2012 QCCA 1150, 2012 QCCA 1150

Compagnie d'assurance-vie RBC (Unum Life Insurance Company of America) c. Gagnon 2012 QCCA 1150 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-021011-101 ( 500-05-054898-992 ) MINUTES OF THE HEARING DATE: June 13, 2012 CORAM: THE HONOURABLE NICOLE DUVAL HESLER, C.J.Q. ALLAN R. HILTON, J.A. NICHOLAS KASIRER, J.A. APPELLANT (INCIDENTAL RESPONDENT) ATTORNEY COMPAGNIE D'ASSURANCE VIE RBC in continuance of suit of UNUM LIFE INSURANCE COMPANY OF AMERICA Mtre René Vallerand DONATI,MAISONNEUVE RESPONDENT (INCIDENTAL APPELLANT) ATTORNEY TIMOTHY GAGNON Mtre Laurent Nahmiash FRASER, MILNER, CASGRAIN

On appeal from a judgment rendered on August 16, 2010 by the Honourable Madam Justice Claude Dallaire, of the Superior Court, district of Montreal. NATURE OF THE APPEAL : Insurance Clerk: Marcelle Desmarais Courtroom: Antonio-Lamer HEARING 14 h 24 Representations by Mtre René Vallerand 16 h00 Suspension. 16h 27 Resumption. 16 h 31 Representations by Mtre Laurent Nahmiash. 16 h 44 Rebuttal by Mtre René Vallerand on incidental appeal. 16 h 49 Ends of arguments. 16 h 49 Suspension. 16 h 57 Resumption BY THE COURT: Judgment – see page 3. Marcelle Desmarais Clerk BY THE COURT JUDGMENT

[ 1 ] Compagnie d'assurance vie RBC, appellant by continuance of suit, appeals from a judgment of the Superior Court, District of Montreal (Madam Justice Claude Dallaire presiding), rendered on August 16, 2010, which granted Timothy Gagnon's claim for insurance benefits against UNUM Insurance Company of America under a disability insurance policy. The trial judge condemned Unum to pay benefits of $4,525 per month, retroactively to December 20, 1998, until such time Mr. Gagnon attains 65 years of age.

The judge further provided that these monthly payments are to be indexed annually at 4%, with interest and the additional indemnity provided by law from the date of the judgment. [ 2 ] The trial judge set forth the facts in exemplary detail. For present purposes, it suffices to note that Mr. Gagnon began work as a "pit trader" on the floor of the Montreal Stock Exchange in 1990. His tasks were to gather information on stock transactions and to transact buy and sell orders for his clients, with other pit traders, on the floor of the Exchange. [ 3 ] In 1997, Mr. Gagnon decided to secure disability insurance.

He met an insurance broker and completed a policy proposal for Unum, including a questionnaire bearing on, among other matters, his state of health. After obtaining supplementary information in respect of a blood test declared by Mr. Gagnon at that meeting as well as the results of a new blood test, Unum issued a "own occupation plus" insurance policy for his benefit, to take effect on July 28, 1997, which would provide him with monthly payments of $4,525 in the event of total disability. [ 4 ] In June, 1998, Mr. Gagnon began to suffer from hearing problems.

He was later diagnosed with a medical condition that resulted in a limited but permanent hearing loss, precluding him from discerning certain forms of ambient noise. Unable to hear properly information on the floor of the Stock Exchange, Mr. Gagnon felt he was no longer able to pursue his career as a pit trader and resigned from his position. He worked thereafter as an investment trader, principally from his computer and on the telephone, which he was able to do notwithstanding his handicap.

In point of fact, in the years following his resignation as a pit trader he often generated as much or more income in his new role. [ 5 ] On September 21, 1998, Mr. Gagnon filed a claim with Unum for disability benefits. Unum informed him on March 31, 1999 that his claim was refused, citing the fact that he had failed to declare back problems for which he had consulted a physician, Dr. Nicholas Newman, and undergone x-rays. Unum considered that the failure to disclose this information was grounds to annul the insurance policy and offered to reimburse Mr.

Gagnon the insurance premiums he had paid to that date. [ 6 ] Mr. Gagnon brought proceedings against Unum for payment of the benefits under the policy. In its defence to the action, Unum set forth the alleged basis for the nullity of the policy, adding a further example of an incomplete statement made by Mr. Gagnon. It alleged that Mr. Gagnon had made false declarations concerning a medical consultation to test for mononucleosis on March 18, 1997 that also justified annulling the policy. [ 7 ] The trial judge wrote extensive reasons maintaining Mr.

Gagnon’s action and ordering Unum to pay him monthly benefits until he turned 65. Compagnie d’assurance vie RBC appeals, alleging that the judge erred in not holding that misrepresentations made by Mr. Gagnon annulled the policy, that in any event he was not totally disabled and, finally, that she was mistaken in providing for the payment of benefits to Mr. Gagnon until age 65. Mr.

Gagnon brings a cross appeal in which he submits that the judge erred in ordering the appellant to pay interest and the additional indemnity as of the date of the judgment rather than on December 20, 1998, the date the monthy payments should have begun. *** [ 8 ] Based on her reading of the evidence, in particular the expert evidence presented by underwriters for both parties, the trial judge concluded that the various omissions attributed to Mr.

Gagnon in his answers to the insurer's questionnaire were not sufficiently material to influence a reasonable insurer in the appraisal of the risk under the disability policy. Notwithstanding Mr. Gagnon's omissions, the judge was thus of the view that he did not violate his obligation to represent all material and relevant facts pursuant to articles 2408 and 2410 C.C.Q. She declined to annul the policy on this basis. [ 9 ] In a detailed and carefully written opinion, the trial judge set out a satisfactory basis for this finding based on the evidence presented at trial.

The appellant has failed to identify a palpable and overriding error made by the judge in this regard and seeks, in its submissions to this court, to retry the matter which is not, of course, the proper role for a court of appeal. At the hearing, counsel for the appellant submitted in particular that the judge manifestly erred in her appreciation of the materiality of Mr. Gagnon's omissions to declare back pains that he had suffered in the past, and the consultation with Dr. Newman. She made no such mistake. It should be recalled that Dr. Newman testified that there was nothing wrong with Mr. Gagnon's back.

Moreover, the evidence revealed that Mr. Gagnon's past back problems were stress-related and not the result of a hockey injury or arthrosis. The trial properly noted his lack of knowledge of the x-ray results. It was not manifestly wrong for the judge to have concluded on this basis that the omission to declare these matters was not material to the appraisal of the risk by a reasonable insurer in her application of

article 2408 C.C.Q. [ 10 ] The grounds for appeal relating to the nullity of the policy based on articles 2408 and 2410 C.C.Q. are thus unfounded. As a result, it is not necessary for the Court to review the judge's findings in connection with her analysis of the rule bearing on Mr. Gagnon's obligation respecting representations set forth in

article 2409 C.C.Q. Indeed, it is an established principle that the criterion of the "normally provident insured / assuré normalement prévoyant " is not to be taken into account until after a court has concluded that the omissions attributed to an insured person are sufficiently material to the appreciation of the risk. [1] This is not what happened here. [ 11 ] In respect of the second ground advanced in support of the principal appeal, the appellant has failed to show that the trial judge erred in finding that Mr. Gagnon suffered a total disability within the meaning of the policy.

The fact that the profession of pit trader no longer exists in Canada or that Mr. Gagnon has substantial earnings from a related but distinct occupation are not relevant to the issue of coverage under the policy. [ 12 ] As to the third ground of appeal, it is sufficient to note, as did the trial judge, that the appellant is condemned to pay disability benefits to Mr. Gagnon until he reaches the age of 65. The medical evidence before the judge indicated that it cannot presently be

envisaged that Mr. Gagnon will regain his auditory function. On this basis, she was entitled to condemn Unum to pay benefits to Mr. Gagnon until he turns 65. As the respondent recognizes in written argument, however, "[s]uch condemnations are purely declaratory and do not prevent the appellant from later proving that the disability of Mr. Gagnon is no longer total or irrevocable". That being said, this ground of appeal is dismissed. [ 13 ] The principal appeal should accordingly be dismissed. [ 14 ] As to the cross appeal, Mr.

Gagnon has shown to the Court's satisfaction that the judge misapprehended the respondent's claim for interest and the additional indemnity provided by law recorded in paragraph [232] of her reasons, and in particular in footnote 7 thereof. The cross-appeal should be allowed on this basis.

FOR THESE REASONS , the Court: [ 15 ] DISMISSES the principal appeal, with costs; [ 16 ] ALLOWS the cross-appeal, with costs, for the sole purpose of replacing paragraph [232] of the judgment with the following: [232] CONDAMNE Unum Life Insurance Company of America à verser à Monsieur Timothy Gagnon des prestations d'invalidité totale de 4 525 $ par mois rétroactivement au 20 décembre 1998 et ce, jusqu'à ce que ce dernier ait atteint l'âge de 65 ans, ces prestations étant indexées annuellement de 4 % à la date anniversaire de l'invalidité, soit le 21 septembre de chaque année, avec intérêts et l'indemnité additionnelle sur chaque paiement à compter de la date où il aurait dû être fait.

NICOLE DUVAL HESLER, C.J.Q. ALLAN R. HILTON, J.A. NICHOLAS KASIRER, J.A.