An insured who applies for insurance benefits 10 years after the limitation period is not entitled to relief from forfeiture
An Insured who applies for insurance proceeds ten years after the limitation period in the policy has expired, is not entitled to insurance, nor to relief from forfeiture despite the fact that the Insured had a Grade 4 education and was not aware of the existence of her entitlement to benefits.
This case was originally edited by David Pilley.
Here is the citation: Silva v. RBC Life Insurance Co.[2007] O.J. No. 2932. Ontario Superior Court of Justice. K.A. Hoilett J. July 26, 2000.
Here is a link to the decision.
Ms. Silva worked for Teknion. RBC Life Insurance Company (“RBC”) became her disability insurer when Teknion purchased employee disability insurance on her behalf (the “Policy”). Ms. Silva was injured in an accident in the Fall of 1996. On December 12, 1996, she ceased working as a spot welder at Teknion due to injuries suffered in a motor vehicle accident. On January 12, 2000, she was terminated by Teknion. On October 7, 2004, almost eight years after the accident, Ms. Silva submitted an application for disability insurance to RBC Life.
On January 21, 2005, RBC advised Ms. Silva that her claim for benefits was denied because it was out of time. On June 16, 2006 Ms. Silva commenced an action against RBC for a declaration of entitlement to benefits (the “Action”). The action was commenced more than ten years after the accident, nine years after the date by which proof of claim was to be submitted under the Policy, and six years after the last time the Action could have been commenced under the relevant limitation legislation. The Plaintiff sought relief from forfeiture to remedy her failure to comply with both the notice requirements in the Policy and the statutory limitation period. Section 328 of the Insurance Act, R.S.O. 1990, c. I-8, provides relief from forfeiture as follows:
328. Where there has been imperfect compliance with a statutory condition as to any matter or thing to be done or omitted by the insured, person insured or claimant with respect to the loss insured against and a consequent forfeiture or avoidance of the insurance in whole or in part, and any court before which a question relating thereto is tried deems it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it deems just.
The essence of Ms. Silva’s claim was that she had a very poor grasp of the English language; the highest grade she completed in school was Grade 4 in Portugal, and that she was unaware of the existence of the Policy. Her counsel noted that permanent disability claims are continuing claims and for that reason are not susceptible to be extinguishment by limitation periods in the way that other actions may be. RBC relied upon Falk Bros. Industries Ltd. v. Elance Steel Fabricating Co., (1989), 62 D.L.R. (4th) 236 in which the Saskatchewan Court, in dealing with a provision similar to section 328 of the Insurance Act, noted as follows: The case law has generally treated failure to give notice of a claim in a timely fashion as imperfect compliance whereas failure to institute an action within the prescribed time period has been viewed as non-compliance or breach of a condition precedent. Thus the courts have generally been willing to granting relief against forfeiture where notice of claim has been delayed. On the other hand, cases in which failure to meet a time requirement has been held to be non-compliance rather than imperfect compliance have largely been cases in which the time period was for the commencement of an action rather than for the giving of notice: [authorities omitted] Hoilett J. determined that RBC suffered real prejudice due to Ms. Silva’s delay. Nearly a decade had passed without RBC having the opportunity to conduct reasonable medical investigations in relation to Ms. Silva’s health. Granting of relief from forfeiture, assuming it was even available for failure to comply with the limitation period, would render the whole concept and purpose of limitation periods nugatory. Hoilett J. dismissed the Plaintiff’s claim.
