Negligent misrepresentation does not meet the intent required for civil fraud: Costanza v. Desjardins 2023 ONCA 54

At the end of the day after some interesting analysis of the test for civil fraud, the test for fresh evidence, s.184(2) of the Insurance Act, and the various standards of appeal, the Court of Appeal held that the Application Judge did not err when she found that the Insured did not meet the intent required for civil fraud in not disclosing his criminal conviction on his insurance application.

The Facts:

The insured applied for life insurance on January 9, 2012. He answered “NO” to the question: “In the last 3 years, have you been convicted of or plead guilty to any criminal offence or any moving violations or driving under the influence of alcohol or drugs?”. The court ultimately considered that the insured was convicted on March 11, 2009: 2 years, 11 months and 8 days prior to applying for life insurance.

On December 3, 2017, the insured was found shot to death in his car in front of his house. The face value of the policy was $500,000.00 and the beneficiary was the insured’s minor son.

The insurer took the position that the insured had made a material misrepresentation on the application, as he was convicted of a criminal offence within 3 years of the insurance application and that the policy was therefore voidable under s.184(2) of the Insurance Act.

The policy contained a standard incontestability clause whereby after a life insurance policy has been in effect for more than two years if the insurer seeks to have the policy voided on the basis of material misrepresentation or material non-disclosure, the insurer must prove, on the civil standard of a balance of probabilities, that the misrepresentation or non-disclosure was fraudulent. The test for civil fraud is set out in Derry v. Peek (1889) where the element of intent is described as the representation is made: knowingly, or without a belief in its truth, or recklessly, careless whether it be true or false.

This case made me consider the differences between negligence and recklessness.

Avril Hasselfield, Results Mediators

The Application:

Justice Chozik took issue with the insurer’s positions. She found that the Canadian Police Information Centre (CIPC) print out was a partial police document that was not sufficient or authenticated. It contained the date of March 11, 2009 but she found that it was not clear if it was the date of conviction, imposition or sentence, or some other date which can be well spread out in criminal proceedings. She noted that “the way to verify the date of a conviction is by reference to the official court record entry contained in an Information or Indictment or a court transcript.” Without proper confirmation of a criminal conviction she found that the onus to prove that the answer on the application was false was not discharged by the Insurer.

Justice Chozik also considered, in the alternative, if a misrepresentation had been proven if it would meet the test for civil fraud. At paragraph 25 of her decision she writes: “I find that in these circumstances, I cannot be satisfied on a balance of probabilities that any misrepresentation by Mr. Costanza was done knowingly or recklessly. It is at least as likely (if not more likely) that Mr. Costanza was mistaken or merely negligent as to the date of the conviction when he filled out the application for insurance.”

The insurer also argued that the insured made a material non-disclosure of having a criminal history or background. Justice Chozik was critical of the insurer for relying on two news articles for this assertion and found they were among other things: unreliable, inadmissible, and the most dangerous sort of hearsay as evidence.

The Appeal:

The insurer appealed the judgment seeking a declaration that the life insurance policy was voidable and sought to admit fresh evidence of a certified copy of the Indictment confirming that the insured was convicted of assault causing bodily harm on February 2, 2009, and was sentenced to 90 days imprisonment and an ancillary weapons prohibition on March 11, 2009. February 2, 2009, is 2 years, 11 months and 8 days before the date of the insurance application.

Fresh Evidence:

The four-part test for admissibility of fresh evidence was established in Palmer v. The Queen 1979 CanLII 8 (SCC):

  1. The evidence should generally not be admitted if, by due diligence, it could have been adduced at trial;
  2. The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial;
  3. The evidence must be credible in the sense that it is reasonably capable of belief, and
  4. The evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced at trial, be expected to have the affected result.

The court of appeal stated that although it would appear the motion for fresh evidence should fail “at first blush” on the first count of the test, they noted that the insurer had also relied on admissions made by the insured’s ex-common-law spouse and mother of the minor beneficiary responded, that the insured was convicted of assault causing bodily harm on March 11, 2009 and sentenced to 90 days in prison. The court agreed that the insurer satisfied its due diligence threshold and was entitled to rely on the admissions of the insured’s conviction and there was no failure by the insurer in not obtaining and filing a certified copy of the Indictment. The court held that the application judge made a palpable and overriding error of fact and a more fundamental error of procedural unfairness to the insurer in not considering the admissions. The court clarified that thier finding did not suggest that the CPIC printout was sufficient proof of a conviction and confirmed that the proper method was to obtain a certified copy of the Indictment or Information.

The second and third parts of the test were conceded by the parties.  The court noted that the fourth part of the test was required to affect the result of the decision.  They wrote that “Although the fresh evidence could affect the issue of whether there was a material misrepresentation, it could not reasonably be expected to affect the result of the application, because it could not reasonably be expected to affect the application judge’s finding that the insurer had failed to establish the intent required for civil fraud.”

Grounds of Appeal:

  1. (1)   That the application judge erred in finding that the insurer had not proven that the deceased had been convicted of assault causing bodily harm in the three years preceding his application;

    (2)   That the application judge erred in law in the test she applied for civil fraud;

    (3)   That the application judge erred in finding that the deceased’s representation that he had not been convicted of a criminal offence in the three years preceding his application had not been proven by the insurer to have been made with knowledge that it was false or with recklessness as to its truth or falsity; and

    (4)   That the application judge erred in finding that the insurer had not proven that the deceased had a “criminal history” or “criminal background” that he failed to disclose.

The court agreed that the application judge erred in disregarding the admissions regarding the criminal conviction and that it was “a palpable and overriding error of fact, but it is also a more fundamental error of procedural unfairness to the insurer” without giving the insurer an opportunity to provide further given that she was not prepared to accept the admissions. The court clarified that the application judge was correct in noting that the proper method to prove the existence of a criminal conviction, if it is not admitted, is with a certified copy of the Indictment or Information. 

The court went on to find: “However, as I explain under the next ground, I find that this error had no impact on the result of the decision by the application judge, because she went on to find that, assuming that the deceased had been convicted of assault causing bodily harm on March 11, 2009, the insurer had not satisfied her on a balance of probabilities that the deceased gave that false answer knowingly or recklessly as opposed to by mistake or negligence not rising to the level of recklessness.” 

The court rejected the insurer’s argument that the application judge applied the wrong legal test for civil fraud, saying that it was based entirely on one reference to her use of the words “intent to deceive”, on the basis that it raised a question of law when the standard of review was correctness.  It found that when read as a whole, the application judge’s findings applied the correct legal standard of knowledge of or recklessness as to the falsehood of the representation that she cited throughout her reasons noting that:  “Her assessment of the evidence shows that she was not assessing whether intentional deceit had been proven. Rather, she considered whether the evidence was sufficient to prove on a balance of probabilities either knowledge or recklessness as to the falsehood of the answer, or was at best sufficient to prove negligence or mistake, which would not amount to civil fraud. She found the latter.”

The court was not persuaded that the insurer showed any palpable and overriding error by Justice Chozik when she found that the insured’s misrepresentation was likely a mistake or merely negligent, in the third ground of the appeal.  The court noted that the insurer had the burden of proof to establish that the deceased’s misrepresentations were fraudulent, and the judge’s findings were entitled to deference. 

Regarding the finding of a criminal history and the insurer’s reliance solely on the two news articles, the court found that the insurer was seeking to change the factual basis of its argument and also rely on the CPIC printout and certified copy of the Indictment as fresh evidence, which was not allowed on appeal as new arguments and that fresh evidence is not a vehicle for a party to advance arguments on a fundamentally different basis than raised in the application.     

Take away:

This case made me consider the differences between negligence and recklessness.  I appreciated this distinction made in What is Recklessness?  Legal Definition & Examples: by Christy Beiber, (although not civil case law or Canadian).  A reckless defendant doesn’t just act less carefully than a reasonable person would have under the same circumstances.  A reckless defendant behaves more egregiously, with an added level of dangerous disregard for safety.  I note that neither the Application Judge or the Court of Appeal analysed the difference in their decisions.  Is this a case of the court favouring a minor beneficiary or a reminder of the distinction between negligence and recklessness. 

Soave v. Stahle Construction Inc., 2023 ONCA 265 (CanLII)

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Stahle appealed the January 13, 2022 decision of Madame Justice Walters

The Appeal was heard on February 14, 2023.  The appeal was allowed, and a new trial was ordered for the Superior Court to reconsider if Soave qualified for LTD benefits.


  • Roberto Soave began working for Stahale Construction Inc. as a site superintendent on October 7, 2013. 
  • He was eligible for the group benefit program that included long term disability benefits with Great West Life Assurance Company.
  • On January 27, 2014 Soave advised Stahle that he needed time off for hernia surgery.
  • Soave’s evidence was that Stahle approved this time off.
  • Stahle’s evidence was that Soave refused to accept the next assignment offered to him.
  • On February 5, 2014 Stahle issued a record of employment for a temporary leave due to medical illness.
  • On March 13, 2014 Soave was injured in an MVA. 
  • After the accident Soave was advised by Stahale that his group benefits were not available to him as he had quit his job.   

The Issues at Trial were as follows:

  1. Was Soave an Employee of Stahale on January 27, 2014?

    Justice Walters found that Soave was an employee on both January 27, 2014 his last day of work and March 12, 2014, the date of the MVA. 

  2. Did Stahale Terminate Soave’s benefits:

    Justice Walters found that Stahale retroactively terminated Soave’s benefits February 28, 2014.

  3. Would Soave have been entitled to received Long Term Disability Benefits?

    Justice Walters framed the question as “but for the termination, what benefits would Rob have received?”  The GWL Policy was not before the court, but rather the “Mercon benefit plan” [I assume the employee benefit booklet] was entered into evidence. Justice Walters found that “According to the Mercon benefit plan, an individual seeking a temporary leave of absence due to disability can continue their benefits on a contribution basis (50 percent paid by each of the employer and the employee) as long as they are in receipt of long-term disability benefits for a period of two years.  There is a 120-day waiting period with an additional 180-day period during which an employee can apply.  I have accepted that Rob received his temporary medical leave on January 27, 2014.  This would allow him until November 23, 2014 or 120 days, before which he would need to apply for long-term disability benefits.”

    She then considered whether Soave would have met the test for LTD benefits as follows:

    “In order to be considered disabled, you must be unable to perform the essential duties of your own occupation during the Qualifying Period and during the first two years immediately following the Qualifying Period.  Thereafter, you will be considered to be disabled if you are unable to perform the essential duties of:  any occupation for which you are qualified or may reasonably become qualified, by training, education or experience.” 

    It appears that the evidence before the court of Soave’s disability and application to GWL for LTD benefits was limited to Soave’s CPP application, Stahle’s employer statement to GWL, a letter from Stahle to GWL regarding the status of Soave’s employment and GWL’s denial letter dated June 6, 2016 which read:

    “Under the provisions of this group plan, in order to be eligible for benefits an employee mush be considered actively at work.  To satisfy this requirement, an employee must: 1) not be disabled according to the definition of disability under this plan’s disability income benefits, and 2) be either: a) actively working at the employer’s place of business or a place where the employer requires him to work; or; b) absent due to a period of scheduled vacation up to 4 weeks, weekends, statutory holidays, or shift variances.”

    Based on the evidence presented and specifically the medical evidence in the CPP file, the trial Judge found that Soave met the definition of disability for LTD benefits and would continue to meet it until the age of 65.

The Ontario Court of appealed found as follows:

  1. ISSUE 1: The Trial Judge did not err in refusing to allow Stahle to introduce the Great West Life Insurance policy

    It was noted that both parties had a copy of the policy but had only used the Mercon Booklet in all their dealings.  The court of appeal found that there was no basis to interfere with the trial judge’s finding in refusing to admit the policy on the basis of trial fairness.

  2. ISSUE 2: The Trial Judge did not err is giving no weight to the Great West Life letter;

    *This painful negative is not a typo, nor is it my editing.  The decision is otherwise very well written.

    The appeal court held that the trial judge did not err in not considering GWL’s denial letter of June 6, 2016, as no context was provided to explain what information GWL relied on in their assessment.  As noted above the GWL file was not produce and no witnesses from GWL were called.

  3. ISSUE 3: The Trail Judge erred in finding that Mr. Soave was eligible for Long Term Disability Benefits.

    The appeal court agreed that the trial judge failed to properly assess whether Soave met the eligibility requirements for receiving LTD benefits in her interpretations of the Mercon Booklet.

    The appeal court noted the following provisions from the booklet:

    • Coverage Effective Dates

      Coverage for you and your dependents starts on the effective date of your employer joining the plan, or on the date that any waiting period ends, provided that you are actively at work on that date. [Emphasis added.]

    • Continuation of Coverage

      If your employment is temporarily interrupted, under the following circumstances, your benefit coverage may be continued on a contribution basis. Please contact Mercon Benefit Services regarding the continuation of your benefits during any of the following periods of leave.

      Leave of AbsenceYou may continue your benefits under this plan, with the exception of disability benefits, for up to six months during a leave of absence elected by you with your employer’s agreement. Prior to beginning the leave, you and your employer must agree to the scheduled start and finish dates.

      DisabilityYou may continue your benefits while you are unable to work due to disability for up to 24 months from the date you become disabled. To be eligible for the continuation of benefits, you must either be in receipt of Workers’ Compensation or Long Term Disability benefits, or be approved for waiver of premium under the Employee Life Insurance benefit. [Emphasis added.]

      “disability” is defined as follows:

      In order to be considered disabled, you must be unable to perform the essential duties of your own occupation during the Qualifying Period and during the first two years immediately following the Qualifying Period. Thereafter, you will be considered to be disabled if you are unable to perform the essential duties of:

      • any occupation for which you are qualified or may reasonably become qualified, by training, education or experience;
      • any occupation for which you are receiving an income that is equal to or greater than the amount of monthly disability benefit payable under this provision, adjusted annually by the Consumer Price Index.

    • You are not eligible to receive LTD benefits during any period that you are:

      on a leave of absence during which you become totally disabled, unless your employer is required to pay benefits during this period as required by legislation, regulation or case law.

The appellate court held that the trial judge erred by failing to consider the provision for entitlement to LTD benefits rather than the provisions for continuation of coverage.  They interpreted the booklet to provide that Soave could only be entitled to LTD benefits if he was disabled withing the meaning of the booklet on the date he stopped working or if he became totally disabled during his leave of absence and his employer was required by legislation, regulation, or case law to pay benefits during that period. 

The appellate court’s comments were as follows:

  • the Continuation of Coverage provisions in the booklet applied to health benefits and not LTD benefits due to the context of the wording.
  • the Leave of Absence provision specifically excluded LTD benefits and did not address eligibility.
  • The disability provision in the Continuation of Coverage section provides that an employee unable to work due to disability may continue their “benefits” for up to 24 months and eligibility for continuation depends on the employee already being in receipt of WCB or LTD benefits. Again, the court found that “benefits” in this provision applied to other benefits such as health, dental or life insurance benefits.
  • The trial judge should have applied the provision that specifically addressed entitlement to LTD benefits rather than continuation of coverage, meaning that Mr. Soave would qualify for LTD benefits only if he was disabled within the meaning of the definition on the date he stopped working.
  • The booklet specifically provides that an employee on a leave of absence is only entitled to LTD benefits if the employer is required to pay benefits by legislation, regulation or case law.

Take Away:

LTD cases do not often go to trial without representation from the Insurer.  Employee benefit booklets are often verbatim of the policy between the employer and the insurer, but without evidence from the insurer on the policy and booklet wording, employers leave themselves open to the court’s interpretations of the contract they negotiated for their employee benefits.  It is always helpful to have context for the provisions for continuation of benefits and eligibility as they are a reflection of the different risks and considerations associated with insuring individuals who are at work vs. individuals who are on leaves of absences.  These situations are all considered in the negotiations when employers are building their employee benefit coverage.   

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Rolling Limitation Periods and Periodic Payments: Karkhanechi v. Connor, Clark & Lunn Financial Group Ltd., 2022 ONCA 518

In Karkhanechi v. Connor, Clark & Lunn Financial Group Ltd., 2022 ONCA 518, the Ontario Court of Appeal reviewed the concept of rolling limitation periods and held that rolling limitation periods do not apply to periodic payments when an employee is aware of a potential breach from the beginning and there is no “fresh cause of action” with each payment.

…rolling limitation periods do not typically apply to disputes involving contracts with recurring payments.

Results Mediators

In Ontario, the Limitations Act, 2002 provides a basic limitation period of two years. The limitation period is triggered two years from the date the claimant knew, or ought to have known, that the potential defendant did or failed to do something that caused the claimant harm. This is referred to as the discoverability principle.

A rolling limitation period can be applied when an ongoing contractual obligation is breached on a recurring basis. With each breach, a new limitation period could begin. However, it is not automatically applied to claims that involve ongoing obligations. Specifically, rolling limitation periods do not typically apply to disputes involving contracts with recurring payments.

In this case, Mr. Karkhanechi (“Mr. K”) became an employee of Connor, Clark & Lunn Financial Group Ltd. (“CCL”) in 2014 at which time his compensation package was structured in a partnership agreement with CCL. The partnership agreement involved a post-retirement scheme, which included periodic payments to be made to Mr. K for nine years following his retirement on a declining basis. In the ninth year, his share of equity in his employer would be zero.

In 2016, Mr. K was terminated from his employment with CCL, triggering the compulsory retirement provision in the partnership agreement. Following Mr. K’s termination, he claimed that the post-retirement payments that he was receiving were less than he believed he was entitled to. CCL disagreed with Mr. K’s claimed entitlement to receive permanent post-retirement payments. Despite bringing the disagreement up in March 2017 after receiving his first post-retirement compensation statement that had been reduced, Mr. K did not take action to commence proceedings until more than two years later, in December 2019.

In September 2021, a motion judge granted summary judgment against Mr. K after finding that his claims were statute barred under the Limitations Act, 2002. The motion concluded that the applicable two-year limitation period began to run on March 27, 2019 because on that date the loss was discoverable. Mr. K appealed the order arguing that the motion judge erred by failing to apply a rolling limitation period, and by finding his request for a declaration to be statute-barred, contrary to s. 16(1)(a) of the Limitations Act, 2002, which provides that there is no limitation period for the seeking of a declaration.

The Court of Appeal disagreed that a rolling limitation period applied and found that the motion judge was correct in concluding that a single breach with continuing consequences occurred on March 27, 2017, when CCL clearly rejected Mr. K’s claim to permanent periodic payments under the partnership agreement. By March 2017, Mr. K had the material facts required to initiate an action relating to the ongoing damage that would arise from CCL’s denial to the claims Mr. K was making.

According to the Court, the key distinction in determining whether a roiling limitation period applies is whether there are multiple, separate damage claims arising from the breach or continued loss or damage. In the latter situation, the basic limitation period still applies. The Court explained: This distinction matters because entitlement to rolling limitation periods is premised on the notion that with each new breach a “fresh cause of action” arises that “sets the clock running for a new two-year limitation period” …. Put simply, without a “new breach”, there is no justifiable basis for applying a rolling limitation period.

Take Away:

It is important to understand any limitation periods that may apply to a claim that you may have, and to understand exactly when clock starts running on that limitation period. Generally, you have two years to start a lawsuit after you discover that you have suffered an injury, loss, or damage. In determining whether a rolling limitation period applies, one should always look at the nature of the breach. In cases where there is a breach that gives rise to continuing loss or damages, a rolling limitation period typically will not apply. On the other hand, where there is more than one breach leading to separate damages claims or a “fresh cause of action”, a rolling limitation period may apply.


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What is a Reasonable Amount of Exercise in a Disability Claim? Dhanda v. Thind, 2022 BCSC 1003

When a claim for disability is made, the claimant opens themselves up to scrutiny of how they are living their life, what medical care they receive and how they function in their work and personal life.  “Activities of daily living” are used to describe day to day functions that everyone needs to perform for basic self-care and survival.  Other activities, such as socializing, entertainment, travel and exercise are also considered when Insurers adjudicate disability claims.  As with any evidence, there are subjective and objective factors to consider both for the Plaintiff and Adjudicator, and as with most claims the findings are often in the grey areas.

The Plaintiff’s credibility is arguably the most important factor in disability trials.

Results Mediators

The recent jury decision of Baker v. Blue Cross has left everyone guessing what evidence led the jury to award the largest punitive damages award in Canadian history.  We have read that there was 375 hours of surveillance and my understanding is that Ms. Baker’s fitness routine was likely questioned.  Surveillance has long been used by Insurers as another piece of evidence to consider in adjudication.  The use of surveillance at trial has had a mixed outcome for Insurers, from an unsuccessful defence in cases such as Baker v. Blue Cross and a successful defence in Bezanson v. Sun Life Insurance Company, 2015 NSSC 1, where “surveillance took place over the course of the next few years, for several days each time” and there was “many hours of DVD evidence from 2009 to 2013”.  

In the recent case of Dhanda v. Thind, 2022 BCSC 1003 we have one Judge’s findings on what was argued to be an “extensive” exercise routine, that was self-reported by the Plaintiff, at the time of trial. It is another example of what a court looked at when tasked with assessing a Plaintiff’s disability claim. 

Ms. Dhanda was in second year of her undergrad degree at UBC when she was struck from behind while at a red light in March of 2018.  She sustained persistent soft tissue pain in her neck and back with sleep mood disturbances, and sensitivity to light and noise.  Prior to the accident, she was very active and played competitive soccer through high school, recreational soccer while at university, pursued gymnastics, weight-training and running.  She was also supportive at home with the household and family business as well as at her Sikh temple.

After her accident she declined a dual-degree business program fearing the workload would be too much, given her physical discomfort and difficulties concentrating. She stopped cooking at the temple, working for the family business, playing soccer and doing gymnastics and helped out less around the house. She was accommodated with extra time for exams and provided note-taking assistance at UBC and graduated in April 2020 with a BA. In September of 2020 she began UBC’s accelerated nursing program.  She experienced back pain and fatigue in her clinical rotations and was concerned how her body would respond to a full workload.  In late 2021 she began working as a student nurse in the emergency department at Surrey Memorial Hospital.  She continued to worry about the physical nature and longevity of nursing work.

At the time of trial she was embarking on her nursing career and was seeking $640K-$790K of damages for preclusion from physically demanding jobs.  The Defendants suggest $120K – $170K and argued that her functioning was better than she alleged. 

The Judged awarded damages of $328,210.00.

A significant portion of the Defendant’s defence focused on the Plaintiff’s exercise routine at the time of the trial.  The Plaintiff self-reported that she participated in strength training 4 times per week as well as walking or running an additional 4 times per week.  She claimed that her workouts were now less strenuous than before her accident.  The Judge used the adjective “extensive” to describe the exercise routine in paragraph 29, but it is not clear is he was paraphrasing from an expert report or if he found the routine extensive himself.  

The Judge found that “regarding her exercise regime, in my view this is an important aspect of Ms. Dhanda’s overall condition”.  I agree with the defendants that her exercise regime is difficult to reconcile with some of the limitations she described at trial, such as with housework and cooking at the temple.  Having said that, I do not find this discrepancy undermines Ms. Dhanda’s overall credibility about her condition.” 

Take Away:

The amount of exercise and activity that a Plaintiff participates in, will likely always have to be considered on a case by case basis and credibility is arguably the most important factor in disability trials where the evidence is always conflicting.  If Ms. Dhanda had not disclosed her exercise routine and it had been found on surveillance, would the outcome have been different? I personally do not consider Ms. Dhanda’s activity level “extensive”.  There is certainly a general conception of what a disabled lifestyle should include when a Plaintiff is looking for compensation due to an inability to work.  Any activities beyond what are required for basic functioning will always be examined, and what is “reasonable” will continue to be subjected to both objective and subjective evidence and views of the court. 

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Largest Punitive Damages Award – Baker v. Blue Cross Life Insurance Company of Canada

By now everyone has heard about the Toronto jury decision awarding the largest known punitive damages on record to an individual plaintiff in Canada after a five-week trial in the Ontario Superior Court of Justice.

The award of $1.5 million in punitive damages was made against the Blue Cross Life Insurance Company of Canada (“Blue Cross”) in connection with its more than 6-year denial of long-term disability (“LTD”) benefits in favour of Sara Baker, a 47-year-old woman who suffered a brain bleed/stroke in 2013 after which she was unable to return to her job as a Director at a hospital. The six-member jury also awarded the full reinstatement of Ms. Baker’s LTD benefits, along with $40,000 in aggravated damages for Ms. Baker’s mental distress.

As this was a jury decision there are no reasons for the decision but this is what has been reported so far:

  • Blue Cross initially paid disability benefits to Ms. Baker after her brain bleed/stroke. LTD benefits were denied when Blue Cross determined she could return to work in an alternate occupation that would pay her at least 60% of her pre-disability earnings. Ms. Baker’s doctors opined that her cognitive impairments, headaches, and mental fatigue, were intractable and rendered her unable to work.
  • Due to the COVID-19 pandemic and restrictions on civil jury trials, Ms. Baker sought to have her case determined by a Judge alone.  Blue Cross maintained the trial should be decided by a Jury which resulted in a further delay. Blue Cross, in a sworn affidavit, explained that a jury trial was essential to its “strategy for the defence of this action” based on “the surveillance reports and videotapes.” These included 375 hours of covert surveillance Blue Cross had undertaken of Ms. Baker, none of which showed Ms. Baker engaged in any activities inconsistent with the symptoms of her brain bleed/stroke.
  • In his closing address to the jury, Ms. Baker’s counsel, Stephen Birman, cited Blue Cross’ excessive and irrelevant surveillance, along with numerous examples of Blue Cross failing to consider available medical and vocational evidence, including that of its own medical experts, as grounds for a finding that Blue Cross had breached its duty of good faith and caused Ms. Baker mental distress.

TAKEAWAY:  In assessing the merits of a claim for bad faith, the Court must find that the conduct was high-handed, arbitrary, malicious or reprehensible to offend the Court’s sense of decency and therefore worthy of punishment. Vulnerability or hardship of the insured is also an important consideration. It is important to understand that although an insurers’ claims file may be full of errors, those by themselves do not constitute bad faith. Similarly, the incorrect denial or termination of disability benefits is not in itself evidence of bad faith.


Relief from Forfeiture in LTD – Smith v. Sun Life and Wiles v. Sun Life

Smith v. Sun Life 2021 ONSC 7109 (CanLII)


The Ontario Court granted the Plaintiff relief from forfeiture for failing to submit a formal Long Term Disability (LTD) application and dismissed Sun Life’s motion for summary judgment to dismiss the Plaintiff’s claim.  

Key Facts and timing in Smith 

The Plaintiff was approved for Short Term Disability (STD) benefits under the same Policy through his employer with Sun Life.  The Plaintiff was participating in an approved gradual return to work (GRTW) plan when he was unable to continue working and submitted another STD claim.  The Plaintiff’s STD benefits were declined at first review and then upon appeal.  The time to submit an LTD application was less than a month after the STD benefits were denied.  The Plaintiff sued Sun Life about two months after the STD denial.         


Wiles v. Sun Life 2018 ONSC 1090 (Can LII) (appeal dismissed 2018 ONCA 766 (CanLII)

In Wiles, Sun Life was successful in their motion for summary judgment to dismiss the Plaintiff’s claim for salary continuance and LTD benefits.  Sun Life was the administrator of a Salary Continuance Service for the Employer as well as the insurer for LTD benefits.  The Plaintiff claimed disability in 2015, after she was terminated by her Employer without cause.  She submitted Salary Continuance forms in December of 2015.  An attending physician’s statement (APS) was requested by Sun Life and not submitted.  The Claim was closed in February of 2016 for failure to submit an APS.  A Statement of Claim was issued in January of 2017 only against Sun Life for breach of a group Disability Policy. The motion for summary judgment was served in May of 2017, an attending physician’s statement and LTD claim was served in July of 2017 and the Statement of Claim was amended to include LTD benefits in September of 2017.   

The court found that:

      • The Plaintiff did not submit a claim for LTD benefits until May 2017.
      • The LTD claim was not completed until July 2017, when the Plaintiff’s lawyer submitted an APS.
      • The Plaintiff was aware of the distinction between Salary Continuance Services and LTD benefits in November of 2015.
      • There was no explanation why the forms were not submitted in a timely manner.
      • There was no explanation why a claim for LTD benefits was not made within the time limits as set out in the insurance Policy.  







The transition between STD and LTD can trigger procedural issues if there is a denial at the STD stage and the claim does not officially transition into LTD benefits.  It can be even more complicated if there are different carriers for the STD and LTD benefits.  Many contracts provide that LTD benefits are only available once STD benefits are paid in full, but as seen in the Smith case, the Courts was unwilling to find that a separate process was necessary, when the Plaintiff’s disability had been adjudicated for STD benefits and little time had passed, which would result in the Plaintiff being barred from further benefits due to a procedural failure.  Although the courts have often chosen the two year statutory limitation period over any shorter contractual period, one of the larger differences between these cases is the unexplained delay in Wiles, of almost two years before the insurer had the documents to assess the disability claim, compared to Smith, where the insurer had already made an initial assessment of the claim when the LTD period arose.       


Are mediations always confidential?

Union Carbide Canada Inc. v. Bombardier


The Supreme Court of Canada found that a confidentiality clause in a private mediation can override the exception to the common law settlement privilege that enables parties to produce evidence of confidential communications in order to prove the existence or the scope of a settlement.  The court explained that if the parties choose to tailor their confidentiality requirements by contract to exceed the scope of the common law settlement privilege, it must be done expressly and with the intention that the clause prohibit the parties from disclosing the terms of settlements for enforcement purposes.

Signed minutes of settlement

In Union Carbide Canada Inc. v. Bombardier Inc.  2014 SCC 35 the mediation contract was signed on the eve of the mediation.  It was a standard form contract provided by the mediator to which no changes were made by either party. To determine if a confidentiality clause displaces settlement privilege, the court considered the wording of the clause, the intent of the parties, the circumstances in which it was formed and the contract as a whole.

The court held that there was no evidence that either party intended to exceed the settlement privilege.

The confidentiality clause in question read as follows:

  1. Anything which transpires in the Mediation will be confidential.  In this regard, and without limitation;
  2. Nothing which transpires in the Mediation will be alleged, referred to or sought to be put into evidence in any proceeding;
  3. No statement made or document produced in the Mediation will become subject to discovery, compellable as evidence or admissible into evidence in any proceeding, as a result of having been made or produced in the Mediation; however, nothing will prohibit a party from using, in judicial or other proceedings, a document which has been divulged in the course of the Mediation and which it would otherwise be entitled to produce;
  4. The recollections, documents and work product of the Mediator will be confidential and not subject to disclosure or compellable as evidence in any proceeding.

TAKEAWAY: If you want override the presumption of settlement privilege and make everything at a mediation confidential, you can, but you need to clearly state that is your intention in the mediation agreement and lose the ability to enforce a potential settlement with evidence from the mediation. 

Peres v Moneta Porcupine Mines Inc.

The Importance of Signed Minutes of Settlement

We have all been in lengthy mediations that carry on well past 5pm. At the end of the day when a settlement number is agreed on, the parties may decide to finalize the settlement after the mediation, the next day, or even later.

Results Mediators - Signed minutes of settlement
Signed minutes of settlement

This may not be wise, as you could end up arguing a motion about whether a settlement was reached in which mediation communications are admissible as in the case of Peres v Moneta Porcupine Mines Inc., 2021 ONSC 5798 (CanLII)

The plaintiff, Ian C. Peres, brought a successful motion enforcing a settlement agreement that was purportedly reached via email correspondence between counsel within an hour following the end of a full day mediation.  There were no minutes of settlement signed, and the defendant denied that a settlement was reached despite numerous emails exchanged following the mediation. The issue before the Superior Court was whether the emails following the mediation were an agreement to settle.

Upon reviewing the emails, the Court found that “the essential terms are clear, albeit requiring embodiment in formal legal language to be drafted by counsel.” The Court found there was little merit in defendant counsel’s argument that there was no “meeting of the minds” instead, it found that the parties did agree on the essential terms, but some further work was required to write up the details.

TAKEAWAY: If you believe there is a settlement in principle, ensure there are signed minutes of settlement before walking away from the mediation.

How diverse is your list of Mediators?

Results Mediators Neutral DiversityThe OBA’s Working Group on Neutral Diversity recently released a report examining diversity in alternative dispute resolution settings and proposing recommendations about how it can be improved in Ontario.

The report revealed that arbitrators and mediators hired in Ontario do not reflect the gender or racial diversity of the demographics of the province or the legal profession. Respondents to a survey reported that in the last two years, the mediators that they hired were men 70% of the time, and white 94% of the time.

As female mediators and one of us of South Asian decent, we are pleased that the OBA has taken the initiative to spotlight that a diversity issue does exist.  It should be a priority for the legal profession to reflect the community it serves, improving diversity across the board, from legal recruiting and retention to Neutral development, retention and selection.

The report sets out a number of recommendations for lawyers and organizations to consider to increase Neutral diversity. By following the recommendations in this report, the diversity of mediators and arbitrators hired in Ontario can be improved with positive results for clients, lawyers, Neutrals and the legal and ADR professions as a whole.

Below are a few recommendations to diversify your Neutral selection:

1. Request diverse names when seeking recommendations for Neutrals.

2. When proposing Neutrals to opposing counsel, include diverse candidates.

3. If you are wary of retaining someone new, consider hiring unfamiliar or less senior Neutrals to mediate smaller value or simpler cases as a way of gaining comfort with them.

4. Instruct outside counsel to include diverse Neutrals in lists of Neutrals they propose and encourage selection of diverse Neutrals where appropriate.

5. Educate clients about the benefits of using Neutrals from diverse backgrounds, e.g., different perspectives can help you identify gaps in your case and avoid group thinking.

By following the recommendations in this report, the diversity of mediators and arbitrator hired in Ontario can be improved with positive results for clients, lawyers, Neutrals and the legal and the ADR professions as a whole.

The legal profession in Ontario needs to step up in increasing Neutral diversity because “diversity is everyone’s business”.

Presumption of In-Person Attendances Start April 19, 2022

Just when we thought the Ontario courts were embracing on-line appearances they have released guidelines setting out presumptive methods of attendance for events in Superior Court of Justice proceedings.  The guidelines that take effect on April 19th set out the Court’s expectations for the following proceedings:  Case conferences, pre-trials, trials, motions, examinations for discovery, mandatory mediations, assessment hearings, cost hearings, and appeals.

Specifically for Mandatory Mediations, the guidelines state:


Read the full Guidelines here: http://

Results Mediators is happy to accommodate either virtual or in-person mediations to suit your and/or your client’s needs.  Please contact us to discuss any specific accommodation requests.