



COURT OF APPEAL FOR ONTARIO

CITATION: Kumarasamy v. Western Life
    Assurance Company, 2021 ONCA 849

DATE: 20211130

DOCKET: C69084

MacPherson, Simmons and Nordheimer
    JJ.A.

BETWEEN

Kamalavannan
    Kumarasamy

Plaintiff (Respondent)

and

Western
    Life Assurance Company
and Morris National Inc.

Defendants (
Appellant
)

Elizabeth Bennett-Martin and Heather M.
    Gastle, for the appellant

Adam B. Kuciej, for the respondent

Heard: November 1, 2021 by
    video conference

On appeal from the order of Justice Jana
    Steele of the Superior Court of Justice, dated January 14, 2021, with reasons
    reported at 2021 ONSC 337.

Nordheimer J.A.:

[1]

Western Life Assurance Company appeals from the dismissal
    of its summary judgment motion, in which it sought to have this action
    dismissed on the basis that the respondents claim is statute-barred under the
Limitations
    Act, 2002
, S.O. 2002, c. 24, Sched. B. For the following reasons, I would allow
    the appeal, grant the summary judgment motion, and dismiss the respondents
    action.

A.

Background

[2]

The respondent was injured in a car accident on
    August 25, 2014. He has been unable to work since that time. At the time of the
    accident, the respondent was working as a truck driver. He says that, as a
    result of the accident, he suffered injuries to his back, neck, shoulders and
    right leg. He also suffers from severe depression, anxiety and chronic pain
    disorder, which he has treated with various anti-depressants and anti-psychotic
    medications. His medical condition following the accident is such that his
    drivers licence has been medically suspended by the Ministry of Transport.

[3]

At the time of the accident, the respondent was
    employed by Morris National Inc. (Morris), and was covered under Morris group
    long-term disability (LTD) policy with the appellant (the Policy). Under
    the terms of the Policy, the deadline for the respondent to provide a Notice of
    Claim to the appellant, and the first day that LTD benefits would become
    payable to the respondent, was February 26, 2015. The Policy also provided that
    a claimant waives their right to claim benefits if they do not provide notice
    within the prescribed time.

[4]

On August 26, 2014, the respondent retained
    litigation counsel to represent him with respect to his tort and accident
    benefits claims. He did not retain these lawyers with respect to any potential
    long-term disability claim. The respondents lawyers wrote to Morris to advise
    it that they had been retained by the respondent with respect to his accident
    benefits claim.

[5]

The respondents sister worked as a legal
    assistant for the lawyers that the respondent had retained. As found by the
    motion judge, the respondents sister:

[p]resumably, as a personal favour to her
    brother (who had limited ability in English and no knowledge whatsoever of
    legal matters), emailed his employer, Morris, for a notice of LTD claim form on
    December 15, 2014. She did this to help her brother put Western Life on notice
    regarding a potential LTD claim.

[6]

Morris emailed the Notice of Claim form to the
    respondents sister. The respondent completed the form (again, presumably with
    help from his sister). The sister signed the form as the respondents
    representative, and noted the name of the law firm representing the respondent
    in parentheses. It was the sister who faxed the form to the appellant on March
    9, 2015. This initial Notice of Claim is a brief form, not a completed LTD
    application.

[7]

On March 11, 2015, the appellant says that it
    sent an acknowledgement letter directly to the respondent requesting that he
    complete the LTD application forms, which were enclosed. However, the respondent
    said that he never received this letter. The motion judge found that the
    respondent did not receive it.

[8]

The appellant sent three follow-up letters to
    the respondent, including a letter dated June 2, 2015, that advised the
    respondent that it had closed the respondents file because he had not
    forwarded the completed LTD application forms. The motion judge found that,
    while the respondent did not receive the other letters, he did receive the June
    2, 2015 letter.

[9]

There is no evidence that anything consequential
    occurred between that time and October 13, 2016, when the respondents lawyers,
    although still not retained to deal with the respondents potential long-term
    disability claim, wrote to the appellant requesting the respondents LTD claim
    file.

[10]

On November 8, 2016, the appellant responded to
    the lawyers to advise that the file had been closed on June 2, 2015, as the
    plaintiff had not sent the required LTD forms. The appellant enclosed a copy of
    the Notice of LTD claim form submitted by the respondent and a copy of the Certificate
    of Insurance for Group Benefits underwritten for Morris.

[11]

The motion judge found that, between November 8,
    2016 and February 10, 2017, and once again presumably, the respondent met
    with his lawyers to discuss what had happened to his LTD claim. On February 10,
    2017, the respondent signed a retainer with his lawyers to also represent him
    on his LTD claim.

[12]

On February 24, 2017, the lawyers wrote to the
    appellant to advise that they had now been retained by the respondent to assist
    with his LTD application. The lawyers requested copies of earlier letters that
    the appellant had sent to the respondent but that the respondent had not
    received. They also requested a copy of the claim forms.

[13]

On March 9 and 10, 2017, the appellant sent the
    lawyers copies of the missing letters together with blank LTD claim forms. On
    March 30, 2017, the lawyers sent the completed LTD claim forms to the
    appellant. A couple of weeks later, the appellant contacted the lawyers to
    advise them that the appellant would require an authorization signed by the
    respondent, so that the appellant could discuss the claim with the lawyers. The
    signed authorization was sent to the appellant by the lawyers through email on
    May 2, 2017.

[14]

On May 10, 2017, the appellant and the lawyers
    had a call to discuss the respondents claim. After the call, the appellant
    provided the lawyers with a letter dated April 19, 2017, which the respondent
    had not previously received. In that letter, the appellant had advised the
    respondent of certain additional information that the appellant required from
    the respondent to evaluate his claim. In that letter, the appellant advised the
    respondent that he should be aware that by reviewing your claim, we are not
    waiving our right to rely on any statutory or Policy provision including any
    time limitations.

[15]

On June 14, 2017, there was another telephone
    call between the appellant and the lawyers to further discuss the respondents
    LTD claim. After the call, the lawyers sent some information to the appellant
    by email. The lawyers also attempted to explain the reasons why the respondent
    had been delayed in making his LTD claim.

[16]

On June 28, 2017, the appellant wrote to the
    respondent advising that his claim was denied as the information provided in
    your letter does not support reasonable cause for the delay. Presumably the
    letter referred to is actually a reference to the lawyers email of June 14,
    2017. The letter also provided information on how the respondent could appeal
    the claim decision. The respondent did appeal the decision, but the appeal was
    denied.

[17]

The respondent issued a statement of claim against
    the appellant and Morris on June 28, 2019.

B.

THE DECISION BELOW

[18]

The motion judge began her analysis with
    reference to s. 5 of the
Limitations Act, 2002
,

and this
    courts decision in
Clarke v. Sun Life Assurance Company of Canada
,
    2020 ONCA 11, 149 O.R. (3d) 433, for the test on when a claim is discovered.

[19]

The motion judge set out the opposing views on
    when the appellants claim would have been discovered. The appellant said that
    the loss to the respondent occurred on the date that it would have been
    required to pay LTD benefits to the respondent under the Policy (i.e., February
    26, 2015). It argued that a reasonable person in the respondents circumstances
    ought to have discovered his claim on June 7, 2015, the date by which he would
    have received the appellants letter closing his file.

[20]

The respondent, on the other hand, argued that
    he could not have become aware of the loss until there was a denial of the LTD
    claim by the appellant. The plaintiff argued that this occurred on June 28,
    2017, which was the date of the denial letter.

[21]

The motion judge did not accept the appellants
    submission that the respondent ought to have discovered his claim on June 7,
    2015, when he received the claim closure letter of June 2, 2015. She found that
    the closure letter was not a denial of the respondents LTD claim because, at that
    point, no claim application had been made.

[22]

Ultimately, the motion judge stated that the
    issue to be determined was when the respondent discovered that a proceeding
    against the appellant was the appropriate means to remedy his loss. She concluded
    that the claim was not fully ripened until the respondents LTD claim was
    denied by the appellant. Because the respondent commenced his claim within two
    years of this date, his action was not statute-barred. On this basis, the
    motion judge dismissed the appellants summary judgment motion.

C.

Analysis

[23]

As I shall explain, the motion judge erred in
    her analysis of the central question. Section 5(1) of the
Limitations Act,
    2002
requires consideration of when the plaintiff ought to have known four
    things: (i) that the injury, loss or damage had occurred, (ii) that the injury,
    loss or damage was caused by or contributed to by an act or omission, (iii) that
    the act or omission was that of the person against whom the claim is made, and
    (iv) that, having regard to the nature of the injury, loss or damage, a
    proceeding would be an appropriate means to seek to remedy it. The subsection
    then requires a determination of the day when a reasonable person first ought
    to have known of these matters. A claim is discovered, within the meaning of
    the
Limitations Act, 2002
, on the earlier of these two dates.

[24]

Of importance as well is section 5(2). It
    provides a statutory presumption regarding the state of knowledge of a person
    with respect to the requirements set out in s. 5(1). Specifically, s. 5(2)
    reads:

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.

The section is a statutory
    codification of the requirement that an insured person must act with due
    diligence in pursuing any claim:
Longo v. MacLaren Art Centre Inc.
,
    2014 ONCA 526, 323 O.A.C. 246, at paras. 42-43.

[25]

In this case, the respondent knew of his
    injuries at the time of the accident. At the same time, he knew that he was
    covered by his employers long-term disability insurance provided by the
    appellant. Indeed, he knew enough, with the help of his sister, to ask for an
    LTD claim form from the appellant, which the appellant provided. By June 7,
    2015, the respondent knew that the appellant had closed its file. The
    respondent had to know, from that fact alone, that his claim for coverage was
    in jeopardy. Further, from this time forward, the respondent had lawyers
    representing him with respect to his injuries and, more specifically, with
    respect to his accident benefits. He therefore had access to legal advice and
    assistance if he chose to use it.

[26]

Yet, it is almost a year and a half later before
    the respondent speaks to his lawyers about his LTD claim. Throughout this time,
    the respondent knows that he is not receiving any LTD payments from the
    appellant. The respondents lawyers are told that the file has been closed and
    they have discussions with the respondent about his claim. Notwithstanding
    those circumstances, the respondent does not expand his lawyers retainer to
    include the LTD claim until February 10, 2017.

[27]

Thereafter, the lawyers engaged in discussions
    with the appellant. Both the lawyers and the respondent had to know that there
    was an issue about whether the appellant was going to agree to coverage. Indeed,
    by May 10, 2017, the appellant expressly told the respondents lawyers that by
    engaging in a review of the respondents claim, we are not waiving our right
    to rely on any statutory or Policy provision including any time limitations.
    By this point, the alarm bells ought to have been ringing loudly, and yet the
    claim is still not commenced until June 2019.

[28]

The central errors made by the motion judge are
    her conclusion regarding when the respondent ought to have known that a loss
    occurred and her conclusion that the required element of discoverability, found
    in s. 5(1)(a)(iv), that a proceeding would be an appropriate means to seek to
    remedy the injury, loss or damage, was only satisfied when the appellant clearly
    and unequivocally denied the respondents claim. The motion judge does not cite
    any authority for this conclusion, and it is at odds with other authorities,
    most notably, this courts decision in
Thompson v. Sun Life Assurance
    Company of Canada
, 2015 ONCA 162, [2015] I.L.R. I-5721.

[29]

In
Thompson
, this court found that
    there were two reasons why the injured partys claim was barred. One was that
    the injured party had failed to meet the qualifying conditions of the policy:
    at paras. 11-12. The other was that the two-year limitation period had expired
    because the injured party knew of her total disability in August 2008 but did
    not commence her action until September 17, 2010: at paras. 13-14. The latter
    conclusion applies equally to this case. The respondent knew of the
    significance of his injuries by the end of August 2014. However, because of the
    terms of the Policy, the respondent was not entitled to receive LTD disability
    payments until February 26, 2015. Applying the
Thompson
approach, the
    limitation period would have commenced on February 26, 2015, which was the
    first day benefits would have been payable had the respondent submitted a
    timely application and met the Policys definition of Total Disability. By that
    time, the respondent knew that he was injured, he believed that he was entitled
    to long-term disability payments, and he knew that the appellant was not making
    those payments.

[30]

The motion judge attempted to avoid the
    consequences of
Thompson
, and other cases in the Superior Court of
    Justice subsequently decided along the same lines, on the basis of s. 5(1)(a)(iv),
    that is, that litigation was not an appropriate remedy until the appellant
    categorically denied the respondents claim. While the motion judge said, I
    agree with Western Life that a clear and unequivocal denial is not necessarily
    required to start the limitations clock (at para. 62), it is evident from the
    balance of her reasons and her conclusion that that is, in fact, what she
    required.

[31]

There is no authority for the proposition that a
    clear and unequivocal denial is required. It may be that there will be some
    cases where an insurer may, by its conduct, lead an insured person to believe
    that their claim has not been denied (and thus litigation is not required).
    Those cases will likely be rare, and, in any event, this case is not one of
    them. The appellant did not do anything to lead the respondent into the belief
    that his claim was still alive and well. In fact, the appellant did the
    opposite. First, the appellant had told the respondent that his file had been
    closed. Second, when the issue was raised again, almost two years later, the
    appellant expressly told the respondents lawyers that, in undertaking its re-examination
    of the claim, the appellant was not waiving any applicable time limits.

[32]

To accede to the motion judges conclusion is to
    do that which this court cautioned against in
Markel Insurance Company of
    Canada v. ING Insurance Company of Canada
, 2012 ONCA 218, 109 O.R. (3d)
    652, where Sharpe J.A. discussed the appropriate means requirement in s. 5(1)(a)(iv)
    and said, at para. 34:

To give appropriate an evaluative gloss,
    allowing a party to delay the commencement of proceedings for some tactical or
    other reason beyond two years from the date the claim is fully ripened and
    requiring the court to assess to tone and tenor of communications in search of
    a clear denial would, in my opinion, inject an unacceptable element of
    uncertainty into the law of limitation of actions.

[33]

I would add another reason for rejecting any
    suggestion that a limitation period does not commence until an insurer has made
    a clear and unequivocal denial of a claim. To adopt such an approach would
    only serve to encourage insurers to make such denials at their earliest
    opportunity to ensure that the limitations clock starts to run. It would thus
    discourage insurers from undertaking a fair evaluation of the claim before
    making a decision. It might also lead to the commencement of more premature or
    needless proceedings, which is contrary to the intent of the subsection:
Markel
,
    at para. 34;
407 ETR Concession Co. v. Day
, 2016 ONCA 709, 133 O.R.
    (3d) 762, leave to appeal refused, [2016] S.C.C.A. No. 509, at para. 48.

[34]

The motion judges conclusion in this case is at
    odds with the jurisprudence from this court regarding the proper interpretation
    of s. 5(1)(a)(iv), that is, when litigation is an appropriate remedy. It is
    contrary to the decision in
Thompson
, as I have already explained. It
    is also contrary to this courts decision in
Nasr Hospitality Services Inc.
    v. Intact Insurance
, 2018 ONCA 725, 142 O.R. (3d) 561, where Brown J.A.
    undertook an analysis of the existing authorities on the proper interpretation
    of s. 5(1)(a)(iv). In doing so, Brown J.A. noted that there are certain
    circumstances where the conduct of an insurer may, essentially, toll the
    limitation period. He referred to the decision in

Presidential MSH Corp.
    v. Marr, Foster & Co. LLP
, 2017 ONCA 325, 135 O.R. (3d) 321, where
    Pardu J.A. had identified two such circumstances: (i) where the plaintiff
    relied on the superior knowledge and expertise of the defendant, especially
    where the defendant undertook efforts to ameliorate the loss; and (ii) if an
    alternative dispute resolution process offers an adequate alternative remedy
    and that process has not fully run its course. Like the situation in
Nasr
,
    neither of those circumstances arise in this case.

[35]

Indeed, in this case, there is little to which
    the respondent can point in the conduct of the appellant that could give rise
    to a situation akin to promissory estoppel that is often used in insurance
    cases to avoid the effect of a limitation period: see the discussion in
Nasr
at paras. 53-56. Any such suggestion becomes more problematic, in the circumstances
    of this case, since the respondent had access to lawyers throughout the five
    years before this action was commenced.

[36]

In the end result, there are three potential
    start dates for the limitation period that arise in this case and that would be
    consistent with the existing jurisprudence. One is February 26, 2015, when the elimination
    period required by the Policy expired and the respondent should have started to
    receive LTD payments, if he was entitled to them. Another is June 7, 2015, when
    the respondent would have received the appellants notification that his claim
    file had been closed. At that point, the respondent knew that, not only was the
    appellant not making payments to him, but the appellant was also not going to
    make payments to him in the future. Yet another is November 8, 2016, when his
    lawyers received copies of the same correspondence.

[37]

I do not need to decide which of these three
    dates is the actual start date because the two-year limitation period passed
    with respect to all of them before this proceeding was commenced on June 28,
    2019. The respondents claim for LTD benefits under the Policy is therefore
    statute-barred.

[38]

Before concluding, I should note that the motion
    judge did not expressly address s. 5(2) of the
Limitations Act, 2002
when
    conducting her appropriate means analysis. In fairness, it is not clear that
    the parties raised it. Nevertheless, it was a matter that was required by the
    terms of the
Limitations Act, 2002
to be taken into account. However,
    it is obvious that the motion judge took the view that the respondent had
    displaced the presumption that the date of the injury (extended to February 26,
    2015 because of the terms of the Policy) was the day he ought to have known
    that a proceeding was an appropriate means to remedy his loss, because the
    appellant had not made an unequivocal denial of his claim. I have already
    explained why the motion judge erred in adopting that approach.

D.

CONCLUSION

[39]

I would allow the appeal, set aside the order
    below, and, in its place, make an order granting the summary judgment motion
    and dismissing the action. The appellant is entitled to its costs of the appeal,
    which I would fix in the amount of $10
,000
inclusive of disbursements and HST. The appellant is also entitled
    to the costs of the summary judgment motion, which the parties have agreed are
    to be fixed at $25,000 inclusive of disbursements and HST.

Released: November 30, 2021 J.C.M.

I.V.B. Nordheimer J.A.

I agree. J.C. MacPherson J.A.

I agree. Janet Simmons J.A.


