COURT FILE NO.: CV-16-0507-00
DATE: 2022-05-30
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
EMMA SHWALUK
Sabrina A. Lucenti, Agent for the Plaintiff
Plaintiff
- and -
HSBC BANK OF CANADA and SUN LIFE ASSURANCE COMPANY OF CANADA
Helen D.K. Friedman, for the Defendant, Sun Life Assurance Company of Canada
Defendants
HEARD: February 16, 2022 at Thunder Bay, Ontario
Regional Senior Justice B. R. Warkentin
Reasons on Motion
[1] The plaintiff seeks to amend her Statement of Claim to add particulars and to include additional relief. Sun Life Assurance Company of Canada (Sun Life) opposes the motion.
[2] The plaintiff was employed with HSBC Bank of Canada (HSBC) from August 19, 1997 until February 17, 2017, when her employment was terminated because of a branch closure. The plaintiff had ceased working with HSBC on March 31, 2015 due to a disability she claimed was a result of injuries she sustained in a motor vehicle accident in 1944.
[3] In April 2015 the plaintiff applied for short term disability (STD) benefits through HSBC. Sun Life was the provider of administrative services to HSBC for an Early Claims Intervention (ECI) plan. Under this plan, HSBC paid a disabled employee’s salary for a limited period, subject to qualification. This plan was similar to a claim for STD benefits.
[4] In addition to the ECI plan, Sun Life issued a separate Long-Term Disability (LTD) policy to HSBC that provided LTD benefits to qualifying employees of HSBC.
[5] Thus, when the plaintiff applied for short term disability benefits from HSBC, it was the defendant, Sun Life that administered the STD benefits and adjudicated the plaintiff’s short-term disability claims.
[6] The plaintiff retained counsel, Christopher Hacio on June 10, 2015 after her initial STD/ECI claim was denied.
[7] On September 30, 2015, Mr. Hacio’s law clerk wrote to D. Grund of Sun Life (administering the ECI claim on behalf of HSBC) in which she stated:
We anticipate that we are going to commence an action for LTD benefits. Is SunLife the administrator of the plan and benefits are paid by employer HSBC or does SunLife make the payments? In otherwords (sic), who would be the named defendant? Thank you.
[8] Ms. Grund responded that day and advised that the plaintiff had not made any claim or application for LTD benefits:
Please note that Ms. Shwaluk has not filed a Long Term Disability (LTD) claim with Sun Life. The claim that she filed that has been denied under appeal, is an Early Claims Intervention (ECI) claim. For ECI claims Sun Life is the administrator.
[9] It is Sun Life’s position that claims for LTD are not contingent on receipt of the STD/ECI benefits from HSBC.
[10] The plaintiff’s STD claims were denied through three levels of appeal. Mr. Hacio represented her through the various levels of appeal and then commenced this action against both HSBC and Sun Life on October 31, 2016.
[11] The plaintiff settled her STD/ECI benefits claim with HSBC on September 5, 2017. The details of that settlement have not been disclosed.
[12] The remaining claims are against Sun Life for failing to pay LTD benefits and punitive damages. The plaintiff now seeks to amend her statement of claim to amend a number of paragraphs in the October 31, 2016 statement of claim.
Proposed Amendments and Additional Claims
[13] In her statement of claim the plaintiff pled “that she is entitled to a declaration that the defendants (HSBC and Sun Life) were obligated to pay her Short-Term and Long-Term Disability benefits…”.
[14] The plaintiff also pled that Sun Life had never provided the plaintiff with a copy of its policy, despite requests for same. She therefore denied any knowledge of the provisions of the policy relating to the LTD notice requirements.
[15] Sun Life, in its statement of defence, served on June 29, 2017, pled at paragraph 18, “The Plaintiff has not submitted an application for LTD benefits to Sun Life, and the time for doing so has expired” and at paragraph 11 under the Sun Life Policy, “Sun Life must receive a proof of a claim no later than 90 days after the end of the elimination period.”
[16] In her reply at paragraph 4, served on Sun Life on September 20, 2017, the plaintiff stated that “The Plaintiff did not submit an application for LTD benefits to Sun Life, pending resolution of her STD benefits with her employer.”
[17] In examinations for discovery of the representative for Sun Life, on March 28, 2018, the following exchange occurred:
Q251: Ms. Voisin, Sun Life isn’t relying on any omissions or errors in the application form for the denial of benefits, is that correct?
MS. DESIMINI: Do you mean like failure to fill out the application?
Q252: THE DEPONENT: Correct. As far as the short-term benefits are concerned, but long-term disability benefits we didn’t get an application.
Q253: MS. LITTLE: Q. So is Sun Life relying on the fact that it has not received a – an actual long-term disability application?
Q254: MS. DESIMINI: Yes, we’ve pled it in our defence. We never received a – a – an LTD claim from the plaintiff and the time for doing so under the policy has passed.
[18] Mr. Hacio died on February 19, 2019. The plaintiff is now represented by David Prezler in this litigation. This matter was set down for trial on May 9, 2019, and a pretrial was held on November 19, 2020. There was a discussion at the pretrial regarding the plaintiff’s intention to amend her pleadings to include relief from forfeiture in light of Sun Life’s position that the LTD claim was statute barred for failure to apply for benefits within the contractual limitation period.
[19] This motion to amend the pleadings, served on February 1, 2022, is brought by Dooley Lucenti LLP as agent for the plaintiff.
[20] The proposed amendments to the statement of claim and reply now seek to withdraw the admission by the plaintiff that she did not submit an application for LTD benefits to Sun Life by amending her pleading at paragraph 21 of her claim as follows:
The Plaintiff did not submit an application/formal proof of loss claim form for LTD benefits to Sun Life, pending resolution of her STD benefits with her employer. However, the Defendant Sun Life Assurance Company of Canada was put on notice by June 22, 2015 that the Plaintiff was seeking short term and long term disability benefits.
[21] In addition, the plaintiff seeks to add to her claim a new allegation that Sun Life was obliged to provide the plaintiff with the LTD application forms and breached that obligation. Various other amendments are proposed to align the rest of the statement of claim and reply with these amended paragraphs. These amendments, in essence, seek to add a claim for relief from forfeiture.
[22] Sun Life objects to the proposed amendments to the statement of claim arguing that the amendments seek to add new facts, new claims and causes of action, including relief from forfeiture.
[23] Sun Life argued that these new claims are statute barred because the plaintiff was aware as early as September 30, 2015 and at the latest when Sun Life filed its statement of defence on June 29, 2017 that an application for LTD benefits had not been made. Therefore, the time to make an application for LTD benefits has expired and the statutory limitation period in which to advance a claim for a denial of those benefits has also expired.
[24] Counsel for the plaintiff argued that while the plaintiff had not initially pled relief from forteiture, the proposed amendment is simply as an alternative claim for relief and not a new cause of action and therefore the amendments should be permitted.
[25] For the reasons that follow, I find that the plaintiff failed to file her claim for LTD benefits within the proscribed limitation period, that the proposed amendments are new claims and causes of action, thus the statutory limitation period to advance these claims has expired. Therefore, the plaintiff’s motion to amend her pleadings is denied.
[26] If there are proposed amendments that fall outside this ruling and if the parties are unable to agree to those amendments, they may return before me to address those proposed amendments.
Analysis
[27] The amendments proposed by the plaintiff are an attempt by the plaintiff to withdraw her admission; that she never filed an application for LTD. The plaintiff knew or ought to have known that an application for LTD had not been filed and was required by Sun Life as early as September 30, 2015, when Mr. Hacio was notified that an application was required and at the latest on September 20, 2017 when Sun Life served its statement of defence.
Withdrawing an Admission
[28] Rule 51.05 of the Rules of Civil Procedure provide that a party may withdraw an admission only on consent or with leave of the court.
[29] In Yang v. The County of Simcoe, 2011 ONSC 6405, at para 46, the court defined an admission:
Generally, admissions in a pleading are made boldly and baldly and they are, in general, specific and identifiable as admissions.[1] An admission contemplated by rule 51 is one that is an unambiguous deliberate concession to a position taken by the defendant.[2] An admission contemplated by rule 51 occurs when the plaintiff admits that a set of facts were posed by the defendant is correct.[3] An admission must be an intentional concession to the other side and not simply the result of the words chosen in the claim.[4] A factual pleading made in error cannot fairly be characterized as a deliberate admission.[5]
[30] Vassos v. Enterra Holdings Ltd., 2019 ONSC 661, at para 12, sets out the three-part test with respect to the granting of leave to withdraw an admission:
(1) The proposed amendment raises a triable issue. The requirement to demonstrate a ‘triable issue’ requires the moving party to demonstrate that the proposed amendments raise an arguable case on the merits.
(2) The admission was inadvertent or resulted from wrong instructions. … As stated by Saunders J. in Antipas, supra ‘if there is a triable issue, a party should be able to withdraw an admission upon furnishing a reasonable explanation for the change in position’.
(3) The withdrawal will not result in any prejudice that cannot be compensated for in costs. … the onus is on the moving party to show that the opposite party will not be prejudiced, rather than the reverse as is the case under rule 26.01.
[31] The plaintiff admitted at her cross-examination that she had not applied for LTD benefits, (and was unaware as to what Mr. Hacio might have done).
[32] With respect to the first prong of the test, I find that there is no triable issue. The plaintiff has provided no reasonable explanation for the change in her position regarding withdrawing her admission that would permit a withdrawal. The allegation that she is entitled to relief from forfeiture because Sun Life failed to provide a copy of its policy when requested to do so, does not excuse the plaintiff or her former counsel from failing to apply for LTD benefits in a timely manner or to make inquiries regarding the application process.
[33] The second prong of the legal test asks whether the admission was inadvertent or resulted from wrong instructions. The plaintiff has never alleged that her admission was either inadvertent or that it resulted from wrong instructions. Mr. Hacio is deceased, and the plaintiff has refused to disclose the contents of his file which leads me to conclude there is nothing in his file that would support this second prong of the test or it would have been produced.
[34] In fact, I find that the admission was not inadvertent. In her reply, the plaintiff provided the explanation for the admission - she was waiting to settle her ECI/STD claim with HSBC before making an LTD claim.
[35] With respect to the third prong, the onus is on the plaintiff to demonstrate there is no prejudice to Sun Life by the withdrawal of her admission. I find that the plaintiff has not met her onus. This action has been set down for trial and is on the trial list. Sun Life has conducted its litigation strategy on the basis of the admission. To permit the withdrawal of an admission of this nature at this stage in the litigation would prejudice Sun Life and could not be compensated for with costs should the plaintiff succeed at trial based upon the withdrawal of the admission and amended pleadings. Leave to withdraw or amend the admission is therefore denied.
Is this a New Cause of Action?
[36] A new cause of action is not asserted if the amendments plead an alternative claim for relief arising out of the same facts previously pleaded, or simply provide particulars of an allegation already pleaded, or additional facts upon which the original right of action is based. (Sbaraglia v. Canada Life Assurance, 2018 ONSC 8 at para 22.)
[37] A cause of action is “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”. The test for determining if amendments are permissible is to assess whether the proposed amendments do, or do not, arise out of the same facts, or the factual matrix, that was pleaded in the original pleadings. If they do, then the amendments should be permitted. If they do not, and the limitation period has expired, then the amendments should be refused. (Navigator limited v. Owens, 2022 ONSC 251, paras 25-26 and Farmers Oil and Gas Inc. v Ontario (Natural Resources), 2016 ONSC 6359 (Div Crt), para 22.).
[38] I find that the amendments sought by the plaintiff are an attempt to include new claims and allegations. By withdrawing her admission that she had not filed an LTD claim in her reply, the plaintiff is statute barred from now asserting relief from forfeiture on new facts that had not been previously pled and were not previously disclosed or alleged. They do not arise from the same facts already admitted and pled, and to permit the amendments proposed would result in fundamentally different claims than those originally pleaded.
[39] Because of the findings set out above, it is unnecessary for me to provide further consideration to the test for amending pleadings.
[40] The plaintiff’s motion to amend her pleadings, subject to my comments in paragraph 26 above is dismissed.
[41] If the parties are unable to agree on costs, they may make written submissions within 30 days of this decision and shall limit their submissions to four pages, not including Bills of Costs.
Regional Senior Justice B. R. Warkentin
Released: May 30, 2022
COURT FILE NO.: CV-16-0507-00
DATE: 2022-05-30
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Emma Shwaluk
Plaintiff
- and –
HSBC Bank of Canada and Sun Life Assurance Company of Canada
Defendants
REASONS ON MOTION
B. Warkentin R.S.J.
Released: May 30, 2022