Court File and Parties

COURT FILE NO.: CV-11-424103 DATE: 20170307 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Len MacIvor and Roberta MacIvor Plaintiffs – and – Pitney Bowes Inc. and Manulife Financial The Manufacturers Life Insurance Company Defendants

Counsel: Kyle Smith, for the Plaintiffs Gordon Jermane and Veronica Mohan, for the Defendant The Manufacturers Life Insurance Company

HEARD: December 5 and 6, 2016

POLLAK J.

Reasons for Judgment

[1] The Plaintiff, Mr. MacIvor, worked for Pitney Bowes Inc. and was insured under the company’s Manulife group benefit policy when he was seriously injured on April 16, 2005 during a company trip to Costa Rica. He claims that he is entitled to payment of long-term disability (“LTD”) benefits pursuant to a Manulife Group Insurance Policy (the “Policy”) held by his former employer Pitney Bowes. The Plaintiff seeks a declaration from this Court that he is entitled to benefits from May 24, 2010 (or alternatively, December 23, 2010), in the amount of $5,834 per month, less 85% of the amounts he received from WSIB and CPP disability over that period of time. He also requests a declaration that he continues to be entitled to benefits under the policy.

[2] The only remaining Defendant, Manulife Financial (“Manulife”), denies any liability for benefit payments to Mr. MacIvor. Claims against his former employer, the Defendant Pitney Bowes, have been dismissed. Ms. Roberta MacIvor's claims have also been dismissed. The parties have agreed that there is no evidence, other than an Agreed Statement of Facts, for the Court to consider in this trial.

[3] The Defendant admits that the Plaintiff meets the “disability requirements" under the policy at all relevant times. However, it argues that the Plaintiff was not covered by the insurance policy at the time he made his claim, because his claim was made after he voluntarily left employment with Pitney Bowes. Alternatively, it argues that his claim was made after the expiration of the limitation period.

[4] The issues in this trial are: (a) Did the Plaintiff's coverage under the Policy cease when he left Pitney Bowes? (b) Did the Plaintiff establish a valid claim under the Policy? (c) Did the Plaintiff commence his action within the relevant limitation periods? (d) If LTD benefits are payable, what offsets apply?

Was the Plaintiff covered under the policy after he resigned from his employment with Pitney Bowes?

[5] The Defendant relies on the terms of the insurance coverage pursuant to the policy. It argues that Mr. MacIvor did not make his claim for benefits under the policy while he was covered by the Policy.

[6] Under the Policy, coverage ends when an employee ceases to be "Actively Employed" by Pitney Bowes as follows:

TERMINATION OF COVERAGE Your coverage will terminate on the earliest of the following dates unless continuation of coverage is provided under the Extension of Coverage provision:

• the last day of the month for which contributions have been remitted on your behalf;
• the day on which you cease to be Actively Employed;
• the day on which you cease to be listed as a member of an eligible class;
• the day on which you attain the termination age specified for a coverage in the Summary of Coverages; or
• the date the Contract terminates. [emphasis added]

[7] The Defendant submits that the Plaintiff's coverage ended on August 11, 2008 when he resigned as he was no longer an Employee of Pitney Bowes - he could not be a “Covered Person” and no premiums were paid for his coverage. The Plaintiff became an employee of Samsung on August 13, 2008.

[8] The Defendant further argues that the Plaintiff was no longer contractually able to provide Proof of Claim under the Policy. Although he tried to provide Proof of Claim on September 9, 2010, he was no longer a "Covered Person" under the Policy. Pursuant to the terms of the Policy, Proof of Claim can only be made by a Covered Person. There is no such right for former employees. The Plaintiff was an employee of another company when he made his claim. The Policy is not designed to cover employees of other companies. The Plaintiff was not a Covered Person and was not contractually able to submit his Proof of Claim in September 2010.

[9] The Defendant submits that failure to apply for LTD benefits while he was insured should result in the dismissal of Mr. MacIvor’s claim. It relies on the case of Thompson v. Sun Life, 2015 ONCA 162, 47 C.C.L.I. (5th) 287, wherein the Court of Appeal upheld the summary dismissal of a plaintiff's LTD claim because of the lack of coverage. At para. 11, the Court of Appeal upheld the motion judge’s conclusion that:

Under the policy, the plaintiff's coverage for disability benefits ended when her employment terminated on September 19, 2008. The plaintiff made no claim while she was an employee. The plaintiff did not make a claim for benefits within the 60 day period after disability that is required pursuant to the policy.

[10] The Plaintiff however, relies on paragraph 22 of the Agreed Statement of Facts, which states: "If one qualifies for LTD benefits and employment is terminated, coverage does not terminate."

[11] The Defendant argues that the Plaintiff does not qualify for LTD benefits. Although his inability to work is not in issue, the Plaintiff did not submit proof of his claim while covered under the policy, and therefore he cannot qualify for LTD benefits.

[12] The Plaintiff argues that Manulife's interpretation is in contravention of the Insurance Act, R.S.O. 1990, c. I.8.

[13] Mr. MacIvor relies on s. 297(1) of the Insurance Act, which provides that:

Where a contract of group accident and sickness insurance, or a benefit provision therein, is terminated, the insurer continues to be liable to pay to or in respect of any group person insured under the contract benefits under the contract relating to,

(a) loss of income because of disability; (b) death; (c) dismemberment; or (d) accidental damage to natural teeth,

arising from an accident or sickness that occurred before the termination of the contract or benefit provision as though the contract or benefit provision had remained in full force and effect; but the insurer is not liable to pay a benefit for loss of income because of disability in respect of the recurrence of disability arising from an accident or sickness that occurred before the termination of the contract or benefit provision if the recurrence occurs after the termination of the contract or benefit provision and after a period of six months, or such longer period as is provided in the contract, during which the group person insured was not disabled. [Emphasis added.]

[14] The Plaintiff argues that the coverage provision in the policy uses the date of disability, not the date of application as the relevant date for whether a person is, or is not, covered under the policy. The section provides that the Monthly Benefit is paid if you become disabled while covered under the policy, not if you apply for benefits while covered under the policy. Similarly, the amount of the benefit payable is set based on the date of Total Disability, not the date of application. Therefore, the Plaintiff submits that the time of the injury, rather than the time of the application for benefits, is the relevant point in time for one to be a “Covered Person” under the policy.

[15] The Defendant however argues that the provision of the Insurance Act relied on deals with the “termination” of an insurance policy and does not deal with when there is coverage pursuant to the terms of an insurance policy. I agree with this submission. Section 297(1) specifically states that “Where a contract of group accident and sickness insurance, or a benefit provision therein, is terminated".

[16] There was no “termination” of the insurance policy and therefore the section does not apply. Unfortunately, in this case, Mr. MacIvor would have been able to make a claim for benefits while he was an employee of Pitney Bowes. He did not do so, but made a claim for and received Worker’s Compensation benefits during that employment. The Policy in my view states in clear terms that there is no coverage for persons who are not employed by Pitney Bowes. It therefore follows that with respect to paragraph 22 of the Agreed Statement of Facts, it cannot be said that Mr. MacIvor “qualified” for benefits because at the time he made his claim there was no insurance coverage for him. If there is no coverage for Mr. MacIvor, he cannot make a successful claim for benefits against the Defendant.

[17] For these reasons I dismiss Mr. MacIvor's action.

Costs

[18] If the parties are unable to agree on costs, they may make brief written submissions to me no longer than three pages in length. The Plaintiff’s submissions are to be delivered by 12:00 p.m. on March 17, 2017, and the Defendant’s submissions are to be delivered by 12:00 p.m. on March 24, 2017. Any reply submissions are to be delivered by 12:00 p.m. on March 31, 2017.

Pollak J. Released: March 7, 2017