2011 QCCA 2397, 2011 QCCA 2397

Unofficial English Translation Transamerica Vie Canada c. Cadrin 2011 QCCA 2397 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF QUEBEC No. 200-09-006975-103 (200-17-007317-068) DATE: December 22, 2011 _____________________________________________________________________ CORAM: THE HONOURABLE MARC BEAUREGARD, J.A. LOUIS ROCHETTE, J.A. LORNE GIROUX, J.A. ______________________________________________________________________ TRANSAMERICA LIFE CANADA APPELLANT – Defendant and cross-plaintiff v.

CAMILLE CADRIN RESPONDENT – Plaintiff and cross-defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Court ; - On the appellant’s appeal from a judgment of the Superior Court (Quebec, January 27, 2010, the Honourable Mr.

Justice Georges Taschereau), condemning the appellant to pay the respondent insurance benefits for a total disability; [ 2 ] For the reasons of Beauregard J.A., with which Rochette and Giroux JJ.A. agree; [ 3 ] ALLOWS the appeal, with costs against the appellant, for the sole purpose of clarifying that, at all times, the monthly benefit is calculated by dividing the current consumer price index by the consumer price index in effect on the date of the start of disability, and that, at all times, the monthly benefit must not be less than 1.04% of the benefit payable at the start of disability, but that does not mean that, each year, the benefit must be 1.04 times that of the previous year.

(

s) MARC BEAUREGARD, J.A. (

s) LOUIS ROCHETTE, J.A. (

s) LORNE GIROUX, J.A. Mtre. Pascale Caron (DONATl, MAISONNEUVE) For the appellant Mtre.

Michel Gilbert (MELANÇON, MARCEAU, GRENIER) For the respondent Date of hearing: October 27, 2011 ______________________________________________________________________ REASONS OF BEAUREGARD, J.A. ______________________________________________________________________ [ 4 ] The appellant contends that the Superior Court judge was wrong to conclude that the respondent was totally disabled within the meaning of the policy set up for him. [ 5 ] For the general facts, I will refer to the appellant’s factum, eliminating passages that constitute the appellant's arguments and adding somewhat to it: [TRANSLATION] In his insurance application of April 30, 1993, the respondent requested professional category A4 disability insurance under the Discovery Pro Plus (residual loss) plan .

He remitted a cheque for $500 and signed a bank authorization for direct debit. On June 28, 1993, insurance policy P-1 was issued, before the plaintiff submitted to his representative, Robert Carrier, his letter of August 19, 1993, giving non-exhaustive details of [TRANSLATION] “all the clinical duties” involved in his profession as an internist.

In this letter of August 19, 1993, which reached the insurer, the respondent described as follows the duties he performed at the Centre hospitalier Chauveau: [TRANSLATION] I hereby wish to provide clarifications about the work of an internist in a general short-term care hospital. In the absence of available medical ultraspecialists, specialists in internal medicine at the Centre hospitalier Chauveau are responsible for the following:

– Medical consultation services in the emergency clinic, at the out-patient clinic and in the hospital; – Continuous on-call services in internal medicine; – Hospitalization services in collaboration with general medical practitioners, if necessary; – Responsibility for, and treatment of, patients admitted to the intensive care unit; – Responsibility for, and supervision of, respiratory therapy, resting and stress electrocardiography, as well as echocardiography services; – Responsibility for, and supervision of, externs, interns or residents in internal medicine during optional practicums in our hospital.

In such a hospital, all the work of an internist is performed in the hospital environment. The various clinical duties are carried out under the department of internal medicine. Our profession of internist, therefore, entails in performing all these clinical duties. It would be my pleasure to provide you with additional information if you deem it useful. And, subsequent to that letter, the appellant’s actuary wrote the following to the respondent on November 19, 1993: [TRANSLATION] Dear Dr. Cadrin, The purpose of this letter is to clarify the definition of total disability in your contract #89015258.

Total disability means the inability to perform most of the duties of your regular profession further to an injury or illness. As a medical specialist in internal medicine, working in a short-term care hospital, whose availability to see to on-call services in internal medicine and whose responsibility for the care dispensed in intensive care, emergency care and cardiopulmonary resuscitation units are essential duties in the practice of your regular profession, a total disability benefit will be paid to you if you are unable to perform those duties.

We hope these explanations clarify any doubts with respect to your coverage. This policy contained different types of coverage, including life insurance and, in riders, coverage in the event of an injury or illness. The respondent was forced to take leave from work from July 11 to August 17, 2003, because of essential tremors. It is accepted that, since returning to work in August of 2003, he has worked between 35 and 40 hours a week. The respondent believes he is entitled to total disability insurance benefits, whereas the appellant is paying him benefits in the event of residual loss of income instead.

The trial judge ruled in favour of the respondent and recognized a total disability. It is common ground that, subsequent to the 1996 [TRANSLATION] “shift to ambulatory care", the respondent had to modify his duties. The policy also provides that, in the event of total disability only, a monthly benefit of $1250 will be paid as a contribution to a retirement savings plan, and policy costs will be waived, both of which are claimed by the respondent. The appeal deals with the

definitions of total disability and residual loss of income included in the disability insurance rider: [TRANSLATION] “Total disability” means your inability to perform most of the duties of your regular profession further to an injury or an illness that forces you to be followed by a physician. “Residual loss of income” means that: (

a) you are not totally disabled; (

b) you engage in gainful employment; (

c) you sustain a loss of income of 20% or more, solely as a result of an injury or illness that occurred while the rider is in effect. The injury or illness must subsist and you must be followed by a physician during the grace period only. These

definitions are supplemented by the

definitions of “regular profession” and “gainful employment”: [TRANSLATION] “Regular profession” means the profession you practised immediately before the start of your disability. “Gainful employment” means regular employment that you engage in for at least 30 hours a week. The appeal also deals with the

interpretation of the provisions in the rider governing the 7% cost of living adjustment. - 0 - [ 6 ] The appellant submits four grounds: 1. The judge failed to interpret the clauses of the policy in light of the others, in violation of

article 1427 of the Civil Code of Québec . [ 7 ] The appellant contends that the clause dealing with “total disability” should be interpreted in light of the clause dealing with “residual loss”. [ 8 ] Interpreted literally, the clause dealing with “residual loss” applies only if there is no “total disability”. But according to the clause that deals with “total disability”, the words “total disability” have a very specific meaning: [translation] “the inability to perform most of the duties of the regular profession” of the insured.

Hence, if an insured is unable to perform most of the duties of his or her regular profession, the clause dealing with “residual loss” is null and void in the insured’s regard. [ 9 ] If, as the judge ruled, the respondent was unable to perform most of the duties that were his before his illness, the appellant's proposal is without merit unless the words "total disability" in the clause dealing with "residual loss" are given their ordinary meaning, not the special meaning given in the policy. [ 10 ] It may have been the appellant's intention not to consider as "total disability" a disability that does not prevent an insured from holding a regular job for at least 30 hours a week, but that is not the intention expressed in the policy, which, unless I am not interpreting it properly, is very poorly written since, according to the clause dealing with "residual loss", an insured who is partially disabled and does not hold regular employment for at least 30 hours a week is not entitled to benefits, whereas a person who holds such employment for at least 30 hours receives benefits from the insurer.

[ 11 ] It is certain that, normally, insurance of the kind involved here is not a source of enrichment. But no legal provision prevents an insurer from assuming the obligation to pay its insured a lump sum in the event that the insured, while not being unable to earn the income earned before his or her illness, can no longer perform most of his or her pre-illness duties. The appellant's argument can perhaps be made in the context of another policy, but the policy involved here does not limit the benefits to the insured's loss of income. 2.

The judge committed a palpable and overriding error in determining that the respondent was totally disabled within the meaning of the policy. [ 12 ] The appellant affirms that the judge contradicted himself, first, by saying that the November 19, 1993 letter from the appellant's actuary did not change the policy, and then using the letter to find in favour of the respondent. [ 13 ] That argument is without merit: I understand that the judge decided that the letter could not restrict the respondent's rights under the policy, but it could be used to describe "most of the duties" of the respondent before his illness. [ 14 ] The appellant then criticizes the judge for limiting himself to considering only those duties that the respondent no longer performs since he became ill and completely disregarding the fact that the respondent continues to perform prior duties that, in 2002, alone provided nearly 80% of his fees for services billed or blended pay. [ 15 ] To rebut that argument, the respondent states the following in his factum: [TRANSLATION] The appellant makes much of the

summary profile of the respondent's practice in order to contend that he continues to perform the duties he frequently performed before 2003. That being so, the appellant proposes a quantitative examination of the respondent's practice, an approach rejected by the trial judge because of its incompatibility with the terms of the policy. Especially since the

summary practice profile paints a very incomplete picture of the respondent's practice during the period prior to June of 2003 in that it does not provide a precise idea of the technical services he performed while receiving blended pay at the Centre hospitalier Robert-Giffard. As the respondent underscored in his testimony, apart from the first consultation, for which he was paid at 40%, none of the technical or resuscitation services he performed at Robert-Giffard, in an intra-hospital context, appear in the billing profile, since half his pay was on a per diem basis (3.5 hours of work). Solely for the year 2002, the

summary profile of the respondent's practice indicates 222½ per diems, i.e., the equivalent of 111 days of work for which the profile provides no indication of the services provided or procedures performed by the respondent. In fact, witness Éric Vaillancourt, a RAMQ billing analyst, corroborated that, since they were included in the per diem paid by the blended pay method, the services could not be described in the

summary practice profile. The respondent also testified that he received lump-sum pay for the care he provided patients in intensive care at Hôpital du Saint- Sacrement. There again, the technical and resuscitation services provided in that context were included in the lump sum and cannot be described in the

summary practice profile.

Yet, as the evidence adduced at trial demonstrated, it was precisely in the context of work remunerated by a lump sum or blended pay, i.e., for an intra-hospital and intensive care clientele, that the respondent was the most likely to have recourse to the medical services and procedures for which he had been trained. [ 16 ] I accept that, in light of the evidentiary elements to which the paragraphs I have just cited refer, the [TRANSLATION] "summary of practice" serves no great purpose. [ 17 ] The appellant adds that, since his illness, the respondent still maintains his practice privileges as an active member of the internal medicine staff at the Centre hospitalier Chauveau and as an associate member at the Centre hospitalier Robert-Giffard. [ 18 ] The respondent counters that, as a result of his illness, he wrote to the various heads of professional services for the institutions where he worked in July of 2003 to notify them that he was unable to perform the on-call duties in internal medicine or to assume responsibility for patients in the emergency clinic or hospitalized in care units.

Further to that, he lost his privileges as an active member at the Hôpital du Saint-Sacrement. Whether the respondent retained his privileges at the two other hospitals in theory is of little importance if, in practice, he does not perform duties that are central to his specialty.

[ 19 ] The appellant's main argument is that if the respondent does not now perform the duties he performed in 1993 when the policy was established, it is because, following the 1996 "shift to ambulatory care", he no longer has the opportunity of performing the bulk of those duties. [ 20 ] Thus, according to the appellant, the judge erred by not giving enough weight to the fact that the respondent's regular profession as at July 11, 2003, was not the same as the one that existed at the time the appellant's actuary wrote his letter dated August 19, 1993. [ 21 ] The judge described the hospitals where the respondent worked in 2003, before his illness, as follows: [TRANSLATION] In 1996, in the wake of a major reform of the hospital system, the role of the Centre hospitalier Chauveau changed.

It became an [TRANSLATION] "ambulatory" hospital, and only six beds remained assigned to short-term care. This shift in the hospital's role compelled the plaintiff to retrain, and it was during that period that he began to work at the Centre hospitalier Robert-Giffard and the Hôpital du Saint-Sacrement. The Centre hospitalier Robert-Giffard, a large psychiatric care institution, had a 30-bed hospitalization unit for patients with acute health problems, and a five or six-bed unit equipped for intensive care.

As for the Hôpital du Saint-Sacrement, previously a university teaching hospital, it became part of the Centre hospitalier affilié universitaire de Québec under the 1996 reform and was converted to a community hospital. In July of 2003, when he had to stop working, the plaintiff was still working at the three hospitals. He was an associate member of the council of physicians, dentists and pharmacists of the Centre hospitalier Robert-Giffard, with internal medicine privileges at the clinical department of specialized medicine. His activities were recorded in the file respecting his practice privileges.

This description remained unchanged from the time of his arrival in 1996 and was written as follows: – As an attending physician, follow up on patients hospitalized in the medical-surgical unit; – Respond to urgent and non-urgent consultations from the medical-surgical unit; – Perform specialized procedures: – pleural punctures; – lumbar punctures; – arterial blood tests; – etc.; – Respond to consultations from the other units of the C.H.R.G. and the Pavillon Roy-Rousseau; – Respond to consultations from the out-patient clinic concerning users followed as out-patients by the C.H.R.G. and the Pavillon Roy-Rousseau; – Meet with various stakeholders, such as the family, nursing staff, members of the multidisciplinary team, and so on.

He was also an active member of the council of physicians, dentists and pharmacists of the Centre hospitalier Chauveau, Loretteville institution, with privileges in internal medicine, echocardiography, resting and stress electrocardiogram readings, and performance and

interpretation of respiratory function tests.

Lastly, he was an active member of the council of physicians, dentists and pharmacists of the Centre hospitalier affilié universitaire de Québec – Hôpital du Saint-Sacrement, with internal medicine privileges, in the clinical medicine and geriatrics department, for clinical internal medicine and short-term care services. [ 22 ] Moreover, he added the following concerning the appellant's argument: [TRANSLATION] The defendant adduced evidence tending to show that the plaintiff's duties evolved between the issuing of the insurance contract, in 1993, and his work stoppage, in July 2003.

It mainly contended that the 1996 shift to ambulatory care led to changes in the significance of certain duties described by the plaintiff in his letter of August 9, 1993, to the Groupe financier AVC Itée, while he was working at the

Centre hospitalier Chauveau, as well as in his daily

schedule and the techniques regularly used. Consequently, according to the defendant, the letter from Serge Assayad to the plaintiff on November 19, 1993, is, in any case, irrelevant. It should first be pointed out that the plaintiff's practice, both in 1993 and in 2003, must be the subject of a general qualitative analysis.

The definition of total disability in the insurance contract, which refers only to the plaintiff's inability to perform most of the duties of his regular profession, and no more, and the letter from Serge Assayad to the plaintiff of November 19, 1993, in which he described the essential duties of the plaintiff's regular profession, without regard for their frequency or the income he derived from them, compels that conclusion.

But in 2003, the plaintiff's practice, considered as a whole, not hospital by hospital, was that of an internist working in a community hospital environment, with all that this involved and with all that to which it exposed him, as in 1993.

From a qualitative standpoint, his practice remained similar, even though the frequency of certain duties related to such practice had changed. [ 23 ] The appellant believes that the judge should have taken into consideration the following changes that occurred between 1996 and 2003 at the Centre hospitalier Chauveau, the Centre hospitalier Robert-Giffard and the Hôpital du Saint-Sacrement: 1. Before 2003, the respondent no longer installed endovenous pacemakers. That is correct, according to the respondent himself.

That was not due to the [translation] "shift to ambulatory care" but also to changes in cardiology treatments. 2. Before his illness, the respondent no longer did liver biopsies. The respondent admits this, but adds that he continued to do biopsies of the pleura, pleural punctures, bone marrow aspirations or osseous biopsies. 3. At Chauveau and Saint-Sacrement, duties requiring an emergency intervention were performed by front-line emergency physicians or anesthesiologists. The appellant refers us in that regard to certain pages of the respondent's testimony and to certain pages of Dr.

Roy's testimony, without specifying where that was supposedly said. [ 24 ] The appellant also points out the following changes. 4. At the Centre hospitalier Chauveau, arterial punctures and intubation procedures were done by physicians in the emergency clinic, and cases requiring intensive care, after stabilization by the physicians in the emergency clinic, were taken to another hospital. 5. At the Centre hospitalier Chauveau, no invasive pulmonary procedures were performed. If pleural punctures were required, the emergency physician performed them. 6.

At the Centre hospitalier Chauveau, there was no longer any cardioversion. 7. At the Centre hospitalier Chauveau, biopsies and abdominal punctures were transferred to another hospital. [ 25 ] But the appellant refers us to no testimony concerning these changes.

[ 26 ] The appellant adds the following: 8. A physician on call is first called. He need not come in at night, unless the patient's condition requires it, as any intervention to stabilize the patient is, in principle, over by the time the physician on call arrives. [ 27 ] The appellant refers us to Dr. Roy's testimony in this regard. The reference provided, however, appears to be wrong. [ 28 ] The appellant also adds the following: 9.

In 2002 and 2003 the respondent billed only four times for resuscitation services. [ 29 ] This allegedly appeared from Exhibit D-10d), but the appellant did not tell us where that information was to be found in the exhibit, which has dozens of pages. [ 30 ] The appellant adds the following change: 10. At the Centre hospitalier Robert-Giffard, acute cardiac cases were transferred to another hospital. [ 31 ] The respondent conceded that patients were sent to the Laval hospital if an artery had to be unblocked.

For anything else, the patient was treated at Robert-Giffard. [ 32 ] The respondent counters the appellant’s argument as follows: [TRANSLATION] Note that a number of the statements made in paragraph 34 of the appellant’s factum are at times ambiguous (for example, the respondent no longer does liver biopsies at the Hôpital du Saint-Sacrement or the Centre hospitalier Robert-Giffard because of the availability of gastroenterologists in those hospitals; the respondent did not install endovenous pacemakers after 1996 because of technological improvements or the availability of cardiologists at the Hôpital Saint-Sacrement), and at other times contrary to the evidence (the respondent continued to perform electric cardioversion in various hospitals; acute cardiac cases were treated at the Centre hospitalier Robert-Giffard, with the exception of certain more complicated types of myocardial infarction, which were transferred to the Hôpital Laval, for example, to unblock an artery and then returned to Robert-Giffard), or even obviously false, or based on hearsay, such as the testimony of the director of professional services, André Roy, for example, about the practice of internal medicine and the procedures performed by the respondent at the Centre hospitalier Chauveau.

Dr.

André Roy, a general practitioner and director of professional and hospital services at the Centre de santé et des services sociaux de Québec-Nord, described in detail during his examination in chief, the operations of the Centre hospitalier Chauveau, and candidly admitted, in his cross-examination, that he was the director of professional services for 29 distinct physical institutions, he did not have specific knowledge of what was done in each department, and the departmental medical organization was up to the department heads and might have varied at Chauveau, between 2001 to 2006, according to the type of agreement or daily operations set up by the department head.

Merely as an illustration, Dr. Roy was unaware that Dr. Cadrin was the on call internist at Chauveau for patients hospitalized in the short-term care unit and the emergency observation unit. Hence, it is not overly surprising that the judge did not comment on his testimony in the judgment. [ 33 ] In my opinion, the appellant’s demonstration is not convincing. It does not show that the judge erred in concluding that the respondent’s illness had affected his work in the way the judge described it in paragraphs [54] to [66] of his judgment.

[ 34 ] It must also be noted that the services of an internist now being less in demand in the hospitals where the respondent worked and still works does not hide the fact that he could not perform the duties he saw to before his illness if another hospital, here or elsewhere, was looking for the services of an internist. - 0 - [ 35 ] At the parties’ request, the judge allegedly refrained from interpreting the rider appended to the policy and entitled [TRANSLATION] “Rider concerning the 7% cost of living adjustment". [ 36 ] In a related case ( Transamerica Vie Canada v.

Madeleine Grandchamp , C.A. 500-09-020686-101), the Court filed concurrently with this case a judgment in which it declared that, at all times, the monthly benefit is calculated by dividing the current consumer price index by the consumer price index in effect on the date of the start of the disability, and that, at all times, the monthly benefit must not be less than 1.04% of the benefit that was payable at the start of disability, but that does not mean that, each year, the indemnity must be 1.04 times that of the previous year. [ 37 ] The same conclusion applies here. [ 38 ] For these reasons, I would allow the appeal, with costs against the appellant, for the sole purpose of clarifying what I just said regarding the rider dealing with inflation. (

s) MARC BEAUREGARD, J.A.