Justice David Crane made the decision in the recent Royal Bank of Canada v. Mujagic case, in which Royal sought a summary judgment on a defaulted mortgage.

The defendants counterclaimed the bank, alleging that the bank was liable for aggravated damages because it was involved in a “deliberate and persistent violation of the law with regard to the providing and promoting of insurance products.”

The judge dismissed the motion for a summary judgment as he said the counterclaims raised factual issues of the breech of the Ontario insurance scheme.

The Province of Ontario has not enacted enabling legislation specifically requiring banks promoting the specified insurance products at their branches in Ontario from obtaining a form of license.  The judge said that the question then was, notwithstanding specific legislation of the Province, does its insurance scheme apply to banks at those branches in which it promotes the sale and/or takes applications for the specified insurance product?

The judge said it did.