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Docket: |
CA028971 |
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COURT OF APPEAL FOR BRITISH COLUMBIA |
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BETWEEN: |
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KAREN WATTERSON |
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APPELLANT (Plaintiff) |
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AND: |
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SUN LIFE ASSURANCE COMPANY OF CANADA, doing business as SUN LIFE OF CANADA |
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RESPONDENT (Defendant) |
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Before: |
The Honourable Madam Justice Huddart |
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The Honourable Mr. Justice Mackenzie |
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The Honourable Mr. Justice Thackray |
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O. Samuel |
Counsel for the Appellant |
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W. Cheung |
Counsel for the Respondent |
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Place and Date of Hearing: |
Vancouver, British Columbia |
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9 January 2003 |
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Place and Date of Judgment: |
Vancouver, British Columbia |
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23 May 2003 |
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Written Reasons by:
The Honourable Madam Justice Huddart
Concurred in by:
The Honourable Mr. Justice Mackenzie
The Honourable Mr. Justice Thackray
Reasons for Judgment of the Honourable Madam Justice Huddart:
[1] Ms. Watterson appeals an order dismissing her action to recover long-term disability benefits under a Group Life and Health Benefits policy the respondent’s predecessor, The Prudential Life Assurance Company of England (Canada) issued to the Massage Therapists’ Association. At issue is the construction and application of s. 22(1) of the Insurance Act, R.S.B.C. 1996, c. 226. Mr. Justice Pitfield, for reasons reported at (2001), 99 B.C.L.R. (3d) 373 (S.C.), 2001 BCSC 1269, held that provision barred her claim. Earlier on the same day, Madam Justice Morrison released reasons refusing the respondent similar relief in Balzer v. Sun Life Assurance Co. of Canada (2001), 98 B.C.L.R. (3d) 314 (S.C.), 2001 BCSC 1264. Reasons in that appeal, heard together with this appeal, are being released concurrently.
[2] The relevant provisions of the Insurance Act, supra, are these:
Time for payment of claims
19 If a claim is made against an insurer under a contract, the amount for which the insurer is liable must be paid by the insurer to the person entitled to it within 60 days after reasonably sufficient proof of the claim and of the right to receive payment has been furnished to it.
Limitation of actions
22(1) 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.
(2) An action must not be brought for the recovery of money payable under a contract of insurance until the expiration of 60 days after proof, in accordance with the contract
(a) of the loss, or
(b) of the happening of the event on which the insurance money is to become payable,
or of such shorter period as may be set by the contract of insurance.
[3] These cases provide this Court with its first opportunity to consider the application of s. 22(1), in circumstances where the insurer has accepted a claim for “own occupation” benefits, but terminated payment upon the expiry of those benefits, because it was not satisfied from the information provided by the insured (with the original proof of claim or subsequently at the request of the insurer) that she was “totally disabled” from working at “any occupation.”
[4] This Court’s approval of the reasoning of Parrett J. in Recchia v. Co-operators Life Insurance Co. (1999), 33 C.C.L.I. (3d) 271 (B.C.S.C.), aff’d 2000 BCCA 277, has settled the application of s. 22(1) in circumstances where the insurer has denied unequivocally a claim for long-term disability benefits under a group policy. At para. 14 of his reasons, Mr. Justice Parrett construed s. 22(1) to mean that the limitation period began to run on the “date of the provision of the proof of loss.”
[5] Mr. Justice Pitfield interpreted the same phase as meaning that the limitation period began to run on “the date upon which the insurer receives a reasonable amount of information permitting it to carry out an assessment of liability in good faith.” In concluding (at para. 13) that date was no later than 30 November 1997, he rejected Ms. Watterson’s submission based on New York Life Insurance Co. v. Handler, [1937] S.C.R. 127, P.(R.) v. Sun Life Assurance Co. of Canada (1997), 29 C.C.E.L. (2d) 323 (B.C.S.C.), and Holme Estate v. Unum Life Insurance Co. (2000), 83 B.C.L.R. (3d) 108 (C.A.), 2000 BCCA 627, that Ms. Watterson had a continuing claim that accrued monthly.
[6] Mr. Justice Pitfield saw Ms. Watterson’s circumstances as materially different from those in Handler, supra, because Sun Life’s payment of weekly indemnity benefits under the Prudential policy did not give rise to any entitlement to long-term benefits. He distinguished P.(R.), supra, as a case “where long-term disability benefits, once commenced, had been terminated by a unilateral act of the insurer.” As for Holme Estate, supra, it was different from the present case because it was an action for relief from forfeiture of entitlement for benefits resulting from the late delivery of notice and proof of loss, and the limitation period at issue was “different, and perhaps more generous…” than s. 22(1). I agree with those comments.
[7] The only arguable basis for distinguishing Ms. Watterson’s claim from that of Ms. Recchia is that Ms. Recchia’s claim for benefits from the insurer was her only claim under the Co-operators’ group policy. From the date of the incident giving rise to her disability, Ms Recchia had received weekly indemnity benefits from her union, Teamsters Local 213. Those benefits expired on 25 May 1994. On 19 April 1994, Ms. Recchia prepared a written proof of loss, which the insurer received on 6 May 1994. On 3 June 1994, the insurer denied her claim. Subsequent correspondence and review did not change the insurer’s decision. Ms. Recchia commenced an action to recover benefits on 24 June 1998. Mr. Justice Parrett found the action was statute-barred. This Court agreed.
[8] The fundamental issue on this appeal is whether the same result flows when an insurer is obliged to pay “regular occupation” weekly indemnity benefits for disability and “any occupation” long-term disability benefits under different coverages within the same policy.
[9] The relevant provisions of the Massage Therapists’ Weekly Indemnity Benefits coverage are set out in Appendix A. The relevant portions of the Long-Term Disability Benefits coverage are set out in Appendix B.
[10] After 3 June 1997, when she was unable to work because of a disability, Ms. Watterson, a self-employed massage therapist, filed a proof of claim for a weekly indemnity benefit under the group policy. Sun Life accepted her short-term disability claim and paid the weekly indemnity benefits until 22 September 1997. Because, as Sun Life noted in its factum, the elimination period ended when the weekly indemnity benefits terminated, Ms. Watterson became eligible the next day for benefits under the long-term disability coverage. It appears the master application did not specify any “Own Occupation Period”.
[11] Under this policy, the onus is on the claimant to prove eligibility for the long-term any occupation coverage in such circumstances. Ms. Watterson undertook to do that, when, in compliance with Clause 9 of the long-term disability benefits coverage, she provided written proof of her continuing disability. Around 30 October 1997, she delivered to Sun Life her statements as both employee and employer and the statement of her doctor, together with consult reports from a rheumatologist, a neurologist, and a chiropractor.
[12] On 3 December 1997, Sun Life denied her claim for long-term benefits, explaining:
At the present time we do not have the objective medical evidence of total disability as required under the contract terms and, therefore, we are closing our handling of this claim.
[13] By February 1998, after an unsuccessful attempt to persuade Sun Life to change its decision, Ms. Watterson sought legal advice. On 6 April 1999, she resubmitted much of the medical material she had provided to the insurer in the fall of 1997, and, additionally, the report of a specialist in physical medicine and rehabilitation. A week later, she issued a writ. On 11 August 1999, Sun Life acknowledged receipt of the medical material and advised “there was no new information received that would alter our previous decision.” Ms. Watterson served the writ on 4 October 1999. I agree with the trial judge Ms. Watterson’s action was, by then, barred by s. 22(1).
[14] To the extent Ms. Watterson sees Sun Life’s acceptance of her claim for “regular occupation” weekly indemnity benefits for short-term “total disability” as obliging the insurer to provide her with “any occupation” long-term disability benefits unless it can prove that she is no longer disabled, she is mistaken. The policy is clear that “totally disabled” has a meaning under the Weekly Indemnity coverage that differs from that under the Long-Term Disability coverage.
[15] While the application of s. 22(1) to income replacement insurance is often problematic, this is not such a case. The group policy makes clear a separate notice and a separate proof of claim are required for the long-term “any occupation” coverage. Ms. Watterson understood that. She completed the required proof of claim forms and delivered them to the insurer. The insurer unequivocally denied her claim. She understood that too. There is no basis in the evidence for the application of principles of waiver or estoppel, or need for what the appellant called a “plaintiff-oriented approach” to the interpretation of either the statutory or contractual limitation provision. Nor is there reason to apply the discoverability rule.
[16] While Ms. Watterson may not have known that s. 22(1) applied to her claim, she would have known from the policy that her long-term disability claim was subject to a limitation period. The difference between the statutory provision and the provision in the policy was not material. If Ms. Watterson did not obtain and read a copy of the policy, her failure to do so cannot be laid at the door of the insurer.
[17] I would dismiss the appeal.
“The Honourable Madam Justice Huddart”
I AGREE:
“The Honourable Mr. Justice Mackenzie”
I AGREE:
“The Honourable Mr. Justice Thackray”
APPENDIX A:
EXCERPTS OF POLICY RELATING TO WEEKLY INDEMNITY BENEFITS
SECTION II
GENERAL PROVISIONS
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Clause 7
Notice of Claim
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Written notice of claim must be given to the Company as soon after the occurrence or commencement of any loss covered by this policy as is reasonably possible…
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Clause 8
Claim Forms
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The Company or the policyholder, upon receipt of a written notice of claim, will furnish forms to the claimant for filing proof of loss.
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Clause 9
Proof of Loss
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In the event of a claim for
(c) a Weekly Indemnity benefit, proof of disability satisfactory to the Company must be given in writing to the Company within 90 days following the date of commencement of the disability;
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SECTION IX
WEEKLY INDEMNITY BENEFIT
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Clause 1
Definitions |
As used in this Section:
“Totally disabled” and “total disability” shall mean the inability of the insured employee, as a result of an illness or injury, to perform substantially the essential duties of the insured employee’s regular occupation.
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Clause 2
Benefit
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If an insured employee becomes totally disabled while insurance in this Section is in force, and since becoming totally disabled has received regular and personal medical supervision and treatment by a legally qualified physician, considered satisfactory by the Company for the illness or injury, the Company will pay, every 2 weeks in arrears to the insured employee for each day the total disability continues, one seventh of the weekly indemnity benefit applicable to the insured employee under the Schedule of Insurance specified in the master application at the commencement of the total disability. Benefits will commence on the date of total disability specified in such schedule and continue during the period of total disability, up to the maximum number of weeks for which benefits shall apply whether such total disability is due to one or more causes. |
APPENDIX B – EXCERPTS OF POLICY RELATING TO LONG-TERM DISABILITY BENEFITS
SECTION II
GENERAL PROVISIONS
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Clause 7
Notice of Claim
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Written notice of claim must be given to the Company as soon after the occurrence or commencement of any loss covered by this policy as is reasonably possible. …
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Clause 8
Claim Forms
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The Company or the policyholder, upon receipt of a written notice of claim, will furnish forms to the claimant for filing proof of loss.
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Clause 9
Proof of Loss
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Written proof covering the occurrence, the character and the extent of loss must be furnished to the Company within 90 days after termination of the elimination period. Failure to provide proof within that time shall not invalidate nor reduce any claim if it is shown that proof of loss was provided to the Company as soon as was reasonably possible but in no event shall the time for filing the proof of loss be extended beyond one year after the time proof of loss is otherwise required. No action or proceeding against the Company for the recovery of any claim shall begin within 60 days of, nor later than one year following, the expiration of the time in which proof of loss is required to be filed with the Company.
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SECTION V
BENEFIT PROVISIONS
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Clause 1
Total Disability Benefit
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Upon receipt of evidence satisfactory to the Company that an employee has become totally disabled while insured under this policy, the Company agrees to pay to the insured employee in accordance with the terms of this policy, the monthly benefit to which he or she is entitled.
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Definition
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Total disability and totally disabled mean:
a. during the elimination period and any Own Occupation Period specified in the master application, the inability of an insured employee, as a result of illness or injury, to perform substantially the essential duties of the insured employee’s regular occupation, and
b. thereafter, the inability of an insured employee, as a result of illness or injury, to engage in any occupation for which the insured employee is qualified or may reasonably become qualified by reason of training, education or experience. …
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Commencement of Benefits
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Benefits commence on the day following completion of the elimination period. Subject to the Company receiving satisfactory evidence of continuing total disability and required medical supervision and treatment, payments are due at the end of each month of total disability. Benefits for part of a month are calculated at the rate of 1/30th of the monthly benefit multiplied by the number of days of total disability during that month.
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Termination of Total Disability Benefits
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Total disability benefits terminate on the earliest of: … e. the date the Company deems the insured employee fails to furnish satisfactory evidence of the continuance of total disability, or fails to submit to medical examinations as required by the Company;…
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