



COURT OF APPEAL FOR ONTARIO

CITATION: Dube v. RBC Life Insurance Company, 2015 ONCA 641

DATE: 20150921

DOCKET: C60100

Laskin, MacPherson and MacFarland JJ.A.

BETWEEN

Gregory Russell Dube

Plaintiff (Respondent)

and

RBC Life Insurance Company

Defendant (Appellant)

Donna M. Kraft, for the appellant

Ryan Steiner, for the respondent

Heard: September 16, 2015

On appeal from the judgment of Justice Marc A. Garson of
    the Superior Court of Justice, dated January 7, 2015.

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 Dubes claim was made beyond the policys 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
.

[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. RBCs 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
    Dubes 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.

[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] 2 S.C.R. 490.

(2)

The motion judges decision

[7]

On the first component of the test the motion
    judge found that Dubes conduct was not unreasonable. In support of that
    finding, the motion judge noted that Dubes 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. RBCs 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 its inability to
    intervene and make its own assessment of Dubes 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
    judges 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 RBCs review. And it included an extensive medical brief
    containing reports from two physiatrists, one retained by Dubes accident
    benefit insurer, and the other retained by Dubes 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 Dubes 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.

Released: September 21, 2015 (J.L.)

John Laskin J.A.

J.C.
    MacPherson J.A.

J. MacFarland
    J.A.


