Atwal v. Standard Life Assurance Company of Canada, 2011 ABQB 330

Court of Queen ’ s Bench of Alberta Citation: Atwal v. Standard Life Assurance Company of Canada, 2011 ABQB 330 Date: 20110512 Docket: 0701 03254 Registry: Calgary Between: Kulwinder Atwal Plaintiff/Applicant - and - Standard Life Assurance Company of Canada (The) Defendant - and - Darren Anderson Third Party/Respondent _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice C.L. Kenny _______________________________________________________

[ 1 ] This is an appeal from the decision of Master Laycock wherein he allowed the plaintiff’s application to add Darren Anderson as a defendant in this action. Background [ 2 ] I will briefly paraphrase the facts set out by the Master in his decision. [ 3 ] The Plaintiff is the surviving spouse of Hardev Atwal who obtained a three million dollar life insurance policy from the defendant The Standard Life Assurance Company of Canada (Standard Life) in November of 2002. Mr. Atwal died in January of 2006 and the defendant denied coverage on August 16, 2006.

This action was commenced March 27, 2007. [ 4 ] Darren Anderson is the broker who sold the policy of insurance to Mr. Atwal. It is a term of the policy with Standard Life that Mr. Atwal would have total life insurance coverage not exceeding $3,500,000 will all companies. When Mr. Atwal died it was discovered that he had $8,000,000 in life insurance. Standard Life refused to pay under the policy alleging misrepresentation, breach of a condition precedent and failure to disclose an existing health risk. [ 5 ] The examinations for discovery were held on August 20, 2008.

The defendant’s officer undertook to request the insurance file from the broker, Darren Anderson. Mr. Anderson refused to provide his file. He was then added as a third party by consent. Mr. Anderson was examined for discovery on November 10, 2009. From that discovery the plaintiff learned:

a) that Mr. Atwal needed $8,000,000 of coverage;

b) that the intention was to apply to various companies and see what coverage Mr. Atwal could get approved for;

c) that Mr. Atwal already had $2.5 million in coverage;

d) that Mr. Anderson received a proposal from another company for $2 million dollars in coverage without restrictions on other coverages;

e) that Standard Life had agreed to coverage of $3 million dollars with the limiting provision set out above;

f) that Mr. Anderson was inexperienced with “big case applications” and had not used an “alteration of application form” before;

g) that Mr. Atwal had questions regarding the wording of the policy but Mr. Anderson could not recall what Mr. Atwal said;

h) that Mr. Anderson did not tell Mr. Atwal that he could not keep his existing coverage as well as the Standard Life coverage and did not discuss with Mr. Atwal the issue of cancelling any insurance;

i) When Mr. Atwal told Mr. Anderson he intended to retain all coverage, Mr. Anderson did not indicate to him that he could not do what he was proposing to do;

j) Mr. Anderson did not advise Standard Life of Mr. Atwal’s intention to maintain all coverage.

[ 6 ] Upon receiving the information from the discovery, the plaintiff sought to add Darren Anderson as a defendant in the action. The plaintiff argues that until they obtained the facts from Mr. Anderson at the examination for discovery they were not aware of the conduct of Mr. Anderson in his dealings with Mr. Atwal. [ 7 ] Mr.

Anderson argues that the time to commence the action has expired by virtue of the Limitations Act and argue that when coverage was denied on August 16, 2006, the plaintiff knew or ought to have known that a denial of coverage had occurred, that the denial was attributed to Anderson’s conduct, and that the injury warranted bringing a proceeding. The Law [ 8 ] The application engages the following sections of the Limitations Act RSA 2000, c. L-12 s. 3 and s.6 :

Section 3: 3

(1) Subject to

section 11, if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. . . .

(5) Under this section, (

a) the claimant has the burden of proving that a remedial order was sought within the limitation period provided by subsection (1) (a), and (

b) the defendant has the burden of proving that a remedial order was not sought within the limitation period provided by subsection (1)(b). . . .

Section 6:

(1) Notwithstanding the expiration of the relevant limitation period, when a claim is added to a proceeding previously commenced, either through a new pleading or an amendment to pleadings, the defendant is not entitled to immunity from liability in respect of the added claim if the requirements of subsection (2), (3) or (4) are satisfied.

(2) When the added claim (

a) is made by a defendant in the proceeding against a claimant in the proceeding, or (

b) does not add or substitute a claimant or a defendant, or change the capacity in which a claimant sues or a defendant is sued, the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding.

(3) When the added claim adds or substitutes a claimant, or changes the capacity in which a claimant sues, (

a) the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, (

b) the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on the merits, and (

c) the court must be satisfied that the added claim is necessary or desirable to ensure the effective enforcement of the claims originally asserted or intended to be asserted in the proceeding.

(4) When the added claim adds or substitutes a defendant, or changes the capacity in which a defendant is sued, (

a) the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, and (

b) the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on the merits.

(5) Under this section, (

a) the claimant has the burden of proving (

i) that the added claim is related to the conduct, transaction or events described in the original pleading in the proceeding, and (ii) that the requirement of subsection (3)(c), if in issue, has been satisfied, and (

b) the defendant has the burden of proving that the requirement of subsection (3)(

b) or (4)(b), if in issue, was not satisfied. Decision of the Master

[ 9 ] The Master concluded that neither the Plaintiff nor Standard Life would have had any knowledge about the meetings and discussions between Mr. Anderson and Mr. Atwal since Mr. Atwal has died. The only person with knowledge of the discussions between the two of them is Mr. Anderson. It was only upon the completion of the examinations for discovery of Mr.

Anderson that the full facts became known to the Plaintiff and Standard Life as indicated by the Master. [ 10 ] The Master went on to say that there were insufficient facts to conclude that the Plaintiff, simply from the letter denying coverage, would have had sufficient facts to conclude that she had an action against Anderson in negligence. As such the Master granted the amendment and determined that it was not necessary to consider s. 6 of the Limitations Act . Decision [ 11 ] I agree with the Master.

The test is whether the Plaintiff knew or ought to have known of the injury before the expiration of the limitation period. Mr. Anderson says that even if the Plaintiff did not know, she should have known as a result of the letter from Standard Life denying coverage. They say that letter should have put her on a path of inquiry to find out the details of why coverage was denied. [ 12 ] In the facts of this case, that was virtually impossible until the examination of Mr. Anderson on the third party notice. The plaintiff and Standard Life had requested his file earlier however he refused to produce it.

Even had they had the file, there was limited documentation in the file. Most of the details about the conversations between Mr. Atwal and Mr. Anderson only came out at the discovery. Even if the Plaintiff had applied under the rules of court for documents from a third party that still would not have provided them with the information they learned from the examination for discovery of Mr. Anderson. [ 13 ] I am satisfied, that the Plaintiff did not have sufficient information to know, or by which she should have known, that she may have suffered an injury as a result of the negligence of Mr.

Anderson until such time as the information was received at the examination for discovery. [ 14 ] The appeal is dismissed. Heard on the 29 th day of April, 2011. Dated at the City of Calgary, Alberta this 12th day of May, 2011. C.L. Kenny J.C.Q.B.A.

Appearances: David A. Thurmeier for the Plaintiff, Kulwinder Atwal Domenic S. Venturo, Q.C. for Darren Anderson