DATE: 20050622

DOCKET: C41472

COURT OF APPEAL FOR ONTARIO

RE:

KAMILA AST (Plaintiff/Respondent) v. SUN LIFE ASSURANCE COMPANY OF CANADA (Defendant/Appellant)

BEFORE:

DOHERTY, MACFARLAND and LAFORME JJ.A.

COUNSEL:

Rudy V. Buller

for the appellant

Hedy L. Epstein

for the respondent

HEARD: June 17, 2005

RELEASED ORALLY: June 17, 2005

On appeal from the judgment of Justice Paisley of the Superior Court of Justice dated January 27, 2004.

E N D O R S E M E N T

[1] This is a dispute over the interpretation of the long-term disability provisions in an insurance policy sold to the respondent’s employer by the appellant.

[2] The trial judge found that read as a whole, the policy provided for long-term disability benefit payments to age 65 as long as the prerequisites to the receipt of those benefits were met. There is no question in this case that those prerequisites were met.

[3] The appellant argues that the policy as a whole clearly limits payments to a maximum of two years. Counsel for the appellant persuasively argues that the trial judge confused the provisions dealing with coverage under the policy with provisions dealing with the payment of benefits under the policy. We agree with that analysis. Under the policy, and in particular, the portion of the policy dealing with “Benefit Details”, the maximum benefit period is defined as:

Two years or a period ending in the last day of the month for which the employee reaches age 65, whichever is less [emphasis added].

[4] Under the heading “When Long-Term Disability Payments End” in the long-term disability part of the policy, the following appears:

An employee’s Long-Term Disability payments end on the earlier of the following dates:

• the date the employee is no longer totally disabled.

• the end of the maximum benefit period as specified in Benefit Details.

• the last day of the month the employee retires on pension with the employer or is eligible to retire with a full pension or a full pension equivalent [emphasis added].

[5] We think these provisions are clear and yield no ambiguity. The maximum payment provided for under the policy is two years.

[6] The trial judge referred to the provisions in the long-term disability part of the policy entitled “Payment After Coverage Ends”. That provision has no application to this case. First, the provision applies only if the long-term disability provisions have been terminated. There was no termination of the coverage in this case. Second, the provision does not extend entitlement to benefits, but simply indicates that if the long-term provisions of the policy are terminated, the employee remains entitled to the benefits provided under the coverage. As indicated above, those benefits do not extend beyond payments for two years.

[7] Counsel for the appellant in her able arguments, directed the court to the definition of long-term disability in the policy and to certain obligations placed on the employee under the policy. Those terms refer to periods beyond the two year period to which we have held benefits are available. Counsel for the appellant concedes that on his reading of the policy, these provisions have no meaning and no application. We think this concession is properly made. We also agree, however, with his further contention that while these provisions have no meaning in the policy, they do not render the clear payment of benefit provisions ambiguous.

[8] In the result, the appeal is allowed, the judgment of Paisley J. is set aside, and the action is dismissed.

[9] The appellant as the successful party is entitled to costs, if demanded, on a partial indemnity basis. This was a straightforward appeal on a narrow issue. We would fix those costs at $8,000.00, inclusive of disbursements and GST. The appellant is also entitled to costs of the trial if demanded. Those costs must be assessed.

“Doherty J.A.”

“J. MacFarland J.A.”

“H.S. LaForme J.A.”