Case Summary: Maynard v. Alberta Motor Assn.
Where a party pleads equitable relief (such as rescission, estoppel or relief from forfeiture) with respect to an insurance policy, the claim cannot be heard by a jury.
Maynard v. Alberta Motor Assn., 2015 ABQB 564, per Pentalechuk, J.
I. FACTS AND ISSUES
The Plaintiff’s vehicle was involved in a motor vehicle accident while being operated by another individual with her consent. The driver stuck another vehicle, damaging the Plaintiff’s vehicle and injuring three people (Third Parties). The Third Parties sued the Plaintiff and driver for the injuries they sustained.
The Defendant insurer denied the Plaintiff’s claim on the basis that the Plaintiff made material misrepresentations when placing the policy, rendering the policy void. The Plaintiff brought an action against the Defendant for the damage to her vehicle as well as defence and indemnity for the Third Parties’ claims.
The Defendant was made a party to the Third Parties’ action and settled those claims. Then, by way of counterclaim, the Defendant sought judgment against the Plaintiff for the damages it paid to the Third Parties.
The Plaintiff applied to the Court to have the actions heard by a jury. The Defendant opposed the application on the basis that the Plaintiff’s claim and its counterclaim plead equitable relief which bars trial by jury.
II. HELD: Application dismissed. The equitable nature of relief claimed by both parties precluded a jury. In addition, the Plaintiff did not establish a statutory right to a jury (under s.17 of the Jury Act, RSA 2000, c J3).
1. The equitable, and therefore discretionary, nature of the relief sought by both the Plaintiff and the Defendant precludes a jury trial.
(a) The equitable remedies sought by the Plaintiff included:
(i) Relief from forfeiture in the event she has failed to comply with the terms of the insurance policy;
(ii) Estoppel; and
(iii) The Court accepting the Defendant’s argument that the Plaintiff’s claim for indemnity was really a claim for specific
performance of the insurance contract.
(b) The Defendant pled that the insurance policy was void due to the Plaintiff’s material misrepresentation. This involves the equitable remedy of rescission.
(i) The Court cited the Alberta Court of Appeal in Coulter v. CoOperators Life Insurance Co., 2013 ABCA 295 for the finding that voiding a policy on the basis of misrepresentation is relief based in equity.
(c) The Court determined that equitable claims cannot be decided by a jury as “equitable claims involve an exercise of judicial discretion in applying factors that cannot easily apply” (at para 24).
(i) This is in contrast to s.17(1) of the Jury Act, where there is no discretion. The actions in s.17(1) are ones where the judge is able to explain the law and issues to the jury and tell them the verdict they must give if certain elements are proven.
2. The threshold for whether an equitable claim bars a jury trial is quite low. It is sufficient that the equitable claim “could potentially form the cornerstone of the case” (at para 26).
(a) A Court need not determine with exactitude the degree to which the Plaintiff will end up relying on equity at trial.
(b) The fact that the Plaintiff’s claims were equitable in nature and would become key issues at trial was sufficient to find that the case could not be heard before a jury.
(i) Thus, while the Defendant also pled alternative defences not in equity (a failure to report a change material to the risk and a simple breach of policy), this was not enough to permit a jury trial.