Civil Litigation

Silver’s case shows witness arrogance can backfire

By Staff

A dispute over life insurance on a mortgage shows how arrogance on the witness stand can backfire against parties in court, says Toronto senior litigation lawyer Jeffrey Silver.

Silver, principal of Jeffrey C. Silver Barrister, acted for the plaintiff in the case, a woman whose husband died shortly after they took out a mortgage on a home in Toronto.

She sued her bank after it refused to discharge the mortgage using funds from a life insurance policy, explains Silver.

The case primarily turned on whether a waiver of insurance was properly explained before it was signed by the couple, who were from Portugal and spoke little English, he tells As a result, the pair relied on a translation by their two sons, who were also listed as guarantors on the mortgage, and claimed to have missed the part of the meeting when the waiver was discussed. The couple ended up signing the document, but weren't aware they were waiving life insurance. Plus, the bank continued to collect money for the premiums despite the signed waiver.

During evidence at trial, the bank representative who dealt with the couple and the two sons when the mortgage documents were signed admitted that she had no specific recollection of the meeting with them, but relied heavily on her usual practice, Silver says.

“The bank employee explained that her practice was always the same, which was to make sure each document was understood, dealing with them and signing them in the same order, no matter who the client was,” he says. “The point she was trying to impress on the judge was that she had developed this perfect system over the years, and since there was no way she would have deviated from it, the sons must have been there the whole time to explain the life insurance waiver.

“She had no doubts, but that’s where arrogance plays a big role,” says Silver, who was eventually able to use the bank officer’s certainty against the defendant after discovering that the two sons’ signatures were on only some of the mortgage documents in evidence.

During cross-examination, he asked the bank worker to reaffirm her standard practice and got her to agree that her “perfect” system would have seen the sons, as guarantors, signing all of the documents.

Silver was then able to confront her with the missing signatures, arguing that they supported the sons’ claim to have missed the part of the meeting when the insurance waivers were addressed.

“She had no explanation,” he says of the memorable courtroom moment. “Based on that evidence, the judge believed the sons’ evidence that they weren’t present the entire time and that the waiver was not explained properly, and the mortgage was discharged.”

Silver says the odds were stacked against his client from the outset, not only because the bank was able to produce the signed document waiving the option of life insurance on the mortgage. In addition, the husband’s poor health meant it was unlikely he would ever have been approved for coverage even if the couple had wanted it.

But due to an apparent glitch in the bank’s back-office processing, the financial institution had been regularly collecting an amount for life insurance premiums in addition to mortgage repayments, despite the existence of the signed waiver. These debits bolstered the wife’s claim that she believed life insurance was in place.

“At that time, the default in the bank’s computer system was to input life insurance, and then rely on a clerk to delete it for cases when a waiver was signed,” Silver says. “Since then, the default has been changed to no insurance.

“It was a fascinating case that gave me an interesting insight into how mortgages work and the number of people involved in them,” he says.

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