



COURT OF APPEAL FOR ONTARIO

CITATION: MacIvor v. Pitney Bowes, 2018 ONCA 381

DATE: 20180419

DOCKET: C63579

MacFarland, Huscroft and Nordheimer JJ.A.

BETWEEN

Lenard MacIvor

Plaintiff (Appellant)

and

Pitney Bowes Inc. and
Manulife Financial

The
    Manufacturers Life Insurance Company

Defendants (
Respondent
)

Jeffrey Strype and Mark De Sanctis, for the appellant

Gordon Jermane and Veronica Mohan, for the respondent

Heard: March 20, 2018

On appeal from the judgment of Justice Andra Pollak of
    the Superior Court of Justice, dated March 7, 2017, with reasons reported at
    2017 ONSC 1550.

MacFarland J.A.
:

A.

Introduction

[1]

This is an appeal from a trial judgment holding that the appellant,
Lenard MacIvor, as a former
    employee of Pitney Bowes, had no coverage for his claim under the long term
    disability policy of the Manufacturers Life Insurance Company (the Manulife
    Policy).

[2]

The appellant suffered a traumatic brain injury and a severe back injury
    during a company sponsored event in Costa Rica on April 16, 2005. He was
    unaware of the permanent and disabling nature of his brain injury until after
    he had resigned his employment with Pitney Bowes.

[3]

Three issues are presented in this appeal: (1) whether the appellant, as
    a former employee of Pitney Bowes, is entitled to coverage under
the Manulife Policy
;
    (2) whether the appellant submitted a timely proof of claim; and (3) whether
    the one-year contractual limitation period in the policy bars the appellants
    claim.

[4]

For the reasons that follow, I would allow the appeal.

B.

Background and Facts

[5]

Briefly stated, the material facts are as follows.

[6]

Following his accident, the appellant was off work for nearly four
    months and returned to work in August 2005. It is clear from the history and
    chronology set out in an Agreed Statement of Facts that his work performance
    deteriorated dramatically from what it had been. Paragraph 2 of the Agreed
    Statement of Facts set out the appellants employment history for the years
    preceding the accident where, between 1996 and 2005, he rose through the ranks,
    from junior sales representative to Division Sales Vice President, managing
    over 130 sales representatives.

[7]

He was a different man when he returned to his employment following the
    accident. Paragraph 5 of the Agreed Statement of Facts sets out the
    difficulties he encountered in resuming his employment. His responsibilities
    were continuously reduced and in frustration he quit his job at Pitney Bowes on
    August 11, 2008. Within days he took up employment with Samsung to perform a
    role similar to the one he held at Pitney Bowes before his accident.

[8]

The difficulties hed experienced in job performance before leaving
    Pitney Bowes soon became apparent and he was fired from Samsung in August 2009.
    He asked Samsung about making a Long Term Disability Claim and was told that, because
    his injury occurred when he was working for Pitney Bowes, he would have to
    apply under that policy. He tried to train as a real estate agent but his
    efforts resulted in overall failure.

[9]

It is apparent from the medical evidence summarized in the Agreed
    Statement of Facts, at paras. 13-14, that the appellant was, for a long time,
    unaware of the seriousness of his brain injury and in particular the permanent
    nature of that disability. As Dr. Lad recorded in his notes Mr. MacIvor
    thought that he would recover from the effects of his brain injury.

[10]

On
    September 9, 2010 the appellant applied for Long Term Disability benefits and
    provided proof of claim. On November 1, 2010 the respondent denied his claim. On
    April 11, 2011 he commenced this proceeding.

[11]

The
    parties agree the appellant is:

[U]nable to perform the essential and material duties of his
    regular occupation and for any occupation for which he was reasonably fitted,
    or could so become, by education, training or experience under the terms of the
    Manulife policy, and has been since the date of his injury in Costa Rica on
    April 16, 2005.

They further
agree
that as such, he meets the qualification for disability benefits as set out in
    the
Manulife
Policy. The respondent agrees
    that it received sufficient notice of the claim in April 2005.

[12]

There
    is no issue that the appellant had coverage while he was employed. The
    respondent argues however, that: [h]e had access to [Long Term Disability]
    benefits if he applied while he was employed and, therefore, covered. Once he
    was outside of this coverage and/or failed to meet the Policys terms, he no longer
    had entitlement to claim; and that [t]he policy indicates that coverage ends
    when employment ends.

[13]

The
    trial judge accepted this argument. She concluded, at para. 16, that the policy
    states in clear terms that there is no coverage for persons who are not
    employed by Pitney Bowes.

C.

Analysis

(1)

Issue #1: Is the appellant, as a former employee of Pitney
    Bowes, entitled to coverage under
the Manulife Policy?

[14]

The
    trial judges conclusion that the policy provided no coverage for former employees
    raises a question of law reviewable on a standard of correctness. It arises in
    the context of the interpretation of a standard form group policy insurance:
Ledcor

Construction Ltd. v. Northbridge Indemnity Insurance Co.
, 2016 SCC 37, [2016] 2 S.C.R. 23
.

[15]

The
    respondents position quite simply is that the Manulife Policy provides for
    coverage only during employment and that coverage ended when the appellant resigned
    from his position on August 11, 2008.

[16]

The
    language of the policy upon which the respondent relies to deny the appellants
    claim is found at p. 9 of the policy:

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 day on which you cease to be Actively Employed;



[17]

Actively
    Employed is a defined term. There is no issue that the appellant ceased to be
    actively employed at Pitney Bowes on the date he quit, August 11, 2008.

[18]

In
Ledcor
, the Supreme Court summarized the governing principles of
    interpretation applicable to insurance policies. The primary interpretive principle
    is that where the language of the insurance policy is unambiguous, effect
    should be given to that clear language, reading the contract as a whole:
Ledcor
,
    at para. 49.

[19]

In
    my view, the language of the Manulife Policy when considered as a whole is
    clear; it means only that coverage does not continue when an employee begins
    working for another employer or after the employee has retired. The Termination
    of Coverage language relates to future claims, not claims that may have arisen
    during the course of the employees employment. In other words, if an
    employees claim arises as the result of an occurrence that takes place during
    their employment, the policy provides coverage. The additional words unless
    continuation of coverage is provided under the Extension of Coverage provision
    supports this conclusion.

[20]

Moreover
    the Manulife Policy also provides:

TOTAL DISABILITY BENEFITS

A Monthly Benefit will be paid if you become Totally Disabled
    while covered under the Long Term Disability Coverage and are under the
    continuing care of a physician.

[21]

The
    language of this provision confirms the entitlement to be paid a monthly
    benefit if the total disability occurs during the coverage period. I note that
    this provision contains no language indicating that it applies only to current
    employees.

[22]

Where
    the language of a policy is ambiguous, the general rules of contract
    construction must be employed to resolve that ambiguity:
Ledcor
, at
    para. 50. These principles include that the interpretation should not give
    rise to results that are unrealistic or that the parties would not have
    contemplated in the commercial atmosphere in which the insurance policy was
    contracted:
Ledcor
, at para. 50. If ambiguity still remains after
    applying the general principles, then the principle that coverage provisions are
    to be interpreted broadly, and exclusion clauses narrowly, may be considered:
Ledcor
,
    at para. 51.

[23]

These
    principles do not support the respondents position. The Manulife Policy does
    not contain the type of exclusionary language that terminates coverage for undiscovered
    disability claims the employee had and that originated during their employment,
    when their employment ceases. To so conclude would leave former employees, like
    the appellant, in the untenable position of having no disability coverage from
    either their former employer or any new employer. Such a result would be
    contrary to the very purpose of disability insurance and the plain meaning of
    the coverage provision.

[24]

Subject
    to the policy requirements to provide timely proof of claim and to commence the
    claim within the relevant limitation period, if the incident or illness
    occurred or arose during the currency of employment, coverage will be provided
    and the policy must respond: see
Smith v. Empire Life Insurance Co.
(1996)
, 19 C.C.E.L. (2d) 171 (Ont. Gen.
    Div.), at para. 16, leave to appeal refused, 1996 CarswellOnt 3896 (Div. Ct.),
    leave to appeal refused, 1996 CarswellOnt 3671 (C.A.);
Smith v. Empire Life
    Insurance Co.
(1998), 83 O.T.C. 140 (Gen. Div.);
Spring v. A. Saley
    & Associates Ltd.
(1997), 54 O.T.C. 149 (Gen. Div.), at para. 36, varied
    on other grounds (1999), 123 O.A.C. 175 (C.A.); and
Tarailo v. Allied
    Chemical Canada Long Term Disability
(1989), 68 O.R. (2d) 288 (Sup. Ct.),
    at paras. 25 & 43.

(2)

Issue #2: Did the appellant submit a timely proof of claim under the policy?

[25]

The
    policy requires that proof of claim be filed within 90 days of the date
    benefits would begin. Benefits would begin only when an employee is no longer
    receiving employment income. There is no dispute that the appellant continued
    to receive his salary equivalent as an employee of Samsung until he was fired
    in August 2009 (Agreed Statement of Facts, at paras. 7-9). When the appellant
    was fired from Samsung, he also received a termination package.

[26]

The
    record is anything but clear on the precise dates to which the Samsung package
    extended. We do not know what the pay period was and whether he was paid to the
    end of August 2009 or later. We know that the package represented eight months
    of salary. Assuming that payment began on September 1, 2009 he would have been
    paid through the end of April 2010 and thus became eligible to receive benefits
    on May 1, 2010.

[27]

Benefits
    under the policy are paid monthly in arrears. Accordingly, the date that
    benefits would begin was June 1, 2010 at the earliest. The appellants proof
    of claim was filed September 9, 2010. Based on the date of termination and the
    package that the appellant received from Samsung, the proof of claim appears to
    have been provided some 10 days after the required 90-day contractual period.

[28]

It
    would be most unfair, in my view, to permit the imperfect compliance with the
    90-day contractual period to defeat the appellants claim in the particular circumstances
    of this case. The appellant was injured during his employment when he was
    covered by a Long Term Disability policy, but did not appreciate the
    significance of his injury during his employment. The respondent has conceded
    the appellants total disability as of the date of the accident and that he
    enjoyed coverage under its policy at the time of his injury. The appellant left
    his employment sometime after he was injured but before he was aware of the
    extent of his injury. The imperfect compliance with the requirement to file the
    proof of claim form may only be a matter of 10 days at most. His employer and
    the insurer were aware that he had suffered a serious injury that included a
    brain injury at the outset. All of the foregoing facts have been known to the
    parties for years now.

[29]

Although
    relief from forfeiture pursuant to the provisions of the
Insurance Act
,
    R.S.O. 1990, c. I.8, or the
Courts of Justice Act
, R.S.O. 1990, c. C.43,

was not raised at
    trial, given the facts outlined above, it is in the interests of justice to
    grant that relief here.

(3)

Issue
    #3: Does the one-year limitation period in the policy apply?

[30]

The
    respondent alternatively relies on the one-year limitation period set out in the
    Manulife Policy to say that, in any event, the claim is out of time. Even on
    the appellants evidence, he became aware of his ability to claim in August
    2009. Accordingly, if the one-year contractual limitation period began tolling
    on that date, the claim issued in April 2011 is out of time.

[31]

The
    policy provides:

Legal Action

No legal action for the recovery of any claim may be brought
    against Manulife Financial until 60 days have elapsed from the date written
    proof of loss has been furnished to Manulife Financial. Any such action must be
    brought within one year after filing written proof of loss.

[32]

Proof
    of loss is not a defined term in the policy. I take this term to be a
    reference to written proof of claim which the policy requires to be received by
    Manulife Financial within 90 days of the date benefits would begin. The
    appellant filed his proof of claim on September 9, 2010 and his claim was denied
    by the respondent on November 1, 2010.

[33]

It
    is arguably unclear whether the policy language required the appellant to
    commence his action within one year of November 1, 2010, the date that Manulife
    denied the claim, or whether the one-year period runs from September 9, 2010, the
    actual date the proof of claim was submitted. Because the statement of claim
    was issued on April 11, 2011, it is not necessary to resolve that question as
    regardless of how the one-year contractual period is to be calculated, it was
    met on the facts of this case.

[34]

In
    any event, in view of this courts decision in
Kassburg v. Sun Life
    Assurance Company of Canada
, 2014 ONCA 922,
124 O.R. (3d) 171
,
it is unlikely that the one-year period of limitation would be upheld: see
    paras. 53-62.

[35]

The
    respondent argues that the appellant knew he had a claim while he was still
    employed at Pitney Bowes and ought to have brought his claim much earlier. It
    points to the fact that his awareness was sufficient to apply for WSIB
    benefits in 2005 and that he continues to receive those benefits.

[36]

This
    argument fails to take into account the fact that the appellant suffered not
    only a traumatic brain injury in April 2005 but that he also had a significant musculoskeletal
    injury and was unable to work for nearly four months after the accident. The
    focus of medical attention at the time the appellant suffered his injuries
    appears to have been on his severe back injury. There is nothing in the Agreed
    Statement of Facts that explains or details in any way what the WSIB payments
    relate to. What is clear, however, is that it was not until his discussion with
    personnel at Samsung that he became aware that the seriousness of his brain
    injury would prevent him from working in the future.

[37]

The
    only reasonable available conclusion on this record is that the appellant could
    not reasonably have appreciated he had a cause of action until the end of
    August 2009. The claim was therefore not discovered until that time:
Limitations
    Act, 2002
, S.O. 2002, c. 24, Sched. B, at s. 5. Even on that basis his
    action was commenced well within two years of that date. I would also note that
    he did not receive his CPP disability pension until May 2011.

D.

Conclusion and Disposition

[38]

For
    these reasons, I would allow the appeal, set aside the judgment of the trial
    judge and in its place issue a judgment in accordance with these reasons.

[39]

As
    agreed between the parties, costs to the appellant fixed in the sum of $8,000
    inclusive of disbursements and HST.

Released: April 19, 2018 (J. MacF.)

J. MacFarland J.A.

I agree. Grant Huscroft
    J.A.

I agree. I.V.B. Nordheimer
    J.A.


