IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20121128

Docket: S094917

Registry:
Vancouver

Between:

Sun
Life Assurance Company of Canada and Teck Metals Ltd.

Plaintiffs

And

Joseph
Catalano

Defendant

Before:
The Honourable Mr. Justice Savage

Oral Reasons for Judgment

[1]            
The defendant, Joseph Catalano, worked for the plaintiff Teck Cominco
Metals Ltd., most recently as a crane operator, from 1977 until February 6,
2003. Teck Cominco Metals Ltd. changed its name to “Teck Metals Ltd.” on June
1, 2009. I will refer to this plaintiff as “Teck Metals”.

[2]            
Mr. Catalano was in five motor vehicle accidents between January 7, 1998
and December 22, 2003. He commenced actions for some of those accidents.

[3]            
Teck Metals provided long-term disability benefits (“LTD benefits”) to
its eligible employees under a group policy of insurance (the “Group Policy”).
The Group Policy was administered by Sun Life Assurance Company of Canada (“Sun
Life”). Mr. Catalano claimed and was eventually paid LTD benefits under the
Group Policy. He continues to receive benefits.

[4]            
The Group Policy contains a subrogation clause under which the plan
sponsor “will be subrogated to all rights of recovery of the Employee for loss
of income to the extent of the sum of the benefits paid or payable to him under
such provision”. Under the subrogation clause the plan sponsor required that
Mr. Catalano sign a reimbursement agreement (the “Reimbursement
Agreement”).

[5]            
The Reimbursement Agreement is dated January 10, 2005, and provided that
“Upon recovery of an amount or amounts from another person or his insurer for
loss of income, I will remit the amount (less costs) to Sun Life, to the extent
of the sum of disability benefits paid to me by Sun Life as at the date of
recovery”. Under the Reimbursement Agreement, Mr. Catalano also directed his
solicitor to provide information and pay certain money to Sun Life.

[6]            
Teck Metals and Sun Life learned that Mr. Catalano had settled certain
of the actions arising out of the motor vehicle accidents referenced earlier.
No monies were paid and no information was forthcoming to Teck Metals or Sun
Life. Sun Life was aware that one of the actions had settled by receipt of a
letter dated June 22, 2006. Mr. Catalano’s solicitor was reminded of the terms
of the Reimbursement Agreement by correspondence dated March 22, 2007.

[7]            
Since no information or monies were forthcoming, Teck Metals and Sun
Life eventually commenced action June 6, 2009. Mr. Catalano was of the view
that the action was out of time by virtue of limitations contained in the Insurance
Act, R.S.B.C. 1996, c. 226. The specific limitations relied on are those
contained in s. 22 and s. 65 of the Act. Teck Metals and Sun Life say
that those limitations do not apply. There is a six year limitation under the Limitation
Act, R.S.B.C. 1996, c. 266 they say which does apply.

[8]            
Mr. Catalano says that the general limitation of one year as provided in
s. 22(1) of the Insurance Act applies in this case. Section 22(1)
says that “every action on a contract must be commenced within one year after
the furnishing of reasonably sufficient proof of loss or claim under the
contract and not after”.

[9]            
There are some relevant definitions. The term “contract” is defined in s.
1(1) as meaning “…a contract of insurance….”  The term “insurance” is
defined to “mean the undertaking by one person to indemnify another person
against loss or liability for loss in respect of a certain risk or peril to
which the object of the insurance may be exposed…”

[10]        
In my opinion, applying these two definitions in s. 22(1) entails that
the action so limited is one on a contract of insurance against an insurer who
has agreed to indemnify the insured against a loss or peril to which the object
of the insurance may be exposed. An insured does not indemnify his insurer. Therefore,
a “claim under the contract” cannot include a claim by an insurer against its
insured, as is the case in the present action. This interpretation is supported
when consideration is given to s. 22(2).

[11]        
Subsection 22(2) requires that “an action” for recovery of money payable
under “a contract of insurance” not be brought until 60 days after “proof”, in
accordance with the contract. The “proof” clearly refers to “proof of a loss or
claim” referenced in s. 22(1). Section 22(2) also refers to “insurance money”.
That is also a defined term that only applies to money payable by an insurer.

[12]        
Thus ss. 22(1) and 22(2) bookend the period during which an action can
be commenced on a contract of insurance. Such action must be commenced within
one year of furnishing reasonably sufficient proof of loss or claim, but not
before the expiration of 60 days after furnishing such proof, subject to other
provisions of the subsection. In my opinion s. 22 does not apply to the cause
of action in this case.

[13]        
 In the alternative, Mr. Catalano relies on the one year limitation
period contained in s. 65 of the Insurance Act. It is clear that s. 65
of the Insurance Act refers to life insurance. Section 29 of the Insurance
Act defines the term “insurance” in Part 3 as “life insurance”. Section
65(1) references s. 62 which references “the age of the person whose life is
insured”, and “the name and age of the beneficiary” which make it clear that
this section within this Part of the Insurance Act is referring to life
insurance. Section 65 does not apply to the circumstances of this case.

[14]        
Mr. Catalano referred the court to two decisions in aid of his
submission, that of Donald J.A., speaking for the Court in Kobzey v. Sun
Life of Canada, 2001 BCCA 517 and that of Coultas J., in Davidson v.
Leine, 1994 CarswellBC 2328. With respect, I do not see how either of these
decisions is of assistance to the defendant here. While Coultas J. refers to
the reimbursement agreements in that case as contracts of indemnity, they are
not contracts of insurance indemnifying an insured against perils or
risk of loss.

[15]        
In my opinion, the applicable limitation period here is that contained
in s. 3(5) of the Limitation Act, R.S.B.C. 1996, c. 266. The plaintiffs
are suing on the Reimbursement Agreement entered into pursuant to the
subrogation clause in the Group Policy. It is an action for breach of contract
for which the limitation period is 6 years: Chisamore v. Cumis Life Insurance
Company., 2006 BCSC 462.

[16]        
In the circumstances, the application for summary judgment is dismissed
with costs at scale B. An order will go on the agreed terms with respect to the
production of information in the plaintiffs’ application. The plaintiffs are
also entitled to costs of that application.

“The Honourable Mr. Justice Savage”