Ontario Court Of Appeal Certifies Class Action Against Sun Life

On September 5, 2018, the Ontario Court of Appeal released its decision in Fehr v. Sun Life Assurance Company of Canada,1 overturning certain parts of the motion judge's decision and certifying a class action against Sun Life brought by life insurance policyholders. The Court of Appeal applied a "consumer-focused approach" that places emphasis on the viewpoint of insurance policy consumers.

Background

The action involved "universal life" insurance policies that, in addition to providing life insurance, also serve as an investment vehicle. The Court noted that many of these policies were sold when interest rates were high; therefore, premiums were relatively low and returns were favourable. When interest rates fell in the mid-1990s and thereafter, premiums increased and returns decreased.

The plaintiffs brought a proposed class action against the insurer. Justice Perell, the motion judge, declined to certify the action and granted the defendant's summary judgment motion dismissing the action on the basis that the claims were limitations-barred.2 When the case reached the Court of Appeal, there were a number of appeals and cross-appeals. However, the following three claims were central to the appeal:

The plaintiffs alleged that sales agents made numerous misrepresentations regarding the policies, including that they would provide guaranteed interest and become self-sustaining. The plaintiffs alleged that the insurer breached the insurance policies by increasing the cost of insurance based on criteria not identified in the insurance policies. The plaintiffs sought a declaration interpreting the "maximum premium" provision in the policies. In addition, as the defendant had argued that the claims were limitations-barred, there were issues relating to whether there was concealment of the claims (in other words, when the claims were discoverable).

The Court's focus at this stage of the proposed class proceeding is whether the claims should be certified to proceed as a class action. The actual merits of the claims will be determined at a future date, should certification be granted and the action proceed.

The Court of Appeal's Decision

Misrepresentation Claim

The Court of Appeal upheld the motion judge's decision that the misrepresentation claim was not suitable for certification on the basis that various misrepresentations were alleged that were personal to each policyholder; the experiences of the representative plaintiffs were idiosyncratic...