





CITATION:
Goorbarry v. Bank of Nova Scotia, 2011 ONCA
          793



DATE: 20111216



DOCKET: C53790



COURT OF APPEAL FOR ONTARIO



Feldman, Sharpe and Epstein JJ.A.



BETWEEN:



Camille Goorbarry



Plaintiff (Appellant)



and



The Bank of Nova Scotia, Operating as Scotiabank



Defendant (Respondent)



William G. Scott, for the appellant



William M. LeMay and Kathryn J. Bird, for the respondent



Heard: November 25, 2011



On appeal from the judgment of Justice P. Theodore Matlow of
          the Superior Court of Ontario dated April 26, 2011.



Feldman J.A:

[1]

The appellant commenced her action for long term disability benefits in
    December 2006. On a motion for summary judgment, the action was dismissed because
    it was commenced beyond the limitation prescribed by her Employee Benefit Plan.
[1]
The Claims provision of the Plan reads as follows:

Initial proof of the
    individuals disability must be given to the Head Office of the Administrator
    in writing within 90 days from the date on which the individual has been
    continuously disabled for 26 weeks. The Administrator may demand proof of the
    continuance of his disability at any time thereafter when and so often as it
    may reasonably require. If proof of the continuance of the individuals
    disability is not so furnished at any time, he will be deemed to have ceased to
    be disabled immediately prior to the date as of which such demand was made.

The Planholder shall have the right and opportunity
    to have a physician designated by it examine any person in respect of whom a
    claim is being made when and so often as it may reasonably require.

No action or proceeding against the Planholder in
    respect of a claim under this plan shall be commenced within 60 days of the date
    on which proof of the claim is filed with the Administrator, nor after 2 years
    from the date of the happening of
the covered event
. [Emphasis added.]

[2]

The phrase the covered event is not defined anywhere in the Plan.

[3]

The appellant suffered two accidents, one at work in June 1993, and a
    car accident in May 1994. The appellant applied for and received short term
    disability benefits for 26 weeks, then she applied for long term disability
    benefits. That application was denied by letter dated June 23, 1995 from Canada
    Life, the Plan administrator. The same letter advised her of the appeal
    process. The appellant appealed but her appeal was denied. The respondents
    records show a letter dated July 31, 1995 from Canada Life, explaining that the
    medical opinion the appellant provided was unsupported by any objective tests
    or other support to substantiate her claim. As a result, her appeal was denied
    and her claim remained terminated as of July 31, 1995. According to the
    appellants Statement of Claim, she received a letter from Canada Life
    terminating her benefits effective November 21, 1995. Although this letter is
    not in the record on the appeal, its existence seems to be acknowledged by the
    respondent and by the motion judge.

[4]

Although no action was started until 2006, 11 years after the claim was
    denied, the appellant submits that the claim is not barred for two reasons. The
    first is that because there is no definition of the covered event in the Plan
    document, there is an ambiguity in that document which must be read
contra
    proferentem
against the insurer. The result is that there is no
    identifiable starting point for the limitation period and therefore the claim
    is not out of time.

[5]

The second argument is that case law has established that long term
    benefits that are payable monthly are governed by a rolling limitation period
    that runs for two years from each month that no payment was made. The result is
    that although the claim cannot go back to 1995, it was commenced in time in
    respect of the payment for November 2004 and for all following payments as long
    as the disability continues.

[6]

In my view, neither argument has merit.

[7]

When the Claims section is read as a whole and in context, the intent
    and meaning of the term covered event as well as the intent and meaning of
    the two year limitation period are clear.

[8]

Although there is no specific definition of the covered event in the
    Plan document, the meaning flows from these three paragraphs of the Claims
    section. The first paragraph describes the time criteria and method for launching
    a claim and for maintaining the claim. The second gives the plan holder the
    right to require a medical examination and the third contains the limitation
    period for commencing an action on a claim under the Plan.

[9]

From these three paragraphs, it is apparent that the covered event
    defines the factual elements that must be in place before a claimant can
    commence an action.  There are two possible covered events. The first is the
    date when the person provides initial proof of disability following 26 weeks of
    being continuously disabled. If no payment is made, the person has two years to
    commence an action. The second covered event occurs when the person is deemed
    to have ceased to be disabled as of the date prior to the date when demand was
    made for proof of continuing disability and proof was not furnished. Again, the
    person has two years following that date to commence an action.

[10]

In this case, the appellants claim is that she became disabled in
    accordance with the Plan for the purpose of entitlement to long term disability
    benefits when she made a claim after being continuously disabled for 26 weeks
    in 1994. From the record before this court, although her claim was denied, it
    appears that she was paid benefits up to either the end of July 1995 or mid-November
    of that year. It is unclear whether these were short term or long term
    disability benefits. Alternatively, when she appealed the denial of her claim,
    she provided some medical evidence but it was rejected as insufficient,
    resulting in her being deemed no longer disabled. Again, this occurred either in
    July or November of 1995. Therefore, one or both of the covered events occurred
    in 1995 and the appellant had two years thereafter to commence her action,
    unless the rolling limitation period case law applies.

[11]

I now turn to that argument. It is based on the decision of this court
    in
Wilsons Truck Lines Ltd. v. Pilot Insurance Co.
(1996), 31 O.R. (3d)
    127 (C.A.); (1997), 33 O.R. (3d) 37 (C.A.). The claim in that case was for
    accident benefits payable under the
Insurance Act
, R.S.O. 1980, c. 218,
    Schedule "C", (3), para. 7, subsection (c), which contained the
    limitation period of one year from the date on which the cause of action
    arose. The court adopted the definition of cause of action previously given
    by Morden J.A. in
July v. Neal
(1986), 57 O.R. (2d) 129 (C.A.), at
    p. 137, adopting the words of Lord Diplock in
Letang v. Cooper
, [1965] 1
    Q.B. 232 at 242-43: a factual situation the existence of which entitles one
    person to obtain from the court a remedy against another person.

[12]

Applying that definition, the court rejected the argument that the cause
    of action did not arise until there was a definite denial of a claim by the
    insurer.  Rather, the right to sue arises when the claimant has a right to what
    is being claimed, which in that case was 31 days after the claim was filed with
    the insurer. (para. 38) Importantly, the court added at para. 58 that if the
    claimant was actually entitled to the benefits claimed, then his right to sue
    for them accrued every 30 days thereafter and lasted for one year each time.
    This is referred to as a rolling limitation period.

[13]

In order for the rolling limitation period to apply in the context of
    the limitation contained in the respondents Benefit Plan, the covered event would
    have to occur every month, just as the cause of action accrued every month in
    the
Wilsons Truck
case. However, on the specific wording of this Plan,
    the covered event does not reoccur.  As I explained above, there are two
    covered events that are described within the Claims section of the Plan. The
    first occurs when the person first qualifies for long-term disability benefits,
    and the second, when the person is deemed no longer to be disabled because they
    have not provided satisfactory proof of continuing disability. Unlike in
Wilsons
    Truck
, each of these events happens only once, not every month on an
    ongoing basis.

[14]

I agree with the motion judge that the action must be dismissed as it
    was brought beyond the period set out in the Benefit Plan.

[15]

I would therefore dismiss the appeal with costs to the respondent fixed
    at $7,500
inclusive of disbursements and H.S.T.


Signed:           K.
    Feldman J.A.

I agree
    Robert J. Sharpe J.A.

I agree G.
    J. Epstein J.A.

RELEASED: KF DECEMBER 16, 2011





[1]
Under the former
Limitations Act
R.S.O. 1990 c. L.15, no section
    prohibited parties from agreeing to a limitation other than the statutory
    limitation. Under the
Limitations Act 2002
S.O. 2002, c. 24 Schedule B,
    s. 22, private agreements cannot supercede the Act, subject to a number of exceptions,
    one of which in s. 22(2) allows a limitation under the new Act to be varied or
    excluded by an agreement made before January 1, 2004. In his article,
    Developing a New Uniform Limitations Act: A Survey of Canadas Emerging
    Limitations Regimes in Jacob Ziegel, Wayne Gray, Brian Bucknall et al. eds.,
The
    New Ontario Limitations Regime
(Toronto: Ontario Bar Association, 2005)
    165, author John Lee states at p. 183 that under the former Act, it was
    accepted that parties could make their own limitation agreement because the Act
    was silent on the issue.


