CITATION: Thiruchelvam v. The Canada Life Assurance Company, 2015 ONSC 3474

NEWMARKET COURT FILE NO.: 68225/03

DATE: 20150529

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Stalin Thiruchelvam

Plaintiff

– and –

The Canada Life Assurance Company

Defendant

David S. Wilson, for the Plaintiff

Scott D. McTaggart, for the Defendant

HEARD: May 28, 2015

RULING ON MOTION

CHARNEY J.

[1] This claim arose more than a decade ago. The plaintiff was terminated from his job at R-Theta Inc. on January 14, 2002. His employer had a group insurance policy with the defendant, Canada Life Assurance Company. When his employment was terminated, his employer advised him that his long term disability (LTD) coverage ceased immediately, although other elements of the group insurance policy continued for a limited time. For reasons that are irrelevant to this motion, the employer did not advise the insurer that the plaintiff’s employment with the company had been terminated and continued to pay premiums for LTD (and other) insurance on his behalf. On March 16, 2002, he suffered an injury in a motor vehicle accident and alleges that he became permanently disabled and unable to return to work.

[2] The plaintiff’s lawyer learned that the former employer had continued to pay premiums on the plaintiff’s behalf after the termination date and, taking the position that his client had been covered by the LTD insurance on the date of the motor vehicle accident, asked the former employer to submit an LTD claim to the insurer. On March 17, 2003, the former employer submitted a claim form to the insurer through the plaintiff’s lawyer. In this claim form the former employer stated that the plaintiff was “laid off” from work on January 14, 2002. The insurer denied the claim and the plaintiff commenced this action on August 22, 2003. One of the primary issues in the claim is whether the insurer waived the requirements of insurance contract. The details of the waiver argument are irrelevant to this motion.

[3] In its statement of defence filed October 10, 2003, Canada Life stated (at para. 3):

The [group insurance] Policy was subject to the definitions, terms, conditions and exclusions contained therein. The Defendant relies on the Policy, in its entirety. The said Policy provided coverages to eligible employees of the Policyholder, subject to the terms of the Policy.

[4] In paragraph 7 of the statement of defence, Canada Life relied specifically on the “lay-off” clause of the policy which terminates the LTD insurance on “the last day of the month that follows the month in which his absence from work began”. The “lay-off” clause is more generous than the “termination” clause, which terminates LTD insurance on the date the employee is terminated from work. Canada Life relied on the “lay-off” clause because the information that it had from the claim form submitted by the employer was that the plaintiff had been laid off.

[5] During the course of discoveries in 2006, the plaintiff disclosed the employer’s termination notice, which clearly indicated that the plaintiff had been terminated and not laid off. Accordingly, both the plaintiff’s counsel and the defendant’s counsel have known that the plaintiff was terminated rather than laid off for many years.

[6] This case began on May 26, 2015. Both plaintiff and defendant counsel made opening submissions. It was clear from defence counsel’s submissions that he would be relying on the “termination” clause of the policy. Plaintiff’s counsel then called the plaintiff as his only witness. In the midst of the cross-examination of the plaintiff, counsel for the defendant was permitted, with the consent of the plaintiff’s counsel, to call a witness (the former Human Resources Manager of the former employer) to accommodate that witness’s medical schedule.

[7] Following the closing of the plaintiff’s case, counsel for the defence advised that he wanted to raise a “house-keeping” matter and provided the court with an amended statement of defence, dated May 20, 2015. The proposed amendment would add a specific reference to the “termination” clause of the policy, which states that an employee’s insurance terminates “on termination of his employment”. The defendant relies on rule 26.01 of the Rules of Civil Procedure which provides that:

On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[8] The cases under this rule are clear: “shall’ means “shall”, and amendments may be made at any time in a proceeding, for example, on the eve of, during, or after trial. The only issue for consideration is whether the amendment will cause prejudice that cannot be compensated for by costs or an adjournment (Carthy, Millar, Cowan, Ontario Annual Practice, 2014-2015, p.1026).

[9] The plaintiff has refused to consent to the amendment and has opposed this motion to amend, arguing that the plaintiff will be prejudiced by the amendment, and given the many years that it has taken for this case to get to trial, an adjournment would only add to the prejudice to his client. He rightly states that he is entitled to prepare his case on the basis of the pleadings. He complains that the defendant’s counsel did not notify him of his intention to bring this motion until May 15, 2015 and did not raise this as a preliminary issue when the trial began.

[10] Defendant’s counsel explained that he did not raise this amendment until after the plaintiff closed his case because he considers it a “housekeeping” matter, pointing to paragraph 3 of the original statement of defense, which expressly states, “The Defendant relies on the Policy, in its entirety”. The termination clause is a part of that policy. It was certainly open to plaintiff’s counsel to seek particulars of this pleading at any stage, or to pursue it during the discovery process to try to narrow the pleading. Defendant’s counsel also points to paragraph 4 of the plaintiff’s amended reply, dated March 31, 2004, wherein he admits “as of the date of his disability, his employment had purportedly been terminated” by his employer, demonstrating that the plaintiff knew that termination of employment (rather than just lay-off) was an issue in the case.

[11] That being said, I do not understand why counsel for the defendant would wait until the plaintiff had closed his case to raise even a “housekeeping” matter, knowing that it could give rise to allegations of prejudice and likely result in disruption and delay. Nor do I understand why counsel for the plaintiff, having been advised by the defence on May 15 of his intention to make the amendment, would not raise this at the beginning of the trial and seek to have it dealt with as a preliminary matter. Both counsel are experienced insurance litigators, and I can only assume that each is trying to gain some strategic advantage that is hidden from me. Whatever this advantage may be, it is unrelated to the efficient use of court time.

[12] At the end of the day, however, it is the defendant’s motion, and he is responsible for its timing. Given the reference to “the Policy, in its entirety” in the original statement of defence, and the discovery questions read into the record by the plaintiff’s counsel, it is not clear to me that the plaintiff will suffer any real prejudice by this amendment. That being said, it is for counsel for the plaintiff to make that call, and if he informs me that he requires a short adjournment to conduct further discovery, wishes to recall either or both of the two witnesses who have so far testified or needs time to find or call additional witnesses to deal with this amendment, I will be favourably disposed to accommodate his concerns that his client is prejudiced by this amendment. Otherwise, I will consider the timing of this amendment when it comes time to consider costs.

Mr. Justice R.E. Charney

Released: May 29, 2015