Andrusiw v. Aetna Life Insurance Co. of Canada, (2001) 289 A.R. 1 (QB)

• Judge: Murray, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 22, 2001
• Citations: (2001), 289 A.R. 1 (QB)

Andrusiw v. Aetna Life (2001), 289 A.R. 1 (QB)

MLB headnote and full text

Temp. Cite: [2001] A.R. TBEd. JN.041

Zennie G. Andrusiw (plaintiff) v. Aetna Life Insurance Co. of Canada (defendant)

(Action No. 9703 08213)

Indexed As: Andrusiw v. Aetna Life Insurance Co. of Canada

Alberta Court of Queen's Bench

Judicial District of Edmonton

Murray, J.

June 13, 2001.

Summary:

The plaintiff (the insured) commenced an action against the defendant insurance company, claiming that he was entitled to total disability benefits under an insurance policy. The insurance company counterclaimed for the return of disability benefits paid to the insured over a 10 year period (1987 to 1997) and for return of waiver of premium benefits. The insurance company alleged that the insured wilfully misrepresented that he was not engaged in a gainful occupation or employment and that he did not suffer the total and irrecoverable loss of the use of his left foot as claimed.

The Alberta Court of Queen's Bench dismissed the insured's action. The court held that not only did the insured fail to show that he fell within the definition of "total disability" in the policy, but the evidence showed that the insured was and had been performing important duties relating to his company since at least January 1987. This involvement progressively increased until 1988 when he was doing so on a full time basis. The court held that the insured fraudulently misrepresented his situation to the insurer. Thus the insurance policy was void and all claims thereunder forfeited. The court ordered that the insured return the benefits paid and pay punitive damages of $20,000.

Damage Awards - Topic 2027

Exemplary or punitive damages - Fraud - An insurance company claimed against an insured for return of disability benefits paid over a 10 year period, alleging that the insured had wilfully misrepresented that he was not engaged in a gainful occupation or employment - The Alberta Court of Queen's Bench held that the insured fraudulently misrepresented his situation to the insurer and therefore the contract was invalidated - Not only was the insured not disabled, he had been working for his company - The court ordered the insured to return the benefits paid - In addition the court awarded the insurer punitive damages of $20,000 - See paragraphs 78 to 86.

Insurance - Topic 3136

Payment of insurance proceeds - Actions - Relief against forfeiture - Extent of power to grant relief - An insurance company claimed against an insured for return of disability benefits paid over a 10 year period, alleging that the insured had wilfully misrepresented that he was not engaged in a gainful occupation or employment - The Alberta Court of Queen's Bench held that the insured fraudulently misrepresented his situation to the insurer and therefore the contract was invalidated - Not only was the insured not disabled, he had been working for his company - The insured argued that the court had a discretion to grant relief from forfeiture under s. 385 of the Insurance Act and s. 10 of the Judicature Act - The court held that neither section was of assistance to the insured and, in any event, the court would not exercise its discretion to grant relief from forfeiture in this case - See paragraphs 57, 58.

Insurance - Topic 3137

Payment of insurance proceeds - Actions - Relief against forfeiture - When available -[See Insurance - Topic 3136 ].

Insurance - Topic 3139

Payment of insurance proceeds - Actions - Relief against forfeiture - Imperfect compliance with statutory conditions, claims, notice and proof of loss - [See Insurance - Topic 3136 ].

Insurance - Topic 3305

Payment of insurance proceeds - Actions - Defences - False statement by insured respecting claim - [See Insurance - Topic 3570.1 and first Insurance - Topic 3573 ].

Insurance - Topic 3570.1

Accident and sickness insurance - The contract - Interpretation of terms - Total disability - Disentitlement - Grounds - An insurance company claimed against an insured for return of disability benefits paid over a 10 year period, alleging that the insured had wilfully misrepresented that he was not engaged in a gainful occupation or employment - The Alberta Court of Queen's Bench held that the insured fraudulently misrepresented his situation to the insurer and therefore the contract was invalidated - Not only was the insured not disabled, he had been working for his company - See paragraphs 1 to 77.

Insurance - Topic 3573

Accident and sickness insurance - The contract - Interpretation of terms - Dismemberment or loss of use - An insured fraudulently misrepresented to his insurer that he was totally disabled and had not been engaging in gainful employment - The insurer sought return of benefits paid -The insured argued that even if he did not fall within the definition of "total disability" he did fall within the definition of "assumed total disability" and thus it did not matter that he had been or was still engaged in his occupation and employment - The "assumed total disability" definition, it was argued, was a separate insuring agreement and the insured's representations were to be disregarded in assessing that claim - The Alberta Court of Queen's Bench held that there was one insuring agreement and two definitions of "total disability" within the agreement - Whether or not the insured could have claimed under the "assumed total disability" definition did not alter the fact that he made false statements to induce the insurer to make payments under the policy - The making of wilfully false statements in this situation vitiated the entire claim - See paragraphs 59 to 62.

Insurance - Topic 3573

Accident and sickness insurance - The contract - Interpretation of terms - Dismemberment or loss of use - An insured misrepresented to his insurer that he was totally disabled and had not been engaging in gainful employment - The insurer sought return of benefits paid - The insured argued that even if he did not fall within the definition of "total disability", the loss of use of his left foot constituted an "assumed total disability" and thus it did not matter whether he was working - The Alberta Court of Queen's Bench held that the insured's wilfully false statements vitiated the entire claim - The court opined, however, that the insured did not have an "assumed total disability" because he had not established that he suffered the total and irrecoverable loss of the use of his left foot - The court noted that when the insured used a brace he had substantial use of his left foot - See paragraphs 63 to 77.

Insurance - Topic 3573

Accident and sickness insurance - The contract - Interpretation of terms - Dismemberment or loss of use - The Alberta Court of Queen's Bench stated that "... if an artificial device enables a person to make substantial use of a part of his or her body which is otherwise not functional and if it enables that part of the body to become functional, then it cannot be said that the person has suffered total and irrecoverable loss of the use of the affected part of the body" - See paragraph 76.

Cases Noticed:

Sucharov v. Revere (Paul) Life Insurance Co., [1983] 2 S.C.R. 541; 50 N.R. 144; 26 Man.R.(2d) 161; 5 D.L.R.(4th) 199, refd to. [para. 49].

Hiscock v. Metropolitan Life Insurance Co. (1988), 72 Nfld. & P.E.I.R. 126; 223 A.P.R. 126 (Nfld. T.D.), refd to. [para. 49].

Adams v. Confederation Life Insurance Co. (1994), 152 A.R. 121 (Q.B.), refd to. [para. 49].

Bacon v. Saskatchewan (1990), 88 Sask.R. 182 (Q.B.), refd to. [para. 49].

MacEachern v. Co-operative Fire and Casualty Co. (1986), 75 N.S.R.(2d) 271; 186 A.P.R. 271 (T.D.), affd. (1987), 79 N.S.R.(2d) 127; 196 A.P.R. 127 (C.A.), refd to. [para. 49].

Lefebvre v. C.N.A. Assurance Co. (1978), 20 O.R.(2d) 37 (H.C.), refd to. [para. 49].

Mercuri v. Imperial Life Assurance Co. of Canada (1990), 107 N.B.R.(2d) 320; 267 A.P.R. 320 (T.D.), refd to. [para. 49].

Glassman v. Constellation Assurance Co., [1983] O.J. No. 325 (H.C.), refd to. [para. 49].

Bater v. Bater, [1950] 2 All E.R. 458 (C.A.), refd to. [para. 51].

Hanes v. Wawanesa Mutual Insurance Co., [1963] S.C.R. 154, refd to. [para. 51].

Smith and/or Irdo Holdings Ltd. v. Royal Insurance Co., [1983] 3 W.W.R. 577; 42 A.R. 38 (C.A.), refd to. [para. 51].

Britton v. Royal Insurance Co. (1866), 4 F. & F. 905; 176 E.R. 843, refd to. [para. 53].

Swan Hills Emporium & Lumber Co. and Wenger v. Royal General Insurance Co. of Canada (1977), 2 A.R. 63; 2 Alta. L.R.(2d) 1 (C.A.), refd to. [para. 54].

Anastasov et al. v. Halifax Insurance Co., [1987] I.L.R. 1-2245 (B.C.C.A.), refd to. [para. 55].

Fotinos v. Pitts Insurance Co., [1981] O.J. No. 224 (H.C.), refd to. [para. 55].

Dimario v. Royal Insurance Canada, [1988] I.L.R. 1-2260; 26 O.A.C. 370 (Div. Ct.), refd to. [para. 55].

Thumbers Video Ltd. v. I.N.A. Insurance Co. of Canada, [1989] I.L.R. 1-2511 (B.C.S.C.), refd to. [para. 55].

Economical Mutual Insurance Co. v. Kadoche, [1988] I.L.R. 1-2303 (Ont. Dist. Ct.), refd to. [para. 55].

Provident Assurance Co. v. Adamson, [1938] S.C.R. 482, refd to. [para. 57].

Travellers' Indemnity Co. v. Sumner Co. (1961), 27 D.L.R.(2d) 562, refd to. [para. 57].

Dolloff v. Phoenix Insurance Co. (1890), 19 Alta. R. 396 (C.A.), refd to. [para. 62].

Shaw v. Globe Indemnity Co. of Canada, [1921] 1 W.W.R. 674; 29 B.C.R. 157, refd to. [para. 72].

McGinn v. Seaboard Life Insurance Co. (1992), 95 Nfld. & P.E.I.R. 298; 301 A.P.R. 298 (Nfld. T.D.), refd to. [para. 73].

Lloyd v. Commercial Union Assurance Co. of Canada (1984), 6 D.L.R.(4th) 182 (Ont. H.C.), refd to. [para. 74].

Kinal v. Aetna Life Insurance Co., [1989] S.J. No. 657 (Q.B.), refd to. [para. 74].

Grant v. British Pacific Life Insurance Co., [1980] I.L.R. 1-225; 36 N.S.R.(2d) 137; 64 A.P.R. 137 (S.C.), refd to. [para. 74].

Douglas v. Mutual Life Assurance Co. of Canada, [1985] I.L.R. 1-1902 (Ont. Co. Ct.), refd to. [para. 74].

Copelund v. Locomotive Engineers Insurance Association (1910), 16 O.W.R. 739 (Ont. C.A.), refd to. [para. 74].

Labelle v. Great-West Life Assurance Co., [1986] I.L.R. 1-2104 (B.C.S.C.), refd to. [para. 74].

Tadman v. Seaboard Life Insurance Co. (1989), 93 A.R. 83 (C.A.), refd to. [para. 75].

Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085; 94 N.R. 321; 58 D.L.R.(4th) 193; [1989] 4 W.W.R. 218; 36 B.C.L.R.(2d) 273; 90 C.L.L.C. 14,035; 25 C.C.E.L. 81, refd to. [para. 80].

Paragon Properties Ltd. v. Magna Investments Ltd. (1972), 24 D.L.R.(3d) 156 (Alta. C.A.), refd to. [para. 80].

Rookes v. Barnard, [1964] A.C. 1129, refd to. [para. 80].

Hill v. Church of Scientology of Toronto and Manning, [1995] 2 S.C.R. 1130; 184 N.R. 1; 84 O.A.C. 1; 126 D.L.R.(4th) 129, refd to. [para. 81].

Whiten v. Pilot Insurance Co. et al. (1999), 117 O.A.C. 201; 42 O.R.(3d) 641 (C.A.), refd to. [para. 82].

Statutes Noticed:

Insurance Act, R.S.A. 1980, c. I-5, sect. 385 [para. 57].

Judicature Act, R.S.A. 1980, c. J-1, sect. 10 [para. 57].

Authors and Works Noticed:

Brown and Menzes, Insurance Law in Canada (4th Ed.), generally [para. 55].

Hayles, R., Disability Insurance: Canadian Law and Practice (1998), p. 307-311 [para. 49].

Counsel:

J.L. Bowen, for the plaintiff;

W.J. Kenny and J.A. Agrios, for the defendant.

This matter was heard at Edmonton, Alberta, on May 22, 2001, before Murray, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following decision on June 13, 2001.