Bodnarchuk v. RBC Life Insurance Co. et al., 2010 MBQB 85

• Judge: McKelvey, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: April 20, 2010
• Jurisdiction: Manitoba
• Citations: 2010 MBQB 85;(2010), 253 Man.R.(2d) 7 (QB)

Bodnarchuk v. RBC Life (2010), 253 Man.R.(2d) 7 (QB)

MLB headnote and full text

Temp. Cite: [2010] Man.R.(2d) TBEd. MY.019

Wayne Curtis Michael Bodnarchuk (plaintiff) v. RBC Life Insurance Company, William Carey, carrying on business under the firm name and style W.R. Carey Corporation, and the said William Carey and Assante Financial Management Ltd. (defendants)

(CI 07-01-51446; 2010 MBQB 85)

Indexed As: Bodnarchuk v. RBC Life Insurance Co. et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

McKelvey, J.

April 20, 2010.

Summary:

Bodnarchuk commenced a legal action against the defendants. In support of his claim against the defendant Assante Financial Management Ltd., he advanced the following grounds: wrongful dismissal; breach of agency duties; the tort of mental distress; and negligence and/or negligent misrepresentation. Assante moved for summary judgment to dismiss the claim.

A Master of the Manitoba Court of Queen's Bench, in a decision reported at [2009] Man.R.(2d) Uned. 76; 2009 MBQB 241, granted the summary motion. Bodnarchuk appealed.

The Manitoba Court of Queen's Bench allowed the appeal in part. The claim for intentional infliction of mental suffering and emotional shock had no realistic chance of success. There remained, however, a genuine issue for trial with respect to the remaining claims.

Agency - Topic 326

Creation of relations - Parties - By contract - An agency relationship was considered with respect to a summary judgment motion to dismiss - The plaintiff contended that the defendant Assante Financial Management Ltd. acted as an agent on behalf of the defendant insurer and/or the defendant broker and brokerage firms relative to the policy of disability insurance offered by Assante - He argued that the relationship was one of an agency by contract wherein both the principal and the agent acted in such a way so as to suggest that there must be actual authority - The Manitoba Court of Queen's Bench stated that, "[i]n such circumstances, a court may infer the existence of the contract and can imply whatever terms as are necessary to explain the actions of the agent and of the principal. This can occur despite the fact that the agent and/or principal deny the existence of the relationship and that it is difficult to produce proof of its existence. There, arguably, could also be an ostensible agency contemplated in these circumstances" - See paragraph 45.

Agency - Topic 326

Creation of relations - Parties - By contract - [See third Practice - Topic 5708 ].

Agency - Topic 4168

Relations between principal and third parties - Principal's liability for torts by agent - Fraud by agent (incl. negligent misrepresentation) - [See fifth Practice - Topic 5708 ].

Fraud and Misrepresentation - Topic 2743

Misrepresentation - Negligent advice - What constitutes - [See fifth Practice - Topic 5708 ].

Master and Servant - Topic 303

Nature of relationship - What constitutes an employer-employee relationship - [See first Practice - Topic 5708 ].

Master and Servant - Topic 7502

Dismissal or discipline of employees - General principles - What constitutes dismissal or discharge (incl. constructive dismissal) - [See second Practice - Topic 5708 ].

Practice - Topic 5274.6

Trials - General - Simplified procedure actions, fast track litigation, etc. - Summary judgment - When available - The Manitoba Court of Queen's Bench set out the requirements governing a summary judgment motion, and considered a number of recent decisions from the Manitoba courts dealing with the issue - The court stated that "[a] summary judgment case is often difficult to determine, in part, because it is based upon evidence presented in affidavit form. This difficulty is particularly enhanced where there are competing affidavits and no cross-examination thereon to assist in credibility determinations. The purpose of a summary judgment motion is to allow the court, based upon the evidence provided, to determine if a case can be ended before trial because a genuine issue does not exist. Whether there is a genuine issue will be considered with reference to the applicable substantive law" - See paragraphs 4 to 10.

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - Bodnarchuk, a financial advisor, appealed an order which granted Assante Financial Management Ltd.'s summary judgment motion to dismiss his wrongful dismissal claim - Bodnarchuk contended that he was an employee of Assante and not an independent contractor - He was not treated as an employee for income tax, Canada Pension Plan and Employment Insurance deduction purposes - The Shareholder Advisor Agreement (SAA) described him as an independent contractor - The Manitoba Court of Queen's Bench held that there remained a genuine issue for trial - Assante had proven, on a prima facie basis, that the action must fail, primarily based on the terms of the SAA - However, there were clear issues as to whether Bodnarchuk was an independent contractor or an employee, based on the level of control Assante maintained over his activities, the fact that Assante provided the intellectual property, including all software, and the fact that he did not retain any rights over his client base - Entitlement to damages would also require determination - See paragraphs 11 to 38.

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - The plaintiff (Bodnarchuk) appealed an order which granted a summary judgment motion to dismiss his claim that he was an employee of the defendant Assante Financial Management Ltd. and wrongfully dismissed - An issue was whether he had resigned or had been dismissed - Bodnarchuk's health issues precipitated client service complaints - On November 9, 2003, he executed a commercial agreement to transfer his book of business to another Assante financial advisor (Dickson) - Bodnarchuk's understanding was that the "transfer" was temporary - A notice of suspension letter was sent to him on November 25, 2003 - It was during this time period that Bodnarchuk submitted that he was wrongfully dismissed - On May 31, 2004, by a client transfer agreement effective December 5, 2003, Bodnarchuk resigned from Assante, and sold his book of business to Dickson - The Manitoba Court of Queen's Bench held that there was a genuine issue for trial - Bodnarchuk's medical condition placed the parties' actions into some debate - Further, credibility needed to be evaluated - Also, the issue was significantly tied to the resolution of the independent contractor/employee issue - See paragraphs 39 to 43.

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - Bodnarchuk and other financial advisors associated with the defendant Assante Financial Management Ltd. were invited to a meeting relative to LTD coverage offered through the defendant insurer (RBC) - The plan was negotiated by Assante - Enrollment was mandatory - Members of Assante (Smith and Shields) instructed Bodnarchuk on how to complete the application form - An individual policy was issued to him - His application to RBC for LTD benefits was declined because of misrepresentation on the application form - Bodnarchuk sued - Assante successfully moved for summary judgment dismissing the claim that it acted as an agent on behalf of RBC (agency by contract) - Bodnarchuk appealed - The Manitoba Court of Queen's Bench concluded that there remained a genuine issue for trial "after having a good, hard look at the merits of the situation. It should not be summarily dismissed as the actions of Smith, Shields and Assante require the Court to consider the agency issue" - See paragraphs 44 to 53.

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - The defendant Assante Financial Management Ltd. moved for summary judgment dismissing the plaintiff's claim with respect to the intentional infliction of mental suffering and emotional shock - A Master held that the allegation did not constitute a "stand-alone" tort for the purposes of summary judgment, and granted the motion - The Manitoba Court of Queen's Bench was satisfied that Assante had proven, on a prima facie basis, that the action must fail - In reviewing the medical evidence, the court also did not accept that the plaintiff had established that there was a genuine issue for determination - The medical evidence failed to disclose a connection between the plaintiff's illness and Assante's actions - The onset of the plaintiff's health issues occurred in advance of the alleged wrongful actions - Further, the plaintiff failed to expressly attest to a connection between Assante's actions and his illness - He failed to adduce evidence to support the element of the tort related to a visible and provable injury - See paragraphs 56 to 61.

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - The plaintiff was a financial advisor - He joined the defendant Assante Financial Management Ltd., under an alleged employment agreement - His application for LTD benefits under a national benefits plan was declined by the defendant insurer (RBC) because of non-disclosure and misrepresentation of income on the application form - His wrongful dismissal action included an agency issue and negligent misrepresentation - The plaintiff maintained that he completed the application form for LTD insurance in accordance with the advice given by two Assante financial advisors, as agents of RBC - He appealed a Master's order which granted Assante's summary judgment motion to dismiss - The Manitoba Court of Queen's Bench held that there was a genuine issue for trial over the "misrepresentation" that was said to have occurred related to the declaration of net income earned - There was a clear issue of credibility to be resolved at trial - The parties' positions and the evidence were of a conflicting nature which should not be determined by way of summary judgment - Further, the issue was significantly intertwined with the agency issue - See paragraphs 69 to 73.

Torts - Topic 8710

Duty of care - Particular relationships - Claims for nervous shock and emotional suffering - Intentional infliction of - The Manitoba Court of Queen's Bench stated that "the three elements of the tort of an intentional infliction of mental suffering are conduct that is: (1) flagrant and outrageous; (2) calculated to produce harm (3) resulting in a visible and provable injury ... It is necessary for a plaintiff to adduce evidence to support each of the three elements of the tort so as to avoid a summary judgment from being granted" - See paragraphs 54 and 55.

Torts - Topic 8710

Duty of care - Particular relationships - Claims for nervous shock and emotional suffering - Intentional infliction of - [See fourth Practice - Topic 5708 ].

Cases Noticed:

Towers Ltd. v. Quinton's Cleaners Ltd. et al. (2009), 245 Man.R.(2d) 70; 466 W.A.C. 70; 2009 MBCA 81, refd to. [para. 5].

Arctic Foundations of Canada Inc. et al. v. Mueller Canada Ltd. et al. (2009), 248 Man.R.(2d) 123; 2009 MBQB 309, refd to. [para. 5].

Blanco et al. v. Canada Trust Co. et al. (2003), 173 Man.R.(2d) 247; 293 W.A.C. 247; 2003 MBCA 64, refd to. [para. 5].

Homestead Properties (Canada) Ltd. v. Sekhri et al. (2007), 214 Man.R.(2d) 148; 395 W.A.C. 148; 2007 MBCA 61, refd to. [para. 5].

Homestead Properties (Canada) Ltd. v. Robert - see Homestead Properties (Canada) Ltd. v. Sekhri et al.

Bridgwater v. Stanhope et al., [2009] Man.R.(2d) Uned. 73; 2009 MBCA 126, refd to. [para. 5].

Beavis et al. v. PricewaterhouseCoopers Inc. (2009), 246 Man.R.(2d) 254; 2009 MBQB 286, refd to. [para. 5].

Hydro Electric Board (Man.) v. Inglis (John) Co. et al., [2000] Man.R.(2d) Uned. 183; 2000 MBQB 218, refd to. [para. 5].

Engels v. Merit Insurance Brokers Inc. et al., [2007] O.T.C. Uned. A39; 2007 CanLII 6455 (Sup. Ct.), refd to. [para. 12].

Engels v. Merit Insurance Brokers Inc. et al., [2008] O.T.C. Uned. 387; 2008 CanLII 6642 (Sup. Ct.), refd to. [para. 12].

Jaremko v. LePage (A.E.) Real Estate Services Ltd. (1987), 59 O.R.(2d) 757 (H.C.), affd. (1989), 69 O.R.(2d) 323 (C.A.), refd to. [para. 13].

Belton et al. v. Liberty Insurance Co. of Canada, [2002] O.T.C. 701; 20 C.C.E.L.(3d) 262 (Sup. Ct.), refd to. [para. 14].

671122 Ontario Ltd. v. Sagaz Industries Canada Inc. et al. (2001), 274 N.R. 366; 150 O.A.C. 12; 2001 SCC 59, refd to. [para. 15].

Tajarobi v. Corporate Couriers Ltd. et al., [2006] B.C.T.C. 454; 2006 BCSC 454, refd to. [para. 37].

Harding v. Myotech Therapeutics Inc. (1999), 85 O.T.C. 49 (Gen. Div.), refd to. [para. 37].

Hub Financial Inc. v. Molinaro et al., [2002] O.T.C. 526 (Sup. Ct.), refd to. [para. 37].

International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 464 v. Taylor-Read Enterprises Inc. (1980), 109 D.L.R.(3d) 653 (B.C.S.C.), refd to. [para. 51].

Bohl v. Great-West Life Assurance Co. (1973), 40 D.L.R.(3d) 584 (Sask. C.A.), refd to. [para. 51].

Toronto-Dominion Bank v. DeGraauw (1998), 55 O.T.C. 201 (Gen. Div.), refd to. [para. 51].

Van Eeken Estate v. Royal Bank of Canada et al., [1988] A.J. No. 1351 (Q.B.), refd to. [para. 51].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84, refd to. [para. 54].

Boothman v. Canada (1993), 63 F.T.R. 48; 49 C.C.E.L. 109 (T.D.), refd to. [para. 59].

Correia v. Canac Kitchens et al. (2008), 240 O.A.C. 153; 2008 ONCA 506, refd to. [para. 59].

Schuenneman v. Riello Canada Inc. et al. (1997), 38 O.T.C. 371; 30 C.C.E.L.(2d) 242 (Gen. Div.), refd to. [para. 59].

Zsoldos v. Ontario Association of Architects et al., [2005] O.T.C. 810 (Sup. Ct.), affd. 2006 CarswellOnt 7311 (C.A.), refd to. [para. 64].

Harris et al. v. Cosmetology Association of New Brunswick et al. (2008), 341 N.B.R.(2d) 131; 876 A.P.R. 131; 2008 NBQB 377, refd to. [para. 64].

Morrison v. Clear Water Pool & Spa Inc. et al. (1997), 122 Man.R.(2d) 62 (Q.B. Master), refd to. [para. 74].

Statutes Noticed:

Queen's Bench Rules (Man.) - see Rules of Court (Man.), Queen's Bench Rules.

Rules of Court (Man.), Queen's Bench Rules, rule 20.01(3), rule 20.02(1), rule 20.02(2), rule 20.03(1) [para. 4].

Authors and Works Noticed:

Fridman, Gerald Henry Louis, The Law of Agency (7th Ed. 1996), p. 11 [para. 44].

Counsel:

Timothy J. Lach and Deborah E. Labun, for the plaintiff;

Steven Z. Raber and Curran P. McNicol, for Assante Financial Management Ltd.;

Melissa D.L. Beaumont, on a watching brief.

This appeal was heard by McKelvey, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following judgment on April 20, 2010.