Dube v. RBC Life Insurance Company, 2015 ONCA 641

Released September 21, 2015 | Decision

Dube permitted relief from forfeiture for a disabled employee who failed to give proof of claim within the 90-day period under his employer’s group policy.  The Court of Appeal provides a victim-friendly analysis under the relief from forfeiture test.

In Dube, the Plaintiff was injured in an accident in May 2010. His employer advised him that he was ineligible for LTD benefits under their group policy.  In September 2011, he hired a lawyer, who wrote to RBC for claim forms. RBC did not respond.  A statement of claim against RBC was issued in May 2012.  In October 2012, Mr. Dube’s counsel again asked for the application forms.  RBC responded in March 2013, and sent the forms to Mr. Dube’s counsel on April 19, 2013.  Mr. Dube applied for benefits in June 2013.   RBC denied benefits on the basis of late proof of claim, which was 90 days after the date of disability.  Mr. Dube argued that the last day to submit a claim was one year and 90 days after the accident.

RBC brought a motion for summary judgement.  The motions judge considered the 3-part test for relief from forfeiture under section 98 of the Courts of Justice Act.

Conduct of the applicant: Garson J. found that the employer’s message to Mr. Dube that he did not have LTD coverage led to confusion in Mr. Dube’s mind as to whether coverage was in place.  Mr. Dube was also compliant with numerous requests by his employer for medical information.  In light of these facts, Garson J found that there was nothing in Mr. Dube’s conduct that was unreasonable.

Gravity of the breach: this arm of the test was the subject of the appeal.  The length of the “breach” was 6 months and 17 days, according to Garson J. The Court of Appeal later held that the length of the breach was 22 months.  Regardless, whether it was 6 months or 22 months, the Court of Appeal found that both time periods were short enough that the prejudice to RBC was minimal.  RBC had failed to take any investigative steps until after it was placed on notice of a claim on March 19, 2012 – and did not ask for medicals for two years thereafter.  Hence, “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.”   While not commented upon  by the Court of Appeal, the motions judge did state that the employer played a role in the subject breach, for failing to assist Mr. Dube in applying for LTD and delaying its submission of its section of the LTD claim forms.

The Disparity between the value of the property forfeited and the damage caused by the breach: The disparity between the value of the claim forfeited and the damage caused by the late filing was significant.  Mr. Dube was 43 at the time his disability arose.  The amount of the available LTD benefit was $2,497 per month, which would be reduced by income replacement benefits.  The net available LTD benefit was $897 per month.  Mr. Dube was entitled to LTD payments to age 65.

Mr. Dube ought not to be punished for the employer’s conduct in this regard.  While not explicitly stated, the decision nonetheless underscores an employer’s obligation to deal with its disabled employees in good faith — the employer must inform a disabled employee of his/her rights under a group policy, and assist the employee in applying for those benefits.

 

Read the full decision on CanLII

Najma Rashid
Written by

Najma Rashid joined Howard Yegendorf & Associates in 1999 and became a partner of the law firm in 2009. Her practice is devoted exclusively to personal injury litigation and she is well versed in Ontario’s Insurance Act and its Regulations, including the Statutory Accident Benefits Schedule.

Najma has developed an expertise in disability and bad faith claims against insurance companies, and participates in the Long-Term Disability Section of the Ontario Trial Lawyers Association.

Najma is a member of the Ontario Trial Lawyers Association and the Advocates Society, as well as a supporter of organizations such as REACH Canada, the Ontario Brain Injury Association and the Canadian Paraplegic Association.