



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 Pagliarolis 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 Pagliarolis
    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 insureds state of
    health.  The appellant submits that these are different factors so that the
    insureds 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 appellants Director of
    Underwriting, testified:

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

A.      No, I dont think so.

Q.      And youll 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, its his
    state of health that we are looking at when we deal with change of
    insurability.

A.      Correct.



Q.      And youll agree with me that in fact there was no
    change in Franks health between the time of the application and the time of
    delivery, that Franks 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 appellants 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
    insureds state of health and occupation; and, in this case, the appellant
    concedes that the insureds state of health did not change in the relevant time
    period.  In these circumstances, the trial judges charge was correct and the
    jurys 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.


