



COURT OF APPEAL FOR ONTARIO

CITATION: Barber v. The Manufacturers Life Insurance Company
    (Manulife Financial), 2017 ONCA 164

DATE: 20170227

DOCKET: C62383

LaForme, Pepall and Pardu JJ.A.

BETWEEN

Adrian Barber

Appellant

and

The Manufacturers Life Insurance Company, carrying on
    business as Manulife Financial

Respondent

David Share and Samantha
    Share, for the appellant

Gordon Jermane, for the respondent

Heard: February 22, 2017

On appeal from the order of Justice Edward P. Belobaba of
    the Superior Court of Justice, dated June 16, 2016.

ENDORSEMENT

Introduction

[1]

Adrian Barber appeals from the dismissal of her action against The
    Manufacturers Life Insurance Company (Manulife) by the Superior Court of
    Justice. The motion judge granted Manulifes motion to strike Barbers claim,
    pursuant to r. 21.01(3), because Barbers collective agreement (the CA)
    granted exclusive jurisdiction over her matter to the labour arbitration
    process.

[2]

Barber became disabled from her
    employment as a Port Hope police constable in July 2009. She applied for
    long-term disability (LTD) benefits under a group policy of insurance,
    insured by Manulife. Manulife paid these benefits until January 2013; then terminated
    the benefits. The collective agreement between the Port Hope Police Services
    Board (the Board) and the Port Hope Police Association (the Association),
    which governed Barbers employment, requires the Board to offer disability
    insurance coverage to the Associations members.

[3]

Barber commenced an action against Manulife asserting that LTD benefits
    were paid to January 31, 2013 and terminated effective February 1, 2013. She
    claimed they ought to have continued. As a remedy, Barber claimed payment of
    disability benefits.  She alleged she has a contract for insurance with
    Manulife through her employer, Port Hope Police Service, and was issued Group
    Policy Number 572397.

[4]

Manulife brought a motion under r.
    21.01(3)(a) of the
Rules of Civil Procedure
to have Barbers claim dismissed because the Superior
    Court had no jurisdiction over the subject matter of the action. In a brief
    endorsement, the motion judge agreed with Manulife that the Superior Court
    lacked jurisdiction.

[5]

The motion judge concluded that the
    language of Articles 18.01 and 18.02 of the collective agreement made Barbers
    matter arbitrable because the matter fell within category 2 of the Brown
    & Beatty categories and possibly category 4. The motion judge dismissed
    Barbers claim and awarded $1,500 in costs to Manulife.

[6]

There is only one issue on appeal: Did the motion judge err in holding
    that the Superior Court does not have jurisdiction over Barbers matter?

Analysis

[7]

Although this case concerns jurisdiction,
    its resolution turns on the interpretation and application of a collective
    agreement.  It is a negotiated contract and not a standard form contract. The
    issue determined by the motion judge, therefore, is a question of mixed law and
    fact to which the palpable and overriding error standard of review applies:
Sattva
    Capital Corp. v. Creston Moly Corp.
, 2014
    SCC 53, [2014] 2 S.C.R. 633, at paras. 50-55;
Ledcor Construction
    Ltd. v. Northbridge Indemnity Insurance Co.
,
    2016 SCC 37, at para. 24.

[8]

Neither party denied that the essential character of the dispute
    concerned LTD benefits. Therefore, the motion judge moved directly to the
    question of whether the claims essential character arose from the
    interpretation application, administration or violation of the CA.
If so, an arbitrator, not a court, had exclusive
    jurisdiction to decide the issue:
Weber v. Ontario Hydro
, [1995] 2 S.C.R. 929, at paras. 11, 52, 54
.

[9]

A
rbitration jurisprudence has
    developed a well understood method of deciding the arbitrability of benefit
    entitlement claims, which is
to consider t
he
    four Brown and Beatty
[1]
categories considered by the motion judge: see,
London Life Insurance Co.
    v. Dubreuil Brothers Employees Assn.
(2000), 49 O.R. (3d) 766, at para.
    10. The four categories are:

1.       where
    the collective agreement does not set out the benefit sought to be enforced,
    the claim is inarbitrable;

2.       where
    the collective agreement stipulates that the employer is obliged to provide
    certain medical or sick- pay benefits, but does not incorporate the plan into
    the agreement or make specific reference to it, the claim is arbitrable;

3.       where
    the collective agreement only obliges the employer to pay the premiums
    associated with an insurance plan, the claim is inarbitrable; and

4.       where
    the insurance policy is incorporated into the collective agreement, the claim
    in arbitrable.

[10]

This courts decision in
London
    Life
advanced the
Weber
analysis in the context of benefit disputes by
    adopting the four categories from Brown and Beatty.

[11]

Barber submits that the dispute falls within Category 3 and is not
    arbitrable. The Board's only obligations, she says, are to offer long-term
    disability coverage and remit premiums. The Board fulfilled its obligations
    under the CA. Therefore, there is no dispute arising out of the CA.

[12]

Manulife
, Barber points out,
assessed, paid and then terminated her long-term
    disability claim, pursuant to the terms and conditions of the Policy.
    Therefore, the dispute arises out of the Policy, not the

CA and is not arbitrable.

[13]

Barber argues the dispute does not fall
    within Category 2, as the motion judge found, because the CA does not oblige
    the Board to pay or to provide long-term disability benefits. The Board merely
    offers the coverage and pays premiums; Manulife provides the benefits.
    Furthermore, she argues, the dispute does not fall within Category 4, as the
    motion judge suggested, because the CA does not incorporate the insurance
    policy; the CA merely refers to the Policy number and provides a short
    description of the coverage.

[14]

Article 18 establishes Barbers rights to
    LTD benefits. They do more than merely oblige the employer to pay premiums for
    insurance

they cover terms, the amount of the disability
    benefits and even the definition of total disability, and it makes specific
    reference to the Policy. The employer may change insurers as long as the
    benefits defined in the CA are continued.

[15]

The fact that LTD benefits are paid under the Policy does not change the
    fact that Barbers entitlement to LTD benefits is provided by the CA. Indeed, t
he degree of detail Article 18 provides on the terms
    of the relevant insurance plan supports the correctness of the motion judges
    decision. We agree with Manulife when it notes, the language of Article 18
    demonstrates that the CA is the root of the contractual entitlement to the
    relevant disability insurance.

[16]

The decision of the motion judge is correct. Jurisdiction over this
    dispute belongs to an arbitrator and the motion judge correctly dismissed
    Barbers action under r. 21.
Accordingly, the
    appeal is dismissed. Manulife is awarded its costs of the appeal fixed in the
    amount of $ 2,000 inclusive of disbursements and HST
.

H.S.
    LaForme J.A.

"S.E. Pepall
    J.A."

G. Pardu J.A.





[1]
Brown and Beatty, Canadian Labour Arbitration, 3rd ed. (1988).


