A proposed class action challenging deductions from automobile-insurance benefits can continue despite having been started by a Prince Edward Island resident, the New Brunswick Court of Appeal has ruled.
In Desjardins Financial Security Life Assurance Company et al. v. Wood and Sirois, 2026 NBCA 122, released October 29, 2026, the court rejected the insurers’ argument that the residency defect made the class proceeding a nullity incapable of correction.
But the court set aside a separate order deeming a later-added New Brunswick plaintiff to have been the proposed representative from the action’s original filing in May 2022. The parties had not been heard on that relief, which could affect when limitation periods were suspended.
The ruling does not certify the class action or decide whether the challenged benefit deductions were lawful.
A dispute over deductions from weekly benefits
Kelly Anne Wood brought the action in May 2022 against Desjardins and other insurers carrying on business in New Brunswick. Her claim challenges reductions to weekly loss-of-income benefits under the province’s standard automobile policy to account for other disability benefits.
According to the reasons, Desjardins interpreted the policy as allowing deductions for Canada Pension Plan and Employment Insurance disability benefits received by Wood. The proposed class encompasses people whose benefits were reduced for specified collateral disability benefits.
Wood lives in Prince Edward Island. Section 3(1) of New Brunswick’s Class Proceeding Act provides for a member of a class of New Brunswick residents to commence proceedings on the class’s behalf.
In April 2024, the Court of King’s Bench permitted Wood to add Paula Joanne Sirois, a New Brunswick resident whose claim involved similar benefit reductions, as a plaintiff. That order was not appealed.
Desjardins subsequently sought a declaration that the class proceeding was a nullity because a resident had not commenced it. The insurers accepted that Wood’s and Sirois’ individual claims could continue; their challenge targeted the claims advanced for the proposed class.
Residency can be corrected before certification
Writing for a unanimous panel, Justice French upheld the conclusion that the residency requirement was capable of correction.
The court read the requirement within the statute’s broader structure, including its provisions for certification, representative plaintiffs and judicial supervision. New Brunswick expressly defines a class proceeding to include a case whose certification motion has not yet been decided.
Section 14 gives courts broad authority to manage class proceedings fairly and efficiently. That power applies before certification and was available to address the residency defect by allowing a resident plaintiff to be added.
The court rejected the argument that the original non-residency prevented the legislation from applying at all. In an otherwise properly commenced action that asserted a class proceeding, the defect was not an incurable barrier to the court’s supervisory authority.
The decision does not dispense with the residency requirement. It confirms that the requirement can be satisfied through a corrective step rather than requiring the proposed class proceeding to be abandoned.
The timing of limitation protection was not decided
The appeal succeeded on the narrower issue of the retroactive order concerning Sirois. Neither side had asked the motion judge to determine when the legislation began suspending proposed class members’ limitation periods, and neither had addressed the issue in submissions.
That lack of an opportunity to be heard was sufficient to set the order aside. The appeal court left the application of the limitation provision for determination in the Court of King’s Bench if the issue is not otherwise resolved.
Justice French nevertheless cautioned against litigating related objections incrementally. The limitation consequences had been apparent when Sirois was added, and a further distinct hearing might now be necessary.
The court rejected Desjardins’ request for judgment ending the class proceeding and ordered one set of $5,000 in costs payable to the respondents. The proposed class action remains subject to the further steps required by the statute, while the timing of limitation-period suspension remains unresolved.
