Tabor v. Hospitals of Ontario Pension Plan

96 O.R. (3d) 161

Court of Appeal for Ontario,

Feldman, Juriansz and Epstein JJ.A.

July 22, 2009

Pensions -- Interpretation -- Pension plan providing for appointment of independent referee on member's appeal to resolve any dispute between plan's physician and member's physician and to determine whether member is partially disabled, totally disabled or totally and permanently disabled -- Independent referee's opinion required to flow from his or her resolution of dispute between plan physician and member's physician -- Independent referee not entitled to substitute his own opinion if he disagreed with both physicians.

As part of her application for a disability pension, the plaintiff provided an opinion letter from her physician which stated that she was totally and permanently disabled. The plan advised her that the plan physician had concluded that she was totally disabled but was not satisfied that her condition was permanent. Clause 11.16 of the pension plan provides that a member may appeal and request that an independent medical referee be appointed. An independent medical referee was appointed and decided that the plaintiff was not totally disabled. The plaintiff sued the plan. The motion judge granted the defendant's motion for summary judgment, holding that clause 11.16 is unambiguous and clearly provides the role of an independent medical referee is to determine whether the member is totally and permanently disabled. The plaintiff appealed.

Held, the appeal should be allowed.

The motion judge's interpretation of clause 11.16 would render meaningless the term of clause 11.16 that the independent referee is appointed to resolve any dispute between the plan's physician and the member's physician. The entire clause, when read as a whole, means that the independent referee's opinion as to whether the member is totally and permanently disabled must flow from his or her resolution of the dispute between the plan physician and the member's physician. Because the plan administrator did not ask the independent medical referee to provide an opinion in accordance with clause 11.16, there was a genuine issue for trial as to the consequence of that failure and the remedy available for the plaintiff.

APPEAL from the summary judgment of Kelly J., [2008] O.J. No. 5636 (S.C.J.) for the defendant.

Derek Ballard, for appellant. Ryder Gilliland, for respondent.

[1] BY THE COURT: -- The motion judge allowed the respondent's summary judgment motion because she found clause 11.16 of the pension plan to be clear and unambiguous. On her interpretation, a physician is appointed as an independent referee under that clause to determine "whether the Member is ... Totally and Permanently Disabled" within the meaning of the plan.

[2] We take a different view. Clause 11.16 provides: [page162]

11.16 Medical Appeals Process

If a: (1) Member's application for accrual of Contributory Service under Section 11.3, or payment of a disability retirement pension under Section 11.6; or (2) Disabled member's continued accrual of Contributory Service; or (3) Retired Member's continued payment of a disability retirement pension,

is rejected after all available medical evidence and any required tests and assessments have been reviewed by the Administrator, the Member may appeal and request that an independent medical referee be appointed by the Administrator and the attending physician to resolve any dispute that may have arisen between the qualified physician appointed on behalf of the Administrator and the Member's attending physician. The independent medical referee shall examine the Member's medical evidence and any required tests or assessments, and make the determination as to whether the Member is Partially Disabled, Totally Disabled or Totally and Permanently Disabled, as applicable. The medical referee's determination shall be final and conclusive and binding on both parties.

The Member must advise the Administrator within 60 days of receipt of the letter from the Administrator rejecting the application for disability retirement or continued accrual of Contributory Service, that she wishes to appeal and request that an independent medical referee be appointed. At the discretion of the Administrator, the time limit may be extended in the case of extenuating circumstances.

[3] A basic principle of contract interpretation is that all of the contract's terms must be given meaning. An interpretation that renders a term of the contract meaningless is to be avoided.

[4] The respondent focuses on the wording in clause 11.16: "The independent medical referee shall examine the Member's medical evidence and any required tests or assessments, and make the determination as to whether the Member is . . . Totally and Permanently Disabled . . . . The medical referee's determination shall be final and conclusive and binding on both parties," and submits that the role of the independent referee is to revisit the entire question whether the member is "totally and permanently disabled". We disagree. Such an interpretation would render meaningless the term of clause 11.16 that the independent referee is appointed to resolve the dispute between the plan physician and the member's physician. The entire clause, when read as a whole, means that the independent referee's opinion as to whether the member is "totally and permanently disabled" must flow from his or her resolution of the dispute between the plan physician and the member's physician. The scheme of the plan and the characterization of the process under clause 11.16 as an "Appeal" confirm this interpretation. [page163]

[5] The scheme of the appeal process under the plan is that if the two physicians, one for the member and one for the plan, agree on an issue, it is accepted for the purposes of determining eligibility for a pension. To the extent that the two disagree on an issue, then a third, independent physician is appointed, effectively to break the tie by resolving the dispute between them.

[6] The way the application judge has interpreted the provision, the third physician's opinion on an issue would be determinative, even if it disagrees with the other two. This is not consistent with either the wording of the appeal provision or with the concept of an appeal process.

[7] The plan defines "Totally and Permanently Disabled" as follows: 2.24 "Total and Permanent Disability" means, as determined based on the advice of a legally qualified medical doctor in Canada or where the member resides, a medical condition causing a physical or mental impairment that prevents the member from engaging in any employment and that can reasonably be expected to continue for the remainder of the member's lifetime. "Totally and Permanently Disabled" has a corresponding meaning.

[8] In this case, the appellant provided as part of her application for a disability pension, a full opinion letter from her physician, Dr. Ogilvie-Harris, which concluded that she was totally and permanently disabled.

[9] The plan advised her by letter of January 27, 2005 that the plan physician had concluded that she was indeed totally disabled, but the physician was not satisfied that her condition was permanent.

[10] Therefore, the dispute between the two was whether the appellant's total disability was permanent. Whether she was totally disabled was not in dispute.

[11] However, after following the process for choosing the independent medical referee, the plan administrator did not advise the referee that the dispute was whether the appellant's condition was permanent, but instead asked him to determine whether the appellant was totally and permanently disabled. Furthermore, it does not appear that the referee was provided with the opinion of the plan's physician.

[12] In this case, the independent referee concluded that the appellant's disability was not total without addressing why he disagreed on that issue with either Dr. Ogilvie-Harris or the plan's physician. However, he did conclude that her condition was not going to improve, i.e., it was permanent.

[13] Because the plan administrator did not ask the independent medical referee to provide an opinion in accordance with the [page164] relevant contractual provision, there is a genuine issue for trial as to the consequence of that failure and the remedy available for the member.

[14] The appeal is therefore allowed and the summary judgment order is set aside. Costs of the appeal are to the appellant, fixed at $9,634.66. The parties have agreed that the amount of the costs ordered on the application would be payable to the successful party on the appeal. So ordered.

Appeal allowed.