court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Sansome v. Industrial Alliance Insurance and Financial Services Inc. , 2021 NLSC 59 Date : May 6, 202 1 Docket : 201904G0098 Between: Garry Sansome Plaintiff And: Industrial Alliance Insurance AND financial services inc. Defendant Before: Justice Daniel M. Boone Place of Hearing: Corner Brook, Newfoundland and Labrador Date of Hearing: April 21, 2021

Summary: The Plaintiff claimed that the Defendant is liable to him, either vicariously as the principal or statutory sponsor of another insurance agent, or directly, because it allowed that agent to operate in breach of the Insurance Adjusters, Agents and Brokers Act . The Court found that the alleged conduct on the part of the Defendant would not have caused any damage to the Plaintiff. The Court allowed the Plaintiff’s Application for

Summary Trial on the basis that there was no genuine issue for trial, but dismissed the action. Appearances:

Garry Sansome Appearing on his own behalf Andrew J. Wadden Appearing on behalf of the Defendant Authorities Cited: CASES CONSIDERED: Sansome v. Rubens , 2020 NLSC 157 ; Sansome v. Sheppard , 2019 NLSC 237 ; Financial Consultants Ltd. v. Industrial Alliance Insurance and Financial Services Inc. (February 21, 2019), Corner Brook 201504G0183 (N.L. S.C. (T.D.)) STATUTES CONSIDERED: Insurance Adjusters, Agents and Brokers Act , R.S.N.L. 1990, c. I-9 RULES CONSIDERED: Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch.

D REASONS FOR JUDGMENT Boone, J. : INTRODUCTION [ 1 ] The Plaintiff was a licensed insurance agent. He signed an agent’s contract with the Defendant in 1998. The Plaintiff incorporated a company, Financial Consultants Inc., through which he operated part of his business; that company signed an agent’s contract with the Defendant in 2000. [ 2 ] The Defendant terminated both these agent’s contracts in 2010. [ 3 ] At around the same time, the Plaintiff declared bankruptcy and became disabled and either lost or surrendered his license as an insurance agent.

The relationship between the Plaintiff and the Defendant, and between the Plaintiff and Manulife Financial, another insurer for whom the Plaintiff acted as agent, ended. The Plaintiff has initiated, or caused to be initiated, several actions in which he has made claims arising out of this period in his life. These actions include this one, as well as the following: • 201204G0050; Garry Sansome v. Industrial Alliance - The Plaintiff claimed damages in his personal capacity resulting from the termination of the Financial Consultants Ltd. agent’s contract.

This Court determined that the Plaintiff’s claim should be struck for want of a cause of action. • 201304G0059; Garry Sansome v. Mark Rubens - The Plaintiff claimed that a medical report prepared by Dr. Rubens for Mr. Sansome’s disability insurer was carried out without his consent, contained defamatory remarks, and was negligently prepared. This Court decided ( Sansome v.

Rubens , 2020 NLSC 157 ) that although there was a negligent misstatement in the medical report, the emotional and financial losses suffered by the Plaintiff had taken place and were continuing prior to that breach and no compensable loss could be causally attributed to it. Rather, significant physical health issues and the economic crisis in the investment market combined to evoke major stress and personal financial decisions that led to his declaration of bankruptcy. • 201504G0261; Garry Sansome v. Scott Sheppard - The Plaintiff claimed that Mr. Sheppard breached an agreement under which Mr.

Sheppard agreed to share commissions with the Plaintiff earned from servicing clients who had purchased Manulife financial services products through the Plaintiff. This Court found ( Sansome v. Sheppard , 2019 NLSC 237 ) after

summary trial that the Plaintiff and Financial Consultants Ltd. were automatically terminated in their respective roles as agent and key representative of Manulife when Mr. Sansome made an assignment in bankruptcy. Without Manulife’s written approval, Scott Shepherd could not represent Financial Consultants Ltd. in its dealings with Manulife clients. Any dealings Scott Shepherd had conducted at Garry Sansome’s request with any of Manulife’s customers after the bankruptcy were contrary to the Producer’s Agreement with Manulife and the Insurance Adjusters, Agents and Brokers Act , R.S.N.L. 1990, c.

I-9 , (the “ Act ”), s. 45 , and the contract between the parties was illegal and unenforceable. • 201504G0183; Financial Consultants Ltd. v. Industrial Alliance Insurance and Financial Services Inc. - The Plaintiff as the sole shareholder and director of Financial Services Ltd. directed a solicitor to initiate an action against Industrial Alliance claiming that Industrial Alliance had wrongfully terminated its agency contract. This Court (in Financial Consultants Ltd. v. Industrial Alliance Insurance and Financial Services Inc., (February 21, 2019), Corner Brook 201504G0183 (N.L.

S.C. (T.D.)) dismissed an application by Mr. Sansome to represent the corporate plaintiff and decided that the action could only be continued if the corporate plaintiff is represented by a solicitor. That action remains outstanding. • 201204G0051; Garry Sansome v. Deon Hancock - In that action, the Plaintiff claims that he is entitled to damages because Hancock operated his insurance agency with which the Plaintiff was affiliated, in breach of the Act , s. 45 . I previously ordered that both that action and this one will be heard together, with the evidence in one being evidence in the other.

[ 4 ] The original Statement of Claim in this action broadly alleged two bases on which the Plaintiff claims damages from the Defendant. First, the Plaintiff claimed that the Defendant wrongfully terminated the agent’s contract between Financial Consultants Ltd. and the Defendant because the Defendant relied on the bankruptcy of the Plaintiff to terminate that agreement.

The Plaintiff said that this caused damage to Financial Consultants Ltd., which was his “personal property.” Second, the Plaintiff says that the Defendant, as principal and statutory sponsor of Deon Hancock, is vicariously liable, or directly liable as a fiduciary, for the damage that Hancock caused to the Plaintiff by operating in breach of the Act . [ 5 ] The Plaintiff amended the Statement of Claim with leave of the Court. The Amended Statement of Claim dropped the claims for the damage allegedly suffered by the Plaintiff due to the Defendant’s termination of the Financial Consultants Ltd. agent’s contract.

I presume that the Plaintiff is no longer pursuing this claim because a previous decision of the Court in a direct action by Mr. Sansome against Industrial Alliance, struck a similar claim for want of a cause of action, and because Handrigan J. in Sansome v. Sheppard , at paragraphs 68-69 , said this about a similar assertion made in that case: [68] Mr. Sansome clearly confuses his status as Financial Consultants Limited’s sole shareholder and the company’s separate status as a legal person. Several times in my dealings with Mr.

Sansome he claimed that there is no distinction between him and Financial Consultants Limited, or as Mr. Sansome puts it: Financial Consultants Limited was “…his private property which he has 100% legal rights to”. [69] Mr. Sansome is wrong in law about Financial Consultants Limited’s legal status. The company is the legal person who contracted with Manulife and to the extent that Mr. Sansome negotiated with Scott Shepherd for Mr. Shepherd to transact any business for Manulife under the Producer’s Agreement it could only be on behalf of Financial Consultants Limited and not Mr.

Sansome personally. [ 6 ] The Amended Statement of Claim now only says that the Defendant is liable for an alleged breach of the Act by Deon Hancock.

The Plaintiff says that the Defendant is liable, either vicariously as the principal or statutory sponsor of Hancock, or directly, because it allowed Hancock to operate in breach of the Act . [ 7 ] The Defendant denies any knowledge that Hancock operated illegally, denies vicarious liability for any unlawful conduct of Hancock, denies that the Plaintiff can seek damages personally as a result of termination of the Financial Consultants Ltd. agency contract, and denies that the Act imposed any duties to the Plaintiff, fiduciary or otherwise, on the Defendant. [ 8 ] The Plaintiff has applied for

Summary Trial and judgment. The Defendant says that the Plaintiff’s Application should be dismissed as it does not meet the threshold for

summary trial. On the hearing of this Application, the Defendant put forward the argument in the alternative that if I decided that the action against Hancock in 201204G0051 should be dismissed on

summary trial, then this action should also be dismissed because it is now based entirely on the allegation of vicarious liability or liability for failing to ensure that Hancock operated in breach of the Act . ISSUES 1. Is the question whether Industrial Alliance was in breach of the Insurance Adjusters, Agents and Brokers Act a genuine issue for trial? and 2. Is the question whether Industrial Alliance is vicariously liable for Deon Hancock breaching the Insurance Adjusters, Agents and Brokers Act a genuine issue for trial?

ANALYSIS [ 9 ] In action 201204G0051, between the Plaintiff and Deon Hancock, the Plaintiff claims that he is entitled to damages because Hancock operated his insurance agency with which the Plaintiff was affiliated, in breach of the Act , s. 45 . I previously ordered that both that action and this one will be heard together, with the evidence in one being evidence in the other. [ 10 ] In that action, both the Plaintiff and Hancock applied for

summary trial. In a decision filed simultaneously with this one, I allowed both applications and entered judgment for Hancock dismissing the action because answering the question whether Hancock operated his agency in breach of the Act would not affect the legal position of the Plaintiff and Defendant relative to each other. Consequently, although the pleadings presented a question that the Plaintiff and Hancock answered differently, that question was not a genuine issue for trial in that action. [ 11 ] The same is true in this action.

The Plaintiff alleges that Industrial Alliance was in breach of the Act because it allowed Hancock to operate as its Managing General Agent when he was in breach of the licensing requirements in the Act . Whether that was the case or not, it would not have affected the right of Industrial Alliance to terminate the Plaintiff’s agency due to the Plaintiff’s bankruptcy.

The question whether Industrial Alliance was in breach of the Act is not a genuine issue for trial. [ 12 ] The only other claim set out in the pleadings is that Industrial Alliance is vicariously responsible for the conduct of Hancock in his breach of the Act .

As I found that the question whether Hancock was in breach of the Act is not a genuine issue for trial in that action, it follows that the alleged question of vicarious liability is not a genuine issue for trial in this action. [ 13 ] Therefore, the pleadings do not identify any genuine issue for trial and, in accordance with Rule 17A.03(1) of the Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D , judgment is granted for the Defendant. CONCLUSION and DISPOSITION [ 14 ] The only claim made by the Plaintiff in this proceeding fails to present a genuine issue for trial. The application for

summary

trial is allowed but the action is dismissed. [ 15 ] The Defendant, as the successful party, shall have his costs, taxed on Rule 55, Appendix 1, Column 3 of the Scale of Costs, Rules of the Supreme Court, 1986 . _____________________________ Daniel M. Boone Justice