Focus On

LIFE INSURANCE - Exclusions

Tuesday, January 29, 2019 @ 8:48 AM  


Lexis Advance® Quicklaw®
Appeal by the estate administrator from summary judgment dismissing her action for payout of her son’s life insurance policy. The son was a known drug dealer who entered the home of other drug dealers and never returned. His body was never found, but some of his blood was found in the home, and he was eventually presumed dead. The summary trial judge found that the son was murdered as a result of his involvement in drug trafficking. The summary trial judge determined that an exclusion clause in the life insurance policy that excluded payout where the insured’s death was a result of or while the insured was committing a criminal offence applied in the circumstances. The appellant argued that the summary trial judge erred in finding that the clause applied to the deceased’s presumed death and by not ruling on the admissibility of certain paragraphs of the affidavit of the lead police officer investigating the deceased’s death and in then relying on those paragraphs in support of her conclusion.

HELD: Appeal dismissed. The summary trial judge erred in interpreting the exclusion clause by importing the terms “as a result of his involvement in criminal activity” into the clause which interpretation gave the exclusion clause an expansion of the terms of the clause. The summary trial judge also clearly erred in failing to address the appellant’s objection to the admission of the officer’s affidavit. The appellant’s concessions essentially were that the son was associated with a gang, that he was murdered by individuals who were counselled to do so by members of a rival gang, and that his blood was found in the house he entered. These admissions and the evidence to which she failed to object during the application for summary judgment made a new trial unnecessary. The inescapable inference was that the son died while committing the criminal offence of possession, trafficking or possession for the purpose of trafficking illicit drugs, all of which were indictable offences. He was a known drug dealer, he went to a known drug reload house, he was affiliated with a criminal gang, and his intention was to go into the house and quickly return. The only logical inference from this circumstantial evidence was that he bought or sold drugs at that location, was murdered, and therefore died while committing a criminal offence, invoking the exclusion clause.

Valentyne Estate v. Canada Life Assurance Co., [2018] B.C.J. No. 6984, British Columbia Court of Appeal, E.A. Bennett, S. Stromberg-Stein and J.E.D. Savage JJ.A., December 27, 2018. Digest No. TLD-January282019003