COURT OF APPEAL FOR BRITISH COLUMBIA
|
Citation: |
Gish v. Hooper Insurance and |
|
|
2011 BCCA 232 |
Date: 20110512
Docket: CA038173; CA038174; CA038175
Docket: CA038173
Between:
Margaret Carolyn Gish
Appellant
(Plaintiff)
And
Hooper Insurance
and Financial Services Inc., Bernard David Hooper
and Transamerica Life Insurance Company of Canada
doing business as Transamerica Life Canada
Respondents
(Defendants)
- and -
Docket: CA038174
Between:
Margaret Carolyn Gish
Respondent
(Plaintiff)
And
Transamerica Life Canada
Appellant
(Defendant)
- and -
Docket: CA038175
Between:
Margaret Carolyn Gish
Respondent
(Plaintiff)
And
Hooper Insurance
and Financial Services Inc.,
Bernard David Hooper
Appellants
(Defendants)
And
Transamerica Life Insurance
Company of Canada
doing business as Transamerica Life Canada
(Defendants)
|
Before: |
The Honourable Madam Justice Newbury |
|
The Honourable Mr. Justice Lowry |
|
|
The Honourable Madam Justice Kirkpatrick |
On appeal from: Supreme
Court of British Columbia, April 29, 2010,
(Gish v. Hooper Insurance and Financial Services Inc., 2010 BCSC 605,
New Westminster Docket S105362)
|
Counsel for M. C. Gish: |
K. H. Wirsig and B. Trainor |
|
Counsel for Transamerica Life Canada: |
S. K. Gudmundseth,
Q.C. and |
|
Counsel for Hooper Insurance and Financial Services Inc. and Bernard Hooper: |
T. R. Darby |
|
Place and Date of Hearing: |
Vancouver, British Columbia April 11, 2011 |
|
Place and Date of Judgment: |
Vancouver, British Columbia May 12, 2011 |
|
Written Reasons by: |
|
The Honourable Mr. Justice Lowry |
|
Concurred in by: |
|
The Honourable Madam Justice Newbury The Honourable Madam Justice Kirkpatrick |
Reasons for Judgment of the Honourable Mr. Justice Lowry:
[1] In 1985, Robert Gish acquired two policies issued by Transamerica Life Insurance Company of Canada which together insured his life for $250,000. His wife, Margaret Gish, was the beneficiary. Contrary to advice given to him by their insurance consultant, Bernard Hooper of Hooper Insurance and Financial Services Inc., he instructed Transamerica to cancel the policies in the fall of 2004 and was informed that was done. Mr. Gish died the following spring. Two years later, Ms. Gish commenced this action claiming the cancellation was ineffective and that the consultant and the insurer had breached contractual and fiduciary duties, as well as a duty of care, owed to her. She seeks to have the policies reinstated or an award of damages.
[2] Applications were made for summary dispositions by each of the parties. For reasons indexed as 2010 BCSC 605, 320 D.L.R. (4th) 385, Madam Justice Ker concluded Mr. Gish's cancellation of his policies was effective, but she considered there were material conflicts in the evidence and that the evidence of an expert witness adduced by Ms. Gish, though found to be "largely inadmissible", raised issues concerning duties that may have been owed to the Gishes by the consultant and the insurer based on what is said to be industry standards. She concluded those issues could not be properly addressed summarily and dismissed the applications. Each of the parties now appeals.
[3] Mr. and Ms. Gish operated a jewellery business for many years which they wound up in 2004. The business gave rise to their obtaining several life insurance policies. In 2002, they sought financial advice and that led to their consulting Hooper Insurance concerning their insurance policies. They authorized the appointment of Hooper Insurance as their agent/broker of record with Transamerica.
[4] In the fall of 2004, Mr. and Ms. Gish were considering ways to reduce their expenses. They met with Mr. Hooper on October 7. According to Ms. Gish, prior to the meeting they asked Mr. Hooper to do a full review and evaluation of all their policies and to give them an explanation of who owned the policies. They wanted counselling and guidance on understanding the different types of insurance so they could make decisions as to whether to change the arrangements they had. They did not intend to make any changes until they were fully informed. Mr. Hooper is said to have arrived at the meeting without any of the information requested. When the meeting concluded, on her evidence, Ms. Gish asked Mr. Hooper to gather the information previously requested, including the cost of each policy, how long the payments would have to be made, what could be done with each policy if she and her husband wished to make changes, and what the options were for each policy. She followed up with him by telephone thereafter, but the information proved not to be forthcoming quickly. She and her husband received nothing further over the next two weeks.
[5] However, the two subject policies were discussed to some extent at the meeting. One of the policies had, until the business was wound up, been assigned to a bank. Mr. Hooper told Mr. Gish he should maintain both of those policies.
[6] The premiums for the two policies were over $300 a month payable in advance. Payments were preauthorized. There was no conversion option. Ms. Gish was the named beneficiary but it was open to Mr. Gish to revoke that designation if he wished at any time.
[7] Mr. Gish was anxious about reducing expenses where he could. On October 22, for no stated reason, he determined to cancel the two policies. As of that day, the premium was paid for coverage to November 15 for one policy and November 22 for the other. Mr. Gish telephoned Transamerica and spoke with a call centre operator. He inquired about the process for cancelling his policies. He was told he would have to request cancellation in writing. He then sent a letter to Transamerica by facsimile transmission. It provided:
Oct. 22, 2004
Transamerica Life Insurance Company
Attention: Policy Administration
Fax # ....
Please cancel my 2 following policies:
# 465184 @ $189.53
# 465185 @ $127.54
Please cancel immediately:
Thank
you.
[signed]
[8] The insurer responded with two confirmations (one for each policy) by facsimile transmission the following day:
October 23, 2004
robert b gish jr
...
Policy
Number : L00465184 [L00465185]
(Primary) Life Insured : robert b
gish jr
As requested, we have cancelled your life insurance policy.
… Should you have any questions or additional insurance needs, please feel free to contact your Transamerica advisor.
Bernard David Hooper at (604) [phone number]
Client Services
Life Operations
[9] When she learned what her husband had done, Ms. Gish telephoned Transamerica to inquire whether the policies had been cancelled. She was informed they had been. The call centre operator with whom she spoke told her the owner of a life insurance policy could do what he wished and that it was not for her to interfere. Ms. Gish understood from the call the cancellation had been completed and was final. Neither she nor Mr. Gish had any further contact with Transamerica concerning these policies. No request for reinstatement was ever made and no further premium was ever tendered.
[10] On October 28, Hooper Insurance requested information from Transamerica on the status of the several policies the Gishes held with that insurer. Transamerica responded by e-mail on November 3. The information provided with respect to the subject policies was as follows:
Policy L00465184
This policy has been cancelled on October 22/04 effective the paid to date November 22/04
Policy L00465185
This policy has been cancelled on October 22/04 effective the paid to date November 15/04
Hooper Insurance did not pass this information on to the Gishes. Although they subsequently consulted with Mr. Hooper concerning their other policies, they made no further inquiry about these two policies, nor did they express any concern about their having been cancelled.
[11] The case for Ms. Gish, both on her appeal and in answer to the appeals to which she responds, is that the purported cancellation on October 22 was not effective – as pleaded, Mr. Gish's facsimile was ineffective as an instrument to cancel the policies – such that, by their terms, each policy simply "lapsed" (as defined by the policy) for non-payment of premiums once the grace period, in respect of the late payment of premium for which the policy provided, expired. That being so, Ms. Gish then contends she was denied a statutory opportunity she had to preserve the policies, pleading Transamerica and Hooper Insurance breached duties they owed to her, particularized in her statement of claim as follows:
.1 failure to provide information and advice in a timely matter to Margaret Gish and Robert Gish regarding their options under the policies;
.2 failing to obtain the fully informed consent of Robert Gish before surrendering or cancelling their life insurance policies;
.3 failing to obtain the fully informed consent of Margaret Gish before surrendering or cancelling their life insurance policies;
[.4] and failing to counsel or discuss with Margaret Gish options for reinstating the policies.
[12] Ms. Gish maintains that, although her husband intended to have his policies cancelled, it was open to her as the beneficiary under both to preserve them by paying the premiums as she was permitted to do by the terms of the policy and the governing legislation. The policy affords a 31-day grace period (and Transamerica apparently would have afforded a further 14-day administrative period) for the late payment of premium to avoid the policy lapsing and being terminated for non-payment. Section 40(2) of the Insurance Act, R.S.B.C. 1996, c. 226, provides for a 30-day grace period in respect of the payment of premium that is due and s. 40(1) provides that a beneficiary may pay any premium a person who has contracted with an insurer is entitled to pay:
40 (1) Except in the case of group insurance, an assignee of a contract, a beneficiary or a person acting on behalf of one of them or of the insured may pay any premium that the insured is entitled to pay.
(2) If a premium, other than the initial premium, is not paid at the time it is due, the premium may be paid within a period of grace of
(a) 30 days, or in the case of an industrial contract 28 days, from and excluding the day on which the premium is due, or
(b) the number of days, if any, specified in the contract for payment of an overdue premium,
whichever is the longer period.
[13] Ms. Gish relies on Bains v. National Life Assurance Co. of Canada (1991), 58 B.C.L.R. (2d) 162 (S.C.), for the proposition that these provisions of the Insurance Act apply even if the policy holder failed to pay a premium when it was due with the intention the policy be permitted to lapse and be terminated. Ms. Gish says that, had she known within the grace period that she could pay the premiums and preserve the insurance, she would have done so despite her husband's wishes. She attributes the fact that she did not know what she could do to the failure of Hooper Insurance to advise her when it was informed by Transamerica, before the grace period expired, that the policies had been cancelled.
[14] Thus, in the main, her case on the policy having lapsed as opposed to being cancelled ultimately rests on Hooper Insurance having breached a duty said to have been owed to her, the revocable beneficiary, to inform her that, she could prevent the policies being terminated in circumstances where neither she nor her husband made any inquiry of their consultant about the two policies at any time after Mr. Hooper advised Mr. Gish not to cancel them. Her case of course turns on it being accepted that, if she commenced to pay the premiums, Mr. Gish would have been content to have her continue as the beneficiary and permitted the policies to be maintained.
[15] In the course of argument on this appeal, the case for Ms. Gish has been expanded to the contention that under the provisions of the statute she could have preserved the policies by paying the premium even if their cancellation was effective. But Mr. Gish, being the person who had contracted with the insurer, would not have been entitled to pay any premiums if the policies were in fact cancelled. No premiums would thereafter have been due.
[16] The two policies belonged to Mr. Gish. They were his to do with as he wished. They had served their business purpose and he decided to cancel them apparently to save the ongoing monthly costs of the premiums. He gave written notice to Transamerica that he wanted the policies cancelled immediately and did so in terms that were clear and unequivocal. Transamerica responded in equally clear terms and informed Mr. Gish the policies had been cancelled.
[17] Ms. Gish advances various reasons why she says the cancellation was not effective. She first says Mr. Gish could not unilaterally cancel the policies; he required the agreement of Transamerica, which was never given, citing Bolton Estate v. Allstate Insurance Co. of Canada (1995), 23 O.R. (3d) 407 (Gen. Div.) at para. 21. She says that Mr. Gish requested the policies be cancelled immediately, thereby imposing a condition such that his request was not unconditional as was required, citing Edgar v. Great-West Life Assurance Co., [1983] 3 W.W.R. 218, 42 B.C.L.R. 67 (Co. Ct.). Further, Ms. Gish says the request could not have led to an effective cancellation because Mr. Gish derived no consideration.
[18] Finally, although not pleaded as would be required, Ms. Gish says the fact that Transamerica informed Hooper Insurance that the policies had been cancelled on October 22, 2004, effective on November 15 and 22, 2004, respectively, indicates Mr. Gish and Transamerica were not ad idem with respect to the policies being cancelled immediately, such that there was no agreement in that regard. Alternatively she says Transamerica breached any agreement they had reached such that, when she learned of it through the production of documents in the course of this litigation, Ms. Gish was on some basis entitled to treat the agreement to cancel made between her husband and Transamerica as ended with the effect that the policies were not cancelled but lapsed.
[19] In my view, there can be no question Mr. Gish and Transamerica mutually agreed to the immediate cancellation of the policies or the termination of the insurance contracts, so it is unnecessary to consider whether he could have cancelled the policies unilaterally. The cancellation was not conditional on any event; it was immediate; it was unconditional. Generally no question of a failure of consideration arises when parties to an agreement, whether a contract of insurance or otherwise, mutually agree to its termination. In any event, the alleged failure, being a material fact, is not pleaded as would be required; it was not considered by the judge and need not be further considered now.
[20] I do not consider Transamerica informing Hooper Insurance that the policies were cancelled on October 22, effective later, to be of any consequence. Mr. Gish and the insurer were certainly ad idem that the policies be cancelled immediately; that is what was requested and what the following day Transamerica said was done. The insurance contract was then terminated. The fact that the insurer later informed the consultant the cancellation would be effective in mid-November does not mean the policies were not, as a matter of law, cancelled as agreed with Mr. Gish or that the agreement was in some way breached. In the absence of the information being in some way relied upon to the detriment of the Gishes, it appears to me to be irrelevant.
[21] It follows that I consider the judge was right in concluding the policies were cancelled by mutual agreement effective October 22. That being the case, there are no questions of there having been any breaches of duties owed to Ms. Gish by either the insurer or the consultant from that date onwards that can arise. The policies did not lapse because of the non-payment of premium as Ms. Gish contends and, to the extent her case is premised on their having done so, it need not be further considered. Once the policies were cancelled, Transamerica was relieved of its obligations and there was no basis on which Ms. Gish could cause the policies to be preserved or compel their reinstatement.
[22] I conclude the judge should have dismissed the action. I am unable to see what conflict there is in the evidence that precluded a summary disposition.
[23] The judge said there was conflict in the evidence on the affidavits of Ms. Gish and Mr. Hooper bearing on the extent of their dealings and suggested that prior to October 22 Hooper Insurance may have had a duty to provide advice on s. 40 of the Insurance Act with respect to a beneficiary assuming premium payments. But, on Ms. Gish's evidence alone, neither she nor her husband could have been relying on Mr. Hooper in this regard because when they met on October 7 (and in the course of her following up) it was apparently clear to the Gishes he did not have any of the information requested about the policies. It is not said Mr. Hooper purported to give any advice save for telling Mr. Gish not to cancel his policies, and Mr. Hooper could not, in the circumstances, have had any reason to expect any advice on the effect of s. 40 was required at that time, even if he was in a position to provide it. There was no suggestion the Gishes were going to do anything precipitous before Mr. Hooper had obtained and advised on the information requested. Their intention was to wait until they were fully informed. Evidently Mr. Gish was not content to wait for the information and advice Mr. Hooper was to provide before he requested that the policies be cancelled.
[24] I do not share the judge's view that the conflict in the evidence on the affidavits of Ms. Gish and Mr. Hooper requires resolution.
[25] The judge also saw conflict in the evidence concerning the practice of insurers when responding to requests for the cancellation of policies. She said she could "discern" from the expert evidence adduced by Ms. Gish that insurers generally inform those who wish to cancel a policy of the "proper route" including advising that the policy should be permitted to lapse (presumably for the purpose of preserving the grace period). That practice is at odds with Transamerica's practice and no advice of that kind is said to have been given to Mr. Gish. It is, as I understand it, on this basis that Ms. Gish contends Transamerica breached a duty owed to her husband and to herself to obtain Mr. Gish's "informed consent" to the cancellation of his policies. The judge suggested it was at least arguable that a prima facie duty of care arose in the circumstances of the case and that whether it had been met or breached required significantly more developed evidence to permit the necessary findings of fact to be made.
[26] I do not share the judge's view in this regard either. In the first place, I do not consider the expert evidence to have been admissible on the summary trial that was conducted. The statement does not conform to the well-established requirements for proving facts by adducing opinion evidence. The judge recognized that to be the case. She said:
[154] Mr. Staines outlines in his report the facts and assumptions on which his opinion is based. However, as was the case in [Quintette Coal Ltd. v. Bow Valley Resource Services Ltd. (1988), 29 B.C.L.R. (2d) 127 (S.C.)], aspects of Mr. Staines' report, as presently tendered, would not be admissible at a trial as the author does, at times, appear to weigh evidence in his report, and on some occasions offers legal opinions, relies on legal texts to inform his opinions, interprets aspects of the Policies in issue and includes irrelevant considerations such as the pricing of premiums. In some areas of the report, Mr. Staines' opinion appears to be directed more to the legal merits of the case and in some parts appears more to be argument clothed in the guise of an expert opinion.
[27] The witness was asked to answer two questions: did Mr. Hooper and Transamerica fail to follow accepted industry standards in servicing policies 184 and 185; and, if Mr. Gish revoked his cancellation prior to termination of the grace period for the last paid premiums, would Transamerica, according to accepted industry standards, be compelled to continue policies 184 and 185? The witness reviewed nine documents consisting of five discovery transcripts, three affidavits, and one of the statements of defence (without saying which one) from which he apparently formed what he stated to be the facts and assumptions on which his opinion was based. In so doing, he made his own assessment of the evidence and expressed his views about it. He then proceeded to offer opinions on the insurance industry standards for the sales process and the qualification of agents, the servicing of the policies, pricing and premiums, a duty of good faith and fair dealing he suggested is owed by an insurer to an insured, the failure to discharge that duty, and his answer to the two questions: Mr. Hooper and Transamerica failed to follow accepted industry standards in servicing the policies and Transamerica would have been compelled to continue the two policies if Mr. Gish had revoked his cancellation prior to termination of the grace period. The statement runs to 16 pages.
[28] The questions posed were flawed because they required an interpretation of the evidence and considerations of law. Further, the witness was not given a statement of the facts to be assumed, but was apparently left to make his own assessment from one pleading, the discovery transcripts, and the affidavits. In Croutch (Guardian ad litem of) v. B.C. Women's Hospital & Health Centre, 2001 BCSC 995 at paras. 13-17, I endeavoured to explain why that should not be done:
[17] In my view, expert witnesses should not base their opinions on discovery evidence which may or may not be read in at trial. Indeed, as a general rule, I do not consider they should be given access to discovery transcripts. The assessment of evidence is not their function, and there is no place for the delivery of an expert's opinion when it is based on facts drawn by the expert from what was said on discovery. The facts underlying an opinion are within the purview of counsel. It is counsel who must be satisfied they are facts that can be proven, and it is for counsel to settle with an expert witness the facts that are to be assumed for the purpose of the opinion. It is those facts that must then be set out clearly in the statement that is to be delivered in compliance with the Rules.
[29] With respect to the importance of the facts being clearly stated for an expert witness to assume, see also Rowe v. Bobell Express Ltd., 2003 BCSC 472 at paras. 11-15.
[30] The opinions expressed in the expert's statement go well beyond the scope of the questions asked and in some instances are clearly opinions of law. Read as a whole, the statement is more a legal argument than it is the opinion of an expert in the field of life insurance.
[31] While the judge said the statement was largely inadmissible in its present form, she nonetheless found she could rely on aspects of it in concluding the action against Transamerica was not suitable for summary disposition. But the evidence was not admissible – at a trial or on a summary trial – and accordingly could not be relied upon for that purpose. The statement was not to be used to identify possible issues on the basis of it being later perfected for the purpose of a traditional trial. Without the expert's statement, there is no evidence on which to found an action against Transamerica for a breach of the duty Ms. Gish maintains was, by virtue of industry standards, owed by the insurer when Mr. Gish requested his policies be cancelled.
[32] That said, as I understand her, Ms. Gish says Transamerica bore an obligation to both Mr. Gish and herself, to be satisfied they knew that, instead of cancelling the policies, Mr. Gish could have simply terminated the pre-authorized premium payments thereby engaging the grace period of which she could then have taken advantage to preserve the policies. But Mr. Gish wanted the policies cancelled, not preserved, and they were his policies. Further, as an insurer, as opposed to an insurance agent or broker, Transamerica's obligations were generally to be found in the terms of the policy and the governing legislation. It is not said there was any contractual or legislative requirement that the insurer do more than what Transamerica did in responding to Mr. Gish's request, and no authority is cited that would burden the insurer with requiring its call center operator with whom Mr. Gish spoke to give him advice or determine what he may have known about the significance of his policies being cancelled. Mr. Gish simply asked to have that done and Transamerica responded accordingly requiring that the request be put in writing for certainty. To put it in perspective, the evidence is that Transamerica receives upwards of 1500 such requests each month.
[33] Mr. Gish is said to have not been well in the fall of 2004. It is not, however, contended he was not capable of making the decision to request the cancellation of his policies. He was an experienced business man having run a successful business for many years. He and his wife were seeking advice about their several policies of life insurance from Hooper Insurance, not from the insurer. Mr. Hooper had advised that the two subject policies should be maintained. Mr. Gish determined not to follow that advice or to wait for further advice once Mr. Hooper obtained the information he had been asked to provide. As he wrote in his letter to Transamerica, Mr. Gish wanted his policies cancelled immediately and that is what was done. I see little room for complaint based on the Gishes not being given advice.
[34] The determinative question for the judge was whether, on the evidence which was not in material dispute, the policies had been cancelled. Once that issue was resolved, there were no further issues to be tried.
[35] I would dismiss Ms. Gish's appeal, allow the appeals of both Transamerica and Hooper, and dismiss the action.
"The Honourable Mr. Justice Lowry"
I agree:
"The Honourable Madam Justice Newbury"
I agree:
"The Honourable Madam Justice Kirkpatrick"