Client loses lawsuit arising from automatic policy renewal

A motorcyclist who tried to sue his insurer for renewing his policy and deducting money from his account will not have his case heard before the Supreme Court of Canada.

The top court announced Jan. 31 it has turned down an application from Oliver Bajor to hear an appeal of an Ontario court ruling in favour of TD Meloche Monnex.

Bajor was paying his premium through pre-authorized debit. He unsuccessfully sued TD Meloche Monnex, which started insuring Bajor’s motorcycle in February 2012. TD renewed Bajor’s insurance in February 2013 and again in February 2014.

TD obtained $226.16 from Bajor’s bank account in an automated withdrawal on Mar. 10 2014. In the middle of March, Bajor called the insurer and cancelled his policy. TD returned the $226.16 to Bajor on Mar. 27, 2014.

But Bajor took TD to court, asking for an award of $25,000. Bajor essentially argued that TD should not have withdrawn the money in the first place because Bajor had not explicitly agreed to renew the policy.

A Small Claims Court judge disagreed. That ruling was upheld by Divisional Court in 2017. The Court of Appeal for Ontario denied leave to appeal, so Bajor applied in 2018 for leave to appeal to the Supreme Court of Canada.

The “accepted practice in Ontario,” which is intended to protect the client, is to keep an insurance policy in force until it is cancelled, Judge Elizabeth Stewart of Divisional Court wrote in Bajor v. TD Meloche Monnex,  released  April 12, 2017.

“Such cancellation must be clear, unconditional and unequivocal,” added Judge Stewart, citing Bolton Estate v. Allstate Insurance Co. of Canada released by Ontario Court General Division in 1995.

Judge Stewart ordered Bajor to reimburse TD nearly $1,900 in legal fees.

TD sent Bajor a policy renewal package in December, 2013, Stewart noted. TD told Bajor his policy would be automatically renewed Feb. 9. 2014. Included in the package was a cancellation request form, which TD did not receive from Bajor.

“In January and February 2014, Bajor sent emails to [Meloche Monnex] concerning some pricing and renewal concerns,” judge Stewart wrote.

The insurer “responded by providing Bajor with details of his coverage.”

The 1995 decision Bolton Estate v. Allstate arose 1994 after a life insurance client died Aug. 19, 1994 in an airplane accident. Four days earlier, premiums were deducted from the client’s account, at which point the customer prepared a letter requesting the policy by cancelled. The letter was mailed the day before the client died. The court ruled the policy was in effect until Sept. 15, 1994. Although the Aug. 15 letter made clear that the policy was to be cancelled at some point in the future, it was “not a clear, unconditional and unequivocal offer to cancel the policy effective August 15, 1994.”