Last week’s Court Rulings from the Alberta Court of King’s Bench, Court of Appeal and SCC.
Edited by Amanda Kostek and Christie Dewar
Thomson v Ivari, 2023 ABCA 369
Life Insurance | 10 Day Cancellation Period
Center Street v Lloyd’s Underwriters, 2023 ABKB 709
Common Interest Privilege | Interview with Former Employee
Alberta Drywall & Stucco Supply (Calgary) Inc v Alberta Drywall & Stucco Supply Inc, 2023 ABKB 696
Expert Report | Disclosure of Records Expert Relied On
Loncikova v Goldstein, 2023 ABCA 358
Long Delay | New Evidence Not Disclosed
Thomson v Ivari, 2023 ABCA 369
This was an appeal of a Summary Trial Decision which held that a party could cancel the conversion of an insurance policy during the 10 day cancellation period after the insured died during the 10 days. This allowed the party to revive the prior term policy and receive the $1.3 million death benefit. The appeal was dismissed.
The Alberta Court of Appeal confirmed the following distinction between an insurance contract and an insurance policy:
[11] An insurance policy and an insurance contract are distinct. As explained in Barbara Billingsley’s text, General Principles of Canadian Insurance Law, 3rd ed (Toronto: LexisNexis Canada Inc., 2020) at 54, although the terms are often used interchangeably, “[a]n insurance policy is not equivalent to an insurance contract”. An insurance contract requires the parties to agree on the policy, as well as all essential terms in the agreement. The distinction is important, as Billingsley explained at 54, because the existence of a written insurance policy does not, on its own, create legal obligations; a “policy is merely a recitation of terms and conditions”. Thus, a policy may be evidence of an insurance contract because parties often agree to be bound by the terms of a policy but does not necessarily reflect the agreement’s content.
[12] The distinction between the policy and the contract is confirmed in the Insurance Act, which distinguishes between “policy” and “contract”, as section 1(uu) of the Act defines “policy” to mean “an instrument evidencing a contract of insurance”, while section 642(2) states “the provisions in the application, the policy, any document attached to the policy when issued, and any amendment to the contract agreed on in writing after the policy is issued constitute the entire contract”. The distinction is acknowledged in the Converted Policy. The General Provisions at section 22 define the insurance contract as follows:
Contract: The entire contract between the Owner [the respondent] and ivari consists of this policy together with any endorsements, Riders and other documents attached to it by ivari on the Issue Date, the Application and any application for reinstatement or policy change approved by ivari at the Head Office, including any medical evidence form and any written statements and answers furnished as evidence of insurability, and any amendments made in accordance with this policy after it is issued (the “Contract”). The contract does not include, however, any temporary insurance agreement which ivari may have with any person. ivari has issued this policy in consideration of the Application and payment of the Premiums. All statements made by or for the Life Insured will be deemed to have been relied upon by ivari.
The Court of Appeal concluded that the drafters of Section 5 of the Fair Practices Regulation failed to consider that an insured might die during a 10 day cancellation period, but concluded that the 10 day cancellation policy did not undermine the risk allocation purposes of insurance:
[22] The situation is that during the 10-day cancellation period, there is a fortuitous and unpredictable risk about the life of Mr. Thompson. He might survive the 10 days without event, or suffer a life altering change to his health, or actually die. Which of these fortuitous and unpredictable events actually occurs represents the risk underlying the policy. During the 10-day cancellation period, the insurer is essentially at risk that there might be a material change in the insured’s health. The imposition of that risk on the insurer is inherent in the 10-day cancellation right. However, the fact that the insured might die within the 10-day period, as opposed to shortly after its expiry, does not materially alter the nature of the risks being insured against.
As a result, the death of the insured did not terminate the 10 day cancellation, and the appeal was dismissed.
Center Street v Lloyd’s Underwriters, 2023 ABKB 709
This was an Application under Rule 5.13 to require an adjusting firm to produce a copy of a witness transcript for use in the litigation. The transcript was an interview with a former employee, and the issue was whether the transcript was covered by litigation privilege. Parties at the interview included a lawyer for the CGL insurer, the director and manager of a roofing contractor, and an employee of an independent adjusting firm. The party interviewed was a former employee of the roofing contractor’s subcontractor.
The case turned on whether the interview could be categorized under the umbrella of common interest privilege. The Court concluded that the primary purpose of the interview was to evaluate coverage. Further, the Court found it difficult to identify a strong common interest between the parties at the interview. Finally, the Independent Adjuster’s argument suggested that they were not aware of which party the lawyer was representing at the interview. As a result, the Court found it hard to argue for Common Interest Privilege when it was unclear who one party represented. Ultimately the Court concluded that the transcript was not subject to litigation privilege.
Alberta Drywall & Stucco Supply (Calgary) Inc v Alberta Drywall & Stucco Supply Inc, 2023 ABKB 696
This was an Application to compel disclosure of records relied on by an expert. At issue was whether serving an expert report meant that all records relied on by that expert should be disclosed. The Court concluded that once a party commits to calling an expert at Trial, the other side is entitled to all foundational evidence relied on by that expert:
[19] In my view, Stone stands for the principle that once a party has committed to calling an expert at trial, privilege over the expert’s report is waived and the opposing party is entitled to the report and all foundational information.
However, simply serving an expert report did not mean that the party had committed to relying on that expert at Trial:
[22] With respect, I do not agree that by serving an expert report “the party delivering the expert report signals to the other side its intention to rely at trial on the expert report”. A party is free to not call an expert at trial whose report it previously served on the opposing party: Rances v Scaplen, 2008 ABQB 708 at para 219. All that a party serving an expert report does is keep its options open, to call or not call that expert.
As a result, although serving an expert report waives privilege over the report, it does not result in a waiver of privilege of anything else:
[24] Obviously, serving an expert’s report waives privilege over the report. In my view, it does not waive privilege over anything else. McMahon, J reached the same conclusion in Chernetz at para 12.
[25] This is particularly important with respect to communications between a party or its principal and its own expert. Those communications are subject to litigation privilege and solicitor client privilege: Browne at para 30.
[26] I find that the plaintiff did not waive privilege over Mr. Cunningham’s communications with Mr. Thoman, merely by serving Mr. Thoman’s report on the defendants. That waiver will occur only when the plaintiff calls Mr. Thoman as a witness at trial, or earlier if the plaintiff does something that commits the plaintiff to calling Mr. Thoman as a witness at trial.
Loncikova v Goldstein, 2023 ABCA 358
This was an appeal of an order dismissing an action for long delay. The Plaintiff appealed the dismissal of the action and sought to adduce fresh evidence. The Plaintiff alleged that the purpose of obtaining new evidence during the 3 year period of inactivity was to advance the action. However, there was no proof the records gathered were shared with the Defendant dentist. In dismissing the application, the Court of Appeal said the following:
[10] A survey of Alberta judgments where one party’s information and document gathering was put forward as significantly advancing an action shows the courts have considered the importance of the documents, the information in the documents, the relevance and quality of the information, and, importantly, whether the information and documents were provided to the other party. Relevant, valuable information permits a narrowing of issues, agreement on facts or issues, reconsideration of a party’s position or possible steps towards settlement, but none of that is possible if the other party has no knowledge of the work done: Huynh v Rosman, 2013 ABQB 218 [Huynh]; Huerto v Canniff, 2014 ABQB 534 [Huerto], aff’d 2015 ABCA 316; Phillips v Sowan, 2006 ABQB 579, aff’d 2007 ABCA 101; Top Grade Solutions Inc v Flying Pizza 73 Inc, 2009 ABQB 492; Riehs Estate (Re), 2021 ABQB 821 [Riehs Estate]; National Home Warranty Group Inc v Burton, 2022 ABQB 123 [National Home].
…
[12] In any event, the purpose for which the documents were sought is not determinative on its own. As addressed, an important factor is whether the documents, or the document-gathering process, were communicated to the opposing party: see Huynh at para 37, Huerto at para 43, Riehs Estate at para 36, National Home at para 47.