Court File and Parties

COURT FILE NO.: 623/07 DATE: 2008-10-27

SUPERIOR COURT OF JUSTICE - ONTARIO (DIVISIONAL COURT)

RE: SYD-BUNTON SAVUNDRANAYAGAM Plaintiff/Appellant

- and -

SUN LIFE ASSURANCE COMPANY OF CANADA and SUN LIFE FINANCIAL Defendant/Respondent

BEFORE: Mr. Justice Carnwath

COUNSEL: L. Goldstein, for the Plaintiff/Appellant K. McLoughlin, for the Defendant/Respondent

HEARD AT TORONTO: October 22, 2008

ENDORSEMENT

CARNWATH J.:

[1] The appellant, Syd-Bunton Savundranayagam, ("Syd") is the plaintiff in an action brought against the defendant, Sun Life Assurance Company of Canada ("Sun Life") for long-term disability benefits. At a status hearing, May 29, 2007, held pursuant to Rule 48.14(8) of the Rules of Civil Procedure, Master Sproat dismissed the action against Sun Life in reasons issued November 27, 2007. Syd now appeals from that order.

[2] The appeal raises two questions:

1. Did the Master err in law?
2. Did the Master exercise her discretion on the wrong principles or misapprehend the evidence such that there is a palpable and overriding error in her decision?

BACKGROUND

[3] The appellant issued a Notice of Action on March 14, 2003 and served it on July 28, 2003. The appellant alleged he became totally disabled on March 9, 2001. He claimed for benefits under his employer's (Woodbine) short-term disability ("STD") employment benefit plan. The claim was denied on March 18, 2002, because it was submitted almost one year after the deadline established by the terms of the STD plan. An appeal of that decision was denied in June, 2002 because the appellant refused or neglected to provide copies of relevant records that Sun Life had requested. Nothing happened in the balance of the action for long-term disability ("LTD") benefits covered by Sun Life until the appellant's former solicitors requested copies of documentation from Sun Life on January 23, 2003.

[4] Sun Life demanded particulars on August 25, 2003. When they were received on October 6, 2003, Sun Life served its Statement of Defence on October 9, 2003.

[5] On December 16, 2003, the appellant asked for a case management conference to establish a common timetable for this action and for a separate action for both STD and LTD benefits that he started against Woodbine.

[6] Master Polika presided over the first case management conference in this action and the Woodbine action on March 1, 2004. By then, Woodbine had taken the position that the Superior Court had no jurisdiction to deal with the Woodbine action because it was properly the subject-matter of a grievance under a collective agreement. Master Polika established deadlines for the delivery of material, and for cross-examinations, in connection with a proposed motion by Woodbine to challenge the jurisdiction of the court. Master Polika also then directed the appellant's former solicitors to provide documentary evidence to Sun Life by April 30, 2004, which was never done.

[7] A second case conference in both actions was held on May 18, 2004 where the former solicitors advised that the Woodbine action was nearly settled. Master Polika established further deadlines for any motion by Woodbine regarding the jurisdictional issue and ordered that examinations-for-discovery in both actions take place by September 30, 2004. It does not appear that the appellant ever complied with any of the deadlines established by Master Polika on May 18, 2004.

[8] In November of 2004, the appellant filed a labour relation's complaint regarding the failure of his Union to grieve Woodbine's termination of his employment. That complaint was dismissed for delay on April 12, 2005. The Woodbine action finally settled on September 7, 2005.

[9] On October 24, 2006, a status notice was issued, pursuant to Rule 48.14(8). A status hearing scheduled for January 29, 2007, was adjourned to March 28, 2007. On February 21, 2007, the former counsel for the appellant brought a motion to be removed. The order was granted on an unopposed basis. New counsel was appointed on March 13, 2007.

[10] The March 28, 2007 status hearing was adjourned to May 29, 2007, held before Master Sproat.

THE STANDARD OF REVIEW

[11] The vexing problem of the standard of review of a Master's dispositive or final order has been resolved by the Divisional Court in Zeitoun v. The Economical Insurance Group, [2008] 91 O.R. (3d) 131. Low J., writing for the Court, stated:

[40] The appellant argues that the appropriate standard of review of a master's order, whether it be final or interlocutory, should be in accordance with that expressed by the Supreme Court in Housen v. Nikolaisen, supra, and by the Court of Appeal in Equity Waste Management such that the decision will be interfered with only if the master made an error of law or exercised his or her discretion on the wrong principles or misapprehended the evidence such that there is a palpable and overriding error.

[41] I would agree with that submission. There is, in my view, no compelling reason for adopting differing standards of review on appeal depending solely on the place in the judicial hierarchy occupied by the decision maker whose decision is under appeal. Such an approach is anachronistic and irreconcilable with the presumption of fitness. Rather, similar kinds of decisions and similar kinds of errors ought to be treated similarly, and for that reason, I would hold that where the master has erred in law, the standard of review should be correctness whether the decision be final or interlocutory and whether or not it is vital to the disposition of the lawsuit. The danger in doing otherwise is the potential for the development of straying lines of authority with resulting confusion.

[12] I am bound by the authority of Zeitoun, above.

1. Did the Master err in law?

[13] The Master first turned her mind to the test to be met on a status hearing. She considered the cases of Currie v. Corp. of the City of Toronto (1992), 7 O.R. (3d) 796; appeal dismissed (1995) 7 O.R. (3d) 796 (C.A.); and, Royal Bank of Canada v. R. L. Wilson Engineering & Construction Limited, [1992] O.J. No. 1287 (Ont. Gen. Div.). She identified the test to be met on a status hearing as whether there is an explanation for delay such that she would be satisfied that the action should proceed and whether there is prejudice to the defendant. On a status hearing, she found that the onus was clearly upon the plaintiff to satisfy both aspects of the test. The Master was correct in law in her interpretation of the test.

2. Did the Master exercise her discretion on the wrong principles or misapprehend the evidence such that there is a palpable and overriding error in her decision?

EXPLANATION FOR THE DELAY

[14] The Master reviewed the appellant's explanation for the delay from the time the action commenced until August, 2005. She found there to be a sufficient explanation for the delay between the filing of the defence to in or about August, 2005. She found no satisfactory explanation for the delay commencing September 7, 2005, when the appellant settled the case with Woodbine, to December, 2006, when the appellant responded to the status notice. This was a delay of fifteen months. She found the appellant took no steps to prosecute the action from September 7, 2005 until December 27, 2006 when the appellant's former counsel asked for discovery dates. She noted that this request was made over two months after the issuance of the status notice.

[15] The Master found the evidence filed in support of the motion by the appellant's counsel to be unsatisfactory. There was no evidence of the appellant himself attesting to his continued intent to prosecute the action. There was no evidence of the appellant's former counsel of record as to the nature of the arrangements with defence counsel. The evidence of new counsel was unsatisfactory as they had no direct knowledge, information and belief as to the matters at issue on the motion. She concluded by finding that the appellant had failed to provide a satisfactory explanation for the delay in prosecuting the action.

[16] In arriving at her conclusions, I find the Master did not exercise her discretion on wrong principles. Moreover, I find no example in her reasons that would lead me to conclude she misapprehended the evidence to the extent that there was palpable and overriding error.

PREJUDICE

[17] The Master found that to the date of the status hearing, the appellant had not delivered an affidavit of documents that would have clarified the extent to which medical records remained available. She drew an adverse inference from the lack of such disclosure. She noted that the appellant had never completed and submitted an application, with supporting medical evidence, for long-term disability benefits to the defendant prior to the commencement of the action. Indeed, counsel for the appellant on this appeal acknowledged that no application with supporting medical evidence for long-term disability benefits had been made to Sun Life up to and including the date of the status hearing.

[18] The Master was further persuaded of actual prejudice to the defendant as a result of the nature of the case being a long-term disability claim. Since the appellant had not filed an application for long-term disability with supporting medical evidence with Sun Life, Sun Life had no opportunity to investigate the appellant's claim.

[19] I reject the appellant's submission that the defendant led no evidence at the status hearing on the prejudice to the defendant. The affidavit of Duncan McDuff deposed that the most recent medical report that Sun Life had ever received from the appellant was a November 25, 2002 report of his family physician, Dr. Lombardi; that the appellant had not disclosed to Sun Life any change in his medical condition since November 25, 2002 and had not produced any medical records created after that date; the appellant never actually filed an insurance claim for LTD benefits from Sun Life; Sun Life had not been able to determine whether the appellant had any significant evidence to support his allegation of continuous total disability since March 9, 2001; Sun Life had not been in a position to properly instruct any medical experts in order to obtain any expert medical opinions that would be based on a thorough understanding of the appellant's medical history; had the plaintiff been totally disabled for any material period of time, Sun Life had not been in a position to decide what treatment and/or rehabilitation might have brought his claim to an end by the time of the status hearing. This was evidence, indeed powerful evidence, of the prejudice to the defendant caused by the appellant's delay.

[20] In arriving at her conclusion that the defendant was prejudiced, I find no evidence that the Master exercised her discretion on a wrong principle nor is there any indication she misapprehended the evidence in reaching her conclusion. She committed no palpable and overriding error,

[21] The appeal is dismissed.

[22] Costs to the respondent fixed at $7,500, including fees, disbursements and GST, on a partial indemnity basis, payable thirty days.

CARNWATH J.

DATE: 2008-10-27