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Case Study: Burns v. RBC Life Insurance Company
Defence + Indemnity

The Ontario Court of Appeal ducked the issue of whether or not an insurer’s employee can be sued in his/her personal capacity for bad faith.

Burns v. RBC Life Insurance Company, 2020 ONCA 347; varying 2019 ONSC 6977

Facts and Issues

The Plaintiff insured Burns had a disability policy issued by the Defendant RBC Life Insurance. He stopped working in 2013 with a diagnosis of disc protrusion and cauda equine syndrome and underwent spinal surgery. RBC initially approved LTD benefits for Burns and paid it for five years. In October 2017 an RBC claim specialist (the Defendant Maclean) on behalf of RBC advised Burns that his LTD benefits were being terminated. In May 2018 an RBC appeals consultant (the Defendant Oslizlok) on behalf of RBC denied Burns’ appeal from the termination and in August 2019 denied the insured’s further appeal.

Burns sued RBC, MacLean and Oslizlok in breach of contract and also for bad faith, negligence and negligent misrepresentation, seeking special, aggravated, punitive and exemplary damages.  In his statement of claim Burns pleaded 45 particulars of alleged bad faith, negligence and negligent misrepresentation. Eight of those particulars alleged only misconduct on the part of RBC. The balance of the particulars were alleged to have been done by all of the Defendants without differentiating among the Defendants.

The motions judge struck out the claims against MacLean and Oslizlok without leave to amend on the basis that Burns had not pleaded a viable cause of action against them for personal liability in their personal capacities, holding that to properly plead a case of personal liability against an employee, a plaintiff must specifically plead a cause of action against the employee in his or her personal capacity for tortious behavior which “manifest a separate identity or interest from the employer”.  [The decision below was briefed in the June 2020 edition of Defence + Indemnity.]

Burns appealed, arguing that the motion judge had erred by not recognizing a cause of action against an employee while acting within his/her course of employment, contrary to Sauter v. Starbucks Canada Inc., 2017 ONCA 1017.  Also in issue on appeal was the denial of the ability for the insured to amend his pleadings.

HELD: For the insured in part; motions judge upheld for deciding the Plaintiff’s claim did not plead a cause of action but reversed so as to allow the insured to amend his claim. 

  1. The Court held that the trial judge had not ignored the principle that an employee can be sued in his/her personal capacity for acts or omissions done in the course of employment. It was held that the motion judge’s “reasons focused not on legal principles, but on whether Mr. Burns had properly pleaded the material facts to support separate tort and bad faith claims against the individual defendants” (para. 13)
    1. That is, the motions judge was held to be correct in concluding that the insured had not pleaded facts upon which a claim against the Defendants MacLean and Oslizlok in their personal capacities could be justified.
    2. The Court held that MacLean and Oslizlok, reading the statement of claim, would not be able to identify what  they each individually had done to support a claim against them:

[16]   Rule 25.06(1) requires a statement of claim to contain a concise statement of the material facts on which the party relies for its claim. Each defendant named in a statement of claim should be able to look at the pleading and find an answer to a simple question: What do you say I did that has caused you, the plaintiff, harm, and when did I do it?

[17]   Mr. Burns’ statement of claim does not provide either Ms. McLean or Ms. Oslizlok with an individualized answer to that question. The heart of Mr. Burns’ claim against Ms. McLean and Ms. Oslizlok is found in paras. 29 through to 35 of his statement of claim, much of which is reproduced above. None of those paragraphs of the statement of claim inform Ms. McLean or Ms. Oslizlok what each did individually that Mr. Burns alleges constitutes actionable wrongs against him for which he seeks a remedy, and when did they it. Instead, his pleading lumps the defendants together, without providing the necessary separate, differentiating material facts that could support a claim against each individual.

[20]   Since Mr. Burns’ statement of claim failed to plead specific acts of bad faith, negligence or negligent misrepresentation by Ms. McLean or Ms. Oslizlok, the motion judge did not err in concluding that Mr. Burns “has not” pleaded a claim against the individual employee defendants that complied with the jurisprudence governing personal liability in tort for the acts of an employee done in the course of employment: at para. 35.

  1. That said, the Court held that the motions judge had been premature in striking out the insured’s claim against the employees without granting leave to amend his statement of claim to properly plead a cause of action against them, without providing reasons for denying leave to amend: 

[22]   The motions judge denied Mr. Burns leave to amend but gave no reasons for doing so. As this court has stated, leave to amend should be denied only in the clearest of cases, especially where the deficiencies in the pleading can be cured by an appropriate amendment and the other party would not suffer any prejudice if leave to amend was granted: Tran v. University of Western Ontario, 2015 ONCA 295, at para. 26; South Holly Holdings Limited v. The Toronto-Dominion Bank, 2007 ONCA 456, at para. 6.

[23]   In the absence of reasons explaining why he denied leave to amend, the discretionary order of the motions judge is not entitled to deference.

[24]   Here, there was no reason to deny Mr. Burns leave to amend his statement of claim as an appropriate amendment might cure the pleading’s deficiency and there is no suggestion that the respondents would suffer litigation prejudice by granting leave to amend. Although we do not interfere with that part of the order of the motion judge striking out the statement of claim as against Ms. McLean and Ms. Oslizlok, we grant Mr. Burns leave to amend.

  1. The Court held that unless and until the insured amends his pleadings it was unnecessary to decide whether or not “alleged bad faith conduct by the employees of an insurance company constitutes a distinct actionable legal wrong that can be pleaded against the employees in their personal capacities” and any decision on that legal point “must await Mr. Burns amending his statement of claim to properly plead individualized claims against Ms. McLean and Ms. Oslizlok”. (para. 25)


Unlike the motions judge, the Court of Appeal ducked the main issue which the insurer (and the insurance industry) sought a decision on. Undoubtedly, Burns would amend his pleadings and the Courts would eventually have to address that question again down the road.  With respect, it is hard to see how merely putting off the decision amounts to expeditious or efficient justice.