Layland v. Canadian Co-Operative Association and Co-Operators Life Insurance Company, 2015 ONSC 6332

CITATION: Layland v. Canadian Co-Operative Association and Co-Operators Life Insurance Company, 2015 ONSC 6332

DIVISIONAL COURT FILE NO.: 443/14
DATE: 20151013

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

SACHS, D. L. CORBETT AND BALTMAN JJ.

BETWEEN:

GRETA LAYLAND Plaintiff (Respondent)

– and –

CANADIAN CO-OPERATIVE ASSOCIATION and CO-OPERATORS LIFE INSURANCE COMPANY Defendants (Appellant Co-Operators Life Insurance Company)

Scott Robinson, for the Plaintiff (Respondent) Pamela Miehls, for the Defendant, Co-Operators Life Insurance Company

HEARD at Toronto: October 13, 2015

SACHS J. (ORALLY)

[1] This is an appeal from the order of Stewart J. dated September 10, 2014, in which she lifted the stay of the action involving the parties, ordered it to be restored to the trial list and refused to dismiss the plaintiff’s action against the appellant for delay.

[2] The plaintiff’s action against the appellant is for ongoing long-term disability benefits. The plaintiff alleges that she became totally disabled in October 1995 – 20 years ago. The plaintiff commenced her action against the appellant in 1997 – over 18 years ago.

[3] In her original claim for disability payments the plaintiff alleged that she was suffering from a number of debilitating symptoms, ranging from diffuse pain and aching to neurological symptoms that rendered her totally disabled. The appellant denied her claim on two related bases. First, it asserted that the real reason the plaintiff did not go back to work was because she was having issues with her employer. Second, it disputed the plaintiff’s allegation that the medical evidence supported the fact that she was totally disabled.

[4] On July 10, 2001 the plaintiff’s action against the appellant was stayed “pending final determination” of the plaintiff’s Right to Sue application before the Workplace Safety Insurance Appeals Tribunal (WSIAT). On November 16, 2006 WSIAT released its decision on the plaintiff’s Right to Sue application.

[5] The appellant was not a party to the WSIAT application. The plaintiff did not advise the appellant of the WSIAT decision when it was released in November of 2006. The uncontroverted evidence of Paul McCallen (the appellant’s counsel) is that the appellant did not learn of the November 2006 WSIAT decision until it contacted WSIAT itself and was told of the decision in mid-2010. Before us, the plaintiff attempted to contradict this evidence by referring us to a letter from WSIAT to the plaintiff in November 2006, wherein the plaintiff was advised that the decision would be forthcoming by the end of that month. According to the copy produced, Mr. McCallen was cc’d on that letter. We reject the submission that this evidence is sufficient to undermine Mr. McCallen’s direct evidence on the point in issue. He was not cross-examined on the letter the plaintiff is relying on and there is no evidence that Mr. McCallen actually received the letter in question.

[6] Under the terms of its governing legislation WSIAT decisions are final subject to a limited right to reconsideration. Any party seeking such a reconsideration must do so within forty days of the decision in question being rendered. There is no indication that the plaintiff ever sought a reconsideration of the WSIAT decision. In response to a request from the appellant, in June of 2011, the WSIAT confirmed that its November 2006 decision was a final determination of the plaintiff’s Right to Sue application.

[7] Upon receipt of this confirmation the appellant took steps to have the stay lifted and the plaintiff’s action dismissed for delay.

[8] In dismissing the appellant’s motion, the motion judge found as follows at paras. 9-15:

[9] On June 29, 2011, the WSIAT confirmed to the parties that it considered its November 16, 2006 decision to be a “final determination” of the Right to Sue Application. Layland continues to seek an avenue of redress from this decision.

[10] Layland has not taken steps to lift the stay. Conversely, the Defendants have waited close to 4 years to bring this motion.

[11] I am satisfied that the stay order should be lifted, and I so order. Layland’s efforts to pursue her remedy further and elsewhere should not delay the ultimate determination of this action.

[12] The Defendants argue that the action is not ready for trial. They argue that an exchange of further productions, examinations for discovery, and possible motions will need to be undertaken. The Defendants also argue that the inordinate and inexcusable delay of Layland in advancing the action has been such to give rise to a substantial risk that a fair trial of the issues in the litigation will not be possible.

[13] I do not agree. The materials and information already assembled during the proceedings should easily permit a fair trial to proceed. In particular, the documentary information upon which the claim was rejected and the test articulated in the applicable policy are likely to be the most relevant focus of inquiry at trial.

[14] Given the nature of Layland’s claim and the fact that the Defendants consented to the stay, did not regularly or actively monitor the progress of the WSIAT proceeding and took no steps to lift the stay before now, I do not consider it fair or just to dismiss Layland’s action for delay at this point.

[15] I hereby order that the action be restored to the trial list and that the pre-trial conference and trial dates be expedited.

[9] On this appeal the appellant submits that the motion judge committed the following errors:

1. She erred in her consideration of the nature of the plaintiff’s action.
2. She erred when she found that the appellant consented to the stay in 2001.
3. She erred in principle when she placed a burden on the appellant to “actively monitor the progress of the plaintiff’s WSIAT application.”
4. She erred when she found that once the appellant was aware of the WSIAT decision it failed to move expeditiously to lift the stay and have the action dismissed.
5. She erred in failing to consider the actual prejudice that had been caused to the appellant by virtue of the delay, a prejudice that has now rendered it impossible to have a fair trial.

[10] The parties agree that the motion judge’s decision was a discretionary one to which considerable deference is owed by this Court. In the absence of a palpable and overriding error or an error in principle, the decision should not be overturned.

Nature of the Application

[11] The appellant submits that the motion judge erred when she failed to consider the fact that the plaintiff’s claim against it was not a static one. The appellant’s point on this issue directly relates to the issue of prejudice and we will deal with it under that heading.

Did the Appellant Consent to the Stay in 2001?

[12] At paragraph 14 of her reasons, the motion judge found that the appellant consented to the order staying the action in 2001. This is simply not correct. CCA consented to the stay, but the appellant did not. Indeed, as even the material filed on behalf of the plaintiff on the motion made clear, the appellant opposed the plaintiff’s request for a stay. This error on the part of the motion judge was a palpable and overriding one that was material to her analysis.

Failure by the Appellant to Monitor the WSIAT Application

[13] The motion judge found that the appellant did not monitor the WSIAT proceeding. This finding is supported in the record and is entitled to deference. We accept it. However, this finding has little legal significance because the appellant never consented to the stay or to the delay in this case and it was not a party to the WSIAT proceeding. In fact, the record discloses that it was the appellant who was most committed to moving the proceeding forward. Certainly its conduct did not amount to the kind of “resistance” referred to in Carioca’s Import v. C.P.R. [2015] O.J. No. 4569.

[14] The primary responsibility lies on the plaintiff to move the case forward: see Wallace v. Crate’s Marine Sales Ltd., 2014 ONCA 671 at para. 18. In failing to even consider this responsibility, the motion judge erred in principle.

Failure to Move to Lift the Stay

[15] At paragraph 14 of her reasons, the motion judge relies on the fact that the appellant “took no steps to lift the stay before now.” This may be true, but what it ignores is the fact that once the appellant knew that there had been a final determination of the WSIAT application, it immediately took steps to lift the stay. After its attempts to solicit a consent from the plaintiff to this course of action failed, it scheduled its motion for November 29, 2011. On that motion the plaintiff appeared without a lawyer and it became clear that the motion would take more than the allotted two hours to ague. The motion was then adjourned to the first available date for a longer motion, which was July 12, 2012. The motion was subsequently adjourned on two more occasions, both at the behest of the plaintiff. Thus, the motion judge’s finding that the appellant “waited close to four years to bring this motion” at para. 10 of her reasons is a palpable and overriding error.

Prejudice

[16] On the issue of prejudice, the motion judge found that “the materials and information already assembled during the proceeding should easily permit a fair trial to proceed. In particular, the documentary information upon which the claim was rejected and the test articulated in the applicable policy are likely to be the most relevant focus of the inquiry at trial.”

[17] What the motion judge failed to consider in her reasons are the following:

1. One of the bases upon which the appellant denied the plaintiff’s claim is its assertion that the plaintiff was having difficulties with her employer and that is why she did not return to work. The material witnesses to this aspect of the appellant’s case are either not locatable or have little or no recollection of the relevant events, which occurred 20 years ago. In this regard, it could not have been anticipated by the appellant that this action would have taken so long to get to trial.
2. The plaintiff’s diagnosing and treating physician, Dr. Reynolds, passed away on March 18, 2009. The last report he prepared that was provided to the appellant was in 1999. The appellant has had no opportunity to cross-examine Dr. Reynolds. This may cause more prejudice to the plaintiff than the appellant in this case (as this may render the report inadmissible) but, either way it may be a significant impediment to the Court doing justice in this case.
3. As already noted, the plaintiff’s claim is not a static claim. She has an obligation to prove her disability on an ongoing basis. The appellant is entitled to ongoing, contemporaneous information about the plaintiff’s medical condition. The last medical report that was provided by the plaintiff to the appellant prior to this motion being brought was in December of 1999. As a result, the appellant has lost its opportunity to review and assess the plaintiff’s medical records on a contemporaneous basis and to test the information in those records by sending the plaintiff to its own experts for assessment. The prejudice caused by this lack of ongoing medical disclosure was specifically recognized by the Court of Appeal in Dynes v. Standard Life Assurance Co. [2012] O.J. No. 1324 where, at para. 12, the Court states:

12. As we have said, this is a claim for damages for the denial of ongoing indemnity and disability benefits. Contrary to the appellant’s assertion that the motion judge misapprehended the nature of the appellant’s claim, the motion judge correctly recognized that, as pleaded, the appellant’s underlying claim involved “a possible evolving medical condition”. The appellant’s conduct in failing to move the action forward and in failing to produce medical evidence of his claimed disability, for more than seven years, prevented the respondent’s early assessment of the basis for and the strength of the appellant’s disability claim, over time. This opportunity has been forever lost.

4. There is every reason to believe that the appellant has lost the opportunity to investigate whether the plaintiff suffered from a pre-existing condition prior to the effective date of her insurance coverage. This issue arose for the first time at the mediation of the action on May 19, 2000. At that time, it was discovered that the plaintiff may have suffered from her alleged disability before she commenced working at CCA in 1995. Despite repeated requests by the appellant, the plaintiff has failed to date to produce her relevant medical records from 1994 or any proof that those records are still available. This is a matter of real concern as OHIP summaries cannot be obtained for a period earlier than seven years from a request and s.19 of The Medicine Act, 1991, O. Reg. 114/94 provides that a physician is only required to retain records for ten years after the date of the last entry in the record or two years after notifying the patient that the records will be destroyed unless the patient obtains the record or request that the record be transferred to another physician because his or her current physician ceases to practise medicine.

[18] In our view, in failing to consider the above, the motion judge ignored important aspects of the record before her that bore directly upon the question of whether the delay in this case gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible.

[19] This brings us to the test that the motion judge had to consider on the motion before her. It is not disputed that on its motion to dismiss her delay the appellant had to show three things:

1. That the delay was inordinate or unreasonable. In Langenecher v. Sauvé 2011 ONCA 803, the Court of Appeal made it clear that “The inordinance of the delay is measured simply by reference to the length of time from the commencement of the proceedings to the motion to dismiss.” (para. 8). In this case, there can be no doubt that the first part of the test has been met.
2. The delay was inexcusable. During oral argument it was noted that this case is distinguishable from other reported cases because 14 of 18 years of the overall delay was authorized by a stay order made by the Court. It is argued that the delay during this 14 year period should not count against the plaintiff, since it was excused prospectively by Court order. We do not accept this argument. The plaintiff as the person who sought and obtained the stay, and as the plaintiff in the action had an obligation to pursue her WSIAT proceedings with diligence. Then, when those proceedings were concluded, it was her obligation to move forward with her action diligently. The stay order could excuse some or all of the period between 2001 and 2006, but not the delay between 1997 and 2001 nor the further delay between 2006 and 2011. The overall delay is “inexcusable” within the meaning of the caselaw on dismissal for delay.
3. The delay gives rise to a substantial risk that a fair trial of the issues in this litigation would not be possible.

[20] In our view, for the reasons already detailed, this is a case where the delay has created a situation where there is a substantial risk that a fair trial of the action is no longer possible.

[21] For these reasons, the appeal is allowed, the decision of the motion judge as it relates to the appellant is set aside and the plaintiff’s action against the appellant is dismissed.

[22] The Court would like to take this opportunity to thank both counsel for their vary able submissions.

COSTS

[23] The appellant seeks its costs of this appeal, the motion before Stewart J. and its costs of the action. Lederer J. awarded it its costs of the leave motion fixed in the amount of $3,500. We agree that the appellant is entitled to its costs of the appeal and the motion before Stewart J. We fix those costs at $10,000, all inclusive. ($5,000 for the appeal and $5,000 for the motion before Stewart J.). With respect to the action, we fix those costs at $15,000, all inclusive. In arriving at this figure we have reviewed the appellant’s costs outline and reduced the amounts claimed to take into account the principle of proportionality and the results obtained. In this regard we have not allowed any costs for the stay motion which the appellant lost or for the WSIAT proceedings which the appellant was not a party to. The claim for approximately $45,000 for the motion to lift the stay and dismiss the action is encompassed by our award of costs for the motion before Stewart J. In total, the plaintiff shall pay the appellant $25,000 by way of costs. This does not include the costs awarded by Lederer J.

___________________________ SACHS J.

CORBETT J.

BALTMAN J.

Date of Reasons for Judgment: October 13, 2015

Date of Release: October 16, 2015

CITATION: Layland v. Canadian Co-Operative Association and Co-Operators Life Insurance Company, 2015 ONSC 6332

DIVISIONAL COURT FILE NO.: 443/14
DATE: 20151013

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

SACHS, D. L. CORBETT AND BALTMAN JJ.

BETWEEN:

GRETA LAYLAND Plaintiff (Respondent)

– and –

CANADIAN CO-OPERATIVE ASSOCIATION and CO-OPERATORS LIFE INSURANCE COMPANY Defendants (Appellant Co-Operators Life Insurance Company)

ORAL REASONS FOR JUDGMENT

SACHS J.

Date of Reasons for Judgment: October 13, 2015

Date of Release: October 16, 2015