Court of Appeal Affirms LTD Benefits Are Addressed in Collective Agreement

July 07, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Morriseau v. Sun Life Assurance Company of Canada, 2017 ONCA 567

DATE of Decision: July 4,  2017
Heard Before:  LaForme, Hourigan and Paciocco JJ.A.

COURT OF APPEAL FOR ONTARIO

On appeal from the judgment of Justice W. Danial Newton of the Superior Court of Justice, dated January 27, 2017, with reasons reported at 2017 ONSC 686, 65 C.C.L.I. (5th) 163.

REASONS FOR DECISION

This is an appeal of the motion judge’s judgment dismissing the within action for want of jurisdiction.

Ms. Morriseau is a unionized employee. Her employment with the LDSB is subject to a collective agreement that provides for certain long-term disability (“LTD”) benefits. The LDSB is self-insured with respect to LTD benefits under the collective agreement.  Sun Life has a contract with the LDSB for provision of LTD benefits, and Sun Life acts as agent for the LDSB and the LDSB has ultimate final decision-making power for the payment of LTD benefits.

Ms. Morriseau sought LTD coverage following a car accident on November 2, 2015. That request was denied in a letter sent to her by Sun Life. She commenced the action seeking a declaration that she is totally disabled within the definition in the contract between Sun Life and LDSB and an order requiring Sun Life to approve the payment of LTD benefits.  The motion judge found that the court did not have jurisdiction because the dispute arises from the interpretation, application or administration of a collective agreement. Accordingly, he struck Ms. Morriseau’s statement of claim.

On appeal, three primary arguments are advanced: (i) Sun Life is not a party to the collective agreement and, therefore, does not have standing to challenge the jurisdiction of the court; (ii) the motion judge erred in finding that the essential character of the dispute involves a subject matter that is covered by the collective agreement; and (iii) the result of the motion judge’s order is that Ms. Morriseau is left without a remedy.

The Court of Appeal did not give effect to these submissions for the following reasons:

1. Pursuant to the Rules of Civil Procedure Sun Life had standing to have the action dismissed on the basis that the court lacked jurisdiction. Sun Life was named as the defendant in the within action, and r. 21.01(3)(a) provides that “[a] defendant” may move to have an action dismissed on the ground that the court has no jurisdiction over the subject matter of the action.
    
2. As Ms. Morriseau concedes, the standard of review of the motion judge’s finding that the subject matter of the dispute is covered by the collective agreement is palpable and overriding error. The Court of Appeal was not satisfied that the motion judge made any such error in concluding that the subject matter falls within “Brown and Beatty category 2”: see Hamilton v. ICI Canada Inc.. The language of the collective agreement supported a finding that the LDSB was required to pay benefits under that agreement, even though the Benefits Booklet is not explicitly incorporated into the collective agreement. As Sun Life points out, under Article C7.00 of the collective agreement, LDSB is required to continue to provide benefits in accordance with the existing benefits plans and collective agreement in effect as of August 31, 2104. The local terms in the collective agreement also reference and describe LTD benefits in the Appendix A - Benefits Summary. LDSB’s obligation under the collective agreement therefore goes beyond the mere payment of premiums, as Ms. Morriseau suggests.
   
   Moreover, the motion judge’s analysis was supported by the analysis of comparable collective agreements in Morris v. Manufacturer’s Life Assurance Co. and Duke v. Toronto District School Board. The Court of Appeal could not discern any palpable and overriding error in the motion judge’s finding that the arrangement whereby Sun Life handles administrative aspects of LTD payments by LDSB, leaving final decision-making power with LDSB, was likely made to remove any doubt concerning the arbitrability of benefits disputes and thereby avoid the situation in Hamilton.
    
3. The Court of Appeal was satisfied that the real dispute is between Ms. Morriseau and the LDSB, against whom Ms. Morriseau may seek an appropriate remedy through arbitration. There is no contract between Ms. Morriseau and Sun Life, and there is no legal basis upon which to order that benefits be paid by Sun Life. It is simply the agent of the LDSB. The entitlement to LTD benefits is a product of collective bargaining, and any dispute is therefore arbitrable under the collective agreement. Ms. Morriseau has not advanced any convincing grounds for concluding that an arbitrator would decline jurisdiction over a claim for those benefits.

The appeal is dismissed. Sun Life is entitled to its costs of the appeal, which fixed at $5,000, inclusive of fees, disbursements and taxes.

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It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.