Fidler v. Sun Life Assurance Co. of Canada

• Jurisdiction: British Columbia
• Court: Court of Appeal (British Columbia)
• Judge: Finch, C.J.B.C., Prowse and Ryan, JJ.A.
• Citation: 2004 BCCA 273,(2004), 196 B.C.A.C. 130 (CA)
• Date: 17 May 2004

Fidler v. Sun Life (2004), 196 B.C.A.C. 130 (CA);

    322 W.A.C. 130

MLB headnote and full text

Temp. Cite: [2004] B.C.A.C. TBEd. MY.050

Connie Fidler (respondent/appellant on cross-appeal/plaintiff) v. Sun Life Assurance Company of Canada (appellant/respondent on cross- appeal/defendant)

(CA030244; 2004 BCCA 273)

Indexed As: Fidler v. Sun Life Assurance Co. of Canada

British Columbia Court of Appeal

Finch, C.J.B.C., Prowse and Ryan, JJ.A.

May 17, 2004.

Summary:

An insurer wrongfully terminated the plaintiff's long-term disability benefits. The plaintiff sued for damages. The trial was limited to determining whether the plaintiff was entitled to aggravated damages for the mental distress suffered and punitive dam­ages for the insurer's breach of its duty of good faith.

The British Columbia Supreme Court, in a judgment reported [2002] B.C.T.C. 1336, awarded $20,000 aggravated damages, but dismissed the claim for punitive damages. The insurer appealed the award of aggra­vated damages. The plaintiff cross-appealed the denial of punitive damages.

The British Columbia Court of Appeal dismissed the insurer's appeal and allowed the plaintiff's cross-appeal, awarding her $100,000 punitive damages for the insurer's breach of the duty of good faith, which was an independent actionable wrong. Ryan, J.A., dissenting part, agreed with the dismissal of the insurer's appeal against the aggravated damage award, but disagreed that the facts of the case warranted an award of punitive damages against the insurer.

Damage Awards - Topic 2018.1

Exemplary or punitive damages - Breach of contract - [See Damages - Topic 1305 ].

Damage Awards - Topic 2030.6

Exemplary or punitive damages - Breach of duty of good faith - [See Damages - Topic 1305 ].

Damage Awards - Topic 2416

Aggravated damages - Infliction of mental suffering - The plaintiff was awarded $20,000 aggravated damages against an insurer for the insurer's wrongful termina­tion of her long-term disability benefits, which caused the plaintiff mental distress but no proof of financial hardship (past benefits paid and entitlement reinstated just before trial commenced) - The insurer challenged the award as inordinately high - The insurer had terminated benefits for five years - The British Columbia Court of Appeal stated that "as the learned trial judge made no error in principle and, in my view, since the amount of $20,000 cannot be considered inordinately high or entirely disproportionate in the circum­stances of this case, I would not disturb the trial judge's award" - See paragraphs 51 to 56.

Damages - Topic 912

Aggravation - In contract - For breach - An insurer wrongfully terminated the plaintiff's long-term disability benefits - The trial judge awarded $20,000 aggra­vated damages for breach of the insurance contract on the basis of the plaintiff's mental distress - The insurer challenged entitlement to aggravated damages where the plaintiff failed to prove financial hard­ship caused by termination of benefits - The British Columbia Court of Appeal held that aggravated damages were jus­tified for mental distress - Although the general rule was that aggravated damages were not available for breach of contract, the exception was "peace of mind" con­tracts (including insurance contracts), where the very purpose of the contract was to ensure the plaintiff's peace of mind - The court stated that aggravated damages were available for an insurer's failure to pay benefits without proof of financial hardship - Mental distress was established where the wrongful termination of benefits caused frustration, anxiety, emotional upset and loss of sleep - See paragraphs 37 to 50.

Damages - Topic 1305

Exemplary or punitive damages - Breach of contract - The trial judge awarded the plaintiff $20,000 aggravated damages for the mental distress resulting from an insur­er's wrongful termination of long-term disability benefits, but declined to award punitive damages because the insurer had not breached its duty of good faith - The British Columbia Court of Appeal held that the trial judge erred in failing to find a breach of the duty of good faith, which was an independent actionable wrong enti­tling the plaintiff to punitive damages if the insurer's breach departed from ordi­nary standards of decency to a marked degree - Benefits were paid for six years, then ter­minated without notice and with no medi­cal evidence to support termination of benefits - The insurer maintained its posi­tion for five years, reinstating benefits only on the eve of trial - The plaintiff was not treated fairly, the insurer failed to objec­tively assess evidence and had little regard for the plaintiff's position of vulnerability - The court held that the insurer's conduct warranted punishment by way of punitive damages, which the court fixed at $100,000 - See paragraphs 57 to 80.

Insurance - Topic 730

Insurers - Duties - Duty of good faith - [See Damages - Topic 1305 ].

Cases Noticed:

Warrington v. Great-West Life Assurance Co. (1996), 81 B.C.A.C. 164; 132 W.A.C. 164; 139 D.L.R.(4th) 18 (C.A.), refd to. [para. 33].

McIsaac v. Sun Life Assurance Co. of Canada (1999), 126 B.C.A.C. 131; 206 W.A.C. 131; 173 D.L.R.(4th) 649; 1999 BCCA 299, leave to appeal refused (1999), 252 N.R. 392; 138 B.C.A.C. 172; 226 W.A.C. 172 (S.C.C.), refd to. [para. 33].

Eddie v. Unum Life Insurance Co. of America (1999), 128 B.C.A.C. 257; 208 W.A.C. 257; 66 B.C.L.R.(3d) 1; 1999 BCCA 507, refd to. [para. 33].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201; 209 D.L.R.(4th) 257; 2002 SCC 18, refd to. [para. 34].

Adams v. Confederation Life Insurance Co., [1994] 6 W.W.R. 662; 152 A.R. 121; 18 Alta. L.R.(3d) 324 (Q.B.), refd to. [para. 35].

Clarfield v. Crown Life Insurance Co., [2000] O.T.C. 757; 50 O.R.(3d) 696 (Sup. Ct.), refd to. [para. 35].

Bassett v. Revere (Paul) Life Insurance Co. et al., [2001] B.C.T.C. 988; 32 C.C.L.I.(3d) 103; 2001 BCSC 988, refd to. [para. 41].

Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085; 94 N.R. 321, refd to. [para. 43].

T.W.N.A. et al. v. Clarke et al. (2003), 190 B.C.A.C. 250; 311 W.A.C. 250; 22 B.C.L.R.(4th) 101 (C.A.), refd to. [para. 44].

Evans v. Crown Life Insurance Co. et al. (1996), 25 B.C.L.R.(3d) 234; 37 C.C.L.I.(2d) 61 (S.C.), refd to. [para. 55].

Cross v. Canada Life Assurance Co., [2002] I.L.R. I-4044; 16 C.C.E.L.(3d) 310 (Ont. S.C.), refd to. [para. 55].

Gerber v. Telus Corp. et al., [2003] 10 W.W.R. 82; 340 A.R. 92; 2003 ABQB 453, refd to. [para. 55].

Asselstine v. Manufacturers Life Insurance Co. et al., [2003] B.C.T.C. 1119; 17 B.C.L.R.(4th) 107; 2003 BCSC 1119, refd to. [para. 55].

Ferme Gérald Laplante & Fils ltée v. Grenville Patron Mutual Fire Insurance Co. (2002), 164 O.A.C. 1; 61 O.R.(3d) 481; 217 D.L.R.(4th) 34 (C.A.), leave to appeal refused [2002] S.C.C.A. No. 488, refd to. [para. 61].

702535 Ontario Inc. et al. v. Non-Marine Underwriters, Lloyd's, London et al. (2000), 130 O.A.C. 373; 184 D.L.R.(4th) 687 (C.A.), leave to appeal refused (2000), 264 N.R. 400; 145 O.A.C. 400 (S.C.C.), refd to. [para. 70].

Kogan v. Chubb Insurance Co. of Canada et al., [2001] O.T.C. Uned. 424; 27 C.C.L.I.(3d) 16 (Sup. Ct.), refd to. [para. 70].

Toneguzzo-Norvell et al. v. Savein and Burnaby Hospital, [1994] 1 S.C.R. 114; 162 N.R. 161; 38 B.C.A.C. 193; 62 W.A.C. 193; 110 D.L.R.(4th) 289, refd to. [para. 71].

Van Mol et al. v. Ashmore (1999), 116 B.C.A.C. 161; 190 W.A.C. 161; 58 B.C.L.R.(3d) 305; 1999 BCCA 6, leave to appeal refused (2000), 252 N.R. 393; 138 B.C.A.C. 269; 226 W.A.C. 269 (S.C.C.), refd to. [para. 71].

Khazzaka v. Commercial Union Assurance Co. of Canada (2002), 162 O.A.C. 293; 66 O.R.(3d) 390 (C.A.), refd to. [para. 79].

Authors and Works Noticed:

Waddams, S.M., The Law of Damages (2nd Ed. 1983), p. 562 [para. 43].

Counsel:

A.M. Mersey and W. Westeringh, for the appellant;

F.E. Hayman and J.D. Thomas, for the respondent.

This appeal and cross-appeal were heard on January 12, 2004, at Vancouver, B.C., before Finch, C.J.B.C., Prowse and Ryan, JJ.A., of the British Columbia Court of Appeal.

The judgment of the Court of Appeal was delivered on May 17, 2004, and the follow­ing opinions were filed:

Finch, C.J.B.C. (Prowse, J.A., concur­ring) - see paragraphs 1 to 84;

Ryan, J.A., dissenting in part - see para­graphs 85 to 105.