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

This is an Appeal from a Motion where Sun Life moves to dismiss the Plaintiff’s LTD Action on the ground that the Court does not have jurisdiction and that the proper forum is arbitration (LRBO) under the collective agreement.

Date Heard: June 30, 2017 | Full Decision [PDF]

Contextual History

This Plaintiff, Ms. Morriseau, is a unionized employee of Lakehead District School Board. Her employment is subject to a Collective Bargaining Agreement that provides long-term disability benefits. By letter dated June 2, 2016, Sun Life denied Ms. Morriseau’s claim for long-term disability benefits.

Sun Life Assurance Company of Canada has a contract with the district school board whereby it provides administrative services with respect to LTD benefits. Under the contract, Sun Life acts as agent for the district school board and the school board has discretion in the decision to pay long-term benefits.

Ms. Morriseau claimed long-term disability benefits following a motor vehicle collision she was involved in on November 2, 2015.

Ms. Morriseau sued Sun Life, seeking an order directing payment of long-term disability benefits. W.D. Newton J., on January 27, 2017, 2017 ONSC 686, determined that while the language of the insurance contract and disability plan within the guidebook was sloppily written, the intention so determined, is that the claim for long-term benefits forms part of the Collective Bargaining Agreement.

At para [40] W.D. Newton J., stated that: I conclude that the essential character of the dispute arises from the interpretation, application, or administration of the Collective Agreement and, therefore, this dispute, the determination of Ms. Morriseau’s entitlement to LTD, is within the exclusive jurisdiction of the arbitrator.

Issue on Appeal

Whether the entitlement to long-term disability benefits is arbitral, as opposed to actionable based on the contract of insurance and whether it is incorporated into the Plaintiff’s Collective Bargaining Agreement.

Brief Answer

The benefit plan outlined in the contract of insurance forms part of the Collective Bargaining Agreement. Appeal dismissed. Costs awarded against the Appellant in the amount of $5,000.00.

Analysis

The Appellant advances three arguments on appeal:

i. Sun Life is not a party to the Collective Bargaining Agreement and therefore does not have standing to challenge the jurisdiction of this court;
ii. The Motion Judge, with respect, erred in finding that the essential character of the dispute involves a subject matter that is covered by the Collective Bargaining Agreement; and
iii. The result of the Motion Judge’s order is that the Appellant is left without a remedy.

Per Curiam, H.S. LaForme, C.W. Hourigan, David M. Paciocco JJ. A., did not give effect to these submissions as follows:

Pursuant Rule 21.01(3) (a) the Respondent had standing to have the within action dismissed on the basis that the court lacked jurisdiction. Sun Life was a named Defendant, and the Rule provides that “a Defendant” may move to have an action dismissed, where the court has no jurisdiction over the subject matter.

The Court of Appeal accepted the Respondent’s submission at para [9] where:

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 the respondent 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 the appellant suggests.

However in London Life Insurance Co. v. Dubreuil Brothers Employees Assn., 2000 CarswellOnt 2419 the Court of Appeal decided (similar issues) that:

This case is not a dispute “between those bound by the collective agreement, but between an employee and the insurer, a stranger to that agreement. It is not a dispute arising out of the interpretation, application, administration or violation of the collective agreement, which has admittedly been fully complied with. It is instead a dispute about entitlement to benefits under the insurance policy. The facts which give this dispute its essential character were not intended by the parties to be governed by the collective agreement and do not engage the rights and obligation of the parties found expressly or by inference in that agreement.”

Citing Hamilton v. ICI Canada Inc., 2001 CarswellOnt 3524 at [9], the Court of Appeal affirmed the following principle when interpreting jurisdictional issues:

The Ontario Court of Appeal has dealt with the arbitrability of certain types of disability benefits, or benefit entitlement claims. The Minutes, of course, were signed prior to these decisions being released. It is common ground that if a claim is arbitrable under a collective agreement, the court has no jurisdiction to hear the claim. Similarly, if a claim is not arbitrable under a collective agreement, this constitutes a circumstance in which the court will take jurisdiction, since to fail to do so would leave the complainant without a remedy. The four categories of claim that have emerged were originally identified in Brown and Beatty, Canadian Labour Arbitration, 3rd ed. (1988). They are:

  1. Where the collective agreement does not set out the benefit sought to be enforced, the claim is not arbitrable.
  2. Where the collective agreement stipulates that the employer is obliged to provide certain medical or sick-pay benefits, but does not incorporate the plan into the agreement or make specific reference to it, the claim is arbitrable;
  3. Where the collective agreement only obliges the employer to pay the premiums associated with an insurance plan, the claim is not arbitrable; and
  4. Where the insurance policy is incorporated into the collective agreement, the claim is arbitrable.

However, the Court of Appeal relies on the interpretation of the within collective agreement akin to the ones in Morris v. Manufacturers Life Assurance Co. (2005), 26 C.C.L.I. (4th) 66 (Ont. C.A.) and Duke v. Toronto District School Board, [2006] O.J. No. 1983 (Ont. S.C.J.) in support of the Motion Judges Decision:

We agree with the motions judge that the essential character of this dispute arises from the interpretation, application, or administration of a collective agreement and that the courts must decline jurisdiction. We also agree with her conclusion that the parties to the collective agreement intended that disputes about “benefit entitlements” would be resolved by arbitration. It is also clearly stated in the LTD plan that no action may be brought against Manulife, the R.S.O. While the plan does refer to legal claims against the city, the plan also applies to non-unionized employees and, so far as employees covered by a collective agreement are concerned, the language of the plan must be read in conjunction with the collective agreement.

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 long-term disability payments by the district school board, and leaving final decision making power with them, was likely made to remove any doubt concerning the arbitrability of benefits disputes and distinguishing this matter form that in Hamilton at para [10].

With respect to the third and final argument, the Court of appeal concluded that, at para [11], the real dispute is between the appellant and the district school board, against whom the appellant may seek an appropriate remedy through arbitration. There is no contract between the appellant 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 district school board. The entitlement to long-term benefits is a product of collective bargaining, and any dispute is therefore arbitrable under the collective agreement. The appellant has not advanced any convincing grounds for concluding that an arbitrator would decline jurisdiction over a claim for those benefits.

Notice of Appeal

At the time of the writing of this article, the Appellant filed a Notice of Appeal with the Supreme Court of Canada dated September 26, 2017.

 

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Written by

Antonio is a litigator with Lemieux Law. His practice focuses on motor vehicle accidents, accident benefits, occupiers’ liability, personal injury, long-term disability, wrongful & constructive dismissal, CPP disability, human rights, general litigation and WSIA Appeals. When Antonio is not practicing law, he enjoys playing hockey, working on cars, and visiting family in southern Italy.