Court File and Parties

Court File No.: CV-12-111754-00 Date: 2016-08-31 Superior Court of Justice - Ontario

Re: Cecil Richards, Plaintiff - and - Sun Life Assurance Company of Canada, Entourage Technology Solutions Inc., and Bell Canada, Defendants

Before: Bale J.

Counsel: Adam Romain, for the plaintiff Stephen Shantz, for the defendant Sun Life Assurance Company of Canada

Heard: February 17, 2016

Endorsement

[1] The plaintiff’s claim is for payment of disability benefits pursuant to a group policy of insurance issued by Sun Life. His action was commenced in October of 2012. On this motion for summary judgment, Sun Life’s position is that the claim should be dismissed, because the action was commenced after the second anniversary of the day on which the claim was discovered. Counsel for Sun Life argues that the limitation period began to run in May of 2007 when Sun Life advised the plaintiff that his file had been closed, and that it expired in May of 2009. However, counsel for the plaintiff argues that the first clear and unequivocal denial of his client’s application for benefits was contained in Sun Life’s statement of defence, and that therefore the limitation period never began to run. In the alternative, he argues that a rolling limitation period applies, and that the plaintiff is only barred from claiming disability benefits that would have been payable more than two years before the action was commenced.

Background facts

[2] The plaintiff was involved in a motor vehicle accident on November 17, 2006, and Sun Life was notified on December 4, 2006 that he intended to pursue a claim for disability benefits.

[3] Sun Life approved the plaintiff’s claim for short term disability benefits from November 19, 2006 through to January 29, 2007. However, before paying any further benefits, Sun Life required further information.

[4] On May 1, 2007, Sun Life sent two letters to the plaintiff. The first letter included the following:

Please note that we have not received a response to our request and reminders sent out to date, and your file has been closed effective January 29, 2007.

On April 10, 2007, you were provided with 14 days to contact our office, and we have not received any response from you and your file has been terminated effective January 29, 2007. No further action will be taken on your claim.

Your policy has a three-month appeal period, and therefore you have until August 1, 2007 (which is three months from the date of this letter) to appeal our decision. After August 1, 2007, our decision will be considered final.

By considering an appeal, we are not nor do we intend to waive any of our rights under the policy, including our right to apply any available contractual or statutory limitation periods.

[5] The second letter, which appears to be a computer-generated form, said the following:

We have received the Plan Sponsor’s Statement for Long Term Disability (LTD) benefits submitted on your behalf. However, we have not yet received your completed Plan Member’s Statement Disability Transaction Form. We need this form to assess your LTD claim. Please ensure this form is sent to us as soon as possible to avoid any delay in assessing your claim. If the form has already been returned, please disregard this notice.

[6] The plaintiff took no steps to pursue an appeal, but called Sun Life on August 13, 2007 and enquired as to the status of his claim. He was informed that his file had been closed, as set out in the first letter to him of May 1, 2007.

[7] On September 6, 2007, the plaintiff again called Sun Life to follow up on the status of his claim. He says that he gave them further information in support of his claim at that time. He was again informed that his file remained closed.

[8] On September 12, 2008, the plaintiff again called Sun Life to follow up on the status of his claim. He was again informed that his file remained closed.

[9] The plaintiff retained his present counsel in relation to a negligence claim, and a statutory accident benefits claim, arising from the same accident. He issued a statement of claim in the negligence action on November 17, 2008.

[10] On March 17, 2010, counsel for the plaintiff wrote to Sun Life enclosing a direction signed by the plaintiff, and requesting a complete copy of his short-term and long-term disability files. Copies of those files were provided by Sun Life to plaintiff’s counsel on April 13, 2010.

Issues

[11] The statement of claim was issued on October 30, 2012. Accordingly, the first issue is whether the claim was discovered before October 30, 2010.

[12] The second issue is whether, even if the claim was discovered before October 30, 2010, the plaintiff is entitled to claim disability benefits from that date forward, based upon the concept of a rolling limitation period.

Analysis

When is a claim for disability benefits discovered?

[13] Pursuant to section 4 of the Limitations Act, 2002, “a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.”

[14] Section 5(1) of the Act provides that a claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew, (i) that the injury, loss or damage had occurred, (ii) that the injury, loss or damage was caused by or contributed to by an act or omission, (iii) that the act or omission was that of the person against whom the claim is made, and (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

[15] The plaintiff’s position is that in the case of disability benefits, limitation periods do not begin to run until the person with the claim has received a “clear and unequivocal denial” of his or her claim for benefits. In support of his position, the plaintiff relies upon the decision of the Court of Appeal in Kassburg v. Sun Life, 2014 ONCA 922. For the following reasons, I disagree with the plaintiff’s argument as a general statement of the applicable law.

[16] In Kassburg, Sun Life had taken the position that the plaintiff knew, or ought to have known, of the matters set out in section 5(1)(a) of the Act, by a particular date, based upon a letter that had been sent to her in which, it was argued, her claim had been clearly and unequivocally denied. The motion judge disagreed because the letter relied upon had advised Ms Kassburg that she could appeal the decision by submitting further medical information, and that she had done so. In these circumstances, the motion judge held that the limitation period began to run on the date when the plaintiff was advised that her appeal had been denied by Sun Life.

[17] On appeal, the Court of Appeal held that the question of when a claim is “discovered” is essentially a question of fact (at para. 40), and that because Sun Life had relied upon its initial letter denying Ms Kassburg’s claim, it was open to the motion judge to consider what, in fact, had been communicated to her by that letter, and whether the claim had been clearly and unequivocally denied (at para. 42). However, while there may be cases that fall to be determined on the basis of whether there was a clear and unequivocal denial, it does not follow that “clear and unequivocal denial” is the only basis upon which the matters set out in section 5(1)(a) of the Act may be satisfied.

[18] The subsequent Court of Appeal decision in Thompson v. Sun Life Assurance Co. of Canada, 2015 ONCA 162 is an example of a case in which the question of “clear and unequivocal denial” did not arise, albeit in a situation where, prior to issuing her statement of claim, the plaintiff had not submitted a claim for benefits which could have been denied, whether clearly and unequivocally, or not. In any event, the Court of Appeal agreed with the trial judge that Ms Thompson’s claim was barred by section 4 of the Act, because she knew, more than two years prior to the commencement of her action, that she had coverage, and that she was totally disabled (at para. 13 ff.).

[19] As previously noted, the plaintiff argued that the first clear and unequivocal denial of his claim was contained in Sun Life’s statement of defence. Assuming this to be the case, “clear and unequivocal denial” cannot be the applicable test, since the plaintiff would then have commenced his action prior to discovering his claim, a logically inconsistent result.

Whether the plaintiff’s claim was discovered before October 30, 2010

[20] The plaintiff’s evidence on this motion concentrates on his state of mind in 2007 and 2008. He says that, at the time, he thought that he had submitted all required information to Sun Life. He says that he now knows that he was “confused and misled”, and did not understand that “closing his file” meant that his claim had been denied. He points out that his file had been closed and re-opened in the past, and says that although he knew that his claim was being delayed, he did not think that it had been denied. Counsel argues that the fact that the plaintiff called Sun Life to enquire about the status of his claim in August and September of 2007, and September of 2008, is confirmation of his belief that his application for benefits had not been denied in May of 2007.

[21] The difficulty with this position is that there is no evidence to explain why the plaintiff waited from September of 2008 (when he last contacted Sun Life), until October of 2012 to commence his action (other than that he thought that he would eventually be paid), and no evidence of anything that happened after October 10, 2010, or for that matter, after September of 2008 that caused him to “discover’ his claim. It may be that he was confused in 2007 and 2008, and expected that his benefits would eventually be paid. However, at some point before October 10, 2010, he must have, or should have known that he was being denied benefits to which he believed himself to be entitled.

[22] The fact that the plaintiff thought that he had provided Sun Life with everything that it required, and that it was delaying payment, can only be interpreted to mean that he knew that he was not getting the benefits to which he believed himself to be entitled. This is especially true when the benefits in question were income replacement benefits that would be used to pay ongoing expenses.

[23] The plaintiff knew that he had coverage, and that he had not been paid. Having retained counsel and commenced a negligence action in November of 2008, he knew before October of 2010 that a proceeding would be an appropriate means to seek a remedy.

[24] In the result, even if we accept that the limitation period did not begin to run in May of 2007, it began to run before October 30, 2010, and therefore expired prior to the commencement of this action.

Rolling limitation period

[25] The plaintiff argues that a rolling limitation period applies, and that the plaintiff is only barred from claiming the disability benefits that would have been payable more than two years before the action was commenced. I disagree.

[26] A rolling limitation period may apply to claims for periodic payments, in cases where the issue is whether certain payments to which the plaintiff is entitled have been made (e.g. payments of rent), as opposed to cases where the issue is whether the plaintiff was entitled to the periodic payments in the first place. In the former type of case, the material facts will have arisen on a periodic basis, and it will not be unfair to require a defendant to litigate those facts during the applicable limitation period following the date upon which an individual payment became due. However, in the latter type of case, the material facts will have arisen at the time that the plaintiff alleges he or she first became entitled to periodic payments, and it would be unfair to require the defendant to litigate those facts, for a potentially unlimited period of time.

[27] In the present case, the issue is whether the plaintiff was entitled to disability benefits, at the time of his application to Sun Life, and the concept of a rolling limitation period does not apply.

Disposition

[28] For the reasons given, the plaintiff’s claim is dismissed.

[29] If counsel are unable to agree on costs, I will consider brief written argument, provided that it is delivered to Judges’ Reception, at the Durham Region Courthouse, no later than September 30, 2016.

“Bale J.” Date: August 31, 2016