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Nova Scotia Court Clarifies When Pre-Judgement Interest Begins Accumulating

Peters v. Great-West Life Assurance Company, 2024 NSCA 21 (Nova Scotia Court of Appeal) 

Reading Time: 4 minutes (approx.) 

By: Alexandre Doucet (Articled Clerk) 

On November 22, 2015, David Peters was injured when he was struck on the head by a door while helping unload a commercial truck at his business. He was taken to the hospital by his wife, Susan Peters, and, within two hours of arriving, was placed on a ventilator. He died the following day, and death benefits from his life insurance were paid to Ms. Peters. Accidental death benefits were not paid as the insurer, Great-West Life, claimed the death resulted from existing infirmity and therefore was not accidental. 

Ms. Peters, the Plaintiff, brought court action against Great-West Life, the Defendant, for the remaining accident death benefits. The Defendant paid the benefits upon receipt of a revised Death Certificate which changed the cause of death to an accident, prior to trial, but the parties were unable to agree on the sum of pre-judgement interest. The trial judge found that interest was payable from the date the Defendant received the medical evidence which proved the Mr. Peters’ death had been accidental, being “when the cause of action arose” per the Judicature Act [para 4]. The Plaintiff appealed this, alleging that the cause of action arose when the Defendant denied coverage. 

The trial judge had been satisfied that the Defendant had been legally entitled to deny benefits when it did as the evidence proving the cause of death had not yet been brought forward. On appeal, the court upheld this decision as Justice Bryson found the trial judge applied the law properly. 

Justice Bryson examined Canada (AG) v. MacQueen, 2013 NSCA 143, a contractual case, which states at paragraph 135 that the cause of action arises when a breach of contract results in a loss. In addition, the language of the policy between the Plaintiff and Defendant was such that the insurer had to be satisfied the benefits were due. This satisfaction required objective evidence which was made available the moment the Death Certificate was adjusted to reflect an accidental death, but not before. As such, Justice Bryson determined that the trial judge had not erred when concluding that pre-judgment interest should be calculated from the time that the Defendant received evidence that Mr. Peters’ cause of death was accidental, at which point the cause of action arose from its failure to pay the accident death benefits. 

Link: https://www.canlii.org/en/ns/nsca/doc/2024/2024nsca21/2024nsca21.html

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