Law360 Canada (October 30, 2026, 4:34 PM EDT) -- The New Brunswick Court of Appeal has rejected insurers’ attempt to invalidate a proposed class action because the original plaintiff lived outside the province, finding that the residency defect could be corrected by adding an eligible plaintiff.
In
Desjardins Financial Security Life Assurance Company et al. v. Wood and Sirois, 2026 NBCA 122, released on Oct. 29, Justice Robert French rejected arguments that a residency defect means a class claim is not a proceeding under the
Class Proceedings Act (CPA).
“In my opinion, Desjardins’ interpretation conflicts with the legislative decision to take an expansive approach in defining ‘class proceeding’ for the purposes of the CPA,” the judge wrote.
In August 2020, the proposed representative plaintiff, Kelly Anne Wood, a resident of Prince Edward Island, was injured while on an all-terrain vehicle in Quispamsis, N.B.
She was insured under a standard automobile policy issued in New Brunswick by Desjardins, under which she was entitled to weekly loss-of-income benefits to a maximum of $250 per week.
However, Desjardins interpreted the policy as allowing it to reduce the amount otherwise payable because Wood also received Canada Pension Plan and Employment Insurance disability benefits. It therefore reduced her benefits to $96.34 per week.
In May 2022, Wood commenced an action against her insurance company and other insurers carrying on business in New Brunswick, claiming breach of contract in her own right and, pursuant to the CPA, on behalf of others who received loss-of-income benefits under the standard policy in New Brunswick.
The proposed class included those whose benefits were reduced because they received disability benefits for which they had personally paid insurance premiums, Canada Pension Plan disability benefits or Employment Insurance disability benefits.
In 2024, Wood brought a motion for leave to amend the action to, among other things, add New Brunswick resident Paula Sirois as an additional plaintiff. The motion was granted in April 2024.
In November 2024, Desjardins brought a motion for a determination that the proceeding was a nullity because it had been commenced by an individual who was not a resident of New Brunswick.
A motion judge rejected this argument, finding that s. 14 of the CPA provides the court with the authority to correct non-compliance with s. 3(1) by adding another plaintiff and allowing the proposed class proceeding to continue.
Under s. 14, the court may make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination.
The motion judge also deemed Sirois to have been the proposed representative plaintiff at the time of the initial filing in May 2022.
Desjardins challenged the decision, arguing that the motion judge erred by interpreting ss. 3(1) and 14 of the CPA as permitting correction of the residency defect. The insurers maintained that Wood’s filing did not qualify as a proceeding under the CPA and therefore did not engage the court’s corrective powers.
They also challenged the order retroactively deeming Sirois to have been the proposed representative plaintiff.
Justice French noted that s. 3 of the CPA provides for a member of a class of persons who are resident in New Brunswick to commence a proceeding on behalf of the members of that class.
However, s. 3(5) permits the court to appoint a representative plaintiff who is not a member of the class where necessary to avoid substantial injustice to the class.
Reading the CPA holistically, the judge found that residency is a requirement, but non-compliance is not a fatal, incurable defect.
He noted that the CPA expressly defines a class proceeding to include a proceeding for which the certification motion has not yet been determined. The court’s powers under s. 14 therefore apply before certification.
Justice French also found no indication that the legislature intended to exclude the CPA’s application, including s. 14, from proceedings properly commenced under the Rules of Court that plead or indicate that the proceeding is brought under the Act.
He cited
Birrell v. Providence Health Care Society, 2009 BCCA 109, in which the B.C. Court of Appeal affirmed a lower court determination that a class-membership defect could be cured by subsequently adding a plaintiff who was a member of the proposed class.
Justice French found no principled basis for distinguishing the class-membership and residency requirements so that non-compliance with one could be cured while non-compliance with the other rendered the proceeding a nullity.
The court dismissed Desjardins’ appeal of the decision that the class proceeding was not a nullity.
However, it set aside the order deeming Sirois to have been the proposed representative plaintiff as of May 2022 because the parties had not been heard on that issue.
Then-Chief Justice Marc Richard and Justice Kathleen Quigg, now acting chief justice, concurred in the decision.
“We’re pleased with the Court of Appeal’s decision and look forward to moving the case forward on behalf of our clients and the proposed class,” counsel for the respondents, Basia Sowinski of Valent Legal, told Law360 Canada in an email.
Michael Dull of Valent Legal also acted as counsel for the respondents.
Counsel for the appellants were D. Geoffrey Machum and Jonathan M. O’Kane of Stewart McKelvey. They were not immediately available for comment.
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