ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 7433/13
DATE: 2014/12/17
B E T W E E N:
Grzegorz Zaprzala
Roelf A. M. Swart, for the Plaintiff/Responding Party
Plaintiff
(Proposed Respondent)
- and -
The Manufacturers Life Insurance Company cob Manulife Financial
Gordon Jermane, for the
Defendant/Moving Party
Defendant
(Proposed Appellant)
HEARD at Welland, Ontario:
October 14, 2014
The Honourable Justice C. A. Tucker
DECISION
Issue
[1] Should the defendant The Manufacturers Life Insurance Company (“Manulife”) be granted leave to appeal the interlocutory order of Madam Justice Maddalena dismissing the motion it brought seeking to strike the plaintiff Grzegorz Zaprzala’s (“Zaprzala”) Statement of Claim as failing to disclose a reasonable cause of action under Rule 21?
Background/Overview
[2] Zaprzala sustained a personal injury at work in 2009 and received benefits from Manulife which issued a group benefits policy to his employer. The benefit was a long term disability payment for which the plaintiff was approved for and began receiving in November 2009 in the amount of $3,000 per month. As a requirement of the policy terms Zaprzala was required to apply for Canada Pension Disability Benefits which, if received, would be deducted from his benefits paid by Manulife. Twice denied these benefits, at the demand of the defendant the plaintiff appealed successfully and received them. The appeal was launched at the request of Manulife which denied him payments to which he was entitled until he did so. The contractual terms did not require the plaintiff to appeal nor did it allow the defendant to cease payments to the plaintiff until he appealed. The plaintiff incurred costs to a lawyer in the amount of $17,079.74 for the appeal. He proposed payment of the net amount between the disability payment and his legal fees incurred to recover such payment but was denied his benefits, to which he was entitled contractually again, until payment was made in full. As a result, the plaintiff sued Manulife for damages. Manulife defended and brought a motion to dismiss which was rejected by Justice Maddalena in her decision.
The Test
[3] The burden is on the defendant in seeking leave to appeal an interlocutory order under both parts of Rule 62.02(4). The law is clear: Leave shall not be granted in these cases unless “(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is in the opinion of the judge hearing the motion, desirable that leave to appeal be granted or (b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted”.
The Positions of the Parties
[4] It is the position of the defendant that Justice Maddalena’s order is not only in conflict with existing cases and that the an appeal should be desirable in my opinion, but further asserts that there is also good reason to doubt the correctness of the decision and the matter is of such importance that leave should be granted. In other words, Manulife asserts that it should succeed under both prongs of the test.
[5] The plaintiff points out that the decisions the defendant puts forth are factually different and as such provide no basis for appeal and, in addition, there is no good reason to launch an appeal of an interlocutory order. Further, he asserts that the order of Justice Maddalena is correct applying the law applicable to Rule 21 motions and that the decision is not of such importance that, as the defendant asserts, to allow it to stand would result in a floodgate of similar actions, as the action is based on its own specific facts and not simply on a policy contract claim.
Analysis and Decision
[6] There is a continental divide in the positions of the parties which in effect resulted in a complete rearguing of the original motion heard by Justice Maddalena on the appeal. It is the defendant’s position that the plaintiff is limited by contract and the contract by interpretation and law prevails and prevents the pursuit of his claim unless the contract is set aside and the plaintiff has not attempted or alleged that such should occur. In the defendant’s argument there is no discussion of the policy breaches by the defendant by failing to pay the plaintiff as it was required to under the policy.
[7] The plaintiff argues that the insurance policy is a contract to be abided by both parties, and the defendant, in failing to do so, committed breaches of that contract, including forcing Mr. Zaprzala into entering a new “agreement”. These breaches caused damages to the plaintiff for which it is entitled to be compensated. The central breach is that in forcing Mr. Zaprzala into signing a further agreement beyond the terms of the insurance policy which was not executed by the insurance company it exceeded its “powers” under the policy thereby gaining a benefit to the detriment of the plaintiff, in other words, unjust enrichment. The plaintiff points out that he was unable to work and dependent on the benefits and, as such, was forced to agree with the insurance company requests.
[8] Manulife is of the view that the appeal was part of the plaintiff’s obligation under the policy and his compliance with the request came at his cost. I agree there is no provision in the policy to pay legal costs, albeit there is no provision requiring an appeal either or for a unilateral agreement to be entered into. It is difficult to understand why the “collateral” or subsequent agreement was entered into if the policy clearly provided for the parties' rights and obligations, but in analyzing such the hearing judge can rely only on the assertions in the statement of claim, accepting these as facts without making assessments of credibility or other findings arising from such factual assertions. Although I have reviewed these arguments to set out the parties’ positions, I am not the justice hearing the matter at first instance. It is not my role to rehear the matter but to determine whether in the circumstances of this case, as proscribed by the Rules, leave to appeal should be granted.
[9] Justice Maddalena in her decision correctly reviews the applicable legal test and applies it to the factual situation before her, correctly examining any allegations made in the statement of claim and finding that it is not plain and obvious that such should be struck. For the reasons set out herein, I agree with her analysis and decision and as such I will dismiss the leave to appeal.
[10] I return to Justice Maddalena’s decision to, firstly, ascertain if there are any conflicting decisions and, secondly, to determine if I should doubt the correctness of her decision. Then, I will determine the value/merit in allowing an appeal of an interlocutory decision.
A. Conflicting Decisions
[11] I agree with Mr. Zaprzala it is important to examine the “comparable” underlying facts to determine if there is in fact conflicting decisions. Not only must there be a conflicting decision, but I must also conclude that it is desirable that such an appeal be heard.
[12] On a review of the case law provided by Manulife, I agree that none of those provided by Manulife are on all fours with the case heard here and that none of them relate to a s.21 motion. One of them, being Kobzey v. Sun Life of Canada, 2001 BCCA 517, [2001] B.C.J. No. 1840 (C.A.), is not even an Ontario case. The added twist of the “collateral” agreement and the failure of Manulife to pay the amounts they were obligated to do so separates the case factually from any cited by the defendant. Accordingly, the onus that the defendant must meet in the circumstances has not been met, I find. Accordingly, I find it is not necessary or desirable that the appeal be granted.
B. Correctness of Decision
[13] I turn to the second prong of the test. Does there appear to the reviewing judge that there is good reason to doubt the correctness of the order in question and does the proposed appeal involve matters of such importance that I should grant leave?
[14] Is there any basis to question the correctness of Justice Maddalena’s order? The defendant suggests that there is, indicating that there is no contractual basis for the plaintiff’s claim, that he fails to attack the contract in his claim, and that he is required to apply for disability benefits. The defendant fails to mention that there was a collateral agreement to the policy of insurance or that a requirement to “appeal” was not a term of the contract and that it failed to comply with the terms of the policy. As such, it appears that it is not plain and obvious that there may not be a case for damages arising from a breach of contract.
[15] Having reviewed the decision, I note Justice Maddalena found that in summary, (a) there are issues involving the insurance policy, including among other the things the obligations of the insured; (b) there are issues arising from the “imposed” agreement that requires interpretation; and (c) there are allegations of unjust enrichment which may be applicable in this case, including bad faith allegations giving rise to such. I find her decision on these issues is properly based on the allegations in the Statement of Claim. As a result she concludes, and I agree, that it is too early in the process to make a determination that it is plain and obvious that no reasonable cause of action has been disclosed.
[16] I find I have no good reason to doubt the correctness of the decision.
[17] Accordingly, leave to appeal is not granted. If the parties are unable to agree upon costs, I may be spoken to, provided such occurs by January 5, 2015.
Tucker J.
Released: December 17, 2014
COURT FILE NO.: 7433/13
DATE: 2014/12/17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Grzegorz Zaprzala
Plaintiff
(Proposed Respondent)
- and –
The Manufacturers Life Insurance Company cob Manulife Financial
Defendant
(Proposed Appellant)
DECISION
Tucker J.
Released: December 17, 2014