COURT FILE NO.: CV-10-411183-CP

DATE: 2021/01/05

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ELDON FEHR, ANGELA WATTERS, GAETAN LAURIER, LESLIE MICHAEL LUCAS, JAMES PATRICK O’HARA, REBECCA JEAN CLARK, and LLOYD SHAUN CLARK

Plaintiffs

and -

SUN LIFE ASSURANCE COMPANY OF CANADA

Defendant

Won J. Kim, Michael C. Spencer, Megan B. McPhee and Aris Gyamfi for the Plaintiffs

F. Paul Morrison, Glynnis P. Burt and Hovsep Afarian for the Defendant

Proceeding under the Class Proceedings Act, 1992

HEARD: December 17, 2020

PERELL, J.

REASONS FOR DECISION

You talk too much

You worry me to death

You talk too much

You even worry my pet

You just talk...

Talk too much

[Joe Jones, You Talk Too Much]

A. Introduction

[1] On February 20, 2020, I settled the form of the Certification Order in this action, and I directed the Plaintiffs to bring a motion to settle the Notices of Certification and the Litigation Plan, which I provisionally approved.[^1] This is the motion to settle the Notice of Certification and the Litigation Plan in this action under the Class Proceedings Act, 1992.[^2]

[2] The lesser dispute between the parties is about the Notices of Certification. The bruhaha is about the Litigation Plan.

B. Notice of Certification

[3] There are four Notices of Certification at issue: (1) the long form for the Universal Plus Class Members ; (2) the long form for the Universal Flexiplus Class Members; (3) the long form for the Universal OptiMet Class Members; and (4) the short form or postcard notice.

[4] Just moments before the commencement of the motion, I was advised that the parties had almost settled their dispute about the Notices.

[5] At the hearing, I dealt with what remained of their dispute and made the following File Order/Direction that also dealt with Sun Life’s request that a summary judgment motion be scheduled:

ORDER/DIRECTION:

On February 20, 2020, I settled the form of the Certification Order in this action, and I directed the Plaintiffs to bring a motion to settle the Notices of Certification and the Litigation Plan, which I provisionally approved.

The motion to settle the Certification Notices and to settle the Litigation Plan came on for hearing today.

At the commencement of the hearing, I was advised that save for two matters in three of the four Notices of Certification, the parties had agreed to the form of the Notices. I heard argument from the parties about the remaining disputes about the notices and reserved judgment with respect to the Litigation Plan.

I also heard from the parties with respect to the Defendant Sun Life’s request to schedule a summary judgment motion for four of the five common issues that have been certified.

With respect to the Certification Notices, one dispute between the parties concerned whether the following sentence should be included in the Flexiplus Class Members’, Universal Plus Class Members’, and Optimet Class Members’ Notice:

“Sun Life engaged in concealment of the potential claims from policyholders.”

The second dispute between the parties concerned whether the following sentence should be included in the Flexiplus Class Members’ Notice:

“Flexiplus policyholders who entered Sun Life’s Flexiplus Options Program and/or signed liability releases are not excluded from this class action.”

In my opinion, these sentences should not be included. With the deletion of these sentences, the four Certification notices are hereby approved.

The primary purpose of a Notice of Certification of a class action under the Class Proceedings Act, 1992 is to inform the Class Members of the existence of the action and to provide them with enough information so that the individual Class Members can exercise a right to opt out of the action if he or she is so inclined.

In the immediate case, the impugned sentences provide information that is not necessary at this juncture of the proceeding, and the deletion in this information obviously does not affect the determination of the issues that have certified.

The deleted information is of little to no relevance to a Class Member’s decision to opt out. Visualize, being informed that Class Counsel has an answer to Sun Life’s limitation period defence or to Sun Life’s reliance on releases signed by Flexiplus Class Members would not provide a reason for a Class Member to opt out, which is an unlikely phenomenon in most class actions and particularly unlikely in the immediate case.

The deleted information might be pertinent for a Class Member to know once and if the Plaintiffs are successful at the common issues trial, because assuming that they succeeded in whole or in part, this information might encourage Class Members to participate in individual issues trials. However, before the common issues trial, this information would just confuse Class Members and indeed might encourage them to opt out when there is no rational reason for them to do so.

Turning now to the Defendant’s request for a summary judgment motion. The Defendant’s request concerns the first four of the five certified common issues.

The Court has certified the following common issues:

Was it a term of the Flexiplus policy that the cost of insurance (“COI”) rate may be adjusted based on specified factors? If so, is Sun Life liable for breach of contract if increases were based, in whole or in part, on other factors?
Was it a term of the Universal Flexiplus policies that Administrative Fees may be adjusted based on factors related to the cost of administering the policies? If so, is Sun Life liable for breach of contract if increases were based, in whole or in part, on other factors?
Was it a term of the Optimet policy that the cost of insurance (“COI”) rate may be adjusted based on specified factors? If so, is Sun Life liable for breach of contract if increases were based, in whole or in part, on other factors?
Was it a term of the Universal Plus, Flexiplus and Optimet policies that the “Maximum Premium” amount set out in the policies was the highest amount of premium that the policyholder would ever be required to pay for the policy in any year, in order to prevent lapse of the policy? If so, are the plaintiffs entitled to a declaration to that effect?
If the answer to any of questions 1, 2, or 3 is that Sun Life breached the contract of insurance, did Sun Life administer the policies in a manner, including violating section 439 of the Insurance Act, S.O. 1990, c I.8 (prohibiting unfair and deceptive practices) such that the breach of contract was concealed?

It emerged in the discussion with Class Counsel that he agreed that the court had the discretion to order a summary judgment motion if it was appropriate for this class proceeding as a way to resolve the common issues. However, Class Counsel’s preferred course, as he put it, was that the determination of the common issues, be it by summary judgment or common issues trial, follow a Discovery Plan and Examinations for Discovery.

In my opinion, Class Counsel’s fairness concerns can be addressed by an appropriate summary judgment procedure, as follows:

Sun Life shall deliver its motion materials for a summary judgment motion by March 30, 2021.
The Plaintiffs shall deliver their responding motion materials, and, if so advised, a cross-motion for summary judgment by May 30, 2021.
Sun Life shall deliver its reply material by June 30, 2021 and no additional material may be delivered.
Within 60 days of the completion of the delivery of the motion materials, Sun Life shall deliver an Affidavit of Documents with respect to common issues 1 to 4 and with respect to common issue 5 if the Plaintiffs have moved for a judgment on that common issue.
Within 60 days of the completion of the delivery of materials the Plaintiffs shall deliver an Affidavit of Documents.

6 Cross-examinations are to be completed by October 15, 2021.

Motions, if any, with respect to the cross-examinations are to be completed by November 15, 2021.
The parties will exchange facta and reply facta by December 31, 2021.
The summary judgment motion is scheduled for February 14-18, 2022.
If the action proceeds after the summary judgment motion, the transcripts of the parties’ deponents for the summary judgment motion shall be deemed to be the transcripts of examinations for discovery.
I shall remain case management judge for this class proceeding solely for the purpose of scheduling purposes and to arrange for a judge to hear any motions including the summary judgment motion.

C. Litigation Plan

[6] Turning now to the Litigation Plan bruhaha. About the Litigation Plan, both parties talked too much and caused each other grief. Class Counsel went too far in the Litigation Plan by including a description of its litigation strategy. That level of polemic goes beyond the scope of the Litigation Plan required by the Class Proceedings Act, 1992. In turn, Sun Life protested too much, particularly about those matters that should not have been in the Litigation Plan in the first place.

[7] Sun Life inflamed matters by bringing a summary judgment motion and insisting that the Litigation Plan reflect – in detail – the parameters of the summary judgment motion or motions should Class Counsel be inclined to bring a summary judgment motion. At the case management conference, I dealt with Sun Life’s summary judgment request and the outcome does not affect the analysis of the Litigation Plan.

[8] Class Counsel was the worst offender in talking too much because it lost sight of the fact that the Litigation Plan that I had provisionally approved no longer needed to demonstrate to the court that the Representative Plaintiff had a Litigation Plan that would satisfy the Representative Plaintiff criterion set out in section 5 (1)(e) of the Class Proceedings Act. What was required was not a persuasive Litigation Plan filled with polemic and rhetoric to achieve certification but an implementation Litigation Plan of a certified class action. Post-certification less said is truly more because the details can and should be provided by the Rules of Civil Procedure.

[9] Class Counsel also lost sight of the circumstance that in the immediate case the architecture of the class action had been substantially changed by what the Court of Appeal certified and by what the Court of Appeal did not certify as common issues. Thus, there is considerable traction to Sun Life’s objection that Class Counsel was attempting to circumvent the narrowing of this class action over the decade of its running the access to justice gauntlet.

[10] One can admire Class Counsel’s tenacity about defining the issues, but they were beating a dead horse that had lost the race and they were stubbornly attempting to infuse the common issues trial with extraneous issues or with issues that would have to be determined at individual issues trials. That said, it was inflammatory of Sun Life’s counsel to taunt Class Counsel about the narrowing of the common issues, and it was unfortunate that Class Counsel picked up the gauntlet and gave back at it to Sun Life.

[11] Class Counsel and Counsel for Sun Life lambasted each other about matters that should be properly determined by other procedures already provided for in the Rules of Civil Procedure. For example, a Litigation Plan for the purposes of a class action is not the place to argue a Discovery Plan and now is not to time to argue some sort of preemptive production motion or some sort of preemptive refusals motion and now is not the time to engage in trial management.

[12] Class Counsel and Counsel for Sun Life lambasted each other about matters like the details of individual issues trials or the details of distributing a monetary award judgment. It is, however, at this juncture premature to detail these matters.

[13] A great deal of the proposed Litigation Plan was premature. Another example is the discussion of the use of expert evidence. While I can understand why Class Counsel might want to show its cards for the purpose of achieving certification, this case, however, is after certification and before a discovery plan, and, at this juncture in settling the Litigation Plan, it is not necessary to be so elaborate and forthcoming. In any event, Sun Life was not grateful for the disclosures of Class Counsel’s litigation strategy and rather objected that the Plaintiffs’ proposed scope of expert testimony was overbroad having regard to the certified common issues.

[14] Keeping the above observations in mind, I redrafted Class Counsel’s proposed Litigation Plan. I removed immaterial, irrelevant, superfluous, extraneous, grandiose, redundant and confrontational information from the form the Litigation Plan. I have removed details that can simply be incorporated by reference to the Class Proceedings Act or the Rules of Civil Procedure[^3] I removed material that is premature to be determined at this juncture of the proceedings. Attached as Schedule A is a tracked changed version of the redrafted Litigation Plan.

[15] Attached as Schedule B is the Litigation Plan that I approve.

[16] I order the costs of settling the Notices of Certification and of the Litigation Plan in the cause.

Perell, J.

Released: January 5, 2021

SCHEDULE “A”

LITIGATION PLAN OF THE PLAINTIFFS (Edited)

I. INTRODUCTION

In this proceeding under the Class Proceedings Act, 1992, S.O. 1992, c. 6 (the “CPA”), the Plaintiffs, Eldon Fehr, Angela Watters, Gaetan Laurier, Leslie Michael Lucas, James Patrick O’Hara, Rebecca Jean Clark, and Lloyd Shaun Clark, sue the Defendant Sun Life Assurance Company of Canada (“Sun Life”).
This action concerns the administration of three types of universal life insurance policies: Universal Flexiplus, Universal Plus, and Universal OptiMet (collectively the “Policies”). The Policies were marketed and sold by the Metropolitan Life Insurance Company or Metropolitan Life Insurance Company of Canada (collectively “MetLife”) from 1987 to 1998. MetLife’s life insurance business in Canada was sold to the Mutual Life Assurance Company of Canada (“Mutual”) in 1998, which changed its name to Clarica Life Insurance Company (“Clarica”) in 1999. Clarica was amalgamated into Sun Life Assurance Company of Canada (“Sun Life”) (the Defendant in this action) at the end of 2002, and Sun Life has administered the Policies since that time.
The CPA requires that a representative plaintiff produce a plan that establishes a workable method of advancing the proceeding on behalf of the Class and of notifying Class Members of the proceeding. The Plaintiffs propose that the proceeding be conducted in accordance with the following Litigation Plan, subject to revision as the case develops. This Litigation Plan is subject to approval and subsequent revision by this Honourable Court.

II. CLASS COUNSEL

The Plaintiffs and Class Members are represented by the law firm of Kim Spencer McPhee Barristers P.C. (“Kim Spencer McPhee”), which has overall responsibility for this litigation as Class Counsel.

III. CLASS MEMBERS; COMMUNICATIONS

The Class consists of three subclasses defined as:

a The “Universal Plus Class” is defined as persons who owned or own a Universal Plus policy sold by MetLife Canada during the period 1987 through 1998, including any successor owners of the policy.

b The “Flexiplus Class” is defined as persons who owned or own a Flexiplus policy sold by MetLife in Canada during the period 1987 through 1998, including any successor owners of the policy whose monthly costs of insurance and/or monthly administration fee was increased in one or more of 2001, 2006, or 2015 or the ninth year of the policy.

c The “Optimet Class” is defined as persons who owned or own an Optimet policy sold by MetLife in Canada during the 1987 through 1998, including any successor owners of the policy. where an increased cost of insurance rate was charged and paid commencing in year nine (9) of the policy.

Eldon Fehr and Gaetan Laurier are the Representative Plaintiffs for the Universal Plus Class. Eldon Fehr, Leslie Michael Lucas, Rebecca Jean Clark and Lloyd Shaun Clark are the Representative Plaintiffs for the Flexiplus Class. James Patrick O’Hara is the Representative Plaintiff for the Optimet Class.
The policyholder information provided by the Defendant for certification indicates that there 136,215 Class Members. The Defendant has records showing the names and present (or last known) addresses of some Class Members. The distribution of Class Members among the Policies is estimated as follows: (a) Universal Flexiplus – 86,212; (b) Universal Plus – 47,672; and (c) Universal OptiMet – 2,331.
Class Counsel have included material on the Kim Spencer McPhee website (www.complexlaw.ca), also replicated on the firm’s Facebook page, about this litigation (the “Website”). Through this medium, the Class Members will be kept apprised of the progress of the litigation. The Website will also provide access to court documents, court decisions, notices, documentation, and other information relating to the action, as well as answers to frequently asked questions regarding class actions.
The Website contains a communication webpage that will provide regular updates on the status of the class action, and contact information for Class Members to submit inquiries to Class Counsel. Prompt responses will be provided.
This Court has approved a Class Notice program and national communications strategy to inform Class Members of their status and rights in this action. The program will include online and print media advertisements, as described below in section VI and detailed in Schedule “A”.

IV PROPOSED LITIGATION TIMETABLE

The Plaintiffs will ask the case management judge to set the schedule for the future conduct of the proceeding including any summary judgment motions and all interlocutory motions until the action is set down for the common issues trial.

V. NOTICE OF CERTIFICATION & OPT-OUT PROCEDURE

Notice of certification will be provided pursuant to section 17 of the CPA in the form and manner that has already been approved by this Court. The Court has also already approved the Notice Program.
This Court has ordered that the Notice Program be administered by CA2 Inc. as Notice Administrator. This Court has ordered that the costs of the Notice Program be paid by the Plaintiffs.

VI. DOCUMENT DISCOVERY AND MANAGEMENT

The Plaintiffs and the Defendant will devise and agree to a Discovery Plan in accordance with Rule 29.1 of the Rules of Civil Procedure and the Sedona Canada Principles.
The Plaintiffs may seek an order requiring that all productions be made in electronically searchable format.
The Plaintiffs will request that the costs of producing documents in the Defendant’s possession or control be paid by the Defendant. The Plaintiffs will pay the costs of producing documents in the Plaintiffs’ possession or control.
Kim Spencer McPhee intends to maintain produced documents using proprietary document management systems.

VII. EXAMINATIONS FOR DISCOVERY

Kim Spencer McPhee intends to seek leave of Court to conduct oral examinations for discovery longer than the seven hours normally permitted, in view of the complexity of the action, under Rule 31.05.1 of the Rules of Civil Procedure.
The Plaintiffs will likely seek leave to examine more than one representative of the Defendant.
The Plaintiffs may bring a motion under Rule 31.10 for leave to examine for discovery certain non-parties, including representatives of Met Life.
The Defendant may examine the Representative Plaintiffs.
The Plaintiffs intend to ask that examinations for discovery be conducted in Toronto.

VIII. EXPERTS

The Plaintiffs expect to offer reports from one or more experts, depending on how the factual and legal issues develop. The Plaintiffs are consulting with experts but have not made any decision on which, if any, may testify at the common issues trial. The fields of expertise would likely be life insurance, policy terms, corporate actuarial analysis, policy and product pricing actuarial analysis, and forensic accounting.

IX. DISPUTE RESOLUTION

The Plaintiffs are willing to participate in mediation or other non-binding alternative dispute resolution efforts.

X. THE COMMON ISSUES AND THE COMMON ISSUES TRIAL

The Court has certified the following common issues:
Was it a term of the Flexiplus policy that the cost of insurance (“COI”) rate may be adjusted based on specified factors? If so, is Sun Life liable for breach of contract if increases were based in whole or in part on other factors?
Was it a term of the Universal Flexiplus policies that Administrative Fees may be adjusted based on factors related to the cost of administering the policies? If so, is Sun Life liable for breach of contract if increases were based, in whole or in part, on other factors?
Was it a term of the Optimet policy that the cost of insurance (“COI”) rate may be adjusted based on specified factors? If so, is Sun Life liable for breach of contract if increases were based, in whole or in part, on other factors?
Was it a term of the Universal Plus, Flexiplus and Optimet policies that the “Maximum Premium” amount set out in the policies was the highest amount of premium that the policyholder would ever be required to pay for the policy in any year, in order to prevent lapse of the policy? If so, are the plaintiffs entitled to a declaration to that effect?
If the answer to any of questions 1, 2, or 3 is that Sun Life breached the contract of insurance, did Sun Life administer the policies in a manner, including violating section 439 of the Insurance Act, S.O. 1990, c I.8 (prohibiting unfair and deceptive practices) such that the breach of contract was concealed?
If the common issues trial results in a determination of some or all issues in favour of the Plaintiffs, the Plaintiffs will request the Court to enter a common issues judgment under CPA section 27, and to decide:

a whether the Court may determine the aggregate or a part of the Defendant’s liability to Class Members on certain issues or matters, and make an aggregate assessment and give judgment to the Class Members accordingly, under CPA section 24; or

b whether the Court considers that the participation of individual Class Members is required to determine individual issues, under CPA section 25, other than those that may be determined under section 24.

XI. DETERMINATION OF INDIVIDUAL ISSUES

At present, the Plaintiffs anticipate that, depending on the Court’s resolution of common issues and with respect to damages and remedies, some individual issues may remain to be determined.
If a determination of individual issues is to proceed under CPA section 25, the Plaintiffs will request the Court to settle a procedural protocol for the individual issues determinations.
If a determination of individual issues is to proceed under CPA section 25, the Plaintiffs will request the Court to settle the form and content of a notice under CPA section 18 and order that the Notice Administrator disseminate the notice accordingly.

XII. DISTRIBUTION PROCESS

After any judgments in favour of Class Members become final, the Plaintiffs will request that the Court direct distribution of amounts awarded, under CPA section 26, less any appropriate deductions. To the extent practicable the distributions should be made directly by the Defendant; otherwise, an administrator may be employed.
If an award is made under CPA section 24 and is not fully distributed to Class Members within a reasonable time, the Plaintiffs will make a motion for an appropriate distribution of remaining amounts.

XIII. COSTS AND FEES

Class Counsel fees, disbursements, and applicable taxes will be subject to Court approval and will be paid out of any funds recovered, unless otherwise ordered.
If there are any levies by the Class Proceedings Fund or charges based on a funding and/or indemnification agreement, those amounts shall be paid.

XIV. REPORTING

Class Counsel and the administrator, if one was appointed, shall deliver such reports as required by the CPA or by Court Order.

SCHEDULE “B”

LITIGATION PLAN OF THE PLAINTIFFS (Approved)