In the recent decision of Wiles v. Sun Life, the Ontario Superior Court allowed a summary judgment motion by Sun Life, finding that the conduct of the plaintiff did not justify granting relief from forfeiture.
The plaintiff was an employee of Spaenaur, who was terminated without cause on November 2, 2015. With the assistance of her lawyer, the plaintiff applied for the Salary Continuance Services Program available through the employer, who also had long-term disability benefits program for employees through Sun Life. After the application for the Salary Continuance Services Program was denied, the plaintiff initiated an action for breach of contract against Sun Life only.
Sun Life issued a motion for summary judgment based on the fact that it did not provide the Salary Continuance Services Program and its role was limited to administration only of that program. Prior to the motion the plaintiff requested to amend the Statement of Claim to remedy the deficiencies in the claim, including adding Spaenaur as a defendant; make claims against Spaenaur for damages for wrongful termination of employment; make claims against Spaenaur for damages for breach of the terms of the Salary Continuance Services Program and clarify her claim against Sun Life for damages of breach of the long term disability policy provided by Sun Life to employees of Spaenaur.
After receiving the Amended Statement of Claim, Sun Life issued a Statement of Defence and the plaintiff brought this motion for leave to issue a reply in which she seeks to plead relief from forfeiture. The plaintiff claimed she was not aware of the need to submit a separate application to Sun Life for LTD versus the application for the Salary Continuance Services Program. Sun Life’s policy included a 90-day term after the elimination period to submit a claim for benefits. In addition, there was a one-year limitation period in the policy to initiate legal action. Both of which the plaintiff failed to meet and therefore wished to claim relief against forfeiture.
The Court stated that relief from forfeiture is available for imperfect compliance with a term of the insurance policy but not for non-compliance with a term of the policy.
Referencing the decisions in Falk Bros., the court explained the difference between imperfect compliance and non-compliance. With imperfect compliance being the failure to give notice of claim in timely manner, whereas failure to institute an action within a prescribed time limit would be viewed as non-compliance, or breach of a condition precedent.
Applying the case law to the facts of the matter, the court found that the plaintiff’s failure to give timely notice to Sun Life of her claim for long-term disability benefits could be the subject of relief from forfeiture. However, the plaintiff’s failure to commence the action against Sun Life until more than one year after the end of the time period in which the initial submission of proof of claim was required would be non-compliance with the contract and therefore not subject to relief from forfeiture. Accordingly, the plaintiff’s claim against Sun Life must be dismissed.
In the event he was wrong about the plaintiff’s failure to commence this action within the contractual time period, Justice Taylor provided an analysis of the remedy of relief of forfeiture, referring to the Supreme Court of Canada case, Saskatchewan River Bungalows Ltd. V. Maritime Life Assurance Co., 1994 CanLII 100 (SCC) the test for relief against forfeiture is discretionary and based on three considerations: a) the conduct of the applicant; b) the gravity of the breach; c) the disparity between the value of the property forfeited and the damages caused by the breach.
In Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363, the Ontario Court of Appeal at paragraph 87 held that relief from forfeiture is to be granted sparingly and the party seeking that relief bears the onus of making the case for it.
The Court started with the proposition articulated in Sweda Farmsthat it is assumed that the plaintiff has presented all of the evidence that will be available for trial and conclude that the plaintiff had not discharged the onus to satisfy that Sun Life has not been prejudiced by the delay in giving notice of the claim.
Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (CanLII), [ 2014] O.J. No. 851 at paragraph 33:
(1) The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;
(2) On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;
(3) If the court cannot grant judgment on the motion, the court should:
(a) Decide those issues that can be decided in accordance with the principles described in 2), above;
(b) Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues;
(c) In the absence of compelling reasons to the contrary, the court should seize itself of the further steps required to bring the matter to a conclusion.
Finally, the Court stated that if it was to grant the plaintiff relief from forfeiture on the basis of the record before it, it would effectively render meaningless the terms of the insurance policy requiring timely notice of a potential claim and the time within which an action must be commenced.
