insurer under s. 203, which then mandated by s. 206, that an action be commenced within 12 months from the date of the submission of such evidence by s. 203.
The insurer rejected the claim within the allotted 30 days for its response by s. 203. It engaged in no dialogue with the insured as the sufficiency of the evidence submitted. It simply rejected the claim.
The court noted that an argument could be advanced that had the insurer replied by requesting additional information, it may be estopped from asserting that the time clock had begun upon the initial submission of the claim:
Even where the court determines that the insurer had “sufficient evidence” to make the necessary assessment by a given date, the conduct of the insurer after that date may estop it from asserting that it had sufficient evidence on the earlier date. I think Ingram, supra, is best understood as a case where the insurer, by its conduct, was estopped from claiming that it had sufficient evidence of the relevant facts at a point in time when it was still requesting additional information concerning those facts from the insured:[24]
[1] in Falk Bros v Elance Steel Fabricating, a 1989 decision.
[3] in Baillie v Crown Life, a decision of Mr. Justice C. Phillip Clarke in March of 1998
[4] Such a statutory scheme is not unique to Alberta. The law is the same in Ontario. See, for example the reference to of Pluzak v Gerling Global, infra –ed
[5] as set out in Liscumb v Provenzano (1986) 51 OR (2d) 129 at 137; affirmed (1986) 55 OR (2 d ) 404n (OCA).
[6] of Saskatchewan River Bungalows v Maritime Life Assurance.
[7] of Pluzak v Gerling Global, a decision made in January of 2001.
[8] 98. A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.
[9] Hutchinson v The Maritime Life is a December 2002 authored by Mr. Justice Vickers.
[11] in a decision written by Mr. Justice Douglas MacLellan in Haggart v NSPS LTD.
[12] in Colgur v Manufacturers Life, a decision of Mr. Justice Hinkson made in August of 2009.
[13] in Silva v RBC Life Insurance
[14] of Herbert v Manulife Financial of Madam Justice S. M. Bensler.
[15] in Holme Estate v Unum Life
[16] in Sander v Sun Life, affirmed on appeal
[17] In Travellers Indemnity Company v Maracle,
[18] in John Burrows v Subsurface
[19] of Marchischuk v Dominion Industrial
[20] of Saskatchewan River Bungalows v Maritime Life Assurance.
[21] with a dissent from McClung, J.A.
[22] in the September 1999 decision of Desgagne v Great-West Life, written by Mr. Justice W. E. Wilson.
[24] see also Thomas v. Manufacturers Life Insurance Co., [2001] A.J. No. 1753 (Q.B.).