Court of Appeal for Ontario

Date: 2017-12-12 Docket: C63979

Judges: Strathy C.J.O., Juriansz and Huscroft JJ.A.

Between

Robert Wilken Plaintiff (Appellant)

and

Sun Life Assurance Company Defendant (Respondent)

Counsel

Douglas M. Bryce, for the appellant

Stephen H. Shantz, for the respondent

Heard: December 7, 2017

On appeal from: the judgment of Justice Ian F. Leach of the Superior Court of Justice, June 12, 2017.

Reasons for Decision

[1] The appellant, who is claiming the payment of long-term disability ("LTD") benefits from the respondent, seeks to distinguish this court's decision in Richer v. Manulife Financial, 2007 ONCA 214, 85 O.R. (3d) 598. The appellant was injured in a motor vehicle accident while working and started collecting Workplace Safety and Insurance Board ("WSIB") benefits before retroactively re-electing to proceed with a tort action against the other driver involved in the accident. The Richer case involved the same situation.

[2] Under the LTD policy in Richer, the insurer was the second payor and could reduce the LTD monthly benefit payable by the amount of any disability payment to which the insured was "entitled" under the Workers' Compensation Act, RSO 1990, c W.11 or similar law. The LTD policy in this case is different in that it provides that the insurer can subtract from the LTD payment any payment or benefit for which the insured is "eligible" under the Workers' Compensation Act or similar law.

[3] The motion judge, on the respondent's summary judgment motion, provided careful and detailed reasons for finding "there are no meaningful or relevant distinctions between the Richer case and the situation before me". As he pointed out:

…the plaintiff's voluntary decision to make a retroactive election, foregoing WSIB benefits to pursue a tort action, effectively would deny the insurer its contemplated and permitted offset, thereby elevating the insurer's relevant coverage obligation to a "first payor" status that obviously was not intended.

[4] The motion judge explained that his conclusion would:

…give effect to the observation of Ritchie J. in Madill v. Chu, at p. 410 S.C.R., that an insurer's obligation under the policy should not be "varied adversely to its interest after the happening of the event insured against by the independent act of the insured".

[5] We adopt the motion judge's reasons and conclusion:

… in the calculation of any LTD benefits to which the plaintiff in this case otherwise may be entitled, a deduction or "deemed offset" accordingly should be applied in relation to the amount of WSIB benefits the plaintiff could have received had he exercised his entitlement to them, and not the amount of WSIB benefits actually received and retained in the wake of the plaintiff's retroactive election to proceed with his tort claim.

[6] Having concluded the insurer was entitled to an "offset", the motion judge dismissed the appellant's claim for benefits during the period November 26, 2012 to August 23, 2014 because the WSIB benefits for which the appellant was eligible exceeded the amount of the benefit that would have been payable under the LTD policy. The appellant recognizes that this result follows from the application of the "offset".

[7] The motion judge also dismissed the appellant's claim for the period August 23, 2014 to June 1, 2015. During this period, the WSIB reduced the appellant's monthly benefit because of his unexplained persistent failure to comply with the work training ("WT") plan the WSIB required. On the record, the motion judge was entitled to infer that the WSIB would have continued to pay the appellant benefits at the "for loss of earnings" level but for his noncompliance with the WT plan. The deduction of "full loss of earnings" benefits results in an LTD benefit of "nil" for this period as well.

[8] The appeal is dismissed with costs payable to the respondent in the amount of $3,450 all inclusive.

"G.R. Strathy C.J.O."

"R.G. Juriansz J.A."

"Grant Huscroft J.A."