



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Sander v. Sun Life Assurance Company of Canada
,









2011 BCCA 3




Date: 20110106

Docket: CA037572

Between:

Kenneth Sander

Appellant

(Plaintiff)

And

Sun Life Assurance
Company of Canada

Respondent

(Defendant)




Before:



The Honourable Chief Justice Finch





The Honourable Madam Justice Saunders





The Honourable Madam Justice Neilson




On appeal from: 
Supreme Court of British Columbia, September 24, 2009
(
Sander v. Sun Life Assurance Company of Canada
, 2009 BCSC 1301)




Counsel for the Appellant:



M. Clemens, Q.C.





Counsel for the Respondent:



V.R.K. Orchard, Q.C.,
  A.M. Gunn





Place and Date of Hearing:



Vancouver, British
  Columbia

October 15, 2010





Place and Date of Judgment:



Vancouver, British
  Columbia

January 6, 2011









Written Reasons by:





The Honourable Chief Justice Finch





Concurred in by:





The Honourable Madam Justice Saunders

The Honourable Madam Justice Neilson




















Reasons for Judgment of the Honourable
Chief Justice Finch:

I. 
Introduction

[1]

Dr. Sander appeals from the judgment of the Supreme Court of British
Columbia pronounced 24 September 2009 following a summary trial under Rule 18A,
holding that the action he commenced by writ of summons filed on 9 November
2004 was barred by s. 22(1) of the
Insurance Act
, R.S.B.C. 1996, c. 266
(the 
Act
).  The section mandates that ... every action on a contract
[of insurance] must be commenced within one year after the furnishing of a
reasonably sufficient proof of loss or claim under the contract ....  The summary
trial judge held that the one year limitation period was triggered when the
respondent insurer provided Dr. Sander with clear and unequivocal notice of
denial by letter dated 29 June 2001.  The limitation period for issuing a writ
therefore expired on 29 June 2002, and the writ issued 9 November 2004 was out
of time.

[2]

Dr. Sander contends that by the terms of the policy of insurance the
limitation period did not begin to run until his counsel provided the insurer
with proof of loss or claim by letter of 23 April 2004.  He says that the
writ of 9 November 2004 was therefore well within that one year statutory
limitation.

[3]

Dr. Sander further submits that in this case, the governing limitation
period is that contained in the policy of insurance, which is two years after
the date the insurance money became payable ... (the Policy Limitation).  He
says that because this policy provided for periodic income replacement benefits
there was a continuing cause of action with a rolling limitation period that
applies to each monthly benefit payable.  He says the date the limitation was
triggered cannot be determined until there is a finding on the merits of his
case, and whether he had a valid continuing claim after 14 June 2001, the date
of the insurers last payment.

[4]

For the reasons that follow, I am of the view that the learned summary
trial judge erred in law in failing to apply the two year limitation period
contained in the policy, rather than the one year limitation period provided by
s. 22(1) of the
Act
.  When that two year limitation period commenced to
run cannot be determined until there is a determination on the merits as to the
time during which Dr. Sander had (or has) a valid claim under the policy.  I
would allow the appeal.

II. 
Background

[5]

Dr. Sander, a former dentist, was diagnosed as having cataracts in both
eyes in early 1998.  The cataracts interfered with his ability to carry on the
practice of dentistry.

[6]

On 13 July 1998, Dr. Sander filed a claim for disability benefits under
a group insurance policy between Sun Life and the Canadian Dental Association
(the Insurance Policy) which provided for income replacement benefits to be
paid if a participant (as defined by the Insurance Policy) became unable to
perform the essential duties of the practice of dentistry.  Dr. Sanders claim
was approved and on 31 July 1998, he began receiving monthly benefits.

[7]

On 20 September and 30 October 2000, Sun Life wrote to Dr. Sander
advising him that it would not continue to pay benefits indefinitely and that
it expected him to undergo corrective cataract surgery.  If he elected not to
do so, Sun Life stated that it would extend payment for a time frame equivalent
to what would have been expected had he proceeded with the surgery and then it
would close his claims file.

[8]

Dr. Sander took issue with Sun Lifes position that the terms of the
Insurance Policy required him to undergo corrective surgery.  Dr. Sanders
position was that corrective surgery was not a precondition to coverage.

[9]

On 2 February 2001, Dr. Sander commenced a petition in the Supreme Court
to resolve the issue.  By consent, the petition was converted into an action
around March 2001 at the request of Sun Lifes counsel in order that an
examination for discovery of Dr. Sander could be conducted.  An application for
summary judgment pursuant to 18A, brought by Dr. Sander, was heard by Madam
Justice Dillon on two days in June 2001, with reasons for judgment released on 24
October 2001:
Sander v. Sun Life Assurance Company of Canada
, 2001 BCSC
1445.  Dillon J. denied Dr. Sanders application and, at para. 36, found his
refusal to undergo corrective surgery unreasonable within the terms of the
Insurance Policy.

[10]

While the judgment was under reserve, Sun Lifes counsel wrote Dr.
Sanders counsel the following letter dated 29 June 2001:

We are writing to confirm that Sun Life Assurance Company of
Canada (Sun Life) will be discontinuing benefits payable to Dr. Sander under
the long term disability coverage.

As you are aware, Sun Life informed Dr. Sander by letters
dated September 20, October 25 and 30, 2000 that it was prepared to continue
payment of benefits for a period within which Dr. Sander could make
arrangements to undergo cataract surgery and also for a period of
post-operative recovery.  Copies of those letters are enclosed for your
reference.

As we understand matters, Dr. Sanders surgery was scheduled
for March 13 or 14, 2001.  If Dr. Sander had proceeded with the surgery, one
would have expected a period of recovery not to exceed three months.

Dr. Sander has received payments
up to May 31, 2001.  Accordingly, Sun Lifes final payment will be for the
period June 1 to June 14, 2001.

[11]

In accordance with the above letter, Sun Life ceased monthly benefit
payments to Dr. Sander as of 14 June 2001.

[12]

Dr. Sander commenced an appeal from the judgment of Dillon J. in
November 2001.  On 29 January 2003, the Court of Appeal dismissed his appeal: 
2003 BCCA 55.

[13]

Following dismissal of his appeal, Dr. Sander underwent corrective
cataract surgery to his right eye on 27 February 2003 and to his left eye on 18
December 2003.  Despite the surgeries, Dr. Sander maintains he still does not
possess the required visual acuity to practice dentistry.

[14]

On 9 November 2004, Dr. Sander commenced an action against Sun Life for
a declaration that he was entitled to disability payments.  On 24 September 2009,
Sun Life was successful in its application under Rule 18A to dismiss the action
as outside the limitation period.

III. 
Summary Trial Judges Decision

[15]

The summary trial judge first considered the commencement of the
limitation period.  He considered and dismissed the limitation period provided
for in the Insurance Policy, which states:

No action or proceeding against
the Company for recovery of a claim under this policy shall be commenced more
than two years after the date the insurance money became payable or would have
become payable if it had been a valid claim.

[16]

The summary trial judge held that applying this limitation period to Dr.
Sanders case would produce an absurd result.  He said at para. 19: Dr. Sander
would have had to sue by July 31, 2000, even though he was then receiving
benefits and continued to receive benefits until June 14, 2001.

[17]

The summary trial judge then addressed s. 22(1) of the
Act
which
provides:

Every action on a contract must
be commenced within one year after the furnishing of reasonably sufficient
proof of a loss or claim under the contract and not after.

[18]

The summary trial judge held that s. 22(1) similarly produced an absurd
result if it were read literally as Dr. Sander would have had to commence his
action against Sun Life by 13 July 1999, one year after the furnishing of
reasonably sufficient proof of a loss ....

[19]

Relying on this Courts decision in
Balzer v. Sun Life Assurance Co.
of Canada
, 2003 BCCA 306, 15 B.C.L.R. (4th) 6, he held that s. 22(1) of the
Act
has been interpreted to mean that the limitation period on filing a
claim commences to run at the point that the insurer provides the insured with
clear and unequivocal notice of denial of coverage or cessation of benefits.

[20]

The summary trial judge then considered the question of whether Dr.
Sander was clearly put on notice by the 29 June 2001 letter that the limitation
period to commence an action had started to run.  He considered the context of
events both before and at or about the date of the letter.  He canvassed the
discussions of Dr. Sanders counsel, Mr. Dives, and Sun Lifes counsel, Mr.
Samuels, regarding a proposed standstill agreement (which was never completed)
that would have preserved the payment of benefits to Dr. Sander while at the
same time preserving the rights of Sun Life in the event that Dr. Sanders
claim was dismissed and the surgery was eventually successful.  He also
reviewed various correspondences after Dr. Sanders unsuccessful appeal between
counsel for Sun Life and Dr. Sander and his counsel noting that Sun Lifes
position had been steadfast throughout.

[21]

In light of all the circumstances leading up to and after the 29 June 2001
letter, the summary trial judge noted 
Balzer
provides that any doubt or
ambiguity in the giving of clear and unequivocal notice must be resolved in
favour of the insured.  However, upon review of the relevant jurisprudence, he
held that even taken in context with the surrounding circumstances of the
outstanding litigation and discussions between counsel which were continuing at
the time, including the standstill agreement, the 29 June 2001 letter
constituted clear and unequivocal notice to Dr. Sander that his benefits were
being terminated and his file closed.

[22]

The summary trial judge concluded:

[63]      In this case, I do not find there is anything in
the conduct of the defendant which derogates from or lessens the import of the
June 29, 2001 letter advising Dr. Sander of its intention to cease payments and
close its file after June 14, 200[1]. In my view, the notice (the effect of
which was that benefits had ceased) contained in the letter should have been
more, not less, clear given the surrounding circumstances. Sun Life, had made
its position clear from the outset and had been consistent. It insisted Dr.
Sander have corrective eye surgery and have it within a reasonable period of
time. It advised him and his counsel that if he did not have surgery within
such reasonable time, it would set a notionally reasonable period of time for
him to have it and recover and then stop the payment of benefits.

[64]      While Sun Life entered into negotiations for a
standstill agreement, no such agreement was concluded. In any event, during the
negotiations for such agreement the terms sought by Sun Life were consistent
with its position.

[65]      ... I accept all
parties contemplated the issue would be resolved in the summary trial. No one
contemplated that there would be an appeal. It was assumed by all involved that
the litigation as well as the possibility of surgery (in the event the
litigation found against Dr. Sander) would occur well within the one-year
limitation period which commenced June 29, 2001.

[23]

Based on the above reasons, the summary trial judge concluded that the
latest Dr. Sander could have commenced his action was one year after 29 June 2001. 
Thus, his claim was statute barred.

IV. 
Issues on Appeal

[24]

This appeal raises the following issues:

(1)     Which limitation period
governs Dr. Sanders claim, the Policy Limitation or s. 22(1) of the
Act
?

(2)     If the Policy Limitation
applies, was Dr. Sanders claim commenced out of time?

(3)     If s. 22(1) of the
Act
applies,
should the section be interpreted literally or should the clear and
unequivocal notice test, as set out in
Balzer
,

govern Dr.
Sanders claim?

V. 
Position of the Parties

A.  Dr. Sanders Position

[25]

Dr. Sander argues that the summary trial judge erred in applying the
statutory limitation period in s. 22(1) of the
Act
instead of the Policy
Limitation.  Dr. Sanders position is that s. 22(1) of the
Act
does not
displace the Policy Limitation as the
Act
only sets minimum requirements
and the insurer may choose contractual terms that are more favourable to the
insured than those provided by the statute.

[26]

Dr. Sander says the summary trial judge further erred by concluding that
insurance money became payable for the purposes of applying the Policy
Limitation on only a single occasion.  According to the Policy Limitation,
insurance money becomes payable when the participant has entitlement to it. 
Relying on this Courts decision in
Holme Estate v. Unum Life Insurance Co.
of America
, 2000 BCCA 627, 83 B.C.L.R. (3d) 108, insurance money becomes
payable, and the limitations period triggered anew, at each successive time
benefits are to be paid.  Accordingly, Dr. Sander was well within the
applicable Policy Limitation when he issued a writ of summons in November 2004
because the monthly benefits payable following his unsuccessful cataract
surgeries raise a continuing cause of action with a rolling limitation that
applies to each monthly benefit instalment.

[27]

If this Court determines that the appropriate limitation period is that
found in s. 22(1) of the
Act
, Dr. Sander argues that the summary trial
judge erred in applying the clear and unequivocal notice test enunciated in
Balzer
rather than applying the section literally.  In Dr. Sanders case, the
reasonably sufficient proof of a loss or claim for the post cataract surgery
disability benefits was provided to Sun Life on 23 April 2004 by Dr. Sanders
counsel.  The writ of summons was issued on November 9, 2004, well within the
limitation period provided for in s. 22(1) of the
Act
.

[28]

Dr. Sander did not advance the preceding arguments in the Court below. 
Rather, Dr. Sander argued that Sun Life had not met its onus to establish that
it had given clear and unequivocal notice to him that his benefits were being
discontinued.  Dr. Sander takes this position again as an alternative in this
appeal.

[29]

According to Dr. Sander, if the clear and unequivocal notice test
applies, there is no evidence reasonably capable of supporting the summary
trial judges conclusion that Sun Life issued a clear and unequivocal denial of
further benefits in the 29 June 2001 letter.  The 29 June 2001 letter was
nothing more than a suspension of benefits.  Dr. Sander supports this position
by emphasizing the context in which the letter was sent, and the conduct of the
parties after Dillon J. dismissed Dr. Sanders application, specifically the
fact that Sun Life defended the appeal from Dillon J.s order after the alleged
limitation period had passed.

B.  Sun Lifes Position

[30]

Sun Life argues the summary trial judge correctly interpreted and
applied s. 22(1) of the
Act
rather than the Policy Limitation.  However,
even if the Policy Limitation prevails, Sun Life maintains that Dr. Sanders
claim is time-barred.  According to Sun Life, the 29 June 2001 letter denied
entitlement not only to the next scheduled payment of benefits but also to any
future payment of benefits.  Dr. Sanders entitlement to benefits terminated on
that date and any rolling entitlement under the Insurance Policy stopped
rolling on that date.

[31]

In response to Dr. Sanders position that
Balzer
should be
distinguished from this proceeding because the wording of s. 22(1) of the
Act
would not create the same absurdity here as it did in
Balzer,
Sun
Life argues Dr. Sanders counsels letter of 23 April 2004 was merely an
attempt to resume discussions regarding Dr. Sanders alleged ongoing
disability.  Reasonably sufficient proof of loss for that claim was furnished six
years ago, on 13 July 1998.  Accordingly, a literal interpretation of s. 22(1)
leads to Dr. Sanders action being time-barred, but only by way of the
absurdity identified by the summary trial judge that the action would have had
to have been commenced while Dr. Sander was still receiving benefits.

[32]

Sun Lifes position is that the clear and unequivocal notice test
applies and that the determination of whether clear and unequivocal notice
had been given by Sun Life is a question of fact.  The summary trial judge was
correct to conclude on the evidence that the circumstances surrounding the 29 June
2001 letter met the test.

VI. 
Analysis

A.  Preliminary Matters

[33]

Dr. Sander raises two issues on appeal that were not raised below:  first,
that his action is governed by the Policy Limitation; and secondly, that if s.
22(1) displaces the Policy Limitation, Dr. Sander provided reasonably
sufficient proof of claim for his post cataract surgery disability benefits to
Sun Life on 23 April 2004 by way of a letter from his counsel to Sun Life.

[34]

In its written and oral submissions, Sun Life did not oppose Dr. Sander
raising the first issue of whether his action is governed by the Policy
Limitation, provided the issue could be adjudicated as a pure question of law. 
To the extent that adjudication of the issue required additional findings on
entitlement not made below, Sun Life opposed the issue being raised in this
Court.

[35]

Sun Life did not take a position with respect to whether the second
issue may be raised.  Given my reasoning on this appeal, I need not deal with
whether this Court could properly address the issue and therefore make no
comment on it.

[36]

Sun Life relies on
Athey v. Leonati
, [1996] 3 S.C.R. 458 at
478-479, 140 D.L.R. (4th) 235 in support of its position that Dr. Sander should
not be allowed to raise a new issue that requires additional findings of fact
for the first time in this Court.

[37]

In my view, whether Dr. Sanders action is governed by the Policy
Limitation or s. 22(1) of the
Act
is a pure question of law.  Because
the summary trial judge held that s. 22(1) applied, he did not address the
meaning of the Policy Limitation.  Its interpretation, like the question of
which limitation period applies, is also a question of law.  In my opinion, it
is open to this Court to interpret the policy language and then to apply it to
the facts as found by the summary trial judge.

[38]

Insurance policies are a special category of contracts.  Where ambiguity
in the terms of a policy of insurance exist, interpretation will involve a
combination of general contractual interpretive principles and special
interpretive principles unique to the insurance context:
Jesuit Fathers of
Upper Canada v. Guardian Insurance Co. of Canada
, 2006 SCC 21, [2006] 1
S.C.R. 744 at para. 27;
Co-operators Life Insurance Co. v. Gibbens
, 2009
SCC 59, [2009] 3 S.C.R. 605 at paras. 20-28.  Given the standard form nature of
most insurance policies and a preference for uniformity, courts are reluctant
to depart from authoritative judicial precedent interpreting the terms of a
policy in a particular way: see
Gibbens
at para. 27.

[39]

As noted by the learned author G.R. Hall in
Canadian Contractual
Interpretation Law
(Markham, Ont.: LexisNexis, 2007) at pp. 182-183,
relying on
David Polowin Real Estate Ltd. v. Dominion of Canada General
Insurance Co.
, 76 O.R. (3d) 161 at para. 110 (Ont. C.A.), leave to appeal
to S.C.C. refused [2005] S.C.C.A. Nos. 388-395:

The case for the application of
precedent is even stronger in the case of interpretation of statutory
conditions which must be included in all contracts of insurance, as it would be
anomalous for conditions which are mandated by statute to mean one thing in one
contract and something else in another. [Citation omitted.]

[40]

As indicated in the next section of these reasons, the statutory
conditions found in Part 4 of the
Act
do not apply to the Insurance
Policy.  However, the relevant wording of statutory condition 12 in Part 4 of
the
Act
relating to limitations of actions is exactly the same as the
wording found in the Policy Limitation, except for the term of two years
instead of one.  Extending the reasoning found in the passage from Hall above,
it would be anomalous given the preference in insurance law for uniformity to
interpret the same wording differently simply because in one case it is
mandated by statute and in the other by contract.

[41]

Interpretation of a statute is undoubtedly a question of law. 
Interpretation of a contract may involve questions of law, questions of fact
and questions of mixed fact and law:
Keefer Laundry Ltd. v. Pellerin Milnor
Corp.
, 2009 BCCA 273, 94 B.C.L.R. (4th) 205 at para. 58.

[42]

Given the similarity in wording between statutory condition 12 and the
Policy Limitation, it is my opinion that if the Policy Limitation governs, its
interpretation in this case is a question of law.  I agree with the insurer
that the application of the Policy Limitation in this case would necessarily
involve a review of the facts, but in my view it would not require this Court
to make any new findings.

B.  Applicable Limitation
Period

[43]

The first step in determining the
applicable limitation period is to classify the insurance policy in question. 
Specific classes of insurance are not defined in the
Act
.  Rather,
pursuant to section 1(2) of the
Act
,

the Lieutenant Governor in
Council may make regulations defining what is deemed to be a class of
insurance.  The
Insurance Classes Regulation
, B.C. Reg. 337/90 provides
the following definitions:

disability insurance

means insurance undertaken by an insurer as part of a
life insurance contract whereby the insurer undertakes to pay insurance money
or to provide other benefits in the event that the insured becomes disabled as
a result of bodily injury or disease;

...

sickness insurance means
insurance against loss resulting from the illness or disability of a person and
against expenses incurred for dental care, other than illness or disability or
dental care arising from accident, but does not include disability insurance;

[44]

In this case, the Insurance Policy
is a group policy providing for income replacement benefits upon disability
with no life insurance component and thus is properly categorized as sickness
insurance.  Part 4 of the
Act
governs Accident and Sickness Insurance
and contains statutory conditions deemed to be part of every contract:

89   Subject to section 90 the
conditions set out in this section are deemed to be part of every contract
other
than a contract of group insurance
, and must be printed on or attached to
the policy forming part of the contract         with the heading
"Statutory Conditions".

STATUTORY CONDITIONS

...

Limitation of actions

12.   An action or proceeding
against the insurer for the recovery of a claim under this contract must not be
commenced more than one year after the date the insurance money became payable
or would have become payable if it had been a valid claim.

[Emphasis added.]

[45]

Because the Insurance Policy is a
group policy, the statutory conditions under Part 4 of the
Act
,
including the statutory condition for the limitation of actions, do not apply. 
Despite not being applicable, the language in statutory condition 12 is
relevant in this case because, as noted in para. 40 of these reasons, it is the
same as the Policy Limitation, except for the term.

[46]

According to Part 2, section 3, of
the
Act
, in the absence of other provisions under the
Act
dealing
with a subject matter, the general provisions of Part 2 apply:

3.   This Part has effect,
despite any law or contract to the contrary, except that

(a)   if any section
or statutory condition contained in Part 3, 4, 5 or 7 is applicable and deals
with a subject matter that is the same as or similar to any subject matter
dealt with by this Part, this Part does not apply, ...

[47]

As the Insurance Policy is not
covered by the specific limitation period provision in Part 4, the limitation
period of general application found in Part 2, section 22(1), would apply:

Every action on a contract must
be commenced within one year after the furnishing of reasonably sufficient
proof of a loss or claim under the contract and not after.

[48]

Dr. Sander relies upon
K.P. Pacific Holdings Ltd. v. Guardian
Insurance Co. of Canada
, 2003 SCC 25, [2003] 1 S.C.R. 433, revg 2001 BCCA
469, 202 D.L.R. (4th) 235 for the proposition that s. 22(1) of the
Act
acts
as a floor of protection beneath which an insurance contract cannot descend. 
Accordingly, Dr. Sander argues it is open to an insurer to exceed the minimum
period prescribed in the
Act
and include a more generous limitation
period in the policy, should it choose to do so.

[49]

K.P. Pacific
concerned the limitation period applicable to an
all-risks insurance policy, which included fire insurance.  The question was
whether statutory condition 14 of Part 5, the Fire Insurance Part, or the
general provisions of Part 2 applied to the policy.  Chief Justice McLachlin
writing for the Court determined that a tangled historical thicket guards
entry to Part 5 and that, absent contrived reinterpretation and anomalous
consequences, statutory condition 14 could not apply.  Rather, Part 2,
although not ideal, applied.

[50]

This interpretation left an alternative argument that even if Part 2
applied, the shorter limitation period found in the contract of insurance, superseded
the longer period in Part 2.  In addressing this argument, McLachlin C.J.C.
stated:

21        ... I cannot accept this argument. The issue is
governed by s. 3(a) of the Act, which provides:

This Part has effect, despite any
law or contract to the contrary, except that

(a)   if any
section or statutory condition contained in Part 3, 4, 5, 6 or 7 is applicable
and deals with a subject matter that is the same as or similar to any subject
matter dealt with by this Part, this Part does not apply....

This provision does not permit
the insurer to substitute harsher terms than those provided in Part 2. The
plain language of the section indicates the Legislatures intent that the
provisions in Part 2 operate as a floor of protection beneath which insurance
contracts cannot descend. If a contract falls within one of the enumerated
Parts, then that Part is engaged and provides a different floor. Otherwise, the
insured is guaranteed, at a minimum, the statutory protections contained in
Part 2. The insurers attempt to argue that the shorter limitation period is
more advantageous to the insured because it is more certain verges on the
disingenuous.

[51]

Sun Life seeks to distinguish
K.P. Pacific
from this case on two
grounds.  First, it says
K.P. Pacific
dealt with an all-risk policy and
Part 5 of the
Act
.  Second, it says the argument advanced was that a
less generous contractual limitation period displaced the more generous
statutory limitation period rather than the other way around: a more generous
contractual limitation period displacing a less generous statutory limitation
period.

[52]

In my view, while
K.P. Pacific
dealt with a different Part of the
Act
, the interpretation of the wording in section 3(a) of the
Act
is
still applicable to this case.  It is clear from the decision of McLachlin
C.J.C. that the limitation period in Part 2 of the
Act
guarantees a
minimum level of protection.  The question that arises is whether section 3(a)
permits insurers to offer a more generous level of protection than that
required by the
Act
.

[53]

The reasoning in
K.P. Pacific
does not specifically address
replacing section 22(1) of the
Act
with more favourable contractual
terms, but it also does not foreclose the possibility that a contract of
insurance may vary the provisions of Part 2 of the
Act
.  McLachlin
C.J.C. describes the provisions in Part 2 as a floor beneath which insurance
contracts cannot descend and reasons that unless a different Part of the
Act
is engaged and provides a different floor, an insured is guaranteed at a
minimum, the statutory protections of Part 2.  Flowing from the use of the
word floor and the idea of minimum protection is the inference that Part 2
leaves it open to an insurer to exceed that standard if it chooses to do so.

[54]

In my view, Sun Life must be held to the terms of the contract it provided
in this case, as they are more favourable to its participant than the
provisions of the statute.  Insurers are only prohibited from providing a less
generous limitation period than that which is prescribed in Part 2.  Nothing in
section 3(a) prevents an insurer from stipulating for a limitation period
greater than that in the
Act
itself.

[55]

In my respectful opinion, the summary trial judge erred in law by
applying the wrong limitation period to Dr. Sanders claim.  The summary trial
judge dismissed the Policy Limitation because he found it resulted in
absurdity.  This finding stems from the trial judges interpretation of the
Policy Limitation as being triggered upon the occurrence of a single event:
i.e.
Dr. Sander becoming disabled as defined in the Insurance Policy.  Dr.
Sander challenges this interpretation.

[56]

I will now turn to the proper interpretation of the Policy Limitation
and to its application to Dr. Sanders claim.

C.  Interpretation of the
Policy Limitation

[57]

For convenience I set out the Policy Limitation again:

No action or proceeding against
the Company for recovery of a claim under this policy shall be commenced more
than two years after the date the insurance money became payable or would have
become payable if it had been a valid claim.

[58]

Dr. Sander argues that the wording in the Policy Limitation has been
interpreted in cases involving continuous entitlement to benefits as creating a
rolling limitation period where the cause of action accrues at each
successive interval at which benefit instalments are to be paid.  In other
words, so long as Dr. Sander continues to be entitled to benefit payments as a
result of his continuous disability, his cause of action against Sun Life is
renewed every time a benefit becomes payable.

[59]

Dr. Sander relies on
Holme Estate
as establishing that the words
the date that the insurance money became payable refer to the entitlement to
benefits.  In
Holme Estate
, Mr. Justice Donald, writing for

this
Court, was concerned with the interpretation of s. 89 statutory condition 12 of
the
Act
,

which as explained in para. 45 of these reasons, does
not apply to this case.  However, as discussed, the relevant wording of the
Policy Limitation is exactly the same as the wording in statutory condition 12,
except for the term, two years instead of one.  Despite the fact that the
policy in
Holme Estate
was not a group policy, both that policy and the group
policy in this case were sickness insurance and insured against the same
risk: continuous total disability as defined in the respective policy.  As
discussed above in para. 40, the interests of uniformity in insurance law weigh
in favour of interpreting the words in the Policy Limitation in the same manner
as statutory condition 12.  Therefore, Donald J.A.s interpretation of
statutory condition 12 is equally applicable to the Policy Limitation.

[60]

In determining when the limitation period began to toll, Donald J.A.
stated at para. 34:

The benefits under the policy
thus initially became payable at the end of the limitation period, and were
then payable on a bi-monthly basis thereafter. The limitation period required
the action to be commenced one year from that date or from the date when each
payment became payable.

[61]

It appears to me that the reference to limitation period in the first
sentence of para. 34 of the decision may be a typographical error and should
read elimination period.  Reading this passage with the suggested correction,
it is clear that each benefit payment gives rise to its own limitation period.

[62]

Donald J.A. concluded that the insured had a continuing claim through
the period of disability and it was not extinguished by the failure to sue
within one year of the commencement of that continuum.  The only effect of the
limitation clause was to bar recovery of insurance money payable earlier than
one year prior to the action being commenced.

[63]

This approach was affirmed by this Court in
Balzer
at para. 38
where Madam Justice Huddart stated:

While the reasoning in
Holme
Estate
,
supra
, will always be appropriate where the cause of action
accrues monthly and the limitation period is determined by the date the
insurance money becomes payable, as is apparent from my reasons in the
companion appeal
Watterson v. Sun Life Assurance Co. of Canada
, 2003
BCCA 305 (B.C. C.A.), I would not apply s. 22(1) as a general rule to limit
recovery under disability coverage to benefits for the year preceding the
action. I agree with Pitfield J. to do so would be to ignore the wording of s.
22(1).

D.  Applying the Policy
Limitation to this Case

[64]

Upon review of the Insurance Policy, it is clear that a participant has
a right to monthly benefit payments so long as the participant meets the
conditions of the Insurance Policy with regard to total disability. The
Insurance Policy provides for income replacement benefits upon total
disability, which is defined as: the inability to perform the essential duties
of dentistry; be under the regular care of a physician; and, not be engaged in
any gainful employment by reason of sickness or injury (also both defined in
the Insurance Policy).  Benefits are payable under the following conditions:

INCOME REPLACEMENT
BENEFIT

1.   If a participant becomes Totally Disabled, the Company
will make income replacement payments in accordance with the following
conditions and provisions of his policy:

a)   Total Disability must
commence while insurance under this Income Replacement Benefit is in force on
behalf of the relevant Participant;

b)   Total Disability must exist
for not less than the applicable Elimination Period while the relevant
Participant is alive; and

c)   during Total
Disability, the Participant must be under the continuing care of a Physician.

2.   So long as a Participant is Totally
Disabled, the amount payable each month under his Income Replacement Benefit
will be the Monthly Income applicable to such Participant, subject to any
reduction by the other provision of the policy.

[65]

So long as Dr. Sander continued to satisfy the above conditions and any
other relevant provisions included in the Insurance Policy, he was entitled to
income replacement benefits.  The risk insured against was continuing total
disability and in that sense insurance money was also payable on a continuing
basis after the prescribed elimination period.  Dr. Sanders claim therefore
accrued monthly and the limitation period, in light of the jurisprudence, must
be viewed as commencing anew on each successive entitlement.

[66]

This case differs from
Holme Estate
in that a determination of continuous
disability beyond 14 June 2001 has not been made and is in dispute.  However,
in my view, interpreting the Policy Limitation as giving rise to a rolling
limitation period is correct and accords with precedent.  Following the
reasoning of Donald J.A., the Policy Limitation should be applied so as to bar
Dr. Sanders claim for the recovery   of insurance money payable earlier than two
years preceding the date on which he issued the writ of summons.

[67]

I do not agree with Sun Life that Dr. Sanders claim is time-barred
under the Policy Limitation despite the recurring cause of action because the 29
June 2001 letter denied entitlement not only to the next scheduled payment of
benefits but also to any future payment of benefits.  In my view, this position
cannot be sustained as it ignores the wording in the latter part of the Policy
Limitation: would have become payable if it had been a valid claim.

[68]

Whether Dr. Sander has a valid claim is yet to be determined.  In my
respectful opinion, the summary trial judge erred in viewing the Policy
Limitation as being triggered by a single occurrence and in applying instead s.
22(1) of the
Act
.  As a result of the summary trial judges approach, no
determination was made as to whether Dr. Sander continued to be disabled and
therefore entitled to benefits after 14 June 2001.  It must be remembered that
Dr. Sander may have continued to be disabled as a result of his refusal to
undergo the corrective surgery, which, as found by Dillon J. and affirmed by
this Court, was required by the Insurance Policy.  The resulting unanswered question
is whether Dr. Sander continued to be entitled to benefits despite his initial
refusal to have corrective surgery until after the court gave its opinion that
such surgery was reasonably required under the terms of the Insurance Policy. 
This question requires a determination of the merits of Dr. Sanders claim.

VII. 
Disposition

[69]

In my opinion, the appeal should be allowed and the order of the learned
summary trial judge set aside.

[70]

The action should be remitted to the trial court for a determination of
whether Dr. Sander is entitled to benefits under the Insurance Policy for the
period of two years preceding the date on which he issued the writ of summons
and anytime thereafter.

The
Honourable Chief Justice Finch

I agree:

The Honourable Madam Justice
Saunders

I agree:

The Honourable Madam Justice
Neilson


