The Court of Appeal for Ontario has certified a class-action lawsuit against Sun Life Assurance Co. of Canada, brought on behalf of former MetLife policyholders in connection with the sale of universal life policies.
In a decision released last week, the appeal court overturned certain lower court rulings in Fehr v Sun Life Assurance Co. of Canada that dismissed a proposed class action against Sun Life involving over 230,000 universal life policies sold by Metropolitan Life Insurance Co.(MetLife) between 1985 and 1998. MetLife’s Canadian business was sold to Mutual Life in 1998, and became Clarica Life Insurance Co., which was later acquired by Sun Life.
The lawsuit, which was launched in 2010 on behalf of the MetLife policyholders, alleged misrepresentation and included various other claims in connection with how the MetLife policies were sold and administered.
In a series of decisions handed down in 2015 and 2016, the Ontario Superior Court of Justice declined to certify the class action. It ruled that certain claims were invalid, or weren’t suitable for a class action, while others were barred by limitation periods. It also awarded $1 million in costs to Sun Life.
The plaintiffs in the case appealed these rulings.
The appeal court ruling, which upheld some of the lower court’s findings, also overturned others and allowed the class action to proceed on certain issues.
Among other things, the appeal court certified the class action for claims of “breach of contract” and “fraudulent concealment”, but said claims for misrepresentation would have to be pursued individually.
In overturning the lower court’s decision on the breach of contract claims, the appeal court found that the motions judge went beyond simply determining whether there is a common issue suitable for trial in the case, and instead ruled on the merits of that claim and whether the contract was interpreted correctly.
“Rather [the motions judge] decided the proposed common issue by interpreting the contract and making a finding that there was no breach. This, respectfully, was an error in principle. This determination was a task for the judge at the common issues trial, not the judge dealing with certification,” Justice George Stathy stated in the appeal court’s decision.