NOVA SCOTIA COURT OF APPEAL
Citation: Federated Life Insurance Company v. Fleet , 2008 NSCA 90
Date: 20081009
Docket: CA 301717
Registry: Halifax
Between:
Federated Life Insurance Company of Canada
Appellant/Applicant
v.
David Richard K. Fleet and Paul Bellefontaine
Respondents
Judge: The Honourable Justice Jamie W. S. Saunders
Application Heard: October 9, 2008, in Halifax, Nova Scotia, In Chambers
Held: Application for stay of execution pending appeal dismissed.
Counsel: Amy Higgins, for the appellant
David A. Grant, for the respondent,
David Richard K. Fleet
Jeff Aucoin, for the respondent,
Paul Bellefontaine
Decision:
Background
[1] In Chambers this morning I set down this appeal to be heard at 10:00 a.m., Wednesday, April 8, 2009, with the companion appeal in CA 301951 to be heard by the same panel at 2:00 p.m. on the same day. Dates were set for the filing of facta. I then heard the appellant’s application for a stay. After considering counsels’ submissions I dismissed the application with costs of $750 payable to the respondent David Fleet, with reasons to follow. These are my reasons.
[2] The appellant, an insurance company, has applied for a stay of execution relating to the trial award granted by The Honourable Justice Gerald R. P. Moir in his decision dated July 25, 2008 and subsequent order dated September 3, 2008. This application is contested by the respondent.
[3] I need only briefly summarize the background to this proceeding so as to place my consideration of the appellant’s application in context. A full canvass of the facts may be found in Justice Moir’s decision now reported at 2008 NSSC 231.
[4] The judgment in this proceeding stems from the claim brought against Federated Life by David Fleet for benefits payable to him as beneficiary under an insurance policy upon the life of his common law spouse, the late Ms. Shirleen Lowe.
[5] Moir, J. found that Federated Life, through its agent Mr. Paul Bellefontaine, solicited Ms. Lowe to purchase an insurance policy on her life. Federated Life received the application form that appeared to have been signed by Ms. Lowe on June 3, 2003 and, relying on the truth of statements made in the application, issued the policy.
[6] Ms. Lowe died on July 4, 2004 of a massive heart attack. On July 9, 2004 Mr. Fleet applied for the life insurance benefits. Federated Life denied liability claiming that the policy was void on the basis of material misrepresentation of facts pertinent to the contract. The appellant returned the premiums previously paid, to Mr. Fleet. In June 2005 Mr. Fleet filed suit against Federated Life and Mr. Bellefontaine.
[7] In advancing his claim Mr. Fleet hired a handwriting expert. The expert opined that there was a strong probability documents known to have been signed by Ms. Lowe and Mr. Fleet were signed by someone else. Mr. Fleet’s statement of claim included the assertion that “the application was forwarded by the defendant Bellefontaine to the defendant Federated after . . . deceased’s signature was illegally affixed to the application.” Mr. Bellefontaine’s defence expressly denied Mr. Fleet’s assertion.
[8] There was also a claim brought by Mr. Fleet, and a cross-claim brought by Federated Life, against the agent Mr. Bellefontaine.
[9] The trial proceeded before Moir, J. in January 2008. Justice Moir dismissed the action brought by Mr. Fleet against the agent Mr. Bellefontaine, but he allowed Mr. Fleet’s claim against Federated Life, ordering judgment against the appellant in the amount of $150,000. The trial judge was not satisfied that Federated Life had established misrepresentation or a failure to disclose material facts which would void the policy. He went on to find that Mr. Bellefontaine signed Ms. Lowe’s name to her application for insurance, without authority, and without Ms. Lowe ever knowing it or ever seeing the application form. Moir, J. held that Mr. Bellefontaine’s actions breached both the duty of care and the fiduciary duties he owed to Federated Life and that without the breach, the policy would never have been issued. Accordingly, he granted judgment in favour of Federated Life against Mr. Bellefontaine for the $150,000 and pre-judgment interest to be paid by Federated Life to Mr. Fleet.
[10] Federated Life filed a notice of appeal dated September 25, 2008.
[11] Paul Bellefontaine filed a notice of appeal dated October 1, 2008 in CA 301951. He takes no position with respect to the insurer’s present application for a stay.
[12] I have ordered that both appeals be heard the same day by the same panel.
Issue
[13] I accept the appellant’s concise statement of the issue arising in the within application.
Are there circumstances in this case that warrant staying execution of the decision of Justice Gerald R. P. Moir dated July 25, 2008 and an order dated September 3, 2008 pending the Federated Life Appeal?
Analysis
[14] There is no automatic stay of an order pending an appeal in Nova Scotia. Civil Procedure Rule 62.10(2) gives the Chambers judge a discretion to issue a stay.
[15] One starts with the principle that a successful litigant may retain and act upon the fruit of his judgment unless “required in the interests of justice.” See, for example, Westminer Canada Ltd. v. Amirault (1993), 125 N.S.R. (2d) 171 (NSCA) per Freeman, J.A. at p. 174; and Wright v. Nova Scotia Public Service Long Term Disability Plan Trust Fund 2006 NSCA 6, per Fichaud, J.A. at ¶ 3.
[16] A stay is a discretionary order and the test must not be administered inflexibly. The paramount objective is to achieve justice as between the parties. See, for example, MacPhail v. Desrosiers, [1998] N.S.J. No. 37 (C.A.).
[17] The law as described in such cases as R.J.R. MacDonald Inc. v. Canada (Attorney General), [1994] S.C.J. No. 17; Fulton Insurance Agencies Ltd. v. Purdy, [1990] N.S.J. No. 361 (C.A.) and the plethora of decisions of this court in such matters is well known and need not be repeated here.
[18] In bringing this application Federated Life relies upon the primary test in Fulton, supra. This triggers my assessment of three factors: arguable issue, irreparable harm, and balance of convenience, all of which must be established in order for a stay to be granted. The respondent Mr. Fleet challenges the application and does not concede any of those three criteria.
(a) Arguable Issue
[19] At this stage the Chambers judge does not delve into the merits of the appeal. Rather, the inquiry focusses on whether the notice of appeal contains realistic grounds which, if established, could be of sufficient substance to persuade a panel of this court to allow the appeal. Lienaux et al v. Toronto-Dominion Bank, 137 N.S.R. (2d) 150 (C.A.); Westminer, supra; and Whitewood v. Austin, 109 N.S.R. (2d) 290 (C.A.).
[20] I am satisfied that the appellant’s notice of appeal sets out a number of grounds which are of sufficient substance to raise serious issues concerning Federated Life’s liability. Accordingly, the first threshold of the Purdy analysis has been met.
(b) Irreparable Harm
[21] As MacDonald, C.J.N.S. noted in Cape Breton Development Corporation v. Nova Scotia (Worker’s Compensation Appeals Tribunal), 2008 NSCA 11: “. . . irreparable harm is a context driven concept . . . the risk of a successful appellant losing its money does not amount to irreparable harm in every circumstance.” (at ¶ 19). “ ‘Irreparable’ refers to the nature of the harm suffered rather than its magnitude.” R.J.R. MacDonald Inc., supra, at ¶ 59.
[22] In this case, the appellant submits that should the stay be denied, and were it to be ultimately successful on appeal Mr. Fleet’s financial circumstances are such that there is a great risk he would be unable to repay the amount of the award.
[23] The difficulty I have with the appellant’s submission is that it invites sheer speculation on my part as to the respondent’s current financial situation, or his capacity to repay the award if his judgment were overturned on appeal many months from now.
[24] When I pursued these concerns with Ms. Higgins who appeared as counsel for the appellant this morning and asked her to point me to the “evidence” by which her client’s claim for relief could be sustained, she candidly acknowledged that the only basis for asserting this risk of default is found in ¶ 63 of Justice Moir’s decision which reads:
[63] Mr. Fleet’s finances were tight before his wife died. He had plans to renovate his home and refinance his high interest, credit card debt through a mortgage. However, the death of his wife was unexpected and devastating for him and his son. As a result, his plans fell through. He has been paying twenty-eight percent interest on debts totalling $65,000 and seeks that in addition to the face value of the policy.
[25] With respect, these observations by the trial judge simply reflect his recognition of the difficulties faced by Mr. Fleet after his wife died. This is no more “evidence” of supposed peril which would expose Federated Life to irreparable harm, than was Mr. Grant’s own submission on behalf of the respondent this morning questioning the financial wherewithal of the appellant in light of volatile market shifts and government sponsored bailouts.
[26] In my view there is nothing in the record before me to support the appellant’s claim of irreparable harm. This is fatal to its plea for a stay under the primary test in Fulton, supra. I need not go on to consider the balance of convenience.
[27] In oral argument Ms. Higgins proposed that her application for a stay would qualify under the “special circumstances” secondary test in Fulton. I cannot accept this submission. The mere fact that Mr. Bellefontaine has launched a separate appeal against Federated Life in which he seeks to overturn Justice Moir’s order that he indemnify the insurer for the judgment that Federated Life is obliged to pay to Mr. Fleet does not constitute “special circumstances” such as to persuade me that a stay of execution is required so as to do justice among the parties.
[28] Counsel for the appellant’s alternative suggestion that the amount of the judgment be kept by her firm in trust pending the decision of this court following the appeal seems to me – in the circumstances of this case – to be no different than my allowing the stay. Both results deprive Mr. Fleet of the fruit of his litigation and oblige him to wait well into 2009 for redress, one way or the other.
[29] For all of these reasons the appellant’s application is dismissed with costs of $750 payable to the respondent Mr. David Fleet.
Saunders, J.A.