COURT OF APPEAL FOR ONTARIO

CITATION: Zelsman v. Meridian Credit Union Limited, 2012 ONCA 358

DATE: 20120530

DOCKET: C54434

Weiler, Blair and Juriansz JJ.A.

BETWEEN

Francine Zelsman also known as Francine Kerdman also known as Francine Zelsman-Kerdman

Plaintiff (Appellant)

and

Meridian Credit Union Limited and The Great-West Life Assurance Company

Defendants (Respondents)

David M. Midanik, for the appellant

Scott McTaggart, for the respondent

Heard: May 18, 2012

On appeal from the order of Justice Kendra Coats of the Superior Court of Justice, dated September 7, 2011, and reported at 2011 ONSC 1680.

ENDORSEMENT

[1] This appeal questions the enforceability of a release clause in an agreement between the appellant’s former employer, the College of Family Physicians of Canada (the “College”) and herself. The appellant contends that the effect of the release, which was for the benefit of a third party, Great West Life Insurance (GWL), infringes sections 54 and 57 of the Employment Standards Act, S.O. 2000, c. 41, (ESA) and that, as a result, GWL cannot enforce the clause.

[2] Sections 54 and 57 of the Employment Standards Act (“ESA”) provide that an employer cannot terminate the employment of an employee who has been employed for more than three months without giving notice in writing and in this case, the required period of notice was a minimum of two weeks. During this period, an employer cannot alter any terms and conditions of employment and must continue to make whatever benefit plan contributions are required to maintain the employee’s benefits until the end of the notice period. The employee cannot bargain away this right to coverage.

[3] The appellant submits that the effect of waiving her right to receive benefits under such coverage is the same as agreeing to waive the right to maintain such coverage. The appellant claims that she should not be able to circumvent the clear intention of the ESA that the college maintain the coverage in place by foregoing her the right to receive the benefit of such coverage.

[4] In addition the appellant submits that the clause in question is ambiguous. Finally, the appellant submits that the motion judge erred in holding that GWL could enforce or rely on the terms of the Minutes.

[5] The facts underlying the appeal and the reasons of the motion judge dismissing the appellant’s application for a declaration that the Minutes did not have the effect of releasing any claims she had against GWL are reported at 2011 ONSC 1680 and we do not propose to detail them here.

[6] For purposes of this appeal the following is sufficient. The appellant was insured for long term disability benefits by GWL under a policy of group insurance provided by her former employer, the College (the “Policy”). Her employment with the College was terminated in April 2008; however, her coverage under the Policy was continued for a month. In June 2008, the appellant filed a claim for such benefits. GWL sought information from the appellant and the College, adjudicated the claim for long term disability benefits and rejected it in November 2008. It resent the letter to the appellant’s current address in December, 2008.

[7] In the meantime, the appellant also filed a complaint with the Human Rights Tribunal against the College, claiming that her employment was terminated on the basis of her disability and as retaliation for seeking accommodation. In August 2009 the appellant entered into Minutes of Settlement with the College.

[8] Article 6 of the Minutes contains the release as set out below. The last sentence of article six, shown in italics, is a handwritten addition to the Minutes inserted by the appellant’s counsel prior to the parties signing them.

In consideration of the Respondents' agreement to enter into these Minutes, the Complainant acknowledges and agrees that upon payment of the amounts set out in paragraph 1 hereof she shall have no further entitlement to any further payments or benefits and fully and finally releases and forever discharges the College and its past, present and future affiliates, successors, assigns, officers, directors, employees and agents, including, without limitation, Dr. Bernard Marlow and Great West Life Assurance Company from any and all actions, causes of actions, claims, demands or proceedings, whether statutory, contractual or common law, arising in any way out of or in relation to the Complainant's employment with the College or the cessation of said employment, including, without limitation, any and all claims relating to wages, hours of work, overtime, vacation pay, holiday pay, benefits (including short-term and long-term disability benefits), pension or any other past, present or future claims relating to any express or implied right under any contract, common law or under any statute or regulation, including, without limitation, the Employment Standards Act, 2000 (Ontario), Human Rights Code (Ontario) or any other statute or regulation, or any other claim which forms part of HRTO File No. 2008-00361-1 or could reasonably have formed part of HRTO File No. 2008-00361-1. This release does not in any way affect any claims against Great West Life Assurance Company or benefits arising out of policies purchased or premiums paid by the Complainant after April 24, 2008.

[9] After signing the Minutes, the appellant appealed from the denial of her claim for long term disability benefits in October, 2009. In November GWL denied her appeal but advised that the decision would be reviewed if there was further medical information to be considered. The appellant submitted a further letter from her family physician on February 3, 2010, which led to her claim for long term disability benefits being approved on February 10, 2010.

[10] On February 22, after GWL had paid the claim retroactive to August, 2008, (following the 105 calendar day waiting period) GWL learned of the 2010 settlement to which it had not been a party and of the clause in issue.

[11] In the end the appellant brought the application for a declaration that gives rise to this appeal.

[12] The appellant contends that the effective date of her disability was April 24, 2008, during the two week period mandated by the ESA and that her claim crystallized at this point. The appellant submits that, by purporting to include a release of claims for benefits in the Minutes, the College was in effect requiring her to waive her rights to the benefit of her coverage during the statutory notice period.

[13] At the time the appellant entered into the Minutes of Settlement in August, 2009, she had made a claim for LT disability benefits that had been denied in November, 2008. There is no evidence that GWL was acting in bad faith in doing so. Her complaint before the Human Rights Tribunal included a submission that she was able to work with accommodation. The appellant’s submission would require us to use hindsight, namely the further evidence submitted by her family physician and GWL’s decision (without knowledge of the settlement) to award her long term disability on February 10, 2010, to conclude that she was not able to work and that one portion of the settlement is not enforceable. We cannot do this: see Cain v. Clarica Life Insurance Co., 2005 ABCA 437, 263 D.L.R. (4th) 368 (Alta. C.A.) at para 54.

[14] The College did not deny the appellant’s right to coverage. Coverage was maintained. The appellant made a claim for benefits within the period of coverage and it was initially denied and subsequently allowed. The ESA is minimum standards legislation. It is not benefits legislation. Once the appellant was entitled to benefits she could compromise the amount, if any, she was entitled to. The benefit of the coverage was quantified as part of the settlement agreement on the basis of the factual situation at the time.

[15] In relation to the appellant’s final argument, principally set out in its factum, namely, whether GWL should be able to enforce or rely on the terms of the Minutes, we agree with the very thorough and well-reasoned analysis of the motion judge. GWL is entitled to rely on the Minutes.

[16] Accordingly, the appeal is dismissed.

[17] Costs of the appeal are to the respondent, if demanded, and are fixed in the amount of $7000 inclusive of disbursements and all applicable taxes.

“Karen M. Weiler J.A.”

“R.A. Blair J.A.”

“R.G. Juriansz J.A.”