



COURT OF APPEAL FOR ONTARIO

CITATION: Clarke v. Sun Life Assurance Company of Canada,
    2020 ONCA 11

DATE: 20200108

DOCKET: C67056

Brown, Huscroft and Trotter JJ.A.

BETWEEN

April Clarke

Plaintiff (Respondent)

and

Sun Life Assurance Company of Canada

Defendant (Appellant)

Linda Plumpton and Davida Shiff, for the appellant

Allan Chapnik, for the respondent

Heard: December 18, 2019

On appeal from the
    order of Justice Janet Leiper of the Superior Court of Justice dated May 14,
    2019, with reasons reported at 2019 ONSC 2942, 147 O.R. (3d) 55.

BROWN
    J.A.:

OVERVIEW

[1]

Sun Life Assurance Company of Canada brought a summary judgment motion
    to dismiss, as statute-barred, Ms. Clarkes action for long-term disability
    benefits under a group policy of insurance. The motion judge dismissed the
    motion and, instead, declared that Ms. Clarkes action was not statute-barred as
    the limitation period for the action commenced on June 19, 2017, a little over
    a year before Ms. Clarke issued her claim. Sun Life appeals, asking this court
    to set aside the order below and dismiss Ms. Clarkes action.

[2]

For the reasons set out below, I would allow the appeal in part.

BACKGROUND
    FACTS

[3]

Ms. Clarke was employed by Canada Post. Sun Life was the insurer for
    Canada Posts group disability insurance plan. Ms. Clarke was a member of the
    plan.

[4]

Under the plan, an insured employees eligibility for total disability
    benefits was determined by reference to two periods of time. In the first
    period, which covered the plans elimination period and the following 24
    months, the plan treated as totally disabled an insured who was prevented
    from performing the essential duties of her regular or Own Occupation. For
    the period beyond the 24 months, the plan treated an insured as Totally Disabled
    for Any Occupation if she was prevented from engaging in any commensurate
    occupation for which she was or became reasonably qualified by education,
    training, or experience.

[5]

Ms. Clarke made a claim for long-term disability benefits after she
    stopped working due to health problems in 2011.  In a letter dated March 19,
    2012, Sun Life denied her claim, stating that it was unable to establish her
    total disability from returning to her own occupational duties. The letter
    informed Ms. Clarke that three levels of appeal were available to her. The
    appeal process was not a term of the plan of insurance but a practice by Sun
    Life that its counsel described as the operationalization of the duty of good
    faith of the insurer.

[6]

Ms. Clarke appealed.

[7]

By letter dated February 24, 2014, Sun Life wrote to Ms. Clarke to tell
    her that it had approved disability benefits for the Own Occupation period,
    which had ended in April 2013. The letter went on to tell Ms. Clarke that the
    medical information she had provided did not support her claim for Any
    Occupation total disability benefits. Specifically, the letter stated:

The current medical information in your file does not appear to
    support Total Disability from Any Occupation. Therefore your last payment date
    is
April 25, 2013
and your LTD file is now closed.

Should you feel Totally Disabled from Any Occupation, you will
    need to provide medical information for our review. You will need to [provide]
    objective medical information including diagnosis, treatment, complications to
    date preventing you from working in any occupation.
Kindly note this is
    your responsibility.
[Emphasis in original.]

[8]

On February 26, 2014, Ms. Clarke and her union representative spoke to
    Sun Life and advised that she would appeal the Any Occupation phase. Sun
    Lifes call record of that conversation went on to state: Union Rep stated
    that PMs [Plan Members] doctor dont think that PM is TD any [Totally
    Disabled Any Occupation], but due to a recent surgery in January/2014, PM needs
    few more months of LTD [long-term disability] benefits, she said maybe 1 more
    year of LTD benefits.

[9]

The record before us does not disclose any further contact between Ms.
    Clarke and Sun Life over the next three years.
[1]
It was not until March 2017 that Ms. Clarke provided Sun Life with further
    medical information for her Any Occupation claim.

[10]

By letter dated April 24, 2017, Sun Life informed Ms. Clarke that your
    request for a review of our decision is now being considered at the first level
    of appeal.

[11]

On June 19, 2017, Sun Life wrote to Ms. Clarke about the decision at
    the appeal process. The letter reviewed the merits of Ms. Clarkes claim for Any
    Occupation benefits, explaining in some detail why it maintained the position
    that she did not qualify for Any Occupation total disability benefits. The
    letter stated: [W]hile we are pleased that we could issue payments for a
    considerable period, the current information on file is not sufficient to
    overturn our prior decision. Like the February 24, 2014 letter, the June 19,
    2017 letter advised Ms. Clarke that her file was closed; as well, it did not
    use the word deny in its text.

[12]

The June 19, 2017 letter informed Ms. Clarke that a final level of
    appeal was available. The letter concluded with a statement that Sun Life had
    not included in its previous communications with Ms. Clarke:

Our consideration of an appeal shall not constitute a waiver of
    any of our rights under the policy or otherwise, including with respect to the
    applicable limitation period. If you decide to take legal action against Sun
    Life, please be advised that your claim is subject to a limitation period. This
    limitation is set out in the
Limitations Act, 2002
[S.O. 2002, c. 24,
    Sched. B] or in the applicable contractual provisions.

[13]

On August 2, 2018, Ms. Clarke issued her statement of claim seeking the payment
    of arrears of long-term disability benefits from the cessation of payments on
    April 25, 2013.

[14]

Sun Life brought a motion for summary judgment to dismiss the action as
    statute-barred, which the motion judge denied. Sun Life appeals.

ANALYSIS

The day on which the injury,
    loss or damage occurred

[15]

The motion judge started her analysis under the
Limitations Act,
    2002
by considering the date the injury, loss or damage occurred: ss.
    5(1)(a)(i) and (b). The motion judge did not accept Sun Lifes submission that
    the February 24, 2014 letter marked the time at which Ms. Clarke first knew
    that an injury, loss or damage had occurred. She described the letter as
    equivocal and noted that it did not use the language of refusal or denial:
    at para. 21. She concluded that it was not clear that the words used by the
    Sun Life letter of February 24, 2014 [were] a denial of disability benefits
    that amounted to injury, loss or damage: at para. 23. She ultimately found,
    at para. 30, that the limitation period commenced with the denial communicated
    to Ms. Clarke by Sun Life on June 19, 2017, notwithstanding that that letter
    also did not use language of denial.

[16]

With respect, the motion judge erred in law by failing to apply the
    principle stated by this court in
Pepper v. Sanmina-Sci Systems (Canada)
    Inc.
, 2017 ONCA 730, [2018] I.L.R. I-5996, at para. 1, that an insured has
    a cause of action for breach of contract against her insurer when the insurer
    stops paying long-term disability benefits. In its February 24, 2014 letter,
    Sun Life informed Ms. Clarke that her disability benefits terminated as of
    April 25, 2013, which was the date the Own Occupation benefits period ended.
    Sun Life went on to state that it would not pay Any Occupation benefits.
    Accordingly, by February 24, 2014, a loss, injury or damage had occurred that
    would have been known to a reasonable person with the abilities and in the
    circumstances of Ms. Clarke:
Limitations Act, 2002
, ss. 5(1)(a)(i) and
    (b).

[17]

I note that in reaching her conclusion on s. 5(1)(a)(i), the motion
    judge relied on the decision of the Divisional Court in
Western Life
    Assurance Company v. Penttila
, 2019 ONSC 14, 144 O.R. (3d) 198. The motion
    judge appears to have misapplied
Western Life Assurance
on the issue
    of when an insured knows that a loss, injury or damage has occurred. As that
    decision clearly stated, at para. 17, the parties agreed that for the purposes
    of s. 5(1)(a)(i) the insured knew that a loss had occurred on the date her
    benefits came to an end, which is the governing principle as stated in
Pepper
.

A proceeding would be an appropriate means

[18]

The motion judge next considered the issue of when a proceeding would be
    an appropriate means to remedy the loss, injury or damage:
Limitations Act,
    2002
, ss. 5(1)(a)(iv) and (b). For the reasons that follow, I conclude
    that the motion judge failed to conduct the analysis required by the Act on
    this point.

[19]

The discoverability analysis required by ss. 5(1) and (2) of the Act
    contains cumulative and comparative elements.

[20]

Section 5(1)(a) identifies the four elements a court must examine cumulatively
    to determine when a claim was discovered. When considering the four s.
    5(1)(a) elements, a court must make two findings of fact:

(i)       The court must
    determine the day on which the person with the claim first knew all four of
    the elements. In making this first finding of fact, the court must have regard
    to the presumed date of knowledge established by s. 5(2): A person with a
    claim shall be presumed to have known of the matters referred to in clause (1) (a)
    on the day the act or omission on which the claim is based took place, unless
    the contrary is proved; and

(ii)      The court must also
    determine the day on which a reasonable person with the abilities and in the
    circumstances of the person with the claim first ought to have known of the
    four elements identified in s. 5(1)(a).

Armed with those two findings of fact, s. 5(1) then
    requires the court to compare the two dates and states that a claim is
    discovered on the earlier of the two dates: see
Nasr Hospitality Services
    Inc. v. Intact Insurance
, 2018 ONCA 725, 142 O.R. (3d) 561, at paras. 34-35.

[21]

Accordingly, as part of her cumulative and comparative discoverability
    analysis, the motion judge was required to determine (i) the day on which Ms.
    Clarke first knew  that, having regard to the nature of the injury, loss or
    damage, a proceeding would be an appropriate means to seek to remedy it (s.
    5(1)(a)(iv)) and (ii) the day on which a reasonable person with the abilities
    and in the circumstances of Ms. Clarke first ought to have known of that matter
    (s. 5(1)(b)).

[22]

The motion judges reasons disclose that she failed to make any specific
    finding about either date.

[23]

Although the motion judge noted, at paras. 30(iii) and (iv), that Ms.
    Clarkes three-year delay in providing additional medical information was
    unexplained and her evidence was silent as to her knowledge, intentions or
    assumptions about the matter, the motion judge was not prepared to draw any
    inferences from this absence of evidence. Read as a whole, her reasons disclose
    that she was not able to determine when Ms. Clarke first knew that a proceeding
    would be an appropriate means to seek to remedy her injury.

[24]

In that circumstance, the motion judge was required to deal with s. 5(2)
    of the Act, which presumes that a person with a claim knows of the matters in
    s. 5(1)(a) on the day the act or omission on which the claim is based took
    place, unless the contrary is proved. Applying the presumption requires the
    court to assess whether the claimant had acted with due diligence in determining
    if she had a claim:
Miaskowski v. Persaud
, 2015 ONCA 758, 393 D.L.R.
    (4th) 237, at paras. 24-27. The motion judge did not deal with the s. 5(2) presumption
    or the related obligation of the insured to act with due diligence.

[25]

Given the motion judges failure to make the requisite findings of fact
    in respect of ss. 5(1)(a)(iv), (b), and (2), her conclusion that Sun Life had
    not established the elements of a limitation defence under ss. 4 and 5 of the Act
    lacked an adequate legal and factual foundation. For that reason, her order must
    be set aside.

[26]

I do not consider this to be an appropriate case to exercise this
    courts fact-finding powers under
Courts of Justice Act
, R.S.O. 1990,
    c. C.43, s. 134(4), in respect of ss. 5(1)(a)(iv), (b), and (2), including the
    issue of Ms. Clarkes due diligence. No examinations for discovery or
    cross-examinations have been conducted in this proceeding. A fuller record is
    required to assess, for the purposes of the s. 5(1)(a)(iv) analysis, the
    significance of the informal appeal process offered by Sun Life and engaged by
    Ms. Clarke, including whether that process constituted an alternative process with
    a reasonably certain or ascertainable date on which it runs its course or is
    exhausted, as required by
Presidential MSH Corporation v. Marr Foster &
    Co. LLP
, 2017 ONCA 325, 135 O.R. (3d) 321, at para. 48. Accordingly, the remaining
    issues related to the limitation period defence are more appropriately
    determined through some form of trial.

DISPOSITION

[27]

I would grant the appeal, set aside the order of the motion judge, and
    direct that the action proceed to trial.

[28]

The parties agreed that the successful party on the appeal should be
    awarded costs of $10,000, inclusive of disbursements and applicable taxes. Success
    on the appeal has been divided. Accordingly, I would fix the costs of the
    appeal at $10,000 but order that they be payable in the ultimate cause of the
    action.

Released: DB JAN 08 2020

David Brown J.A.

I agree. Grant
    Huscroft J.A.

I agree. Gary Trotter
    J.A.




[1]
This unexplained lengthy period of inactivity by Ms. Clarke in pursuing an
    appeal factually distinguishes this case from the situation in
Western Life Assurance Company v. Penttila
,
    2019 ONSC 14, 144 O.R. (3d) 198 (Div. Ct.), a case relied upon by Ms. Clarke.
    The lack of contact between the insured and insurer over the three-year period
    differentiates this case from the circumstances in
Kassburg v. Sun Life Assurance Company of Canada
,
    2014 ONCA 922, 124 O.R. (3d) 171.


