Halter v. Standard Life Assurance Company of Canada, 2013 ABQB 99

Court of Queen ’ s Bench of Alberta Citation: Halter v. Standard Life Assurance Company of Canada, 2013 ABQB 99 Date: 20130212 Docket: 0603 03492 Registry: Edmonton Between: Robert Halter Plaintiff - and - Standard Life Assurance Company of Canada Defendant _______________________________________________________ Memorandum of Decision of the Associate Chief Justice J.D. Rooke _______________________________________________________ I.

Introduction [ 1 ] This matter came before me to be heard as a “ trial of an issue ” by way of a “ Special Chambers Application ” pursuant to the Order of Justice Burrows dated February 29, 2012. The question at issue is whether the Plaintiff ’ s claim for long term disability benefits under an employment disability contract is statute barred by limitation provisions under the Insurance Act , RSA 2000, c. I-3 or the Limitations Act , RSA 2000, c. L-12, and whether the doctrine of estoppel applies against the Defendant in denying continued coverage.

[ 2 ] After the oral hearing on June 4, 2012, pursuant to the request of the Plaintiff, further submissions were filed by the Plaintiff on September 18, 2012 and the Defendant on October 12, 2012. II.

Facts [ 3 ] The facts are set out in a detailed Agreed Statement of Facts ( “ ASF ” ) (Exhibit 1), a copy of which (without internal attachments) is attached as Appendix “ A ” to this Memorandum. [ 4 ] To summarize the material in the Briefs (including the material filed after the hearing on June 4, 2012), I find that the Plaintiff applied for weekly indemnity disability benefits on June 15, 2000 and was paid those benefits pursuant to the terms of the Policy effective June 3, 2000 for a 15-week period ending September 15, 2000.

His eligibility for long term disability ( “ LTD ” ) benefits was still under consideration during this time. Initially the LTD benefits were denied, but on May 7, 2001 the Defendant approved the LTD effective September 16, 2000 to August 31, 2001 [1] .

On October 4, 2001, the Defendant wrote to the Plaintiff advising that his LTD benefits would terminate on December 1, 2001, as they did. [ 5 ] In its communication with the Plaintiff on October 4, 2001, the Defendant indicated that the Plaintiff was at liberty to appeal that result and to provide new information and if, on that new information, the appeal was allowed, benefits might be reinstated. The Plaintiff did provide further information on at least four occasions (September 10, 2002, November 15, 2002, January 6, 2003 and through his agent, Mr.

Iafolla, on May 29, 2004), but the appeal was never allowed. [ 6 ] Between May 2002 and April 2003 the Plaintiff consulted on the disability insurance issue with a reputable Edmonton law firm, but did not enter into a retainer contract with them for this coverage. Subsequently, in May 2003 the Plaintiff hired a non-lawyer “ advocate ” regarding the appeal (and other matters). [ 7 ] On March 2, 2006 the Plaintiff consulted with his current Counsel and on March 15, 2006 a Statement of Claim was issued. III. Issues [ 8 ] The issues as set out by the Order of Justice Burrows of February 29, 2012, are as follows: (

a) Is the Plaintiff ’ s claim in the within action statute barred by virtue of one or both of (i) Section 590(1) of the Insurance Act , R.S.A. 2000, c.1-3, or (ii) Section 3(1) of the Limitations Act , R.S.A. 2000, c.L-12? (

b) If the Plaintiff ’ s claim is statute barred, is it barred completely, or does each periodic payment of long term disability benefits create a separate cause of action, thus creating a rolling limitation period? (

c) Do the doctrines of waiver or estoppel apply? IV.

Summary of Decision [ 9 ] For the reasons that follow, I find that the Plaintiff ’ s claim in the within action is statute barred by both s.590(1) of the Insurance Act and s.3(1) of the Limitations Act , the former being a limitation of one year and the latter being a limitation of two years,

such that the former (Insurance Act limitation) makes the limitation period in the latter redundant. [10] I further find that the Plaintiff’s claim is completely statute barred in the circumstances and that neither the terms of thecontract nor the relevant statute, create a rolling limitation. [11] The Plaintiff’s Counsel in his argument abandoned the waiver argument, but maintained the estoppel argument. On the factsas proven before me, I do not find that the Defendant is estopped from denying coverage. V. Analysis A.

Limitations [12] There is no limitation provision in the long term disability insurance policy, and accordingly the statutory limitation applies. Ifind that s.590 of the Insurance Act applies with a one year limitation period, which runs from the date on which the notice of denial ofcoverage became effective. [13] I find that the Defendant’s notice of October 4, 2001, had this effect, denying the Plaintiff’s further entitlement on and after December 1, 2001. [14] This limitation date begins to run from the date of the “clear and unequivocal” communication: Falk v.

Manufacturers LifeInsurance Co. 2008 BCSC 173 (Humphries J.), at para. 21. I find that the Defendant’s notice of October 4, 2001 was clear andunequivocal communication denying the Plaintiff’s further entitlement to benefits. [15] The insurer is not required to advise the claimant that there is a limitation period or that it is relying upon same: Esau v. Co-operators Life Ins.

Co. 2004 BCSC 14 , 2004 BCSC, at para. 14, upheld 2006 BCCA 209, at para. 42; and Pekarek v.Manufacturer’s Life Insurance Co. 2006 BCCA 250, at para. 24. [16] The insurer’s decision to terminate coverage, to use the language of the Defendant (Defendant’s Written Submissions filedMay 25, 2012, at para. 20), “does not become unclear or equivocal by virtue of the fact that it references the claimant’s ability to ‘appeal’the insurer’s decision, or that an insurer advises the claimant that it will consider new information”: Esau, at para. 36, and Falk, at para.35, referencing Esau.

The reason for this conclusion from Esau makes it clear that the insurer has the duty to consider new evidence,but, doing so does not undermine a clear notice of denial of benefits. For the same result see Gumpp v. Co-operators Life Assurance Co.,2004 BCCA 217. [17] While redundant in light of my findings, s.3 of the Limitations Act also applies with a two-year limitation.

Even if this two-year limitation applies, the time had expired when the action was commenced. [18] On the facts here there was clear notice to the Plaintiff on October 4, 2001 of termination effective December 1, 2001, whichstarted the clock running.

Moreover, he had legal advice by which he knew, or should have known, that there was a clear terminationsubject only to appeal and that all he was pursuing during the period in time was the appeal. [19] The discoverability provisions of s.3(1) are impacted by the same finding, namely that the Plaintiff clearly knew or ought tohave known, by the wording of the notice and his consultations with a lawyer, that the claim had been denied effective December 1,2001: Bowes v.

Edmonton (City) 2003 ABQB 492 (Veit J.), at para. 107; Bowes v Edmonton (City of) 2005 ABQB 502 (Clackson J.), atpara. 220, affirmed 2007 ABCA 347, at para.207-208; Jones Estate v. Cumis Life Insurance Co. 2003 MBQB 5, at para. 29. B. Rolling Limitation

[20] The Plaintiff argued that because the claim for disability benefits leads to benefits that are payable periodically, a rollinglimitation period could arise at the end of each payment period.

While the concept of a rolling limitation period has been recognized inthe caselaw, the availability of this principle depends on the facts of the case, and whether there is a renewing cause of action based onthe wording of the contract or the statutory limitation provision. [21] In the case before me, the Plaintiff first received 15 weeks of payments under the weekly indemnity policy that was part ofhis employment benefits. He then received LTD benefits from September 16, 2000 - November 30, 2001. The Defendant consistentlydenied coverage beyond December 1, 2001.

While the payments were made periodically - initially on a weekly, and then monthly basis -this does not by itself result in a “rolling limitation”, certainly not after November 30, 2001, when the last periodic payment ended. [22] The Plaintiff here cannot point to ongoing payments as support for a rolling limitation; to the contrary, the ongoing paymentswere consistently denied after December 1, 2001. As was stated in Ravndahl v.

Saskatchewan 2009 SCC 7 , 2009 S.C.C. 7,[2009] 1 S.C.R. 181, at para. 22, “[t]he renewing cause of action argument cannot succeed as it assumes that the benefits which wereterminated would have otherwise been paid”. [23] The decision in Wilson’s Truck Lines Ltd. v. Pilot Insurance Co., (Ont. CA) dealt with a claim foraccident benefits arising under a no-fault motor vehicle policy. There was a one-year limitation period under the Insurance Act (Ontario).The question in that case centred on when the cause of action arose.

The insurance contract provided that the insurer will pay within 30days of receiving proof of claim, and within each 30 day period while the insurer remains liable to pay. The insurer’s file showed that, byApril 14, 1982, the insurer had told the claimant that he did not qualify. While the insurer was willing to receive material with respect tothe income loss and medical condition of the insured, there was no indication from the claimant that he was misled by the insurer’srequests for further information, into believing that the limitation period had been extended. [24] Goorbarry v.

The Bank of Nova Scotia, 2011 ONCA 793 involved a claim for disability benefits and the questionarose whether there was a rolling limitation. The insurance contract provided for a “covered event” which was undefined, but which theCourt interpreted as when a claimant first qualifies and when that claimant is no longer disabled.

On this basis, notwithstanding that thiswas a disability claim for monthly benefits, on the specific provisions in this contract, the covered event did not occur every month, andtherefor the rolling limitation concept did not apply. [25] In his submission that a rolling limitation should be found, the Plaintiff relied on cases that are distinguishable from the caseat hand. Cathcart v. Sun Life of Canada [2002] A.J. No. 1164 was an Alberta decision which dealt with an application for

summarydismissal, and as such the Court was dealing with the issue of whether the Defendant met the threshold for

summary dismissal. TheCathcart case should not be read as settling the issue of rolling limitation periods for all cases. Rather, the question of whether a rollinglimitation arises depends on the wording in the limitation provision, whether found in the wording of the insurance contract or in therelevant legislation. [26] The Plaintiff argued that the Sander v. Sun Life Assurance Co. of Canada [2011] B.C.J. No. 5 (C.A.) decision supports hisargument that a rolling limitation period applies in this case.

However, as argued by the Defendant in their Supplemental WrittenSubmission at para. 11, I find that “Sander is distinguishable from this case on the basis that the insurance policy in issue in Sanderincludes wording that permits the application of a rolling limitation period.” I further find that “the specific wording of the limitationprovision is determinative of the issue of whether a rolling limitation applies” (Defendant’s Supplement Written Submission, para. 15.) [27] In the case at hand, the insurance contract provides: 9.1 Insuring Agreement Upon the participant becoming totally disabled due to illness or accidental injury, the insurer undertakes to pay the participant themonthly income specified herein for each month or part of a month (one thirtieth of the monthly income for each day) during which thedisability lasts, subject to the terms and conditions hereinafter specified. ...

9.3.3 Termination of Income Monthly income payments cease at the earliest of the following dates : ... 2. The date on which the participant ceases to be disabled. ... 9. The date on which the participant fails to provide any evidence of disability required by the insurer. (Emphasis added) I find that, as in Goorbarry , the rolling limitation concept does not arise because the wording of the insurance contract here makes it clear that the covered event arose when the Plaintiff became totally disabled and ended when he ceased to be disabled - the latter a singular event - in this case: December 1, 2001.

The benefits were terminated effective December 1, 2001, and there was no further proof of a disability. The Plaintiff ’ s cause of action arose on that date. [ 28 ] Even if there was a “ rolling limitation ” , that ends when there is no longer proof of a disability: Gumpp , 2004 BCCA 217 , at para. 21 , referencing Balzer v. Sun Life Assurance Co. of Canada

(2003) BCCA 306, at para. 19, which in turn references the case of Holme Estate , 2000 BCCA 627 , at para. 36 . In the Balzer case, the Court, at para. 39, stated: I have no difficulty with the proposition that the claim of Ms. Balzer is continuing, that her cause of action accrues monthly, and that the risk insured against was the continuance of a total disability. But that coverage could terminate at any time for want of continuing proof of total disability.

I find that is the situation here, namely that total disability did cease and there was no new intervening claim that brought it forward to revive or “ roll ” the limitation period. The Plaintiff ’ s benefits terminated on December 1, 2001, with no further recurrence. [ 29 ] The wording of s.590 of the Insurance Act is: 590(1) Subject to subsection (2), an action or proceeding against an insurer for the recovery of insurance money must not be commenced after one year from the furnishing of the evidence required by

section 587, or after 6 years from the happening of the event on which the insurance money becomes payable, whichever period first expires.

(2) If a declaration has been made under

section 593, an action or proceeding referred to in subsection (1) must not be commenced after one year from the date of the declaration. Nothing in this wording could be interpreted as creating a rolling limitation on its own. [ 30 ] Thus, I find that the Plaintiff ’ s claim is barred in its entirety by the wording in the provisions of s.590 of the Insurance Act . [ 31 ] The wording of s. 3(1) of the Limitation Act is: 3(1) Subject to

section 11, if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known,

(

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim.

Nothing in this wording could be interpreted on its own as creating a rolling limitation. [ 32 ] Thus, I find that the Plaintiff ’ s claim is barred in its entirety by the wording in the provisions of s. 3(1) of the Limitation Act . C. Estoppel [ 33 ] As Counsel for the Defendant argued, “ the onus is on the Plaintiff to establish that the insurer said by word or conduct, that it would not rely on the limitation period ” : Falk ; Esau, and White v. Manufacturers Life Insurance 2011 BCCSC 615, at para. 79. There is no such evidence here, and I find that the claim is not supported. VI.

Conclusions [ 34 ] In conclusion, I find that the Plaintiff ’ s claim in the within action is statute barred by virtue of s. 590(1) of the Insurance Act , which is a 1 year limitation period ending December 1, 2002, on the facts before me, long (3+ years) before the action was commenced. Even under the longer limitation period in Section 3(1) of the Limitations Act , the action was statute barred as of December 1, 2003.

There is no rolling limitation period and as such that I find that the claim is barred completely. [ 35 ] On the facts before me I find there was no estoppel visited upon the Defendant. [ 36 ] Costs against the Plaintiff follow as the parties may agree, or as may be assessed. Heard on the 4 th day of June, 2012, and further written submissions by the Plaintiff on September 18, 2012 and the Defendant on October 12, 2012. Dated at the City of Edmonton, Alberta this 12 th day of February, 2013.

J.D. Rooke A.C.J.C.Q.B.A. Appearances: Robert A. Joly for the Plaintiff Lorena K. Harris for the Defendant Appendix A (without internal attachments) COURT FILE NUMBER 0603 03492 COURT QUEEN'S BENCH OF ALBERTA JUDICIAL CENTRE EDMONTON PLAINTIFF ROBERT HALTER DEFENDANT THE STANDARD LIFE ASSURANCE COMPANY OF CANADA DOCUMENT AGREED STATEMENT OF FACTS ADDRESS FOR SERVICE AND CONTACT Lorena K, Harris INFORMATION OF PARTY FILING THIS Fraser Milner Casgrain LLP DOCUMENT 2900 Manulife Place 10180 -101 Street Edmonton, Alberta T5J 3VS Phone: 780.423.7315 Facsimile: 780.423.7276 File No.: 134575-17/LKH

OTHER PARTIES Robert A. Joly Barrister and Solicitor Counsel for the Applicant #4, 20 McLeod Avenue Spruce Grove, AB T7X 3Y1 Phone: 780.962.4447 Facsimile: 780.962.3638 File No. 26345 RAJ The parties to this action agree for the purposes of this trial of an issue as defined by the Order of Mr. Justice Burrows dated February 29, 2012, that the facts hereinafter set forth are true and the documents appended hereto are true copies of the original documents and may be accepted as evidence without proof of or production of the original thereof.

Save where stated to have been agreed to by the parties, the documents admitted into evidence hereby shall not be taken to have proved the truth of the facts or statements contained herein. Nothing in this agreement shall limit or restrict the evidence which may be called by any of the parties to the action at trial. 1. On July 2, 1997, Robert Halter ("Halter") began employment with Zender Ford in Spruce Grove ("Zender") as a Service Technician.

As an employee of Zender, he became eligible for group insurance pursuant to a contract of insurance between Zender and The Standard Life Assurance Company ("Standard Life"). The material portions of the Policy in force at the material time are attached at TAB 1. 2. Halter's employment with Zender was terminated effective May 26, 2000 [TAB 2]. Halter retained the law firm of McLennan Ross in September 2000 to provide him with advice with respect to a wrongful dismissal, against Zender. On Halter's instructions, McLennan Ross caused a Statement of Claim to be filed against Zender for wrongful dismissal.

Halter also proceeded with a complaint to the Alberta Human Rights Commission, which investigated the complaint and concluded their investigation by way of a recommendation that Halter receive payment of $5,000 damages plus prescription costs for four months. [TAB 3] 3. On June 15, 2000, Halter applied for disability benefits with Standard Life alleging that as of May 15, 2000, he suffered from insomnia, fatigue and general achiness and allegedly that these symptoms prevented him from working. [TAB 4]. 4.

On October 20, 2000, Halter's claim for short term disability benefits was approved by Standard Life, effective June 3, 2000, for a 15 week period. Eligibility for long term benefits was still under consideration. [TAB 5] 5. Standard Life denied Halter's application for long-term disability benefits by way of letter dated February 15, 2001. [TAB 6] 6. On March 25, 2001, Halter wrote to Standard Life requesting that his file be reopened and attaching letters from Dr. Skeith and Dr. Potgieter in support of his request. [TAB 7] 7.

On May 7, 2001, Standard Life wrote to Halter approving his application for long term disability benefits effective September 16, 2000 to August 31,2001. [TAB 8] 8. On October 4, 2001, Standard Life wrote to Halter advising that his benefits would be terminated on December 1, 2001. [TAB 9]

9. On September 10, 2002, Halter wrote to the "Director, Appeals and Reconsideration, Standard Life" asking for a reconsideration of Standard Life's termination of his long-term disability benefits. [TAB 10] 10. On November 15, 2002, Halter again wrote to Standard Life providing additional information. [TAB 11] 11. On November 18, 2002, Standard Life wrote to Halter confirming their termination of benefits as of October 1, 2001. [TAB 12] 12. On November 27, 2002, Standard Life wrote to Halter confirming their termination of benefits as of October 1, 2001. [TAB 13] 13.

On January 6, 2003, Halter wrote to Standard Life providing additional information. [TAB 14] 14. On January 30, 2003, Standard Life wrote to Halter confirming their termination of benefits. [TAB 15] 15. Halter consulted with McLennan Ross about Standard Life's denial of his application for long-term disability benefits. Attached at TAB 16 are a series of notes and letters written by the lawyers at McLennan Ross relating to Halter's wrongful dismissal claim and claim for disability benefits written between May, 2002 and April, 2003. [TAB 16] 16.

In approximately May 2003, Halter retained Al Iafolla, an "advocate", to act for him in relation to his long term disability claim and in relation to his appeal of the denial of CPP disability benefits. [TAB 16] 17. On May 29, 2004, Iafolla wrote to Standard Life advising of the CPP decision and asking for reconsideration of the decision to deny long-term disability benefits. [TAB 17] 18. On June 8, 2004, Standard Life wrote to Mr. Iafolla confirming that the Halter file had been sent to their consultant for further review. [TAB 18] 19.

On June 28, 2004, Standard Life wrote to Iafolla confirming their termination of Halter's disability benefits was being upheld. [TAB 19] 20. On March 2, 2006, Halter consulted for the first time with and retained his current counsel, Robert A. Joly, to pursue a claim on his behalf for long term disability benefits against Standard Life. 21. On March 15, 2006, Halter issued a Statement of Claim against Standard Life, seeking, inter alia, damages and a declaration that Halter has been totally disabled since May 15, 2000. 22. A Statement of Defence was filed on behalf of Standard Life on July 6, 2006.

Discoveries of both parties proceeded between December 2006 and December 2011 and pursuant to an Order of Justice Burrows dated February 29, 2012, the parties were directed to proceed to trial of issue on questions as outlined in that Order.

ROBERT A. JOLY Per: ____________________________________ Robert A. Joly, Solicitor for the Plaintiff Robert Halter FRASER MILNER CASGRAIN LLP Per: ______________________________________ Lorena K. Harris, Solicitor for the Defendant The Standard Life Assurance Company of Canada [1] The ASF does not address the period from September 1 - December 1, 2001 but presumably there was a continuation of benefits during that period?