ACCIDENT AND SICKNESS INSURANCE - Group insurance

Appeal by the plaintiff from the trial judgment that dismissed her claims for a lump sum award representing the present value of all future long-term disability benefits and for punitive damages. The appellant suffered inflammation of her left elbow tendon for which she underwent two surgeries. She then began to suffer a moderate to severe major depressive disorder. The insurer denied the appellant’s application for long-term disability benefits. The trial judge found the appellant established she was disabled within the any occupation definition under the parties’ policy. The trial judge awarded the plaintiff $77,214 for past long-term disability benefits and ordered the respondent to pay ongoing long-term disability benefits in accordance with the policy. He awarded the appellant $30,000 in damages for mental distress. He dismissed the appellant’s claim that the respondent’s denial of benefits and breach of its duty of good faith constituted a fundamental breach of the insurance contract.

HELD: Appeal dismissed. The trial judge correctly found he was bound by Warrington v. Great-West Life Assurance Co. to find that a non-contracting beneficiary of a group policy was entitled to enforce the payment of benefits but not entitled to terminate the group policy or accept the insurer’s repudiation. It was not an error in principle to fail to award punitive damages after finding the respondent acted in bad faith. The trial judge did not err in holding that not every breach of good faith gave rise to an award of punitive damages. It was not an error to consider whether the respondent’s conduct was so egregious as to warrant punitive damages.

Gascoigne v. Desjardins Financial Security Life Assurance Company Co. (c.o.b. Desjardins Insurance), [2020] B.C.J. No. 1821, British Columbia Court of Appeal, M.E. Saunders, P.M. Willcock and G.B. Butler JJ.A., November 3, 2020. Digest No. TLD-December142020003