Kassburg v. Sun Life Assurance Company of Canada

[Indexed as: Kassburg v. Sun Life Assurance Co. of Canada]

Ontario Reports

Court of Appeal for Ontario,

Watt, van Rensburg and Pardu JJ.A.

December 29, 2014

124 O.R. (3d) 171 | 2014 ONCA 922

Case Summary

Civil procedure — Summary judgment — Defendant bringing motion for summary judgment dismissing action as statute-barred — Motion judge not erring in granting declaration that finally determined limitation issue in favour of plaintiff in absence of motion by plaintiff.

Insurance — Limitations — Group insurance policy consisting of contract document and booklet — Booklet tying one-year contractual limitation period to receipt by insurer of "claim forms" — Contract document tying limitation period to receipt of "proof of claim" — Contractual limitation period unclear and therefore unenforceable.

Limitations — Contracting out — "Business agreement" — Motion judge erring in finding that group disability insurance policy fell within "business agreement" exception to contracting out of Limitations Act — Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. [page172]

Limitations — Insurance — Motion judge not erring in finding that claim against insurer was discovered only when insurer informed insured that her final appeal had failed and not when her claim for long-term disability benefits was initially denied.

The plaintiff submitted a claim for long-term disability benefits under a group insurance policy issued by the defendant. The defendant informed her in December 2008 that her claim could not be approved based on the medical information received to date, and advised her that she should submit new medical information if she wished to appeal that decision. The plaintiff was finally informed on February 24, 2011 that her claim was declined. She commenced an action against the defendant on February 21, 2012. The defendant brought a motion for summary judgment dismissing the action on the basis that it was not commenced within the one-year limitation period set out in the insurance contract. The motion was dismissed. The motion judge found that the group policy fell within the "business agreement" exception to contracting out of the statutory two-year limitation period in the Limitations Act, 2002, but that the contractual limitation period was unenforceable as it was not sufficiently clear. He found that the statutory limitation period did not begin to run until the plaintiff was informed in February 2011 that her final appeal had failed. The defendant appealed. The plaintiff cross-appealed the motion judge's finding that the insurance policy was a "business agreement".

Held, the appeal and cross-appeal should be dismissed.

The motion judge did not err in finding that the contractual limitation period was ambiguous. The insurance policy consisted of the contract document and the booklet. The booklet tied the limitation period to receipt of "claim forms", whereas the contract document tied the limitation period to receipt of "proof of claim". As the contractual limitation period was not clear, it was unenforceable against the plaintiff.

In the absence of an enforceable contractual limitation period, the applicable limitation period was the two-year general limitation period under s. 4 of the Limitations Act, 2002, which runs from the day on which the claim was discovered. The motion judge did not err in finding that the claim was not clearly and unequivocally denied in December 2008 and that the limitation period started to run in February 2011.

The motion judge did not err in granting a declaration that finally determined the limitation issue in the plaintiff's favour in the absence of a motion by the plaintiff.

While the cross-appeal was dismissed as moot, it was appropriate to consider the issue of whether the insurance policy was a "business agreement" for the purpose of s. 22(5) and (6) of the Limitations Act, 2002. The motion judge erred in finding that it was a "business agreement" because it was entered into by the defendant and an employee association of which the plaintiff was a member. The insurance contract clearly had a personal and not a business purpose, and the plaintiff was in effect deemed to be a party to the contract for the purpose of asserting her claim.

Boyce v. Co-operators General Insurance Co. (2013), 116 O.R. (3d) 56, [2013] O.J. No. 2568, 2013 ONCA 298, 22 C.C.L.I. (5th) 1, 307 O.A.C. 28, 228 A.C.W.S. (3d) 834 [Leave to appeal to S.C.C. refused [2013] S.C.C.A. No. 296]; Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641, apld [page173]

Esau v. Co-operators Life Insurance Co., [2006] B.C.J. No. 1156, 2006 BCCA 249, 55 B.C.L.R. (4th) 11, 38 C.C.L.I. (4th) 5, [2006] I.L.R. I-4513, 151 A.C.W.S. (3d) 286 [Leave to appeal to S.C.C. refused [2006] S.C.C.A. No. 307]; Halter v. Standard Life Assurance Co. of Canada, [2014] A.J. No. 137, 2014 ABCA 57, 569 A.R. 148, 31 C.C.L.I. (5th) 191, 31 C.C.L.I. (5th) 191, 99 Alta. L.R. (5th) 217, 237 A.C.W.S. (3d) 482, affg [2013] A.J. No. 158, 2013 ABQB 99, 81 Alta. L.R. (5th) 70, 18 C.C.L.I. (5th) 280, [2013] I.L.R. I-5397, 557 A.R. 353; Maracle v. Travellers Indemnity Co. of Canada, 1991 58 (SCC), [1991] 2 S.C.R. 50, [1991] S.C.J. No. 43, 80 D.L.R. (4th) 652, 125 N.R. 294, J.E. 91-959, 47 O.A.C. 333, 3 C.C.L.I. (2d) 186, 50 C.P.C. (2d) 213, [1991] I.L.R. Â1-2728 at 1284, 27 A.C.W.S. (3d) 70, distd

Other cases referred to

Longo v. MacLaren Art Centre Inc., [2014] O.J. No. 3242, 2014 ONCA 526, 323 O.A.C. 246, 242 A.C.W.S. (3d) 426; Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, [2010] 2 S.C.R. 245, [2010] S.C.J. No. 33, 2010 SCC 33, 293 B.C.A.C. 1, [2010] I.L.R. I-5051, 406 N.R. 182, 323 D.L.R. (4th) 513, 9 B.C.L.R. (5th) 1, EYB 2010-179515, 93 C.L.R. (3d) 1, 2010EXP-3049, J.E. 2010-1683, [2010] 10 W.W.R. 573, 73 B.L.R. (4th) 163, 89 C.C.L.I. (4th) 161; Sattva Capital Corp. v. Creston Moly Corp., [2014] S.C.J. No. 53, 2014 SCC 53, 2014EXP-2369, J.E. 2014-1345, 373 D.L.R. (4th) 393, [2014] 9 W.W.R. 427, 59 B.C.L.R. (5th) 1, 461 N.R. 335, 25 B.L.R. (5th) 1, 358 B.C.A.C. 1, 614 W.A.C. 1, 242 A.C.W.S. (3d) 266

Statutes referred to

Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A

Insurance Act, R.S.O. 1990, c. I.8, s. 318

Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 1, 4, 5 [as am.], 22 [as am.], (2) [as am.], (5) [as am.], (6) [as am.]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 20, 20.04(2.1)

APPEAL AND CROSS-APPEAL from the order of Ellies J. (2014), 119 O.R. (3d) 620, [2014] O.J. No. 1090, 2014 ONSC 1523 (S.C.J.) dismissing a motion for summary judgment.

Duncan McDuff, for appellant.

Geoffrey Larmer, Andrew Wray and Niiti Simmonds, for respondent.

The judgment of the court was delivered by

VAN RENSBURG J.A.: —

Overview

[1] The respondent, Karen Kassburg, an employee of the North Bay Police Service, was insured under a group policy issued by the appellant, Sun Life Assurance Company of Canada, [page174] to the North Bay Police Association, of which she was a member. The respondent's claim for long-term disability benefits, submitted to the appellant in 2008, was denied.

[2] The respondent started an action claiming entitlement to the disability benefits in February 2012. The appellant brought a motion for summary judgment, asserting that the action was out of time, as both of the potentially applicable limitation periods, either under the insurance contract or the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, had expired.

[3] The appellant relied on a one-year limitation period under the insurance contract, which it contended had been grandfathered as a pre-January 1, 2004 contract limitation period (s. 22(2) of the Limitations Act, 2002) or as a limitation period provided under a "business agreement" (s. 22(5) of the Limitations Act, 2002). If the contractual limitation period was unenforceable, the appellant relied on the general two-year limitation period under the Limitations Act, 2002.

[4] The appellant's motion was dismissed, and the motion judge granted a declaration that the respondent's action was commenced within the applicable limitation period.

[5] Sun Life appeals. For the reasons that follow, I would dismiss the appeal.

Facts

[6] The parties agree that the contract consists of a group insurance policy entered into between the appellant and the North Bay Police Association ("NBPA") in 2003, which was amended once, in June 2007, before the respondent stopped working (the "contract document"), as well as an employee benefit booklet (the "booklet").

[7] On October 22, 2007, the respondent stopped working, allegedly due to physical and psychological disabilities. In April 2008, five months before the expiry of the elimination period under the policy, she submitted her long-term disability ("LTD") claim with the assistance of Susan Cousineau, a civilian employee of the NBPA.

[8] After receiving the application, the insurer wrote to the respondent twice, in May and September 2008, asking for additional medical information to assess her claim. Additional medical information was forwarded on her behalf by Ms. Cousineau and the respondent's physicians.

[9] By letter dated December 4, 2008, the appellant informed Ms. Kassburg that the medical information was insufficient, and that it was unable to approve her claim based on the medical information received to date. The letter also stated that her [page175] claim for LTD benefits was declined. The letter advised the respondent, "Should you wish to appeal our decision, you need to submit new medical information". The letter cautioned that "[b]y 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".

[10] On January 20, 2009, Ms. Cousineau wrote to Sun Life acknowledging that the LTD claim was denied based on the information provided. She also set out two questions: first, if Ms. Kassburg submitted further medical information, would the application process start over again; and second, requesting the insurer to advise as to the procedure for the appeal process, as it was not described in the policy. The appellant did not answer these questions, despite a follow-up e-mail and letter from Ms. Cousineau.

[11] What followed during the next two years was correspondence between the appellant and respondent or her representatives. Additional medical information was provided. The insurer advised that the medical information was not sufficient to support total disability. The appellant's letters invited the respondent to "continue to appeal" by submitting further medical information, which she did. Two of the letters repeated the caution that, by considering an appeal, the insurer did not intend to waive its rights under the policy, including the right to apply "any available contractual or statutory limitation periods".

[12] The letters advised that Ms. Kassburg's claim for LTD benefits would be given further consideration upon receipt of further medical information, and specified the type of information the insurer required.

[13] On January 20, 2011, the appellant wrote to Ms. Kassburg, requesting additional medical information for her "third and final appeal". This letter stated: "we have determined that additional medical information is required to fully assess your claim for Long-Term Disability benefits". The medical information was provided.

[14] On February 24, 2011, the appellant advised the respondent by letter that the information submitted was insufficient and did not support total disability. The appellant noted that her claim for benefits was declined at the "third and final appeal level", and stated that Ms. Kassburg could either initiate a complaint with Sun Life's ombudsman's office, or she could "seek independent legal advice".

[15] The respondent retained counsel and issued a statement of claim on February 21, 2012. [page176]

[16] The appellant brought a motion for summary judgment seeking a dismissal of the action based on expiry of the limitation period. In its motion, the appellant relied first on the limitation period under the contract, alleging that it expired on December 11, 2009. The appellant calculated that claim forms for LTD benefits had to be submitted not later than 90 days after the end of the elimination period, that is, no later than December 11, 2008, and tied the one-year limitation period to this deadline for the receipt of the documents. In the alternative, the appellant asserted that the statutory limitation period would run, at the latest, from December 4, 2008, the date of its first letter informing the respondent that her claim for benefits had been declined. All of the communications between the parties were before the motion judge as exhibits to affidavits. The respondent stated in her affidavit that, until Sun Life's February 24, 2011 letter, she did not know that the insurer had made a final determination on her LTD benefits claim. There were no cross-examinations on the materials filed on the motion.

Decision of the Motion Judge

[17] The motion judge first considered whether there was an effective contractual limitation period of one year.

[18] Section 22(2) of the Limitations Act, 2002 provides that a limitation period under the Act may be varied or excluded by an agreement made before January 1, 2004. The appellant argued that the contract in question, having been entered into in 2003, fell within that exception to the general limitation period. The respondent relied on a variation to the policy effective June 1, 2007. The question was whether this amendment took the contract outside the scope of s. 22(2).

[19] The motion judge concluded that it was unnecessary to decide the issue, because even if the amendment gave rise to a new contract, the policy would fit within the "business agreement" exception to contracting out of the statutory limitation period. Section 22(5) provides for the variation or exclusion of a limitation period by a "business agreement" made on or after October 19, 2006. A business agreement is defined to mean an agreement made by parties none of whom is a consumer as identified in the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A. The motion judge concluded that, because the parties to the insurance contract at issue were the NBPA and the appellant, the contract was not entered into by an individual acting for personal, family or household purposes. The contract, if newly formed following the 2007 variation as the respondent argued, [page177] would therefore qualify as a business agreement made after October 19, 2006. Whether or not the amendment resulted in a new contract, the parties had met the requirements under the Limitations Act, 2002 to contract out of the statutory limitation period.

[20] The motion judge then considered whether the appellant met the requirements set out, at para. 20 of Boyce v. Co-operators General Insurance Co. (2013), 116 O.R. (3d) 56, [2013] O.J. No. 2568, 2013 ONCA 298, leave to appeal to S.C.C. refused [2013] S.C.C.A. No. 296, that any contractual term purporting to shorten a statutory limitation period must "in 'clear language'" describe the limitation period, identify the scope of its application and exclude the operation of other limitation periods.

[21] The contract document provides for a one-year limitation period from "the end of the time period in which proof of the claim is required". The booklet provides for a one-year limitation period from "after the date [the insurer] must receive [the insured's] claim forms".

[22] After reviewing the language in the contract document and the booklet together, the motion judge concluded that the contractual limitation period was not clear, and that the appellant had not effectively contracted out of the statutory limitation period.

[23] The booklet tied the limitation period to receipt of "claim forms", whereas the contract document tied the limitation period to receipt of "proof of claim". It was unclear whether "claim forms" are the same thing as "proof of claim". The motion judge noted that, reading the contract as a whole, it appears that "proof of claim" is broader than "claim forms". "Proof of claim" is the entire process of providing information to the insurer to enable it to decide whether to pay benefits. As indicated by the language in the booklet, filling out the "claim forms" is only one step in providing "proof of claim".

[24] The motion judge stated [at para. 26], "it would not be unreasonable to interpret the limitation period in the contract as providing that the limitation period of one year begins to run once Sun Life receives sufficient proof of the claim, and not simply the claim forms". He found that it would be reasonable to believe, as did the respondent, that the appeal procedure formed part of the application process. In support of his conclusion on ambiguity, he noted that the appeal procedure was confusing to the respondent's representative, who had not received a response to her questions about the process.

[25] The motion judge then turned to the statutory limitation period. He held that [at para. 24], because of the language in the [page178] policy referring to "proof of the claim acceptable to Sun Life", the respondent only knew that she was "out-of-pocket" when the insurer denied the claim after receiving proof acceptable to it. He also concluded that the respondent would not have known that it was legally appropriate to start an action until she received a clear denial of the claim, which occurred when she was advised that the appeal procedures had been exhausted. That is when the two-year statutory appeal period began to run.

[26] The motion judge granted a declaration that the limitation period had not expired when the respondent commenced her action. He concluded that, although the respondent had not brought her own motion for determination of the limitation period, such a declaration was consistent with the Supreme Court's call for proportional, timely and affordable access to justice in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7.

Issues on Appeal

[27] The appellant raises the following broad issues on appeal:

(1) Did the motion judge err in finding that the contractual limitation period was ambiguous and therefore unenforceable?

(2) Did the motion judge err in concluding that the statutory limitation period did not begin to run until after the respondent had exhausted the appellant's internal appeal process?

(3) If the motion judge did not err in dismissing the summary judgment motion, did he err in granting judgment in favour of the respondent, and not directing to trial the issue of when the limitation period expired?

Analysis

Issue one: Interpretation of the contract

[28] As I will explain, regardless of whether the contract was formed before January 1, 2004, or whether it constitutes a business agreement pursuant to s. 22(5), the motion judge did not err in concluding that the contractual limitation period was ambiguous. The parties therefore did not validly contract out of the statutory limitation period.

[29] The parties agree that the insurance policy consists of the contract document and the booklet, which is incorporated by [page179] reference into the contract. The limitation period is expressed in different terms in each.

[30] The appellant contends that the motion judge erred in finding that there was an ambiguity in the insurance contract. It argues that there was no ambiguity if the booklet's wording is considered on its own. At the same time, the appellant urges the court to apply the interpretive principle of reading the words of the limitation period in the context of the contract as a whole: Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, [2010] 2 S.C.R. 245, [2010] S.C.J. No. 33, 2010 SCC 33, at para. 22.

[31] Contrary to the appellant's argument, that is exactly what the motion judge did. He considered the wording of the entire contract, including the contract document, and he found an ambiguity. Because the limitation period was not clear, as required under Boyce, it was not capable of being enforced against the respondent.

[32] The motion judge considered all of the relevant terms employed in the contract with respect to "claims" and "proof of claim" in arriving at his conclusion that the contractual limitation provisions were ambiguous.

[33] The interpretation of a contract involves questions of mixed fact and law. An appellate court should not interfere with the interpretation of a contract by a lower court, in the absence of a palpable and overriding error of fact or an extricable legal error, including the application of an incorrect principle, the failure to consider a required element of a legal test or the failure to consider a relevant factor: Sattva Capital Corp. v. Creston Moly Corp., [2014] S.C.J. No. 53, 2014 SCC 53, 373 D.L.R. (4th) 393, at para. 53. The appellant has not demonstrated any legal error in the motion judge's interpretation of the contract in this case.

[34] I would therefore not give effect to this ground of appeal.

Issue two: The statutory limitation period and "discovery of the claim"

[35] In the absence of an enforceable contractual limitation period, the applicable limitation period is the two-year general limitation period under s. 4 of the Limitations Act, 2002, which runs from the day on which the claim was discovered.

[36] Section 5 provides:

5(1) 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, [page180]

(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).

[37] In its second ground of appeal, the appellant invites the court to revisit the motion judge's conclusions with respect to when the claim was "discovered" by the respondent under s. 5 of the Limitations Act, 2002.

[38] The motion judge made a determination, based on the evidence, as to when the respondent discovered her claim in this particular case. He concluded that the claim was discovered on February 24, 2011, the date of the letter in which the appellant advised the respondent that her final appeal had failed.

[39] The appellant contends that, if the statutory limitation period applies, the claim was discovered by the respondent on December 4, 2008, when her claim for LTD benefits was initially denied. The claim was discovered because the respondent knew the material facts giving rise to her cause of action. The fact that there was an appeal process did not extend the limitation period. The fact that the respondent may have believed that the limitation period had not expired is irrelevant to the legal analysis; in any event, her attention was repeatedly drawn to the potential application of limitation periods to her claim in the insurer's correspondence.

[40] Whether a limitation period "expired prior to the issuance of a statement of claim is a question of mixed fact and law": Longo v. MacLaren Art Centre Inc., [2014] O.J. No. 3242, 2014 ONCA 526, at para. 38. The question of when the respondent "discovered" her claim for the purposes of s. 5 is, in the circumstances here, essentially a question of fact.

[41] The appellant asserts that the motion judge failed to consider certain evidence that it put forward on the motion. In particular, the appellant points to various passages in the correspondence between the parties where the insurer communicated that the claim had been denied and reserved its rights to rely on limitation defences. [page181]

[42] I would not give effect to this argument. There is no indication in his reasons that the motion judge ignored the parts of the correspondence referred to by the appellant. Indeed, he was aware of the appellant's position with respect to the statements respecting the limitation periods in the correspondence and the fact that certain letters communicated that the respondent's claim for LTD benefits was declined. Since the appellant relied on the December 4, 2008 letter as providing the date on which the respondent "discovered" her claim, it was appropriate for the motion judge to consider what was in fact communicated to the respondent at that time, and whether the claim had been clearly and unequivocally denied, as asserted by the appellant. His conclusion that the denial was not clear was open to him on the evidence, which included the contract wording and the communications between the parties.

[43] The fact that the motion judge extracted certain passages from the correspondence and included them in his reasons does not mean that he disregarded or ignored other parts. To the contrary. In other parts of his reasons, he cited some of the passages relied on by the appellants. It cannot be said the motion judge was unaware of or ignored these passages in rejecting the appellant's arguments with respect to both the denial of the claim and the reservation of rights contained in a number of the letters sent by the insurer.

[44] The appellant is inviting this court to reweigh the evidence that was considered by the motion judge to arrive at a different factual conclusion. That is not our function. Where the evidentiary record on a Rule 20 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] motion permits the motion judge to resolve the issues justly and fairly, his exercise of discretion in making factual determinations is entitled to considerable deference.

[45] In Hryniak, Karakatsanis J. for the Supreme Court stated that the exercise of a power under the summary judgment rule attracts deference and that when the motion judge exercises the "fact-finding powers under rule 20.04(2.1) and determines whether there is a genuine issue requiring a trial, this is a question of mixed fact and law" (at para. 81). Where there is no extricable error in principle, findings of mixed fact and law should not be overturned, absent palpable and overriding error (at para. 81).

[46] Finally, I note that three cases relied on before the motion judge and in this court do not assist the appellant, either because, in those cases, the date from which the limitation period ran was not at issue, or because they involve different factual findings. [page182] In Maracle v. Travellers Indemnity Co. of Canada, 1991 58 (SCC), [1991] 2 S.C.R. 50, [1991] S.C.J. No. 43, while the case involved the denial of a claim for LTD benefits and an appeal process, the issue was whether a limitation period was extended by the insurer's actions constituting promissory estoppel. The date from which the limitation period ran was clear and not at issue.

[47] In Esau v. Co-operators Life Insurance Co., [2006] B.C.J. No. 1156, 2006 BCCA 249, 55 B.C.L.R. (4th) 11, leave to appeal to S.C.C. refused [2006] S.C.C.A. No. 307, the applicable contractual limitation period ran from one year of the date of proof of loss. The fact that the limitation period had commenced and expired was conceded at trial, and the only issue was whether the limitation period was extended by virtue of promissory estoppel. On appeal, the insured attempted to reassert the limitations issue, but the British Columbia Court of Appeal held that the insured was precluded from doing so (at paras. 26-27 and 31). Further, the court held that, to the extent it was necessary to consider an alternative limitation period, on the whole of the evidence the appellant understood the notice of termination of benefits and that she was involved in an appeal process (at para. 35). In the present case, the motion judge reached a different conclusion on the facts about what the respondent understood from the appellant's communications.

[48] Similarly, Halter v. Standard Life Assurance Co. of Canada, [2013] A.J. No. 158, 2013 ABQB 99, 557 A.R. 353, affd on other grounds [2014] A.J. No. 137, 2014 ABCA 57, 569 A.R. 148, is another case where the trial judge concluded that the claimant had received clear notice of the denial of benefits both from his lawyer and the insurer, notwithstanding that he was offered and pursued an internal appeal process (at para. 18). In the present case, the motion judge found otherwise. This he was entitled to do on the evidence before him.

[49] Accordingly, I would reject this ground of appeal.

Issue three: Granting summary judgment in the respondent's favour

[50] The appellant asserts that the motion judge, having decided to dismiss its motion for summary judgment, and in the absence of a motion by the respondent, erred in granting a declaration that determined the limitations question on a final basis. The appellant contends that it should have the opportunity of exploring at trial the question of when the respondent discovered the claim. [page183]

[51] The appellant points to the clinical notes and records of one of the respondent's physicians, which contain a reference to something the respondent said to her doctor. The appellant says this reference indicates that she understood that her LTD claim had been denied before the receipt of the February 24, 2011 letter, notwithstanding her participation in the internal appeal process. According to the appellant, this suggests that there is a triable issue respecting the expiry of the limitation period. This was argued before the motion judge and rejected.

[52] I would not give effect to this ground of appeal. Consistent with the decision of the Supreme Court in Hryniak and the clear wording and purpose of the summary judgment rule, it was open to the motion judge to determine the issue of the limitation defence on a final basis on the record before him in this case. The parties put a comprehensive record before the court, which the appellant considered sufficient for the limitation period issues to be able to be determined. The appellant could have cross-examined on the respondent's affidavit filed on the motion, but chose not to do so. It is in the interests of justice that the issue was determined on a final basis by the motion judge at this stage. In my view, the motion judge did not err in making the declaration he did as part of his disposition of the summary judgment motion.

Cross-Appeal

[53] Dismissal of the appeal would render the cross-appeal moot, as the statutory limitation period, and not the contractual period, applies. However, I would not want this court's judgment to be interpreted as endorsing the motion judge's conclusion that the insurance policy in this case is a "business agreement" for the purpose of ss. 22(5) and (6) of the Limitations Act, 2002. As the issue was fully argued before us and as it involves an important issue that may recur, it is appropriate for this court to consider it.

[54] Section 22(5) provides that a limitation period under the Act may be varied or excluded by a business agreement made on or after October 19, 2006. "Business agreement" is defined in s. 22(6) to mean "an agreement made by parties none of whom is a consumer as defined in the Consumer Protection Act, 2002". "Consumer" is defined in s. 1 of that statute as "an individual acting for personal, family or household purposes and does not include a person who is acting for business purposes".

[55] Citing Boyce, the motion judge concluded that the group insurance policy is a "business agreement" based on the fact that [page184] it was entered into by the NBPA and the appellant, neither of whom is an individual.

[56] The respondent asserts that the motion judge erred in failing to consider the purpose of the contract, which is to provide personal insurance coverage for loss of income in the event of disability. The insurance contract clearly had a personal, and not a business purpose.

[57] The appellant contends that the only parties to the group insurance policy were the NBPA, which is an association, and the appellant itself, and that the respondent was simply a "beneficiary" of the policy.

[58] The clear wording of s. 22(5) permits contracting out of the statutory limitation period, unless the parties to the contract include an individual, and the contract was for "personal, family or household purposes". There are therefore two requirements for a business agreement to exist: the parties must not include individuals, and the contract must not have been for personal, family or household purposes.

[59] The literal reading of the "parties" aspect of the section that appears to have been accepted by the motion judge, in my view, is inconsistent with the objective of s. 22 of the Limitations Act, 2002, which is to restrict the circumstances in which the statutory limitation periods under the Act can be altered by contract. In my view, the word "parties" in s. 22(6) should be given a broader, purposive reading to accord with the objective of s. 22.

[60] In this action, the respondent is asserting a personal claim for LTD benefits provided under a group policy. She is entitled to assert the claim directly against the insurer under s. 318 of the Insurance Act, R.S.O. 1990, c. I.8. Although the group insurance contract under which she is making her claim was entered into between the NBPA and the appellant, the appellant relies on a limitation period contained in that contract to exclude her claim. The respondent is in effect deemed to be a party for the purpose of asserting her claim, and for the purpose of the appellant's limitations defence.

[61] With respect to the "purposes" requirement, the contract is for personal purposes, and accordingly is not a "business agreement" under s. 22(5).

[62] Accordingly, while I would dismiss the cross-appeal as moot, it is my view that the motion judge erred in concluding that the disability policy in this case constituted a business agreement for the purpose of s. 22(5) of the Limitations Act, 2002. Boyce is properly distinguished by the respondent, as the insurance policy in that case was for business purposes. [page185]

Disposition

[63] For these reasons, I would dismiss the appeal and the cross-appeal, with costs to the respondent fixed at $15,000, inclusive of disbursements and applicable taxes.

Appeal and cross-appeal dismissed.

End of Document