IN THE SUPREME
COURT OF BRITISH COLUMBIA
Citation: | Nayyar v. Manufacturers Life Insurance Company/La |
| 2012 BCSC 28 |
Date: 20120112
Docket: S043024
Registry:
Vancouver
Between:
Annu Nayyar
Plaintiff
And
Manufacturers Life
Insurance Company/La
Compagnie DAssurance Manufactures,
carrying
on business as Manulife Financial and
Costco Wholesale Canada Ltd.
Defendants
Before:
The Honourable Mr. Justice Walker
Reasons for Judgment
Appearing on her own behalf: | A. Nayyar |
Counsel for Defendant, Manufacturers Life Insurance | J.A. Fishman |
Counsel for the Defendant, Costco Wholesale Canada Ltd.: | H.H. Van Ommen J. Cytrynbaum |
Place and Date of Trial: | Vancouver, B.C. May 30-31, 2011 June 1-3; June 6-10, June 13-15; June 24, July 11-14, 2011; October 11-14, 2011 |
Place and Date of Judgment: | Vancouver, B.C. January 12, 2012 |
TABLE OF CONTENTS
III.… Disability
Contracts – General Legal Principles
IV... Background
Facts and the Nature of Ms. Nayyars Depression
Credibility of Mr. and
Ms. Nayyar
Ms. Nayyars Job Duties at
Costco
Dr. Mallavarapus Opinion
Evidence
V.… The
Disability Insurance Regime provided by Costco to its Employees
Short term disability benefits
VI... Termination
of Benefits for Failing to Attend an Independent Medical Examination
Facts, Analysis, and Determination
(a) Events
leading up to the Acceptance of Ms. Nayyars Claim for Long Term
Disability Benefits
(c) Events
following the Incident at Dr. Levins Office
(d) July
25, 2002 to June 23, 2003
VII.. Was
Ms. Nayyar Disabled and Eligible for Benefits Following June 24, 2002?
June 24, 2002 to February 9, 2004
September 1 to December 13, 2004
January 1 to February 28, 2005
September 8 to October 25, 2005
October 26, 2005 to March 10, 2006
July 31, 2006 to March 9, 2007
July 23, 2007 to January 13, 2008
August 11, 2008 to December 31, 2009
Costcos Performance Appraisal
Documents
IX… Damages
for Mental Distress
I. Introduction
[1]
This case involves a claim on two disability insurance policies.
[2]
The plaintiff, Ms. Annu Nayyar, has been employed as a cashier by
the defendant, Costco Wholesale Canada Ltd. (Costco), since 1991. Ms. Nayyar
alleges that she has been disabled from carrying out her job duties and is
entitled to receive disability benefits from the defendants.
[3]
Ms. Nayyar advances a number of claims against the defendants. First, she
claims the defendants breached their contractual obligations to her when they
terminated her disability benefits effective June 24, 2002 and then again, at
later times, when they continued to deny her subsequent claims for disability benefits.
[4]
Second, Ms. Nayyar alleges that Costco and Manulife did not provide
proper rehabilitation assistance to her for the periods in dispute in this
action.
[5]
Third, Ms. Nayyar alleges that Costco and the co-defendant, the Manufacturers
Life Insurance Company/ La Compagnie DAssurance Manufacturers, carrying on
business as Manulife Financial (Manulife), have acted unreasonably throughout
and their conduct has caused her to suffer mental distress.
[6]
Fourth, Ms. Nayyar claims for damages for breach of fiduciary duty.
The pleading in her Statement of Claim is general in nature. It states:
4. At all times material
to this action the Plaintiff was employed by Costco. Costco entered into a
contract with Manulife to provide a group policy of insurance to cover the
Plaintiff with long term disability insurance. Alternatively, Costco provided
coverage for long-term disability for the benefit of the Plaintiff, then Costco
was a Trustee, and owed the Plaintiff a fiduciary duty, and because of the
actions of Costco set out herein, has breached its fiduciary duty to the
Plaintiff and the Plaintiff has suffered loss, damage, and expense as a result.
[7]
Fifth, Ms. Nayyar alleges that Costco and Manulife have acted in bad
faith. She also advances a claim for punitive, exemplary, and aggravated
damages in respect of her bad faith claim.
[8]
And sixth, Ms. Nayyar claims that the defendants breach of
contract and bad faith have caused or materially contributed to her personal
bankruptcy.
[9]
The bad faith claim has been severed from the breach of contract claim. Ms. Nayyars
allegations of bad faith will only be tried if she proves any one or more of
her claims that proceeded to trial on May 30, 2010.
[10]
Manulife administers the insurance coverage plan for Costco (Plan). It
has done so since 2000 (although its involvement with disability coverage began
effective July 31, 2000). The coverage provided by Costco to its employees
is comprehensive and includes short and long term disability benefits and
extended medical and dental benefits. Costco is the insurer for short term
disability benefits and for the first 24 months of long term disability
benefits.
[11]
If an employee is disabled after 24 months, Manulife becomes the insurer
and administers its own policy (Policy).
[12]
The definition of total disability in the Plan differs from the Policy.
To meet the definition in the Plan, the employee must be unable to perform the
essential duties of his or her occupation for the first 24 months. Benefits are
payable under the Policy when an employee is unable to perform the essential
duties of any occupation for which he or she is qualified, or may reasonably
become qualified, by training, education, or experience.
[13]
The time period in issue pleaded by Ms. Nayyar (in her second
amended statement of claim) is June 24, 2002 to August 8, 2008. Specifically, Ms. Nayyar
claims disability benefits for the six following periods:
(a) June 24, 2002 to January
11, 2004;
(b) May 12, 2004 to August
29, 2004;
(c) December 15 to 17, 2004;
(d) March 20, 2006 to July
31, 2006;
(e) July 23, 2007 to January
13, 2008; and
(f) August 6 to 8, 2008.
[14]
Costco and Manulife resist Ms. Nayyars claim on several grounds:
(a) Ms. Nayyar was not
disabled during the six periods in issue;
(b) they
were entitled to terminate her benefits effective June 24, 2002, because she
failed to attend an independent medical examination;
(c) even
if she met the definition of total disability, Ms. Nayyar was not eligible
for benefits by virtue of the terms of the Plan and because she failed to apply
for benefits for some of the periods in which she claims to have been disabled;
(d) Ms. Nayyar is not
entitled to relief from forfeiture;
(e) Ms. Nayyar
has not proven she suffered mental distress as a result of their conduct, nor
that her bankruptcy was caused or contributed to by their conduct; and
(f) no fiduciary duty arose
in this case.
[15]
Over the course of her employment with Costco, Ms. Nayyar has been
approved for short and long term disability benefits. Her disability claims
relate primarily to her long-standing depression that began in 1993. She
received short term disability benefits from Costco when the previous insurer,
Sun Life Assurance Company of Canada (Sun Life), was on risk.
[16]
More recently, Ms. Nayyar applied for short term disability
benefits in August 2001. Costco, with Manulifes assistance, approved her
application. Benefits were paid to her for the period August 14 to December 5,
2001.
[17]
On February 13, 2002, Manulife and Costco accepted Ms. Nayyars
application for long term disability benefits. Her benefits were subsequently
terminated by Costco and Manulife on July 24, 2002, effective June 24, 2002, on
the basis that she failed to attend an independent medical examination that it
had arranged.
[18]
Ms. Nayyar was without counsel at trial. She candidly acknowledged
that she was assisted by her husband. Mr. Nayyar organized Ms. Nayyars
document binders and helped her to prepare for cross examination and with her
opening and closing submissions. I did not permit Mr. Nayyar to act as his
wifes litigation agent because he was a witness in the proceedings.
[19]
In her effort to prove that she is entitled to disability benefits, Ms. Nayyar
gave evidence. She also tendered viva voce evidence from various
sources, including: Dr. Mallavarapu (her treating psychiatrist); her
husband; and certain past and present employees of Costco and Manulife (whom
she called as adverse witnesses).
[20]
She tendered in evidence two medical legal reports from Dr. Mallavarapu
for proof of the truth of their contents.
[21]
Ms. Nayyar also tendered medical reports from Dr. Mallavarapu
and Dr. Gandhi (her family doctor) that were sent to Costco and Manulife
from time to time. Costco and Manulife objected to those documents being
introduced into evidence for the proof of the truth of their contents because Ms. Nayyar
had not delivered notice of her intention to do so pursuant to the Evidence
Act, R.S.B.C. 1996, c. 124. I sustained their objection because Ms. Nayyar
was afforded ample opportunity, through case management, to provide notice of
all medical reports and opinion evidence that she intended to rely upon at
trial.
[22]
As a result, those medical documents prepared by Drs. Mallavarapu and
Gandhi were not tendered as proof of the truth of their contents. Instead, they
were admitted into evidence as proof that the information and opinions
contained in them were provided to Costco and Manulife at various times.
[23]
Ms. Nayyar also tendered into evidence a large number of internal
documents from Costco and Manulife. Some of them contain descriptions of her
job as a cashier at Costco. In addition, certain internal Manulife documents (prepared
by disability adjudicators and examiners) contain detailed assessments of the
medical information provided to Manulife over time, as well as Manulifes
assessment of the merits of Ms. Nayyars disability claim. Many of the
documents produced by Costco and Manulife contain admissions against their
interests. Costco and Manulife did not challenge or resile from those
assessments.
[24]
No medical evidence was adduced on behalf of Costco and Manulife.
[25]
The parties agree that Ms. Nayyar is currently disabled from
working as a result of depression. Ms. Nayyar is presently on leave from
Costco. She is receiving long term disability benefits. Those benefits are
being paid pursuant to the contractual arrangements between Ms. Nayyar,
Costco, and Manulife.
[26]
The parties have agreed to many of the facts giving rise to the dispute.
Many of those admissions are incorporated into these reasons for judgment.
II. Issues
[27]
Seven issues were engaged at trial. Determination of those issues
requires a highly fact specific analysis. The evidence tendered by Ms. Nayyar
in support of her claim is comprised of a significant number of written and
oral communications and events that took place between the parties and Mr. and
Ms. Nayyar over eight years. My reasons for judgment contain an in-depth
review of those communications and events.
[28]
The first issue is whether Costco and Manulife were entitled, effective
June 24, 2002, to terminate the long term disability benefits being paid
to Ms. Nayyar in respect of her depression claim because she failed to
attend an independent medical examination.
[29]
The second issue is whether Ms. Nayyar was disabled (as defined in
the Plan and the Policy) for any or all of the periods in issue?
[30]
The third issue is whether, assuming that she proves that she was
disabled in any of the six periods in issue, Ms. Nayyar is nonetheless ineligible
to receive disability benefits due to certain provisions found in the Plan and
the Policy?
[31]
The fourth issue is whether Ms. Nayyar is entitled to relief from
forfeiture if the only reason that she is not entitled to receive benefits is
due to her failure to submit an application?
[32]
The fifth issue is whether Ms. Nayyar is entitled to damages for
mental distress if she demonstrates that Costco and Manulife were in breach of
their contractual obligations?
[33]
The sixth issue is whether Ms. Nayyar has established that her
bankruptcy was caused or contributed to by any breach of contract of Costco and
Manulife?
[34]
The seventh issue is whether Ms. Nayyar has established a claim for
breach of fiduciary duty?
III. Disability
Contracts – General Legal Principles
[35]
The onus rests upon a plaintiff to prove that he or she is disabled
within the meaning of the insurance policy. The test is objective, although it
is individualized, combining elements of both the objective and subjective: Lumsden
v. Manitoba, 2009 MBCA 18 at para. 62, [2009] 4 W.W.R. 10. Medical
evidence is usually required. The test may be satisfied, however, on the
plaintiffs evidence alone: Warrington v. Great – West Life Assurance Co.
(1996), 139 D.L.R. (4th) 18, 81 B.C.A.C. 164 (C.A.); Lumsden at paras. 57;
Paul Revere Life Insurance Co. v. Sucharov, [1983] 2 S.C.R. 541; Mathers
v. Sun Life Assurance Co. of Canada, 1999 BCCA 292, 126 B.C.A.C. 141; Eddie
v. Unum Life Insurance Co. of America, 1999 BCCA 507 at para. 19, 177
D.L.R. (4th) 738.
[36]
In cases involving any occupation total disability clauses, once a
plaintiff establishes a prima facie case that he or she is disabled, the
evidentiary onus shifts to the insurer to establish that there is some
occupation for which the insured is or may reasonably be suited for: Campbell
v. Canada Life Assurance Co. (1990), 65 Man. R. (2d) 95, 45 C.C.L.I. 73
(C.A.); Lumsden at para. 51.
[37]
Insurance contracts, including those that provide disability coverage
when an insured meets the definition of disability set out in the contract,
contain duties of good faith that are imposed upon the insurer and the insured:
Fredrikson v. Insurance Corp. of British Columbia, 69 D.L.R. (4th) 399, [1990]
4 W.W.R. 637 (B.C.S.C.); Shea v. Manitoba Public Insurance Corp. (1991),
55 B.C.L.R. (2d) 15, 1 C.C.L.I. (2d) 61 (S.C.); Asselstine v. Manufacturers
Life Insurance Co., 2005 BCCA 293, 254 D.L.R. (4th) 464. That duty, which
is also referred to as the doctrine of uberrimae fidei, is governed by
fair play in every dealing: Adams v. Confederation Life Insurance Co.,
[1994] 6 W.W.R. 662, 18 Alta. L.R. (3d) 324 (Q.B.). It requires an insurer to
act promptly and fairly when investigating, assessing, and attempting to
resolve claims: Asselstine at para. 23; 702535 Ontario Inc. v.
Non-Marine Underwriters, Lloyds of London (2000), 184 D.L.R. (4th) 687,
130 O.A.C. 373 (C.A.) at para. 27.
[38]
When damages are awarded for breach of a contract providing for payment
of disability benefits, they are determined in accordance with the rule set out
in Hadley v. Baxendale (1854), 9 Ex. 341, 156 E.R. 145 at 151. In Fidler
v. Sun Life Assurance Co. of Canada, 2006 SCC 30, [2006] 2 S.C.R. 3, the
Court said at para. 27:
Damages for breach of contract
should, as far as money can do it, place the plaintiff in the same position as
if the contract had been performed. However, at least since the 1854 decision
of the Court of Exchequer Chamber in Hadley v. Baxendale [citation omitted],
it has been the law that these damages must be such as may fairly and
reasonably be considered either arising naturally … from such breach of
contract itself, or such as may reasonably be supposed to have been in the
contemplation of both parties.
[39]
Where an insurer is in breach of its contractual obligations, the
insured is entitled to damages to put it in the position it would have been in had
the breach not occurred. Policy defences and coverage limits are not avoided
simply because the insurer is in breach. According to Gordon Hilliker, Q.C., Liability
Insurance Law in Canada, 4th ed. (Markham, Ont.: LexisNexis
Butterworths, 2006) at 132:
In the absence of circumstances
justifying punitive damages, the insured is not entitled to be placed in a
better position than if the contract had been fulfilled.
[40]
Contracts providing coverage for short and long term disability benefits
are called peace of mind contracts: Fidler at para. 41; Warrington
at para. 20.
[41]
Damages for mental distress for breach of peace of mind contracts are
recoverable in Canada: Fidler at para. 41; Warrington; Thompson
v. Zurich Insurance Co. (1984), 7 D.L.R. (4th) 664, 45 O.R. (2d) 744 (H.Ct.J.).
Not all claims for mental distress are recoverable, however. Remoteness is the
governing measure. In Fidler, the Court set out the parameters for
recovery at paras. 44, 45, and 49:
44 We conclude that damages for mental distress for
breach of contract may, in appropriate cases, be awarded as an application of
the principle in Hadley v. Baxendale: see Vorvis. The court
should ask what did the contract promise? and provide compensation for those
promises. The aim of compensatory damages is to restore the wronged party to
the position he or she would have been in had the contract not been broken. As
the Privy Council stated in Wertheim v. Chicoutimi Pulp Co., [1911] A.C.
301, at p. 307: the party complaining should, so far as it can be done by
money, be placed in the same position as he would have been in if the contract
had been performed. The measure of these damages is, of course, subject to
remoteness principles. There is no reason why this should not include damages
for mental distress, where such damages were in the reasonable contemplation of
the parties at the time the contract was made. …
45 It does not follow, however, that all mental
distress associated with a breach of contract is compensable. In normal
commercial contracts, the likelihood of a breach of contract causing mental
distress is not ordinarily within the reasonable contemplation of the parties.
It is not unusual that a breach of contract will leave the wronged party
feeling frustrated or angry. The law does not award damages for such incidental
frustration. The matter is otherwise, however, when the parties enter into a
contract, an object of which is to secure a particular psychological benefit.
In such a case, damages arising from such mental distress should in principle
be recoverable where they are established on the evidence and shown to have
been within the reasonable contemplation of the parties at the time the
contract was made. The basic principles of contract damages do not cease to
operate merely because what is promised in an intangible, like mental security.
…
49 We conclude that the
peace of mind class of cases should not be viewed as an exception to the
general rule of the non-availability of damages for mental distress in contract
law, but rather as an application of the reasonable contemplation or
foreseeability principle that applies generally to determine the availability
of damages for breach of contract.
[42]
Fidler involved a claim for breach of a contract providing
disability benefits. The Supreme Court of Canada determined, at paras. 56,
57, and 58, that one of the objects of a disability policy is to secure a
psychological benefit to be free from anxiety, stress, and financial insecurity
in the event of disability. As a result, the prospect of mental distress is
brought within the reasonable contemplation of the parties at the time the
contract was made:
56 Turning to the case before us, the first question
is whether an object of this disability insurance contract was to secure a
psychological benefit that brought the prospect of mental distress upon breach
within the reasonable contemplation of the parties at the time the contract was
made? In our view it was. The bargain was that in return for the payment of
premiums, the insurer would pay the plaintiff benefits in the case of
disability. This is not a mere commercial contract. It is rather a contract for
benefits that are both tangible, such as payments, an intangible, such as
knowledge of income security in the event of disability. If disability occurs
and the insurer does not pay when it ought to have done so in accordance with
the terms of the policy, the insurer has breached this reasonable expectation
of security.
57 Mental distress is an effect which parties to a
disability insurance contract may reasonably contemplate may flow from a
failure to pay the required benefits. The intangible benefit provided by such a
contract is the prospect of continued financial security when a persons
disability makes working, and therefore receiving an income, no longer
possible. If benefits are unfairly denied, it may not be possible to meet
ordinary living expenses. This financial pressure, on top of the loss of work
and the existence of a disability, is likely to heighten an insureds anxiety
and stress. Moreover, once disabled, an insured faces the difficulty of
finding an economic substitute for the loss of income caused by the denial of
benefits: See D. Tartaglio, The Expectation of Peace of Mind: A Basis for
Recovery of Damages for Mental Suffering Resulting from the Breach of First
Party Insurance Contracts (1983), 56 S. Cal. L. Rev. 1345, at pp. 1365-66.
58 People enter into
disability contracts to protect themselves from this very financial and
emotional stress and insecurity. An unwarranted delay in receiving this
protection can be extremely stressful. Ms. Fidlers damages for mental
distress flowed from Sun Lifes breach of contract. To accept Sun Lifes
argument that an independent actionable wrong is a precondition would be to
sanction the conceptual incongruity of asking a plaintiff to show more
than just that mental distress damages were a reasonably foreseeable consequence
of breach (OByrne, at p. 334 (emphasis in original)).
[43]
Where damages for mental distress are claimed, a plaintiff must prove
that a loss was suffered in order to recover damages. Caution must be exercised
in awarding damages for mental distress: Warrington at para. 25. In
Fidler, the Court said at para. 47:
This does not obviate the
requirement that a plaintiff prove his or her loss. The court must be
satisfied: (1) that an object of the contract was to secure a psychological benefit
that brings mental distress upon breach within the reasonable contemplation of
the parties; and (2) that the degree of mental suffering caused by the breach
was of a degree sufficient to warrant compensation. These questions require
sensitivity to the particular facts of each case.
[44]
In McQueen v. Echelon General Insurance Co., [2009] O.J. No. 3965
(Sup. Ct. J.), varied on other grounds, 2011 ONCA 649, Harris J. said at para. 51
that an award may be made even where the insured does not suffer adverse financial
consequences as a result of the insurers conduct. The Court must be satisfied
that the degree of mental suffering caused by the breach was sufficient to
warrant compensation:
51 The award is not one that is determined solely
according to whether the insured has suffered adverse financial consequences as
a result of the insurers breach. It is reasonably foreseeable that intangible
injuries and mental distress may flow from the insurers wrongful refusal to
pay benefits even where the insured suffers no immediate financial hardship.
This position was adopted by the Supreme Court in Fidler v. Sun Life
Assurance, [2006] 2 SCR 3. Moreover, the Supreme Court, at para. 48
found that while mental distress as a consequence of breach must reasonably be
contemplated by the parties to attract damages, it does not have to be the
dominant aspect or the very essence of the bargain.
52 In considering a case for
mental distress, the court must be satisfied that:
a) An
object of the contract was to secure a psychological benefit that brings mental
distress upon breach within the reasonable contemplation of the parties; and,
b) The degree of mental suffering
caused by the breach was of a degree sufficient to warrant compensation.
[45]
The obligation of good faith does not import fiduciary obligations to
every insurance relationship. Fiduciary obligations must be found in the specific
circumstances of each case: Warrington at para. 10; Plaza Fibre
Glass Manufacturing Ltd. v. Cardinal Insurance Co. (1994), 22 C.C.L.I. (2d)
161 at 166, 115 D.L.R. (4th) 37 (Ont. C.A.); Lac Minerals Ltd v. International
Corona Resources Ltd., [1989] 2 S.C.R. 574; Schneider v. State Farm
Mutual Automobile Insurance Co., 2010 ONSC 4734 at paras. 55 and 56 (Sup.
Ct. J.).
[46]
In Schneider, Code J. explained that the circumstances that may
give rise to ad hoc fiduciary relationships generally possess three
characteristics, at para. 53:
1. The fiduciary has scope for the exercise of some
discretion or power;
2. The
fiduciary can unilaterally exercise that power or discretion so as to affect
the beneficiarys legal or practical interest;
3. The beneficiary is peculiarly
vulnerable to or at the mercy of the fiduciary holding the discretion or power.
[47]
Even where a fiduciary relationship is found, not every breach will
afford a basis for a claim. In Schneider, the Court summarized the law
as follows at para. 56:
For example, a breach of contract
within an established fiduciary relationship, such as solicitor and client, or
mere negligence in the giving of erroneous advice is not a breach of fiduciary
duty. It is only where the breach relates to specific fiduciary obligations
such as disloyalty, breach of confidence, dishonesty or failing to make proper
disclosure that a claim for breach of fiduciary duty can be advanced.
[citations omitted]
[48]
In appropriate cases, punitive and aggravated damages may also be
awarded. Entitlement to those damages arises out of a cause of action that is
separate from the breach of contract: Fidler at paras. 51, 52, and 63.
[49]
Punitive damages, awarded only in exceptional cases, are designed to
address the purposes of retribution, deterrence, and denunciation. They are
measured through an analysis of the wrongful conduct of the party in breach: Fidler
at paras. 61, 62, and 63.
[50]
Aggravated damages are measured from the perspective of the injured
party. In Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R.
1085, the Court adopted the definition from Waddams (The Law of Damages,
2d ed. (Toronto: Canada Law Book, 1983) at 562) at 1099:
[A]ggravated damages describ[e]
an award that aims at compensation, but takes full account of the intangible
injuries, such as distress and humiliation, that may have been caused by the
defendants insulting behaviour.
[51]
As I have pointed out, if Ms. Nayyar is successful at trial, then
her bad faith claim, where she seeks punitive, exemplary, and aggravated
damages, will be tried at a later date.
IV. Background
Facts and the Nature of Ms. Nayyars Depression
Introduction
[52]
Ms. Nayyar began her employment as a cashier with Costco in 1991. Until
2000, the disability program was underwritten by Sun Life. The insurance
carrier changed to Manulife in that year.
[53]
Ms. Nayyar has been married to Sanjay (Bob) Nayyar for approximately
25 years. English is not their first language. The Nayyars have three children,
ages 24, 17, and 15. One of the children suffers from hyperactive attention
deficit disorder; another has been in trouble with the law due to cocaine
addiction.
[54]
I am satisfied that Ms. Nayyar suffers from poor memory, lack of
concentration, lack of energy, and loss of self esteem. In many instances, she
was not able to recall specific dates or able to segregate events. I also find,
from the medical opinion evidence as well as my own observations of her, that
her depression causes her to suffer from memory and concentration problems, and
in addition, to be highly vulnerable to all manner of external suggestion.
Credibility of Mr. and Ms. Nayyar
[55]
For the most part, Ms. Nayyar let her husband deal with Manulife on
her behalf in respect of her disability claims. He has held her power of attorney
since April 25, 1998. Ms. Nayyar was candid in advising me throughout the
proceedings that she has required and received Mr. Nayyars assistance in
preparing for trial and all interlocutory aspects of her case. Throughout the
trial, she read from notes that she conceded were prepared with her husbands
assistance. I am satisfied that without his help and those notes, which were
scripted in advance, Ms. Nayyar would not have been able to run the trial
on her own because of the symptoms caused by her depression.
[56]
I found that Ms. Nayyar attempted, to the extent she was able, to
provide me with an honest account of her symptoms and job duties. She did not
attempt to overstate her evidence. I am satisfied from the evidence of her
treating psychiatrist that Ms. Nayyars problems with recollection,
concentration, and analysis are due to her ongoing, episodic major depression.
[57]
Mr. Nayyar presented as an overtly angry witness, demonstrating hostility
and a pre-occupation with what he perceives to be the ongoing efforts of Costco
and Manulife to thwart his wifes claim for disability benefits and
rehabilitation assistance. Mr. Nayyar continues to assume the worst of all
aspects of their conduct. I am satisfied that his predilection arises out of a
combination of his own longstanding depression and his ongoing dealings with
certain Manulife employees and their agents in respect of his wifes claim.
[58]
I reject the defence submission, which was also put as a question to him
in cross examination, that Mr. Nayyar would deliberately provide false
evidence if it would advance his wifes claim or her interests in this case.
While Mr. Nayyar constantly tried to provide argument in the guise of
evidence, I do not find it to have been done with any mala fide intent. Mr. Nayyar
is so consumed with the minutiae of his wifes case that he finds it difficult
to separate evidence from argument and issues. His obsession has, at times, caused
him to impede the orderly progress of the interlocutory phase of this action.
He perceives his role is, as he put it, to obtain justice for his wife. Overall,
I am satisfied that Mr. Nayyar tried to give an honest account of events when
giving evidence at trial. I am also satisfied that he tried to obtain
rehabilitation assistance for his wife from Costco and Manulife.
[59]
I did find, however, that the depth of Mr. Nayyars anger towards
Costco and Manulife interfered with his ability to provide a reliable account
of events in some instances. As a result, I have taken great care in considering
the weight to be attached to his evidence. I have looked for corroboration
from: the plethora of communications passing between Mr. and Ms. Nayyar
and Costco and Manulife; Ms. Nayyars treating psychiatrist; internal
documents generated by Costco and Manulife (including admissions against
interest contained in those documents); and the viva voce testimony of
adverse witnesses called by Ms. Nayyar.
Ms. Nayyars Evidence
[60]
Ms. Nayyars description of her symptoms and problems carrying out
her job duties was general in nature. She presented as soft spoken, reticent,
and was confused or forgetful on a number of occasions. She was not able to
provide a detailed account of her symptoms, the difficulties she had in
carrying out her job duties due to her depression, details of her visits with Dr. Mallavarapu,
or most of her dealings with Costco and Manulife regarding her disability
claim.
[61]
Ms. Nayyars evidence concerning her depression is contained in the
following extracts of her evidence:
THE WITNESS: My Lord, its very difficult for
me. Im trying my best.
…
I do intend [sic] to forget a
lot of things. On a daily basis I forget things.
My Lord, Im suffering from
major depression.
That stops me from doing
everything. I have three children. My older one is very challenging. Hes got
— hes hyperactive attention deficit disorder.
I have been married for 25
years now with a very wonderful person who has been along my side. He has been
so helpful, My Lord, … He never gave up in helping me, even till now. If it
wasnt for me [sic], My Lord, I dont think I can go on with my day-to-day
life.
…
Every day my kids look up to me.
Mom, how come youre not happy? Why are you so sad? My daughter would say, you
are — mom, you are not fun. Shes almost 15 now. She would take me out of the
house: lets go for a walk. She will try to make program in such a way.
Sometimes she will make me ready: my friends are coming; I want you to look
good in front of them. Somewhere inside their heart they do feel that, my mom
is suffering. My Lord, Im not able to take care of my kids as a normal mother
would do because of my disabilities.
…
I used to see my family doctor.
Then my family doctor send me to psychiatrist. Psychiatrist I used to see once
every two weeks. It depends on my condition. When my condition was worst, I
used to see him a week, and then it went back to two weeks, and then it went in
months.
Im
sorry, my Lord. I need — some things I do remember; some things I remember
not, and then it takes me time to see what to say next.
[62]
Ms. Nayyars evidence is that although she never completely
recovered from her symptoms of depression since her first episode in 1993, she
made efforts to work at Costco, albeit with great difficulty. She has tried to
return to work many times, and even when she does, she ultimately has to stop
because she cannot carry on due to the symptoms of her depression.
[63]
I find that Costco was well aware of Ms. Nayyars depression and
difficulties associated with it well prior to Manulife coming on risk.
[64]
When trying to describe her job duties, Ms. Nayyar remarked that
she was forced to go back to work with my disabilities:
THE WITNESS: I was a cashier, My Lord. Customer
service. The depression starts somewhere around 94, 95, My Lord. Im not sure
of the exact days because I forget very fast.
While working at Costco, I was
forced to go back to work with my disabilities. I remember going to work, My
Lord. I used to cry in the morning before I used to go to work. Due to my
disability at work, My Lord, I had warnings to be terminated. Most of the time
I used to work at Costco, if I get injured, I wouldnt say nothing. When I used
to work at Costco with my disabilities, My Lord, I used to drag myself working
throughout the day. No energy. No smile on the face.
Employees — my co-workers
used to say, whats wrong with you? You should stay home and rest. What are you
doing at work? But I never used to tell them the truth, My Lord, that I have
major depression.
…
My Lord,
going back and forth, back and forth to work, not recovering, made my symptoms
and myself worst day by day. I used to work; sometimes I wouldnt even eat all
day. Ive always had a fear while I was working. Im working at Costco, but my
mind is not there. I cant concentrate. Im thinking about my kids. My Lord,
its very difficult for a person whos got issue like me to work without being
fully cured. My matter got worst and worst.
[65]
I find that many of Ms. Nayyars attendance problems were due to
her ongoing difficulties with depression. I am also satisfied from the
documents in evidence that Costco did discipline Ms. Nayyar from time to
time for showing up late at work and for failing to call in if she was unable
to make it. She received written warnings that her employment could be
terminated if further violations continued.
[66]
Ms. Nayyars belief that she was forced to go back to work
conflates the sense of pressure she felt from: Costco to return to work; ongoing
encouragement from Dr. Mallavarapu to return to work when her symptoms
began to improve; and her familys need for income. There were occasions when Ms. Nayyar
did not believe she could return to work and felt pressured by Dr. Mallavarapu
to do so (in order, as he put it, to assist with her recovery). For those
reasons, I am not prepared, based on the evidence before me, to make any
finding at this time that Costco acted inappropriately in trying to compel Ms. Nayyar
back to work.
Ms. Nayyars Job Duties at Costco
[67]
Ms. Nayyars job duties are described in an internal Manulife
document prepared on October 3, 2001 by Lenore Marlowe, a Manulife disability
adjudicator who was in charge of her short term disability claim at that time:
Her duties as a Cashier require
her to stand at the cash register, enter item numbers, assist caller with
transferring stock, verify checks, accept payment for goods purchased, count
money and provide excellent member service.
[68]
Another disability adjudicator involved with Ms. Nayyars
disability claims also carried out detailed written assessments of Ms. Nayyars
job duties as a cashier for Costco. She described them as follows:
·
Ability to interact with co-workers and the public
·
Ability to understand, remember, and concentrate to operate
scanning cash register, obtain member card/information, receive and record
payment for goods, make change, verify prices, balance till, etc.
·
Ability to prioritize and make decisions.
·
Ability to maintain a work schedule.
…
The mental functions of your job would include:
·
To understand, remember and concentrate sufficiently in order to
operate a cash register, verify prices, accept payment for goods purchased,
count money, and record daily transactions.
·
To interface with members in order to provide excellent customer
service.
·
To locate codes.
[69]
Ms. Nayyars main responsibilities as a cashier are also
described in three Costco performance appraisal documents. The descriptions are
set out below:
(period covered – 7/02-7/03) Putting
through our members orders in an expediant [sic] and accurate fashion.
Participating in ALL Costco Programs (ie. Address Updates; Balloon Sales; Amex
Autobill; Amex Sign-Ups; Front End Guest Sign-Ups; etc). Adhering to Costco
Policy and observing Safety Standards. Performing clean-up, cart retrieval,
merchandise restocking and runs for items as directed. Providing a high level
of member service.
(period covered – fiscal 2004) Processes member
orders, and collects payment while providing a high level of member service.
Performs clean-up, department set and closing tasks as necessary.
(document prepared – June 2006) Provide
member service, puts through members orders and accept payment. Packs members
orders if needed.
Dr. Mallavarapus Opinion Evidence
[70]
Dr. Mallavarapu is Ms. Nayyars treating psychiatrist. In
addition to holding a specialist certificate from the Royal College of
Physicians and Surgeons of Canada, he is a Diplomat of the American Board of
Psychiatry and Neurology with a sub-specialization in geriatric psychiatry.
[71]
Dr. Mallavarapu has seen Ms. Nayyar at his office at periodic
intervals following his initial assessment of Ms. Nayyar in 1999.
Dr. Mallavarapu prepared two medical legal reports. They are dated May 25,
2006 and January 8, 2010 (May 25th Report and January 8th Report,
respectively).
[72]
In Dr. Mallavarapus opinion, Ms. Nayyar has been suffering,
and continues to suffer, from a chronic major depressive disorder that dates
back to at least 1993.
[73]
He described her illness as episodic, causing her ups and downs,
periods of sadness, depressed energy, poor memory and comprehension, anxiety
attacks, disturbed sleep and appetite, and suicidal ideation. Ms. Nayyar
has not, however, exhibited signs of hallucinations or delusions during their
consultations. In Dr. Mallavarapus opinion, Ms. Nayyars depression
has adversely affected her coping skills, which in turn affects her ability to
work.
[74]
Dr. Mallavarapu explained that a major depressive episode consists
of the following key symptoms: sad mood that is persistent through most of the
day for two weeks; decreased energy and motivation; fatigue; poor
concentration; feelings of guilt; suicidal ideation; and disturbed sleep. To
qualify under the DSM-IV classification (DSM-IV) devised by the American
Psychiatric Association, at least five of those symptoms should be present (for
a majority of the time) for at least 14 days.
[75]
DSM-IV involves five different diagnostic Axis:
(a) Axis I refers to the
psychiatric diagnosis;
(b) Axis II refers to the
personality diagnosis;
(c) Axis III refers to the
medical diagnosis;
(d) Axis
IV refers to psychosocial stressors present in a persons life that impact on
the Axis I diagnosis; and
(e) Axis V refers to global
functioning on a scale of 1 to 100.
[76]
The number determined for the Axis V diagnosis signifies global
assessment of function or GAF. GAF is determined from the aggregate of 10
units (each with an individual range of 0 to 10). Each unit has two components
– symptom severity and functioning. According to Dr. Mallavarapu: a GAF
score of 100 is perfectly normal; 1 means were pretty close to being dead;
and anything below 50 means the patient is severely ill, being suicidal and almost
needing to be in a hospital setting for their own protection and treatment. A
GAF score in the range of 55 to 60 means a patients illness is moderately
severe.
[77]
Dr. Mallavarapus diagnosis is set out in the May 25th Report. His
Axis I diagnosis for Ms. Nayyar was major depression chronic recurrent and
severe. He made no Axis II and III diagnosis. He identified Axis IV
environmental stressors to be Ms. Nayyars relationship with her husband.
He determined her GAF score to be 55.
[78]
Dr. Mallavarapu provided a greater description of Ms. Nayyars
illness in his evidence in chief:
Q The history of the illness. Can you
explain to the court. Its on the first page at the bottom.
A Oh, History of the Present Illness? This is
from the report I prepared, medicolegal report I prepared on 25th of May, 2006.
In this one, the History of Present Illness, I stated Annu Nayyar was a
40-year-old married lady. She has been feeling depressed, sad, unhappy,
anxious, worried and unable to cope with any stress on and off since 1993, and
this implies that you were receiving treatment from that point on, and I
happened to see you in 1999 and continued to see you at regular intervals at my
office until we discharged you from my care in the I think it is sometime in
the mid 2000.
And during this time your
illness had ups and downs, meaning you had periods of sadness, decreased
energy, poor concentration, difficulty remembering things, not able to
comprehend whats going on, not able to enjoy anything, bursting into tears,
having anxiety attacks, but these have been present for periods of time
followed by some improvement and again coming back. Thats why we had to
continue seeing you at periodic intervals until you improved and we discharged
you from our care I need to get the date when we discharged you from our
care. And again youre re-referred back and we saw you.
You are
suffering from what we call a major depressive disorder for the past 17, 18
years, and over the period of time the mood swings have gotten worse and more
frequent. This often has been the history of chronic recurrent depressive illness. And
about 45 to 48 percent of the people we treat respond very well with one
antidepressant. When we combine treatments, maybe we get a response up to 63,
64 percent. But in your case you had the longest remission I remember was
around one year, and after that you relapsed and you had to come back.
[79]
In the January 8th Report, Dr. Mallavarapu opined that Ms. Nayyars
severe depression caused her to suffer from poor memory and concentration:
It is probable that Mrs. Nayyar lost her ability to
experience pleasure and interact appropriately in social situations on account
of chronic depression.
It is probable that Mrs. Nayyar
developed her difficulties in coping with her work on account of recurrent
major depression and associated cognitive problems resulting in poor
concentration and poor memory for recent events.
[80]
Dr. Mallavarapu chronicled the episodic nature of Ms. Nayyars
depression since 1998 in both reports. In his May 25th Report, he wrote:
Following my initial assessment, I have seen Mrs. Nayyar
at my office at regular interval. Mrs. Nayyar continued to feel very
depressed, sad, unhappy, anxious, worried and was experiencing symptoms of
dizziness. She was not motivated to do much. She was feeling tired and
dragged out. She was lacking energy and motivation to do anything. She was
showing diurnal variation of mood changes meaning that she was feeling worse in
the morning and feeling a bit better as the day progressed. Her sleep and
appetite were disturbed. In spite of ongoing aggressive treatment, her symptoms
persisted and she remained totally dysfunctional and unable to cope with any
stress.
Mrs. Nayyars symptoms improved by early part of 2003
and she was able to return to work. However, she did suffer from recurrent
anxiety/depressive spells. As of 16th of August 2004, she was having
anxiety/panic attacks, feelings of sadness and inability to cope with life
stresses. She was having problems with her concentration. She was not enjoying
life anymore. She was not sleeping well and her appetite was not good.
I have seen Mrs. Nayyar at my office on the 2nd
of May 2006. This patient started to feel very depressed, sad, unhappy and
worried once again for the past few months. She is bothered with headaches,
neck pain, decreased energy, poor concentration and inability to cope with her
work. She was not sleeping well and her appetite was disturbed.
…
[Mrs. Nayyar] did suffer from major depression on more
than three occasions since her first episode of depression in 1993. This meets
the DSM-IV criteria for major depression recurrent severe.
…
Mrs. Nayyar is also suffering from physical symptoms
like headaches and neck pain.
Most significant ongoing symptoms
with Mrs. Nayyar are sad mood, decreased energy, poor concentration,
disturbed sleep, anxiety, and inability to cope with work and any stress.
[81]
Dr. Mallavarapu provided a similar explanation in his January 8th
Report:
In 1998, Mrs. Nayyar received treatment for depression
with Prozac and Restoril with partial response.
Mrs. Nayyar continued to suffer from symptoms of severe
depression when she was seen at my office first time on February 4, 1999.
In spite of ongoing aggressive pharmacological and
psychotherapeutic intervention, Mrs. Nayyar remained depressed until July
2000. Thereafter, her depression improved and she was advised to go back to
work in August 2000.
Mrs. Nayyar suffered a recurrence of depression once
again in August 2001. Her symptoms of depression persisted until June 18, 2002.
She was advised to go back to work by November 2002.
Mrs. Nayyar only achieved partial remission of her
symptoms of depression; however, she continued working part-time in 2003.
Mrs. Nayyar experienced an exacerbation of her
depression following the death of her mother-in-law in May 2004.
In June 2004, Mrs. Nayyar developed symptoms of severe
anxiety and panic along with symptoms of major depression.
Mrs. Nayyar experience a recurrence of depression again
in October 2006 and she went off work by August 2007.
On August 22, 2007, her father died. This resulted in further
exacerbation of her symptoms of depression.
Mrs. Nayyar suffered recurrence of depression in
November 2009. On this occasion she was confronted with severe psychosocial
stress relating to family problems especially relating to her sons behaviour.
…
Mrs. Nayyar remained in a
state of depression in spite of ongoing pharmacological and psychotherapeutic
interventions over a prolonged period of time. From time to time, her symptoms
of depression improved to the point that she could cope with day-to-day life
stresses and she could return to part-time work at Costco Wholesale. Since 1998,
Mrs. Nayyar experienced at least 6 or 7 episodes of severe depression. Her
symptoms of depression have been persistent and disabling.
TREATMENT PLAN
…
Mrs. Nayyar remained in a
state of depression in spite of ongoing pharmacological and psychotherapeutic
intervention until January 20, 2003. Between January 2003 and June 2003, Mrs. Nayyar
felt well. Around June 2003 Mrs. Nayyar felt very depressed; however, she
continued working with difficulty.
Mrs. Nayyar worked on and
off. She suffered recurrent depressions from time to time. She also developed
difficulty with her concentration and her memory.
In spite of ongoing emotional and
psychosocial problems, Mrs. Nayyar worked part-time or full-time. She went
off work in August 2007 on account of her recurrence of depression. By October
2007, Mrs. Nayyar felt better and I advised her to go back to work.
I saw Mrs. Nayyar again in
March 2008 with a recurrence of her depression. I advised Mrs. Nayyar to
continue with Cymbalta 60 mg a day. By August, Mrs. Nayyar was feeling
better; however, she continued to have decreased energy poor concentration and
insomnia. On this occasion, Mrs. Nayyar was working full-time.
By November 2009, Mrs. Nayyar
started to feel depressed, sad, unhappy, anxious, worried, and having
difficulty coping with day-to-day life stresses especially after she came to
know that her son is getting into drugs by way of crack cocaine and cocaine.
[82]
Given the duration of her illness and the recurrence of episodes of her
major depressive disorder, Dr. Mallavarapus diagnosis for Ms. Nayyar
is guarded. In his May 25th Report he wrote:
Mrs. Nayyars difficulties
are likely due to major depression. As her symptoms have persisted over 13
years, the prognosis for complete resolution of her symptoms and remission is
guarded. In my opinion, there is only 5 to 10% chance of full recovery from her
depression. Mrs. Nayyar is at a very high risk for recurrence of her major
depression at a future date due to the very fact that she suffered more than
three episodes of depression in the past and she did not achieve complete
resolution of her symptoms over a prolonged period of time.
[83]
He provided an updated prognosis in his January 8th Report:
CONCLUSIONS
[Mrs. Nayyar] is a
43-year-old married lady with 3 children. She has been suffering from recurrent
depressions since 1993. Her symptoms of depression got worse in 1998. Since
1998, Mrs. Nayyar is receiving psychiatric treatment for the management of
depression. Since 1998, Mrs. Nayyar continues to receive pharmacotherapy
and psychotherapy for the management of her symptoms of major depression. In
spite of ongoing pharmacological and psychotherapeutic intervention, Mrs. Nayyar
suffered recurrence of her symptoms of depression on 5 or 6 occasions over the
past 15 years.
Chronic depression could result
in cognitive deficits like poor concentration and short-term memory problems.
This appears to be the case with Mrs. Nayyar.
Major depression is a chronic
disorder. With each relapse the prognosis for remission gets worse. Mrs. Nayyar
suffered 5 or 6 episodes of recurrence of depression over the past 15 years.
After 3 episodes of recurrence depression, the prognosis for sustained
remission is very guarded. It is probable that the prognosis for a sustained
clinical remission and functional recovery is guarded with Mrs. Nayyar. It
is also probable that Mrs. Nayyar has a much higher chance of suffering
from a recurrence of depression when compared to the general population who did
not suffer from depression.
[84]
Psychotherapy refers to psychiatric out-patient follow up. Pharmacotherapy
refers to the use of medications to treat depression. According to Dr. Mallavarapu,
medications are used to modulate certain chemicals within the brain, and Mrs. Nayyar
was treated with different groups of antidepressant medications. He prescribed
different medications, including some used to treat bipolar disorders and
schizophrenia, to elicit a favourable response. Unfortunately, most responses
were limited or permitted limited case management.
[85]
At trial, Dr. Mallavarapu expressed his opinion that he thinks
there is only a 5 to 10 percent chance of full recovery, including functional
recovery:
Because of
the length of time you had you have been symptomatic, the prognosis for
complete resolution of depressive disorder is guarded. And I thought that there
was only 5 to 10 percent chance of full recovery from depression. That also
means functional recovery from depression. And I also thought and this, I
expressed the opinion that you were at a high risk for recurrence of the major
depressive disorder at a future date due to the fact that you suffered more
than three episodes of major depressive disorder over the past 13 years. So
thats what the current research indicates: the more relapses one has, there is
more chance of recurrence and persistence of symptoms.
[86]
He also pointed out that one aspect of his advice, which is contained in
his May 25th Report, that Ms. Nayyar has been totally disabled from
engaging in any kind of work since 2001, required qualification:
THE WITNESS: Okay. And in this one we did
mention that you did not achieve complete resolution of your symptoms for a
prolonged period of time, meaning you did have more than one or two or three
symptoms present when youre in partial remission. Thats what I refer to. And
also I expressed the opinion that you were totally disabled to continue any
type of work since the year 2001. I think I should have added a word saying
majority of the times that you were out of work, but I do understand afterward
I did realize afterwards that you did work in between, and when you had a
relapse of the depressive symptoms youre totally disabled to work. And we
did follow you from a pharmacological point of view and supportive
psychotherapy perspective.
[Emphasis
added]
[87]
Dr. Mallavarapu actively encouraged Ms. Nayyar to return to
work when her symptoms improved to the point where she was no longer totally
dysfunctional (even though she remained symptomatic):
…
A Yeah. But we encouraged her to go back to
work, to persist, hoping that the situation will get better and she will get
over her disability. That was wilfully done to encourage people to get back to
work as early as we can.
…
Q You thought it was
good for her to get out of the house?
A Thats what I
tell most of the patients unless they are absolutely not able to function, and
the longer we leave them outside work, the more difficult it is to get them
back in. That has been the premise and thats how I advise the patients, and
that Mrs. Nayyar was no no exception.
Q Its important to
get rehabilitation services going quickly?
A Correct.
[88]
Dr. Mallavarapus opinion (expressed in his May 25th
Report) that Ms. Nayyar was totally disabled to continue with any work
since 2001 was challenged in cross examination several times on the basis that
it was inaccurate and misleading. Dr. Mallavarapu remained steadfast in
his opinion that Ms. Nayyar has been disabled from working for the majority of the
time since 2001 even though she has, from time to time, returned to work as a
cashier for Costco.
[89]
I have set out below excerpts of his evidence in cross-examination:
Q Because its not true that from 1999 to 2006
she was totally dysfunctional.
A Majority of the time. In between she went to
work but she still remained symptomatic.
Q Yes. She had symptoms but sometimes she was
able to work?
A Correct.
…
Q Could you turn to page 2 of that report
[January 8th Report], please. And on the fourth paragraph of that
page you write:
Mrs. Nayyar
suffered a recurrence of depression once again in August 2001.
You say:
Her symptoms of depression
persisted until June 18th, 2002.
A Yes.
Q Okay. She got better sooner than early 2003.
In fact, as you next say in this line:
She was advised to go back to
work by November 2002.
A Correct.
Q Okay. And so in your earlier report where you
say on page 3 that she improved by the early part of 2003 do you have that
report back in front of you, sir? No, the report, sir.
A I have the report, but those depend on my
handwritten notes. Okay. And I have to combine the two together. Go ahead.
Q What Im saying is that in your report on May
25, 2006 … So where you say:
She improved by early part of
2003.
In fact she had improved in June
of 2002.
A Our handwritten notes show on June the 18th,
2002, she was still feeling depressed. There was no major change. She was
exercising, going on the treadmill. She was having headaches. She was sad. She
quit — quiet and unmotivated. She was sleeping a lot, and her appetite was
okay. She was having problems getting along with her husband. Husband says she
is — she is okay, fine. He thinks his wife has no skills to parent her kids.
She also has problems with social skills. She never had these skills. Those
were his words.
Q Okay.
A So at that time on that particular day my
handwritten notes indicate she was still not well.
THE COURT: What was the date of that,
doctor?
THE WITNESS: That was June 18th.
THE COURT: What year?
THE WITNESS: 2002.
Q Your statement that her symptoms of depression
persisted until June 18th, 2002, is incorrect; is that what youre saying?
A Im saying, but Im also looking at the
clinical notes, which clearly indicate that she was still unwell, continued to
experience symptoms of depression.
Q Sir
A And now we look at July 16th. She lacks
energy …
THE WITNESS: No, Im trying to clarify the situation,
because you did mention that she theres some discrepancy in what was said
there and what was in the other report. Im trying to clarify what is here in
my handwritten notes that actually is the fact.
A Her symptoms did persist.
…
Q They persisted beyond June 18th?
A Yeah. But we encouraged her to go back to
work, to persist, hoping that the situation will get better and she will get
over her disability. That was wilfully done to encourage people to get back to
work as early as we can.
…
Q If you go further down on page 5 [May 26th
Report], sir, the second paragraph from the bottom, youve written:
Mrs. Nayyar
was totally disabled to continue with any type of work since the year of 2001
due to major depression.
A Yeah.
Q You wrote that?
A Yeah, I did write that, and I have corrected
that earlier when I — when that came to my notice. In this particular case
there has been so many times she was sick, she went back to work, she was sick,
she went back to work, and as a clinician seeing her at my office, we do not
record whether she is working today or she went off work or when she went back
to work. And there was some difficulty in figuring out the exact dates she was
off work. And I dont have those dates, you know. Im a clinician who is
providing care and treatment for this patient and making an assessment, how she
is functioning, how she is progressing.
…
Q Okay. Now, sir, you used the term totally
disabled. Was that a term you got from the lawyers?
A No. I never met a lawyer.
…
A No. My primary emphasis is I was
treating Mrs. Nayyar for major depression, and it has been a chronic
condition, it has a waxing and waning course, and in spite of treating her as
well as we could, she continued to have relapses and continued disability from
time to time, and it has been a difficult problem for the past nine, ten years,
and were trying to find some kind of a resolution so either she goes back to
work or gets rehabilitated in an alternate situation. Wed like to see her
function and get back into the workforce if possible. Thats primarily my role
in treating this patient.
Q Yes. And during the course of time that youve
been treating her shes suffered from this ailment throughout the time period?
A And some people do suffer their lifetime with
recurrent depression, and only 60, 65 percent of them get well. And we still
have 15, 20 percent of the people in spite of treatment dont get well, and
that is our, you know, state of knowledge and ability to treat these
conditions, but it is gradually getting better.
Q But patients like Mrs. Nayyar, despite
the fact that shes suffering from a depression, are able to work from time to
time?
A Yes.
[Emphasis
added]
[90]
I accept Dr. Mallavarapus explanation for the reason that the
opinion in his report omitted references to dates where Ms. Nayyar
returned to work. His focus was on providing treatment to Ms. Nayyar. Dr. Mallavarapu
was very candid in pointing out the need for qualification, and was quick to
draw it to my attention without prompting.
[91]
I also reject the defence argument that Dr. Mallavarapus opinions
are based on diagnoses made only at two discrete moments in time. Throughout
his evidence, both in examination in chief and in cross examination, Dr. Mallavarapu
looked at his clinical notes to confirm that his opinions were the result of
his ongoing assessments of Ms. Nayyar. Dr. Mallavarapu was able, to
my satisfaction, to distinguish between Ms. Nayyars reporting and his own
opinions based upon his objective assessments. I accept the following
explanation he provided in cross examination:
Q And without a patient describing their
symptoms to you, you wouldnt be able to perform a diagnosis?
A Through observation we could arrive at
certain conclusions, but we do need the history, we do need the subjective
experience, and we need to complement that with clinical observation.
Q And in this case you received the subjective
conditions from Mrs. Nayyar?
A Yep. Absolutely.
Q And you depend on her to be truthful in giving
you her subjective conditions?
A Yes.
Q And its not your function as her treating
psychiatrist to doubt her honesty?
A Yes, it is, but if I do doubt I confront
them.
Q Okay. And that results in a rupture of the
relationship?
A No, it never did.
Q Okay. And, however, her report of her
subjective conditions cant always be tested by you; correct?
A Having seen the patient over about what, 11
years now, you know, I have a fairly clear idea what the presentation is, how
this person has reacted and what I am really looking at.
Q And you dont give us a reasoned diagnosis for
her condition on any other date in this report, do you? Its just those two
dates.
A Right. I gave a mental state examination on
the first time and I gave a mental state examination on the last occasion, so
to say whether there is a difference there is no difference. And I
deliberately excluded giving all the details. If not, well be writing pages
and pages.
[Emphasis
added]
[92]
When Mr. Nayyar was present with his wife, Dr. Mallavarapu
would ask him to leave the consultation interview because he found that Ms. Nayyar
would be afraid to open up in her husbands presence. There was no
suggestion, direct or indirect, that Mr. Nayyar had ever refused to abide
by Dr. Mallavarapus direction.
Mr. Nayyars Evidence
[93]
Mr. Nayyar could not say how his wife coped at work. He described
her presentation at home after working – exhausted and no energy. According to Mr. Nayyar,
Ms. Nayyar forced herself to go back to work after her disability benefits
were terminated in order to help pay the familys bills.
Conclusion
[94]
Ms. Nayyars job duties as a cashier at Costco are briefly
described in her evidence and more fully in the assessments contained in
Costcos and Manulifes internal documents. Her job duties require motivation,
concentration, and an ability to retain details. Ms. Nayyar must be able to
provide and sustain positive interaction with Costcos customers in order to deliver
the high degree of member service required of her.
[95]
I accept Dr. Mallavarapus evidence, which is comprised of his May
25th and January 8th Reports and in his viva voce testimony, that Ms. Nayyar
has suffered from a longstanding major depressive disorder illness that has, over
different periods since 2001, prevented her from working at Costco or at any
occupation.
[96]
I find that Ms. Nayyar was totally disabled from working at her own
job within the meaning of the Plan (as well as any other occupation within the
meaning of the Policy) when Costco and Manulife accepted her claim for long
term disability benefits on February 13, 2002.
[97]
Dr. Mallavarapu constantly encouraged Ms. Nayyar to return to
work as a form of therapy. With his counsel, she took a pro-active approach to
rehabilitation. I find that the mere fact that she returned to her workplace
does not mean that she was no longer symptomatic or no longer incapable of
performing the essential duties of her job as a cashier.
V. The
Disability Insurance Regime provided by Costco to its Employees
[98]
Costco turns over to Manulife the responsibility for handling short and
long term disability claims under the Plan. If a Costco employee becomes
disabled at work, they must submit an application for short term benefits. A
further application for long term disability benefits is required if the
disability continues past the maximum period covered by short term benefits. In
addition to the employees application form, Manulife receives payroll
information, physicians statements, and other medical information, plus a
statement from the employee in support of the claim. Upon receipt of the
application, Manulife will set up a claim file, and from there, it will
determine (for Costco) whether to accept the claim.
[99]
The initial application, which is called a short term disability claims
kit, is given to the employee by a Costco manager or the payroll clerk. Costco
does not receive the medical information that is sent to Manulife. Costco has
the ability to obtain medical information on an internal document called a
Functional Abilities Form, which is a pre-printed form. Costco can then
assess the information on that document to determine whether it will approve
the employees proposed leave of absence.
[100] Short term
disability coverage is provided for a maximum of 17 weeks. To receive disability
benefits thereafter, the Costco employee must meet the eligibility criteria,
including the definition of total disability, set out in the contract
documents.
[101] The Plan is
contained in booklet format that is provided to Costcos employees. New
booklets are distributed from time to time as the Plan is updated. The booklet
also summarizes the coverage provided by Manulife under the Policy.
Short term disability benefits
[102] The
eligibility requirements for short term disability coverage for Ms. Nayyar
are described in that portion of the Plan regarding employees who fall into
categories B, C, and D. If eligible, the benefit is for 70% of weekly earnings
up to a maximum benefit of $800 or the Employment Insurance Maximum Amount,
whichever is greater, for 17 weeks. To be eligible:
(a) the
employee must be continuously totally disabled throughout the qualifying
period;
(b) the qualifying period is
two days for illness, and none for an accident;
(c) the
employee must provide medical evidence documenting how the disability prevents
him or her from performing the essential duties of their occupation;
(d) the
employee must be receiving regular, ongoing care and treatment from a physician;
and
(e) that care and treatment
must be appropriate for the disabling condition.
[103] Benefits
are payable from the end of the qualifying period.
[104]
The definition of total disability for short term disability coverage
is:
Restriction or lack of ability due to an illness or injury
which prevents an Employee from performing the essential duties of his own
occupation.
The availability of work will not
be considered by the Administrator or the Employer in assessing an Employees
Disability ….
[105] Benefits
are not payable in certain circumstances, even where the employee proves he or
she is disabled. The exclusion relevant to Ms. Nayyars case concerns any
period where the employee is receiving earnings or payments from any employer (including
severance payments or vacation pay). In addition, benefits terminate when the maximum
benefit has been paid, or, when the employee: fails to supply appropriate
medical evidence to the employer; fails to attend a medical examination by an
examiner selected by Costco or Manulife; or the employee dies or retires.
[106] Coverage
is available for recurrent disability when the employee becomes totally
disabled from the same or related causes as those for which benefits were
previously paid within 2 weeks from the end of the period for which benefits
were paid. The qualifying period is waived. A recurrent disability is
considered to be a continuation of the same disability. If the same disability
recurs more than two weeks after the end of the disability period for which
benefits were paid, however, then it will be considered a separate disability.
In that event, the two day qualifying period applies.
Long Term Disability Benefits
[107]
An employee is entitled to coverage under the Plan for long term
disability benefits if the definition of total disability is met. The
qualifying period is 17 weeks.
[108]
For Ms. Nayyar, total disability is defined as the inability to
perform the essential duties of her own occupation for the first 24 months, and
thereafter, for any occupation for which she is qualified, or may reasonably
become qualified:
Definition of Total Disability or Totally Disabled
…
Restriction or lack of ability due to an illness or injury
which prevents an Employee from performing the essential duties of:
a) his
own occupation, during the Qualifying Period and the 2 years immediately
following the Qualifying Period; and
b) any
occupation for which the Employee is qualified, or may reasonably become
qualified, by training, education or experience, after the 2 years associated
in part a) of this provision.
The availability of work will not be considered by the
Employer or the Administrator in assessing the Employees Disability.
…
[109] As is the
case with short term disability coverage, an employee seeking long term
disability benefits must provide medical evidence documenting the disability,
and demonstrate that he or she is receiving regular, ongoing care and treatment
from a physician that is appropriate for the disabling condition. Conversely,
an employee is not entitled to benefits in the absence of such medical care. As
well, benefits are not payable where the employee becomes totally disabled
during a leave of absence, is working in any occupation (unless authorized by
Costco or Manulife under a rehabilitation assistance program), ceases to be
totally disabled, fails to supply medical evidence documenting the disabling
condition, fails to attend a medical examination by an examiner selected by
Costco or Manulife, or has been paid the maximum benefit payable under the Plan
or Policy.
[110]
If the employee ceases to be totally disabled during the qualifying
period and then returns to total disability within four weeks, the qualifying
period will be extended by the total number of days during which the employee
was not totally disabled:
The Employer or the Administrator will apply the following
criteria in determining an Employees entitlement to Disability Benefits:
…
a) the Employee has been
continuously Totally Disabled throughout the Qualifying Period. If the Employee
ceases to be Totally Disabled during this period and then becomes Totally
Disabled again within 4 weeks due to the same or related cause, the Qualifying
Period will be extended by the number of days during which the Total Disability
ceased ….
[111]
Recurrent disability coverage is provided when the employee becomes totally
disabled from the same or related causes within six months from the end of the
period for which benefits have been paid:
Where an Employee becomes Totally Disabled again from the
same or related causes as those for which Long Term Disability benefits have
been paid under this Plan and such Disability recurs within 6 months from the
end of the period for which benefits were paid under this Plan, the Qualifying
Period will be waived.
All such recurrences will be considered a continuation of the
same Disability. The benefit payable will be based on the Employees Earnings
as at the original date of Disability. Benefits for all recurrences will not be
paid for a combined period longer than the Maximum Benefit Period shown in the
Benefit Schedule.
If the same Disability recurs more than 6 months after the
end of the period for which benefits were paid, such Disability will be
considered a separate Disability.
Two Disabilities which are due to
unrelated causes are considered separate Disabilities if they are separated by
a return to work of at least one day.
[112] The Policy
also contains recurrent coverage as well.
[113] Long term
disability benefits are payable monthly in arrears, at 70% of monthly earnings
(excluding bonuses, overtime, commissions, and regular incentive pay), so long
as the amount (when combined with other benefits) does not exceed 85% of the
employees pre-disability net earnings. The maximum is set at $25,000 per annum
up to age 65 (less the qualifying period or retirement, whichever is earlier).
Rehabilitation Benefits
[114]
Costco may, in its discretion, offer rehabilitation assistance to an
employee suffering from total disability in order to assist that employee to
return to work. Disability benefits continue to be paid even if the employee
participates in a rehabilitation program, such as returning to the employees
pre-disability job on a part time basis. If Costcos offer of assistance is
declined, disability benefits may be terminated.
[115]
The Plan speaks of rehabilitation assistance being offered, at Costcos
discretion, in partnership with the employee:
Once the Employer or the Administrator determines that an
Employee is Totally Disabled, where appropriate and at the Employer or
Administrators discretion, the Employee may be offered rehabilitation to
assist him in returning to gainful employment, either to his pre-disability
occupation or to another occupation.
In partnership with the Employee, the Employer or the
Administrator will provide the Employee with a structured Vocational Plan that
will prepare the Employee for a return to work:
a) with the Employer;
b) with an alternate employer; or
c) in a self-employed
capacity.
[Emphasis
added]
[116]
Factors taken into account when considering whether rehabilitation
assistance is appropriate are also set out in the Plan:
In considering whether Rehabilitation Assistance is
appropriate for an Employee, the Employer or the Administrator will take into
account:
a) the nature, extent and expected duration of the
Employees Disability;
b) the Employees level of education, training or
experience; and
(c) the nature, scope, objectives and cost of the
Vocational Plan.
…
If an Employee ceases to participate in a Vocational Plan
because of a change in his medical status, the Employer or the Administrator
will require medical evidence documenting how the Employees medical condition
has deteriorated such that the Employees inability to continue with the
Vocational Plan is due to an increase in restrictions or lack of ability.
If the Employee is not available
or does not co-operate or participate in the Vocational Plan, the Employee will
no longer be entitled to Disability Benefits.
[117]
Vocational Plan is defined to mean a training or job placement
program that is expected to facilitate a Disabled Employees return to his own
job or other gainful employment. I find that Costco set up a rapid
re-employment program to assist employees return to work, either to their
pre-disability job or to an alternate one. Costco uses a pre-printed form
entitled Rapid Re-employment Program (RRP) to facilitate a disabled
employees return to work. It is to be completed by the employees treating
doctor. The purpose of the document is described to the physician at the top of
the form:
Costco Wholesales goal is to assist our employees in
returning to their pre-disability job as quickly and as safely as possible.
We have a Rapid Re-employment Program and may be able to accommodate our
employees with alternative tasks or modified duties based on their abilities.
[Emphasis
added]
[118]
The physician is asked a number of questions concerning the employees capability
for working and if so, on what basis:
Is this employee capable of working regular duties? □
yes □no; or modified duties? □yes □ no; □ Immediately
or d ___/ m ___ / y ___.
If yes, □ regular hours or
□ reduced hours. If reduced hours, please explain: __________
[119]
The Policy contains rehabilitation assistance provisions that are very
similar to the Plan.
VI. Termination of Benefits for
Failing to Attend an Independent Medical Examination
Law
[120] Given the
continuing nature of a claim under a disability policy, an insurer is entitled
to information concerning the insured in order to properly assess the claimants
ongoing entitlement to receive disability benefits: Paul Revere Life
Insurance Company v. Patterson, 2002 BCSC 138 at para. 12, 99 B.C.L.R.
(3d) 189.
[121] Some
insurance policies, as is the case with the Plan and the Policy, contain a term
requiring the insured to submit to an independent medical examination at the
request of the insurer. The right of a disability insurer to request such an
examination is also contained in s. 89 of the Insurance Act,
R.S.B.C.1996, c. 226.
[122] An
independent medical examination may be an important tool for an insurer in
cases where there is bona fide reason for concern that the opinions of
the insureds doctor are subject to pre-disposition or bias. Even where that
concern is not present, an insurer may be concerned about the treatment being
provided to the insured by his or her physician: Richard Hayless, Disability
Insurance Canadian Law and Business Practice, (Scarborough, Ont:
Thomson Canada Limited, 1998) at 254.
[123] When an
insured fails to attend an examination that is reasonably required by the
insurer, then he or she is in breach of the policy. The insurer is entitled to
suspend payment of benefits: Paul Revere at para. 14; Mononen v.
Great-West Life Assurance Co. (1998), 6 C.C.L.I. (3d) 247 (B.C.S.C.), affd
1999 BCCA 431, 128 B.C.A.C. 155.
[124] In Haggart
v. Nova Scotia Public Service Long Term Disability Plan Trust Fund, 2003
NSSC 14, affd 2003 NSCA 132, 219 N.S.R. (2d) 250, MacLellan J. said, at para. 44,
that when a disability insurer exercises its right to rely on the policy to
request a medical assessment, it must act honestly, fairly and in good faith.
[125] Costco and
Manulife concede that a disability insurers request for an insured to attend
an independent medical examination must be reasonable in the circumstances.
Facts, Analysis, and Determination
[126] Costco and
Manulife assert that their requests of Ms. Nayyar to attend a medical
examination were reasonable in the circumstances and that their ability to
manage Ms. Nayyars claim has been prejudiced by her failure to attend.
[127] The case
law makes it clear that the determination of the reasonableness of the insurers
request for the insured to attend an independent medical examination is
contextual.
[128] On
February 13, 2002, Ms. Nayyar was advised by Manulife, on behalf of
Costco, that her application for long term disability benefits had been
accepted effective December 5, 2001. She had previously received short term
disability benefits from Costco from August 14 to December 4, 2001.
[129] Ms. Nayyars
claim for payment of short term and long term disability benefits was assessed
and administered by Manulife for Costco.
[130] My
analysis of this part of Ms. Nayyars claim includes a review of the medical
information provided to Costco and Manulife as part of Ms. Nayyars short term
disability claim as well as their assessment of that information.
(a) Events
leading up to the Acceptance of Ms. Nayyars Claim for Long Term
Disability Benefits
[131]
During the time that Ms. Nayyar was being paid short term
disability benefits, Costco and Manulife considered Ms. Nayyars
disability and its impact upon her ability to work. On her application for short
term disability benefits, Ms. Nayyar advised Costco that she could not
work at her job because she could not concentrate. Subsequently, when Ms. Nayyar
submitted her claim for long term disability benefits, Costco and Manulife were
well aware of the nature of her current disability and the effect of the
medical evidence. Costco and Manulife were aware that Ms. Nayyar had previously
and successfully applied for disability benefits recently when Sun Life was
still involved in Costcos insurance program.
[132]
Manulife had only recently joined Costcos disability insurance regime
when Ms. Nayyar applied for short term benefits in August 2001. Manulife
aware of Ms. Nayyars prior history of depression.
[133]
Alaina Kois was Costcos disability manager from the mid 1990s to the
end of August 2001. Thereafter, she assumed the job of Costcos director of
human resources, Western Canada (a position that she currently holds). Chris
Williams assumed her position as disability manager.
[134]
According to Ms. Kois, the disability managers responsibilities
include liaising in between Costcos employees and the disability insurer.
The disability manager works with the insurer/administrator in its handling of
claims, particularly when notified by the insurer that an issue with the claim
has arisen.
[135]
Ms. Kois also said that one of a disability managers functions is
to assist employees to return to work with [a] gradual return-to-work
program.
[136]
Ms. Kois remained involved in the handling of Ms. Nayyars
claim even though Ms. Kois turned over the duties of disability manager to
Chris Williams when she left that position at the end of August 2001. Ms. Kois
was also aware that Mr. Nayyar suffered from depression when Ms. Nayyar
submitted her short term and long term disability applications. Ms. Kois
conveyed her views about Ms. Nayyars claims both internally and to
Manulife. She wanted aggressive management of the claim.
[137]
For example, Ms. Kois sent an internal email to a Costco employee in
the payroll department, Patrick Noone, on September 14, 2001, providing him
with her views regarding management of Ms. Nayyars short term disability claim:
Good morning Patrick. I spoke with the adjudicator at
Manulife on the status of Annus claim….This is another psychological
claim. Annu was off since August 8 and her claim has been paid from August
14 through 28th. (This was because she 1st saw her doctor
on August 14.) I realize she is still off work. Manulife has sent out an
Attending Physicians Update form for Annu to complete. As well, they have
requested that she obtain a RRP (rapid re-employment form) from us to have
completed by her doctor. This was stated on the documentation that was copied
to your payroll department. At this point, I think you or her manager should
contact her and speak to her directly. She needs a RRP form to be completed and
we need to know when she plans on sending in the additional medical
information.
It is important that we stay on top of this one, as it may
be a challenge as it has been in the past to get her back in the workplace.
Her doctor indicated that her husband is also suffering from the same type of
illness. When she was off last time he was quite controlling and it caused
delays etc. I cant imagine that this is going to be any different.
Please let me know when you have touched base with Annu and
advise on when she will be completing the info. requested above. Once I have
more information from you I will discuss further with Manulife. I am going to
have them go directly to her specialist for info., as well I will have them get
their rehabilitation department involved. If you can get a feel for how she
is doing that would be great. Please let me know if you wish to discuss
further. Talk to you soon, Alaina.
[Emphasis
added]
[138]
Ms. Kois telephoned Lenore Marlowe at Manulife on September 17,
2001. Ms. Marlowe has been employed
by Manulife since 2000. Ms. Marlowe is a registered nurse. She was trained
in South Africa. Her training and experience there included a focus on midwifery
and public health nursing.
[139]
Their telephone discussion was recorded by Ms. Marlowe in her
internal memorandum of the same date. In it, Ms. Marlowe recorded that Ms. Kois
telephoned her to find out about the status of Ms. Nayyars claim and if
any new medical information had been received. Ms. Kois also provided
background information to Ms. Marlowe about Ms. and Mr. Nayyar:
Alaina advised that this clmnt has been on claim before for a
very similar condition and the claim rolled over to LTD. She was off work for a
very long time. It appears she is living in an extreme unhappy marriage with an
abusive and controlling husband, so much so, that she developed anorexia
and had rehab involved to get her back to a functioning level.
I agreed to obtain medical information from her doctor, and
Alaina would insist that clmnt obtains an APU and RRP.
[Emphasis
added]
[140]
No evidence was tendered by Costco and Manulife to prove that Mr. Nayyar
was an abusive husband. As I will explain later in these reasons for judgment, Ms. Kois
remarks concerning Mr. Nayyar made during this telephone call and in
subsequent communications with Manulife, were included in a letter of
instruction sent on Manulifes behalf to a psychiatrist it selected to conduct
an independent medical examination in February 2002 after Ms. Nayyars
claim for long term disability benefits had been accepted by Costco and
Manulife.
[141]
The acronym APU referred to in Ms. Marlowes memorandum is a
report from the employees attending physician.
[142]
The RRP completed by Ms. Nayyars family doctor, Dr. Gandhi,
approximately a month earlier, on August 15, 2001, stated:
Not able to do any job
immediately will be reassessed every 2 wk regularly
[143] One aspect
of the RRP form asks the physician to advise if there is cognitive/mental impairment.
Five different areas are identified: concentration; analytical reasoning;
learning new material; comprehension; and social interaction. The physician is
required to state whether any exist, and if they do, then he or she must state
whether they are Mild, Moderate, or Severe. Dr. Gandhi advised Costco
that Ms. Nayyars impairment was moderate for all five categories.
Ms. Marlowe received the RRP signed by Dr. Gandhi.
[144] Manulifes
rehabilitation department was then requested to carry out an assessment. Although
that request is confirmed in an internal memorandum dated October 3, 2001, the
referral was not made until December 11, 2001.
[145]
The written referral to Manulifes rehabilitation department shows that
Manulife and Costco had become concerned at the prospect that another long term
disability claim may be made by Ms. Nayyar. The document also demonstrates
that Manulifes focus had turned to Mr. Nayyar before Ms. Nayyar had
applied for long term disability benefits. The document was directed to Sean ONeill,
a Manulife rehabilitation specialist, with the following comments:
This claimant has a history of
Major Depression. Her claim went to LTD when the group was with another
carrier. The employer has concern this will to go to LTD again. THey [sic] have
a great deal of documentation for the previous claim. The Husband is a
controlling man who has has power of attorney since 1998. According to the
employer he listens [sic] to the claimants phone calls, is always there when
their [sic] is a visit. According to the claimant and her husband he is also
suffering from depression. Alaina has said if ther [sic] is to be a visit to
the home that the husband be requested to leave the room. I have noted he has completed
portions of the ADL. If you have any questions contact Alaina or Chris at
Costco. They know the claimant and her husband very well. Their input from the
previous claim may be helpful.
[146]
Ms. Kois also telephoned Pat McMillan, a disability adjudicator
employed by Manulife, on November 16, 2001. Ms. McMillan assisted in
management of short term disability claims and in arranging independent medical
examinations.
[147]
Their discussion is recorded in Ms. McMillans internal memorandum (Verbal
Communication Record) dated the same day:
Alaina called to fu on this WI claim. She is concerned
this will go to LTD, as it has in the past. Ms. Nayyar was on LTD for sometime.
Costco has previously sponsored Ms. Nayyar for
nutritional counselling, diet & exercise and gym membership.
Alaina explained claimants husband is a very controlling
person who is always in attendance when claimant is interviewed by rehab, etc.
Alaina stated rehab or anyone who visits the claimant has the authority to ask
the husband to leave during the interview. NON COMPLIANCE to rehab. etc. is not
acceptable by Costco.
During the prior LTD claim Costco received several
anonymous telephone calls regarding this claimant. These calls were from
people who had heard remarks about how the claimants family was living on her
Disability Benefits.
Alaina has been dealing with the claimants husband in the
past. From the tone of her remarks, she was not impressed with Mr. Nayyar
and his controlling manner.
I told her I will be referring to file to John Picur for
guidance on future management and will be referring to rehab as well. She agreed
the file should go to rehab.
Alaina is aware Mr. Nayyar is also off work for
depression.
Costco would like a
resolution of this claim prior to going to LTD again.
[Emphasis
added]
[148] The
Nayyars did not hide their need for payment of disability benefits; nor was it
new information to Manulife. Mr. Nayyar conveyed that information to
Manulife in a telephone conversation to Pat McMillan on November 6, 2001, and
then again, after Ms. Nayyar submitted her application for long term
disability benefits.
[149]
A few days later, Ms. McMillan passed along Ms. Kois comments
to John Picur, a senior disability specialist employed by Manulife, in a
memorandum dated November 19, 2001.
[150]
In her memorandum, Ms. McMillan advised Mr. Picur that Ms. Kois
was in agreement that an independent medical examination of Ms. Nayyar
should be pursued as part of the ongoing assessment of her claim for short term
disability benefits and that Ms. Kois held very strong ideas about the
claim:
We briefly discussed this claim Friday, November 16, 2001.
After our discussion Alaina Kois from Costco called to
discuss it as well. I told her we had briefly discussed the claim, and it was
possible we would be requesting an IME. She was in agreement pursuing an IME.
Alaina has very strong ideas about this claim. She wants
aggressive management. See Verbcom of November 16, 2001.
[Emphasis
added]
[151]
Mr. Picur no longer works for Manulife. Prior to testifying, the
Nayyars provided him with copies of many of the documents that were marked in
evidence, including documents that were written by or involved him. Mr. Picur
read through those documents prior to giving evidence. Ultimately, he had to
rely on the face of the documents in Ms. Nayyars file when answering
questions because he said that he had no recollection of them. Mr. Picur
did not dispute that he wrote or received the documents bearing his name as
sender or recipient.
[152]
Mr. Picur explained that his role at Manulife was to provide
in-house training for adjudicators and to conduct file audits. He also said
that one of his duties was to provide guidance to disability adjudicators who
refer files to him for advice.
[153]
At trial, Mr. Picur sought to distance himself from the actual
decision making process. That responsibility, he said, rests with the
disability adjudicators (such as Ms. Marlowe):
But we also did more of a formal
file referral, which essentially was a situation where an adjudicator would be
looking for a second — basically a second set of eyes on a claim file. And the
summaries could be either — you know, my response could either be very short,
you know. Again it could be an okay, JP with the date, or it could be a little
bit more extended if there were things that — you know, there were documents
or things that I wasnt sure that the adjudicator had looked at.
…
The process essentially became
that the disability adjudicator was the centre of action and had a certain
number of tools — that was the proper jargon – that could be used. The
disability specialist is one of them as — for mentoring purposes … So in effect
the adjudicators manage the claim and had around them resources that they could
go to.
[Emphasis
added]
[154]
From the outset of his evidence, Mr. Picur also sought to distance
himself from the documents that he created or were sent to him. For example, moments
after he was affirmed, Ms. Nayyar showed him Ms. McMillans memorandum
of November 19. She asked Mr. Picur if he knew what was meant by Ms. Kois
very strong ideas about her claim. Mr. Picur responded that he had no
involvement in the matters set out in the document:
Q Mr. Picur, what were those very strong
ideas about my claim in the last paragraph?
A Oh, I dont recall. Thats too long ago.
Actually, no, because I wasnt this is a conversation between Pat and Alaina?
[Emphasis
added]
[155]
Ms. Nayyar pursued Mr. Picur, pointing out that Ms. McMillan
wrote the memo to him:
Q No. Pat is writing to you.
A Shes
writing to me but shes
Q Yes.
A — describing a discussion with Alaina.
Q You can take your time and then you can maybe
tell me the last paragraph.
A Yeah. No, shes saying that Alaina has very
strong ideas about this claim. Thats the third paragraph youre talking about?
Q Yes.
A Yeah. I have no idea. I wasnt party to that
discussion.
Q You dont have no knowledge of that?
A No. Its a phone call between Pat and
Alaina, from what I can tell here.
Q But the letter is addressed to you.
A Im sorry?
Q The letter is addressed to you. It says John
on the top.
A Well, yeah. It looks like shes just advising
me, you know, what it says here. But, you know, what was said between Pat and
Alaina, I have no idea.
Q So do you agree to some content in this
letter, that you recall anything?
A Well, Im not sure what you mean by
agree. But, you know, it looks like its a referral to me from Pat. But, you know,
in terms of the content, thats all it is from my standpoint. Shes just
letting me know about something. Shes just letting me know about something.
Thats all.
Q What is that something, Mr. Picur?
A Well, as it says here, she had a telephone conversation
and with Alaina Kois and shes documenting it. It looks to me as I say, it
looks like a referral to me of the file.
Q Do you have any knowledge why was it said that
what were those strong ideas about this claim?
A No. No. Ive already said that.
[Emphasis
added]
[156]
Mr. Picur denied that he made the decisions concerning Ms. Nayyars
claim. According to Mr. Picur, those decisions were made by Ms. Marlowe:
Q Did you take any action in receiving this
e-mail?
A Well, Lenore was the adjudicator, so it was
her responsibility to take any action.
Q Who was, sorry?
A Lenore Marlowe was the LTD adjudicator. Its
her file, so she would be the person who would be the one who would be, you
know, taking action or precipitating action.
You have to understand that the
LTD adjudicator is the person thats responsible for the handling of a file. A
disability specialist can offer well, basically mentoring. You know, we do
training, that type of work. And if the adjudicator would like sort of a second
look at a file by you know, the contents of a file, then theyll refer it to
us and well give them back a memo like the one that we looked at earlier with,
you know, this is what I see. But its up to them to take any further action
and make the decisions, so
[Emphasis
added]
[157]
Ms. Marlowes evidence was to the contrary, stating that she
deferred to the decisions of senior disability examiners such as Mr. Picur.
According to Ms. Marlowe, senior disability specialists do most of the
case management.
[158]
Manulifes documents are also inconsistent with Mr. Picurs
evidence that he played a background role without responsibility for the
decisions that were made concerning Ms. Nayyars claims for disability
benefits. I have included extracts from some of those documents in this
section. Manulifes documents demonstrate that Mr. Picur played a
significant role in Ms. Nayyars claim. His role was not limited to
providing advice and guidance. He made a number of decisions, including the
decision to deny Ms. Nayyars claim.
[159]
I reject Mr. Picurs account of his role in the decision making process
for Ms. Nayyars claim. I find that Mr. Picur was actively involved
in the assessment and management of her short term and long term disability
claims. He questioned the merits of Ms. Nayyars claims throughout his
involvement with her file, even though Ms. Marlowe had concluded Ms. Nayyar
was disabled and entitled to benefits under the Plan. I find that Mr. Picur
is the Manulife employee who made the decision to terminate Ms. Nayyars benefits
effective June 24, 2002 and that he instructed Ms. Marlowe not to offer an
appeal to Ms. Nayyar.
[160]
At trial, Ms. Kois also sought to distance herself from remarks
attributed to her by Manulife employees and from her involvement in the
management and disposition of the claim. Her evidence is contradicted by
Manulifes documents.
[161]
For example, Ms. Kois gave the following evidence concerning Ms. McMillans
memorandum of November 16, 2001:
Q Ms. Kois,
in this verbal communication record shows that you are the caller.
A Yes, I see that.
Q You are
the caller, and arent you agree to the contents of this communication?
A Im not saying I didnt say it. I —
Q Do you agree?
THE COURT: Just let her finish, please. You cut her off.
You said Im not saying I didnt
say it, but …
THE WITNESS: I dont
recall all the issues at the time. I think its also important to add that at
this time Chris Williams was transitioning in. I was training him, so I would
have had involvement in managing too to this point, but I agree. I see the
verbal communication.
[162]
Ms. Kois was also asked to explain her strong ideas about the
claim:
Q Ms. Kois, I just wanted to ask you —
here it says you had very strong ideas about my claim. What do you mean by
that?
A At the time I recall having some interference
with Mr. Nayyar on — calling and calling me when I was managing the claim
on previous claims as well, and so thats what I would have been referring
to, and I would have just had some concerns with compliance as far as doing
what Manulife and Costco see as compliance with the disability claims and
attending an IME.
Q But, Ms. Kois, what were the strong ideas
about my claim?
A I dont know what
that means.
[Emphasis added]
[163]
The evidence does not support Ms. Kois stated concern – that Ms. Nayyar
would not attend an independent medical examination – when she spoke with Ms. McMillan
in November 2001. That issue did not arise until February 2002 when an
incident arose at the office of the psychiatrist chosen by Manulife to conduct
a medical examination of Ms. Nayyar.
[164]
Ms. Kois was also asked to explain what she meant by previous
compliance issues concerning Ms. Nayyar. She identified two. Neither one
concerned independent medical examinations.
[165]
The first refers to an apparent problem that arose during the Sun Life
insurance regime. It concerned a counselling appointment for Ms. Nayyar that Mr. Nayyar
cancelled on behalf of his wife. The issue was resolved to Sun Lifes
satisfaction.
[166]
The second compliance issue concerned the possibility that Mr. Nayyar
would not let his wife meet with Manulifes rehabilitation specialist outside
of his presence. Ms. Kois explained her concern:
As well, there was a rehab visit
from Manulife that Manulife and Costco had talked about having Mrs. Nayyar
be alone to meet with Manulife for that visit.
[Emphasis added]
It was a potential issue that never arose.
[167] In the
midst of Ms. Kois discussions with Ms. Marlowe and Ms. McMillan,
Ms. Marlowe carried out her own assessment of the medical evidence
Manulife had received. In her memorandum of October 3, 2001, Ms. Marlowe
confirmed that Ms. Nayyar has suffered from severe depression since 1994,
and that her current presenting symptoms included a GAF score of 50.
[168]
As I have noted, Dr. Mallavarapu explained in his evidence that a
GAF score of 55 means that the patients depression is moderately severe. A
score below 50 means that the patient is severely ill, suicidal, and in a state
that may require hospitalization.
[169]
In her memorandum of October 3, Ms. Marlowe wrote:
Clmnt is a 35yr female Cashier (medium unskilled) working
Full-Time at Costco since July 31, 1991. She has been absent from work since
August 07, 2001 with Major Depression. …
According to the information received from the doctors this
is a recurrent episode of depression. She has had severe depression on and off
since 1994, with treatment of anti-depressants and counselling. Her last
episode was one year ago, returned to work until she went off work again August
07, 2001.
Her presenting symptoms are poor
appetite, depressed mood, unable to concentrate, and does not want to do
anything, GAF score of 50. She is being treated with Effexor 75 mgs four times
a day and referred to the psychiatrist for ongoing treatment. Her precipitating
factors are severe psychological stress, a husband who suffers from major
depression and a child with Attention Deficit Disorder. Claimant saw the
psychologist August 20, 2001 who confirmed chronic recurrent depression
with a feeling sad, unhappy, withdrawn, apathetic, lacking energy and as a
result has become dysfunctional and unable to cope with work. There are signs
of psychomotor retardation. Her medication has been changed to Remeron 20 mgs
four times daily and encouraged to continue taking her medication as she has on
a previous occasion stopped using the medication prescribed. She has had a
follow up visit with the psychiatrist and advised not to return to work for the
next 12 weeks.
[170]
Ms. Marlowe wrote that Ms. Nayyar was not restricted from
performing her job duties despite her inability to concentrate:
Her duties as a Cashier require her to stand at the cash
register, enter item numbers, assist caller with transferring stock, verify
checks, accept payment for goods purchased, count money and provide excellent
member service. Based on the medical information, her inability to concentrate
or interact with people which amounts for much of her time she would not
be restricted from performing these duties.
[Emphasis
added]
[171]
In argument, counsel for Costco submitted that the word not was incorrectly
placed in this document. Counsel pointed to other documents that demonstrate Ms. Marlowe
accepted Ms. Nayyar as disabled from working as a cashier at Costco within
the meaning of the Plan. Although Ms. Marlowe did not give that evidence
at trial, I agree with that submission because Ms. Marlowe goes on to
state in the memorandum that Ms. Nayyar should receive disability
benefits.
[172]
Ms. Marlowe was aware of Dr. Mallavarapus advice that Ms. Nayyar
should not return to work for a further 12 weeks (e.g., November 12, 2001).
Even so, Ms. Marlowe recommended that benefits be paid only to October 24,
2001 while we await further medical information. Ms. Marlowe wrote in
her memorandum of October 3 that further information should be obtained:
Benefits to be paid to October 24, 2001 while we await
further medical information.
File Management:
·
Obtain Daily Living questionnaire from clmnt;
·
Obtain Medical Management Questionnaire/Major Depressive
Disorder; and
·
Mental Residual Functional Capacity Assessment for the
psychiatrist.
[173] On several
occasions during the fall of 2001, and as part of its assessment of Ms.
Nayyars entitlement to short term disability benefits, Manulife requested and
obtained from Ms. Nayyar, a completed form entitled Activities of Daily
Living Questionnaire (Questionnaire). As well, Manulife requested and
received medical information from Dr. Mallavarapu on two Manulife forms –
Medical Management Questionnaire (MMQ) and Mental Residual Functional
Capacity Assessment Form. Dr. Mallavarapu also sent further clinical
reports concerning Ms. Nayyar with this package of documents.
[174]
Mr. Picur remained sceptical of the merits of Ms. Nayyars
claim for short term disability benefits in spite of the medical information
that Manulife had received. In a memorandum he wrote to Ms. McMillan dated
November 19, 2001, Mr. Picur remarked that there was very little evidence
of impairment:
Based on the information on file, I see very little evidence
of impairment. If we examine her ADL form completed on 23 October we find,
according to her:
— her sleeping habits have not changed;
— she is able to look after personal needs/grooming;
— she is able to look after three young children without
outside assistance;
— she is able
to drive, something which would be risky for someone with impaired
concentration;
— she requires no assistance
with hobbies/activities.
[175]
Mr. Picurs assessment misconstrues the information provided in the
questionnaire. In it, Ms. Nayyar provided the following information:
(a) she
has trouble sleeping at night;
(b) she requires assistance from her
husband to provide childcare for their three children who were then 13, 7, and
5;
(c) the only childcare she provided
to her children was bath and feed, and not on a regular basis;
(d) she performs two hours of
housework per week with Mr. Nayyars assistance, but she is not able to carry
out heavier household duties such as vacuuming, laundry, dusting, washing
dishes, mopping, and household repairs;
(e) the
only hobby identified is exercise;
(f) she does not enjoy reading and
does not watch a lot of television (five to ten minutes at a time); and
(g) she
does not visit family or friends.
[176]
Mr. Picur went on to critique the information from Dr. Mallavarapu
as raising more questions than providing answers. Ultimately, Mr. Picur
suspected that a disciplinary incident at work as opposed to depression may be
the reason for Ms. Nayyars claim:
Medically, she is known to have a history of recurrent
depression. We do not know what caused her condition to change such that she
became unable to work. Dr. Mallavarapu suggests the discontinuation of her
medication might have had something to do with it, but from the GPs notes we
see she stopped taking meds in December 2000. There is no evidence of
deterioration in her condition during subsequent medical visits through to
14 August 2001, when she is reported as feeling depressed. Unfortunately,
I am unable to read some of the following, which seems to refer to something
that happened on 7 August. It could be useful to know what the GP wrote in the
next several lines. To his credit, Dr. Ghandi [sic] sent her to a
psychiatrist right away.
Dr. Mallavarapu also gives no reason for the change. He
doesnt seem to have explored this. He also does not seem to have performed any
cognitive testing although he reports certain limitations, particularly
impaired concentration. This can be easily tested but it is not clear Dr. Mallavarapu
did so. He assessed her with a GAF of 50, which is on the border between
serious and moderate symptoms. Other functional information on file suggests
her symptoms are moderate. Dr. Bezeredi [Manulifes in-house psychiatrist]
could advise if Dr. Mallavarapus assessment is consistent with the
clinical information.
Dr. Mallavarapu stated he advised the claimant to take
12 weeks off work. He does not advise why such a lengthy period is necessary
for recovery. It also is hard to correlate with the other information.
… I suggest checking with Costco to determine if there
have been any recent employment issues such as disciplinary proceedings or
personality conflicts at work, particularly around early August.
[Emphasis
added]
[177] Mr. Picur
also observed that there was no further medical information on file from Dr. Mallavarapu
since August 20, 2011. This did not, however, prevent Ms. Marlowe from
making her detailed assessment on October 3rd.
[178]
Despite his critical remarks about the lack of medical information, Mr. Picur
was not convinced that an independent medical examination was warranted at that
time. He told Ms. McMillan in the same memorandum:
You are suggesting an IME. This
may be warranted. However, we cannot properly consider the merits of an IME until
we have obtained detailed, current medical information from the treatment
providers (unless they refuse to provide it).
[179] No reason
has been provided to explain the basis for Mr. Picurs concern that Ms. Nayyars
doctors would refuse to provide medical information. Indeed, when Mr. Picur
wrote this memorandum on November 19, Manulife had in hand detailed medical
information from Dr. Mallavarapu as well as Lenore Marlowes assessment of
the medical evidence and her determination that Ms. Nayyar was totally
disabled.
[180]
Finally, Mr. Picur advised Ms. McMillan that [r]eferral to
our Rehabilitation Dept. is warranted on all ongoing claims.
[181]
I am satisfied that the information provided by Ms. Kois to
Manulife concerning Mr. and Ms. Nayyar influenced Mr. Picurs
assessment of the claim. I find that her remarks influenced Manulifes view of
the merits of Ms. Nayyars short term and long term disability claims and
the manner in which her claim should be managed.
[182]
Dr. Mallavarapu provided further information to Manulife on
November 21, 2001. He sent to Manulife, by fax transmission, a completed MMQ
and Mental Residual Functional Capacity Assessment form along with copies of
three reports he had written to Dr. Gandhi.
[183]
Through the MMQ, Dr. Mallavarapu advised Manulife that:
(a) his Axis IV diagnosis of Ms. Nayyar
was severe with a Axis V GAF score of 55;
(b) Ms. Nayyar experiences
abnormal sleep patterns, loss of interest, excessive guilt, energy loss,
concentration difficulties, appetite changes, suicidality, and persistent or
prolonged crying/sadness;
(c) Ms. Nayyar
was not able to cope with her work;
(d) stressors
at home have impacted upon Ms. Nayyars recovery;
(e) the results of Ms. Nayyars
most recent mental status examination showed her to suffer from sad mood, low
energy, psychomotor retardation, diurnal variation, mood changes, poor
concentration, guilt, and suicidal thoughts;
(f) Ms. Nayyars functional
impairments included indecisiveness, extreme social withdrawal, being keyed up
with intensity, anxiety, sleep disruption, and preoccupation with physical
complaints;
(g) Ms. Nayyars
symptoms were continuous as opposed to episodic; and
(h) Ms. Nayyar is strongly
depressed and the clinical picture is constant with depression (severe).
[184] Based on
the psychological evaluation that he conducted of Ms. Nayyar, Dr. Mallavarapu
advised Manulife (in a Mental Residual Functional Capacity Assessment form) of
his opinion that she was [m]arkedly [l]imited in sustained concentration and
persistence, social interaction, and adaptation.
[185]
Ms. McMillan carried out a further assessment of the merits of Ms. Nayyars
claim. The document contains her signature and is shown to have been signed
Dec/01. She reviewed the medical information provided by Dr. Mallavarapu.
She determined that Ms. Nayyar was totally disabled:
This 36 year old full time cashier (medium) has been absent
since August 8, 2001. She has been diagnosed with severe recurrent depression.
She has a history of depression (1993 & 1998) and discontinuing her
medication. Her husband is controlling and has had Power of Attorney since
April 25, 1998. One child has Attention Deficit Disorder.
…
The cashiers position requires standing, social
interaction with members, concentration when putting through purchases and
cashing out. Given the medical on file, the claimant would be unable to perform
the basic tasks of a cashier.
[Emphasis
added]
[186]
Mr. Picur reviewed the new information provided by Dr. Mallavarapu.
His views are recorded in a further memorandum he wrote to Ms. McMillan
dated December 4, 2001. Now that he was made aware that Ms. Nayyars
condition was worsening, Mr. Picurs scepticism focused on Dr. Mallavarapus
treatment:
Ive reviewed the most recent material from Dr. Mallavarapu.
The evidence suggests the treatment regime has not been successful. I note the
recent further increase in medication, suggesting a worsening of her condition
rather than a stabilization or improvement. The psychiatrist indicates marked
limitations in several categories on the MMQ.
In view of the evidence of a
controlling husband and difficulty coping with children (one apparently with
Attention Deficit Disorder), I wonder whether it is really to Ms. Nayyars
benefit to be confining herself to her house?
[187] Mr. Picur
suggested a review by Manulifes internal psychiatric consultant, Dr. Bezeredi,
to evaluate treatment options, adding: If we have doubts about the
effectiveness of treatment, we have a right to an IME to establish treatment
alternatives.
[188]
Mr. Picur was also cognizant that Manulife lacked evidence to
contradict Dr. Mallavarapus opinions at that time. He made the following remarks
in his memorandum to Ms. McMillan that Manulife had no choice but to
accept the claim at that moment:
We have no evidence contradicting his [Dr. Mallavarapus]
findings at the moment no indication the claimants functional
level exceeds what is reported by the physicians.
[Emphasis
added]
[189]
Mr. and Ms. Nayyar pressed Manulife for a decision concerning
her application for continued short term disability benefits by early December
2001. The last payment she had received was dated October 24, 2001. Mr. Nayyar
was persistent. On December 21, 2001, Ms. McMillan wrote to Susan Mighton,
Ms. Marlowes supervisor, to advise that she will be receiving an Email
or a telephone call from Mr. Nayyar. Ms. McMillan also communicated Ms. Kois
concerns to Ms. Mighton in that memorandum:
Mr. Bob Nayyar is a very controlling man. He has had
Power of Attorney from hhis [sic] wife since 1998.
Alaina at Costco is very aware of this claim. She does not
want it to go to LTD for any extended period. Mrs. Nayyar had a claim for
LTD through Sun Life. There was difficulty getting her back to work. She had
been given rehab, exercise programmes etc through the previous claim. Alaina
has a file as big as the bible on the previous claim. Chris Williams is
also aware of this.
Information in the file
indicates claimant has children with difficulties – ADD and her husband is off
work for depression as well.
[Emphasis added]
[190] Ms. McMillan
also told Ms. Mighton of her intention to obtain further direction from another
senior disability specialist, Brenda Taylor, about the claim. No explanation
was given for her decision to confer with another senior disability specialist.
[191]
Ms. Kois was asked what she meant by her remarks, as big as the
Bible. She responded:
A At the time when I was transitioning the
disability management department over to Chris Williams I would have been
training him and had some involvement in managing the claims at that time and
any difficulties that came up with it.
From this memo I dont know if this was
Chris calling and talking to the Manulife or myself, but yes, there had been
difficulty in the previous claims, so there was a discussion at that time. I
cant remember if I had it or if Chris Williams had it.
Q Can you please explain, what does it mean when
you say file as big as the Bible?
A I didnt say
those words. I dont know.
[192]
Ms. Kois did admit that other critical comments concerning Mr. Nayyar
that were attributed to Costco in a memorandum written by Ms. Marlowe
sound familiar to me:
THE WITNESS: The comments sound familiar to me, as I had
some involvement with the claim in the past before, the other claims in the
past before, and either myself or Chris was managing at this point with the
insurance carrier, and we were working with them on concerns that we had with
the file. We wanted to make sure that we were assisting Mrs. Nayyar in
getting well, and I do recall speaking to Manulife about that its reasonable
to meet with Mrs. Nayyar, if they chose to do so, and talking about that,
I dont recall Mr. Nayyar not being well. I dont recall that information.
I see its in there, but I dont recall that.
[Emphasis
added]
[193] Regardless
of whether Ms. Kois spoke the words file as big as the Bible, I find
that the words that she used conveyed the same meaning to Ms. McMillan. Moreover,
I find that the various remarks made by Ms. Kois to Manulife throughout
her communications with Manulife created the impression that they were dealing
with a difficult claimant with a longstanding and untoward claims history and
that every step should be taken to avoid a long term disability claim.
[194]
I reject Ms. Kois evidence that she distanced herself from active
involvement in the handling of Ms. Nayyars claim. Manulifes internal
documents demonstrate otherwise.
[195] I find
that Ms. Kois approached Ms. Nayyars short term and long term
disability claims with chagrin and suspicion. Her predilection towards the
merits of Ms. Nayyars claim and her perception that Ms. Nayyar would
not cooperate remained with her throughout. I find that her views adversely
affected the approach taken by Manulife in assessing and handling Ms. Nayyars
claims for disability benefits.
[196]
I also reject Ms. Kois evidence as to her purpose in communicating
with Manulifes employees. In her evidence in chief, she said:
Q And so as a result of the difficulties that
youd had in the past, what, if any, instructions did you provide to Manulife
with respect to the management of Mrs. Nayyars claim?
A That we need to
ensure shes being compliant with the terms of the contract and that she does
everything to get herself better. So we had some concerns with her getting
better and compliance.
[197] There was
only one prior compliance issue, and as I have noted, it was resolved to Sun
Lifes satisfaction. If Ms. Kois purpose was truly to promote recovery
for Ms. Nayyar, then in light of:
(a) Ms. Nayyars
prior difficulties in returning to work due to her depression;
(b) Ms. Kois
concerns about Ms. Nayyar being subjected to ongoing constraints imposed
by a controlling husband; and
(c) Ms. Kois stated
desire to avoid a long term disability claim,
Ms. Kois and Costco should
have persisted in urging Manulife to take immediate steps to implement a
pro-active rehabilitation program, as permitted by the Plan, throughout the
time Ms. Nayyar was receiving short term disability benefits. Instead, at
trial, Ms. Kois said that she left claims handling decisions up to
Manulife as opposed to Costco (who bore the financial exposure of a long term
disability claim):
Q Are there any other instructions that you
provided to Manulife in that regard?
A Just to work with
us and let us know how things were going. We worked closely when there was any
issues such as those on claims.
[198]
On December 24, Manulife recommended to Costco that it accept Ms. Nayyars
claim for short term disability benefits to the maximum allowed under the Plan.
On the same day, Mr. Picur wrote to Mr. Williams at Costco:
Based on medical evidence from the specialist and other
sources, we have determined benefits are payable to the STD maximum. A payment
to 6 December 2001 is being processed today.
Please arrange to have LTD application
forms forwarded to Ms Nayyar.
[199] Mr. Picur
advised Mr. and Ms. Nayyar of Manulifes decision on December 24. In
addition, they were told that if she planned to claim past December 6,
2001, she needed to apply for long term disability benefits.
[200] At no time
did Manulife or Costco request Ms. Nayyar to attend an independent medical
examination as part of their assessment of any aspect of her claim for short
term disability benefits.
[201]
Anticipating that Ms. Nayyar would apply for long term disability
benefits, John Picur and Brenda Taylor communicated their opinion that Ms. Nayyar
should be required to attend an independent medical examination as a condition
of the application process for long term disability benefits. They signed a
joint discussion record that Manulifes go forward position would include a
requirement for an independent medical examination [a]s part of [Ms. Nayyars]
LTD application process. At trial, Mr. Picur explained that he and Ms. Taylor
meant that:
The independent medical examination would become one of the
elements of information that we require precedent to making a claim
decision.
[Emphasis
added]
[202] When Ms. Nayyar
reached the end of the maximum coverage period for short term disability
benefits, she applied for long term disability benefits. She submitted her
application to Costco. Medical evidence in support of her claim was also
provided. Manulife assessed that information.
[203] Later, Manulife
was provided with additional medical information in support of Ms. Nayyars
claim for long term disability benefits. The Initial Attending Physicians
Statement form completed by Dr. Mallavarapu on January 22, 2002, advised
Manulife that Ms. Nayyar continued to suffer from major depression since
July 1, 2001 and that she was not fit to return to work. That form provided
Manulife with information concerning Ms. Nayyars current medication
regime and symptoms, her GAF score of 55, and her cognitive and psychiatric
limitations.
[204]
The prospect that Ms. Nayyar would have to attend an independent
medical examination as part of her application process was raised with her in
early February 2002. Someone left a telephone message on the Nayyars answering
machine to that effect on February 8, 2002. Mr. Nayyar sent an email to Ms. McMillan
to enquire after the reason. He wrote:
Hi Pat Mcmillan Re: my wife Annu Nayyar some one phoned @ our
home regarding Annu to see one of your doctor in order to process her claim for
long term disability. Please confirm why you want her to see another doctor
while she is already seeing one. I also like to bring this to your
attention that she has not being paid by Manulife since December 6th
2001. This non payment of disability has put our family in the sichuation
[sic] where she has no option then-only go on social assistance.
[Emphasis
added]
[205] Ms. McMillan
forwarded the email to Ms. Marlowe, and asked if she wished to respond to
it. She also commented, Looks like we will be receiving future emails from Mr. Nayyar.
[206]
Ms. Marlowe responded to Mr. Nayyar on February 11, 2002. She
did not answer his question about the reason for the medical examination (nor
did anyone else from Costco or Manulife). Instead, she advised Mr. Nayyar
that:
… we have not completed a
review on your wife application for Long Term Disability benefits. We
understand that you have not received any payment as from December 06, 2001 but
once we completed a full review of her claim we will advise you what is
transpiring with her claim.
[207] Two days
later, on February 13, 2002, Manulife wrote to Ms. Nayyar advising that it
had approved her application for long term disability benefits. Although Ms. Nayyar
was advised that she would have to attend an independent medical examination, Manulife
and Costco did not tell Ms. Nayyar that they required her to submit to an
independent medical examination as part of her application process or as a condition
precedent to her eligibility for long term disability benefits.
[208]
In an internal document she wrote on the same day, Ms. Marlowe set
out her detailed evaluation of Ms. Nayyars application for long term
disability benefits and the medical evidence. She determined that the claim for
long term disability benefits should be accepted:
[I]t is reasonable for us to
accept her as totally disabled as per the policy plan.
[209]
At trial, Ms. Marlowe confirmed that her remarks reflected
Manulifes assessment (based on the medical information it had received) that Ms. Nayyar
was totally disabled within the definition in the Plan. She gave this evidence
in an answer to a question put to her by Ms. Nayyar:
A So when we
assessed your claim, we looked at the policy contract to determine
whether youre totally disabled from your own occupation, and based on that
medical information, we had determined, according to the policy contract, that
you were totally disabled from your own occupation.
[Emphasis added]
[210]
Manulife directed its rehabilitation department to set up an appointment
with Ms. Nayyar prior to any independent medical examination taking place.
Mr. ONeill formulated an initial plan for Ms. Nayyar that included an exercise
regime. Mr. ONeill spoke with Dr. Mallavarapu to prepare for his
visit with Ms. Nayyar. Dr. Mallavarapu told him that rehabilitation
assistance (including exercise) would be helpful. Mr. ONeill recorded his
discussion with Dr. Mallavarapu in an internal memorandum dated February
12, 2002, the day before Manulife advised Ms. Nayyar that her claim had been
accepted:
I contacted him on February 1, 2002 and we discussed Annus
plan. Dr. M was not pleased that Annu was forced back to work
previously, as he thinks that caused her relapse and made her worse. He does
not feel that the IME physicians were justified in their recommendations.
Dr. M did agree that an exercise program would be
appropriate for Annu. He was pleased to see that Rehab would be getting
involved in her rehab and rtw plan. I continued to speak of his
disagreement with the IME physicians before hanging up.
[Emphasis
added]
[211]
As a result, Manulife was aware of Dr. Mallavarapus opinion that
an exercise program coordinated by Manulifes rehabilitation department was
appropriate and that she previously suffered a relapse because she was forced
to go back to work too soon. With that advice in hand, Manulife chose to accept
Ms. Nayyars claim for long term disability benefits without conducting an
independent medical examination.
[212]
Ms. Nayyar also agreed to attend a rehabilitation meeting during
her discussion with Mr. ONeill on February 12, 2002. Although it took
some cajoling on Mr. ONeills part to arrange a date, they ultimately
agreed on February 20, 2002. I do not draw from the nature of that discussion
any foundation for the defence submission that Ms. Nayyar refused to
undergo rehabilitation. The reluctance she displayed to Mr. ONeill was
similar to her response to Dr. Mallavarapu. In my opinion, her reluctance
to engage is one of the symptoms identified by Dr. Mallavarapu of the
depression suffered by Ms. Nayyar.
[213]
Following the conclusion of his telephone calls with Dr. Mallavarapu
and Ms. Nayyar on February 1 and 12, respectively, Mr. ONeills
action plan was described as follows:
Rehab will conduct an initial
assessment and develop an appropriate rehab plan from there.
No mention was made of the necessity of conducting an
independent medical examination before a rehabilitation plan could be
developed.
[214]
After Manulife advised Ms. Nayyar that her application for long
term disability benefits had been accepted, she was paid long term disability
benefits in the amount of $2,266 per month (which is approximately 70% of her
pre-disability earnings) retroactive to December 5, 2001.
[215]
In its letter confirming its approval for long term disability benefits,
Manulife told Ms. Nayyar:
We have completed our review of your Long Term Disability
Application for Long Term Disability benefits and wish to advise you that your
claim has been approved effective December 05, 2001.
To be eligible for LTD benefits protection you must satisfy
all Policy Provisions including the Disability Definition of Total Disability
as follows:
…
Based on the medical information
we have concluded that you meet the Criteria of Total Disability and your claim
has been approved effective August 08, 2001 under the own occupation
Definition of Total Disability. After satisfying the Qualifying Period, your
monthly LTD is $2266.00 (70% of your Pre-Disability Earnings of $3,236.13,
rounded to the nearest dollar). Your first payment from December 05, 2001 to
December 31, 2001 is $1888.33 and has been deposited directly into your bank
account. This benefit is taxable, a T4-A will be provided for Income Tax
purposes each February following the calendar year in which benefits have been
issued. These payments are made monthly in arrears at the end of each month.
Please notify us if you have not received a scheduled payment.
[216]
Manulife also advised that it may require updated medical information
from her doctor(s) from time to time:
Supplementary forms may be
required from time to time and our office will provide these forms. When
requested, we ask that you and your Attending Physician complete these forms
and return them as soon as possible to avoid disruption of benefits.
[217]
The letter then advised that Ms. Nayyar was required to attend a
medical examination on February 28, 2002 with Dr. Levin, a psychiatrist
practising in Vancouver:
We also, confirm that you will be
attending an Independent Medical Examination on February 28, 2002 with Dr. Levin.
[218]
Manulife did not provide a reason to Ms. Nayyar for requiring that
medical examination in that letter.
[219]
Ms. Marlowe assumed the role of Manulifes case manager for Ms. Nayyars
long term disability claim.
[220]
At trial, Ms. Marlowe said that the independent medical examination
was required for several reasons related to treatment. She described those
reasons in the course of answering questions about the letter of instruction
that was sent to Dr. Alexander Levin, the doctor Manulife retained to
conduct an independent medical examination:
Q So what were those eight questions and who
dictated those questions?
A We send those questions when we refer you for
an IME to the IME doctor, because at this point in time we wanted to see —
wanted to find out what your diagnose was, if you were following the
appropriate treatment and if the treatment that the doctor prescribed that you
were taking was appropriate at this time for your condition, because we
really wanted to see you get better; right? And thats why we sent all
these questions to the doctor. And theyre really standard questions too for
the individuals that go.
[Emphasis
added]
[221]
And then later, Ms. Marlowe said:
Q In reviewing the file, are you able to tell me
what reasons are documented in the file that led to Manulife requesting the
IME?
A Let me think now. All I can recall is that
we required the IME because we wanted to find out if Mrs. Nayyars
treatment that she was receiving is appropriate and to confirm her diagnosis
and her cognitive impairments so we can work around having some type of
recovery for her and assist with returning her to work, to her employer.
Back to work.
Q All right. Can you tell me why Manulife, as
far as you can recall, wanted to confirm the diagnosis when it had already
accepted Ms. Nayyars claim for LTD — or long-term disability benefits?
A Okay. Sometimes when we refer our files to
IME doctors, which are independent medical examinations, they would look at the
file and give us a — either changed diagnosis or they would confirm the
diagnosis thats already indicated by the doctors.
Q But why would Manulife seek to confirm the
diagnosis if it had already accepted the claim for long-term disability?
A We still would like to confirm the
diagnosis just to determine the treatment for that specific diagnosis.
[Emphasis
added]
[222]
When Ms. Marlowe and Manulife accepted Ms. Nayyars claim for
long term disability benefits, they already had in hand numerous reports from Dr. Mallavarapu
that contained a diagnosis of Ms. Nayyars condition. Manulifes examiners
had analyzed the medical information as part of their assessment of her short
and long term disability claims. Manulife and Costco had considered requiring Ms. Nayyar
to submit to an independent medical examination long before her long term
disability claim was accepted. Mr. Picur and Ms. Taylor recommended
that a medical examination be required as a part of Manulifes assessment of the
merits of Ms. Nayyars application for long term disability benefits. Yet,
Manulife and Costco accepted her claim for long term disability benefits
without requiring one.
[223]
Ms. Marlowes stated purpose for the medical examination differed from
what I find to have been Mr. Picurs predominant purpose. In argument,
Costco conceded that Mr. Picur required the independent medical examination
for a collateral purpose, one that was entirely separate from determining an
appropriate treatment regime. Mr. Picur sought to confirm whether Ms. Nayyar
was disabled and whether she was entitled to benefits. For reasons that I set
out in subsequent paragraphs, I have found that by March 2002, Mr. Picurs
collateral (and predominant) purpose became Manulifes dominant purpose in
pursuing a medical examination. Moreover, I have found that by May 2002, Mr. Picurs
collateral purpose became Manulifes sole purpose for requiring the medical
examination.
(b) Dr. Levin
[224]
A medical examination with Dr. Levin was arranged for February 28,
2002 at 1:00 p.m. by Keyfacts Enterprises Canada Inc. (Keyfacts), a company
that is in the business of arranging independent medical examinations for
insurers. Keyfacts maintains a list of pre-booked appointments with a variety
of medical professionals practising in different medical disciplines so that it
may offer to its clients the prospect of medical examinations without long delays.
According to Ms. Marlowe, she did not have a choice to use anyone other
than Keyfacts to set up the medical examination because of Manulifes internal
arrangements and policies.
[225]
Dr. Levin is licensed to practise psychiatry in British Columbia.
He received his medical training in Russia. He completed his internship and
residency in Russia in approximately 1982 and 1990, respectively. Dr. Levin
also received training in military and forensic psychiatry. He also practised
geriatric psychiatry in Israel before immigrating to Canada.
[226]
Dr. Levin was not Keyfacts first choice. It tried to arrange an
examination with another psychiatrist, Dr. Choo, but Manulife rejected it
because the examination could not be scheduled until April 9, 2002. Manulife
was also concerned about Dr. Choos proposed fee.
[227]
Ms. Marlowe instructed Keyfacts to advise Ms. Nayyar that her
husband was not to attend the interview because he was controlling and has
completed forms for the claimant in the past. She instructed Keyfacts to
communicate the same instruction to Dr. Levin.
[228]
A representative of Keyfacts named Christine McQueen telephoned Ms. Nayyar
on February 13, 2002 to advise her of the medical examination with Dr. Levin.
Ms. McQueen then reported the substance of that call to Ms. McMillan
on the same day. Ms. McQueen advised Ms. McMillan that she had
encouraged Ms. Nayyar to cancel a pre-existing dental appointment in order
to attend the examination with Dr. Levin. Ms. McMillan recorded their
discussion in an internal memorandum dated February 13, 2002:
Christine called to advise she had contacted the claimant
with the IME date. The Claimant said she had a dentist appointment that day.
Christine strongly suggested the claimant cancel/postpone her dental
appointment and go to the IME.
Christine informed Ms. Nayyar that it was her disability
and her husband would not be allowed in the interview. Mrs. Nayyar
questioned how she would get to the IME without a car. Christine offered to pay
for a taxi as the claimant said she does not have a credit card to pay for a taxi.
The Cost of a taxi is $80 each way.
I called Christine back to
Approve the taxi.
[229]
Ms. McMillan said she could not recall if Manulife had a policy at
that time of encouraging an applicant for disability benefits to cancel a
pre-existing medical or dental appointment to attend an independent medical
examination required by the insurer.
[230]
On February 14, 2002, Charlene McQueen wrote to Ms. Nayyar advising
her of the time and location of, what she referred to as, the assessment with
Dr. Levin. The letter enclosed a travel expense cheque of $80 to cover Ms. Nayyars
taxi fare to travel from Delta, where she resided with her husband and family,
to Dr. Levins office on Bayswater Street in Vancouver. Those funds were
provided because Keyfacts told Ms. Nayyar that her husband was not to
attend the examination.
[231]
Ms. Nayyar was told that her failure to attend the assessment may
result in benefit declination/termination in accordance with the terms of your
group policy. Ms. McQueen also wrote:
Further to our telephone
conversation, you have agreed your husband will not be present at the
interview.
[232] Keyfacts
sent two letters of instruction to Dr. Levin. They are dated
February 14 and 15, 2002, respectively.
[233]
In the first letter, Keyfacts provided the following information to Dr. Levin:
The Insureds disability claim is for Major Depression since
August 8, 2001. Annu Nayyar is employed with Costco. Her attending physician is
Dr. V. Gandhi. She has also been seen by Dr. Mallaravarapu,
Psychiatrist.
A [sic] requested by Manulife Financial, the claimants
husband is not to be present during the interview. The Claimant is aware of
this and has agreed.
She will bring details of her
prescriptions. … A medical information package, consisting of copies of
pertinent medical documentation on this file is enclosed to assist you in your
assessment.
[Emphasis
added]
The specific contents of that medical package were not
identified.
[234]
Keyfacts then posed eight questions for Dr. Levin to answer. In the
preamble to those questions, Keyfacts instructed Dr. Levin not to provide
an opinion as to whether Ms. Nayyar was disabled from working:
To help determine the presence and severity of impairment,
your assessment should include a complete history and a psychiatric evaluation.
Please do not perform any testing to which the Claimant objects, but be sure to
document this information should this situation occur. …
Unless required in the questions below, please do not determine
whether the Claimant is disabled from working. The determination of disability
is an administrative decision requiring consideration of factors in addition to
medical information.
[Emphasis
in original]
[235]
The eight questions are set out below. In them, Keyfacts asked Dr. Levin
to opine on certain aspects of Ms. Nayyars ability to work
notwithstanding its instruction not to do so in the preamble. The questions
were not focused solely on an appropriate treatment regime for Ms. Nayyar.
Two questions sought information concerning the threshold question of whether
she was disabled:
Please answer the following
questions as completely as possible:
1. Please
describe the patients appearance, attitude, and general demeanor during the
examination. Please include height, weight, and a psychiatric history (past
& present) including duration, treatment, direction, and outcome. Any
present family issues?
2. What
are the precipitating and perpetuating factors in the present illness?
3. What
is your diagnosis with respect to established DSM-IV diagnostic criteria?
Appropriate coding, including specifiers must be included for accurate
reporting of diagnostic findings. Please do not defer on Axis II, indicate a
specific diagnosis or indicate if there are not diagnosis traits. Axis V should
be provided in numerical form.
4. Please
detail the past and present medication history, dosage and response. Is she
being adequately treated? If not, please advise a treatment regime.
5. Based
on your clinical evaluation and review of medical records, what are the
specific medical restrictions and limitations from her own occupation?
6. Do you
anticipate this illness will result in a full or partial functional
improvement? When can we expect improvement?
7. Is the
patient emotionally fit to begin a gradual community and vocational
reintegration in a normal or sheltered capacity?
8. Would
the patient benefit from attending a hospital day care with a nutritional
program included?
9. Please
complete the enclosed Mental Residual Functional Capacity Assessment form,
which will provide Manulife with an understanding of the clients functional
level. Please return this form along with your report.
This
examination is for evaluation purposes only.
[Emphasis added]
[236]
Keyfacts second letter to Dr. Levin provided additional
information and posed additional questions. The first two questions asked for
similar information requested in the first letter:
We have recently forwarded our letter along with the medical
information on file. In addition to the 9 questions Manulife has
requested you answer, they request you also respond to the following:
1. Please
comment of the appropriateness of past treatment regimes given Ms. Nayyars
recurrent depressive episodes since 1994. If not, please explain.
2. Are
there any further investigations/regimes that Mrs. Nayyar would benefit
from including, but not limited to:
> Change of treatment.
Including dual therapy.
> Out patient psychiatric
program admission.
> In Patient hospitalization.
> Referral to mental health/social worker given the
home stressers. [sic]
[Emphasis in original]
[237]
The third question posed to Dr. Levin contained information received
from Costco concerning Mr. Nayyar:
3. The
employer reports that they have received anonymous phone calls about her
potential abusive and controlling spouse. From your review of medical records
and personal examination is their validity to these concerns. If so, please
explain.
[Bold
emphasis in original]
As I have pointed out, Costco and Manulife did not tender
any evidence to prove that Mr. Nayyar is or was abusive towards his wife.
[238]
Finally, Keyfacts asked a series of five questions concerning Ms. Nayyars
son. Those questions are partially covered by a black marker in the original
document that Dr. Levin received. It is not clear if this was meant to
highlight the questions or to obliterate them. Regardless, the questions are
easy to read:
Manulife Financial has been unable to obtain pertinent
information Dr. Desai and would appreciate if you could obtain the
following:
1. What is the status of Ms. Nayyars sons
condition?
2. What is his prognosis?
3. Has his condition stabilized? If so, since when.
4. Is he following through with the physiotherapy
program?
5. What is the duration,
expectation and anticipated outcome of his treatment?
[239] Dr. Levin
said that he read both letters shortly before he met Ms. Nayyar at his
office.
[240] No
explanation has been provided in respect of the second letter. No evidence
concerning phone calls Costco received regarding Mr. Nayyar was tendered.
[241] In my
opinion, the remarks contained in the second letter removed any aspect of
independence to Dr. Levins examination. At a minimum, the remarks
concerning Mr. Nayyar could inappropriately influence the examiners view
of the cause of Ms. Nayyars depression and an appropriate treatment
protocol.
[242] I also
infer from the second letter that either Ms. Nayyars son had a claim
outstanding with Manulife and that Manulife sought to use the examination by Dr. Levin
to obtain information about that claim, or, that Manulife proffered information
to Dr. Levin concerning Ms. Nayyars son as another potential cause
of her depression. In either case, requesting information about the Nayyars
son was inappropriate.
[243]
I agree with the remarks expressed by the authors in Michel Lacerte,
Pierre Forcier & Michael Hall, Independent Medical Examinations for
Insurance and Legal Reports, 2d ed. (Markham, Ont:
LexisNexis Canada Inc., 2004), at 2, that the letter of instruction to an
independent medical examiner should focus on the issues and should be free from
opinions or comments that could be seen to influence the examiner:
Critical to the legal aspects of
the IME process is the letter of instruction describing the mandate of the
medical evaluator. The letter of instruction should contain the specific
questions that the requesting party is seeking responses to from the medical
evaluator. The IME process should be confined to the issues at hand and should
not offer any opinion that could be construed as possibly influencing the
medical evaluator in his conclusion.
Otherwise, bias or pre-disposition, even unintended on the
part of the examiner, towards any or all issues raised, including the origin of
the disease process or appropriate treatment protocols, may result.
[244]
Manulife continued to be aware that Ms. Nayyar was still suffering
from depression prior to the medical examination at Dr. Levins office. On
February 28, 2002, Mr. ONeill wrote that he was satisfied from his visit with Ms. Nayyar,
on February 20, that [S]he continues to have symptoms related to her
disability.
[245] Mr. Nayyar
accompanied his wife to Dr. Levins office. I accept his evidence that he
did not intend to interfere with the actual interview process.
[246] Evidence
concerning the incident at Dr. Levins office was given by Mr. Nayyar
and Dr. Levin. Although their accounts contained some differences, I am
satisfied that they were honestly given. I find that the differences are
explained by the mindset and preoccupation each one held immediately prior to the
Nayyars arrival at Dr. Levins office.
[247] Mr. Nayyar
said that he and his wife arrived a little late to the appointment scheduled
for 1 p.m. He denied any intention to participate in or interfere with Dr. Levins
interview of Ms. Nayyar. Upon their arrival, they were asked by Dr. Levins
receptionist to wait in the lobby. Dr. Levin came out into the lobby and
asked for Ms. Nayyar. Mr. and Ms. Nayyar approached Dr. Levin
together because he had asked her to sign a document. Mr. Nayyar explained
that he has held his wifes power of attorney for years to assist her with day
to day matters. He and Ms. Nayyar asked Dr. Levin if she could read
the document before signing it, and the reply was no.
[248]
Mr. Nayyar took exception to Dr. Levins comment. Their
communication became confrontational. Mr. Nayyar became distrustful of the
process. He explained that he had asked to read the document because he
held his wifes power of attorney. He denied having any intention to
participate in the examination.
[249] At some
point during their verbal exchange, Mr. Nayyar asked Dr. Levin to
provide him with his business card. Dr. Levin refused to give it to the
Nayyars, claiming that he did not want them to have his office and after hours
telephone numbers because Ms. Nayyar was not his patient. He showed them
his physician identity card.
[250] Mr. Nayyar
asked Dr. Levin if they could sit down and discuss matters. Dr. Levin
responded that they could not until the consent form was signed.
[251] According
to Mr. Nayyar, his wife asked the receptionist for their phone number so
that she could arrange another medical examination, and was told, Im not
going to give you the phone number because youre going to cancel — you wont
call us, so its no use giving you the phone number.
[252]
Mr. Nayyar said that he felt humiliated and embarrassed because his
exchange with Dr. Levin took place in front of other patients who were in
the waiting area. Matters took a turn for the worse because Mr. Nayyar
decided to take the document from Dr. Levin in order to read it. At trial,
he explained:
… My intention was not to
participate in his examination, what hes going to ask my wife. There was no
such intention of mine.
I — we reasonably requested few
things and they were denied arrogantly. And the humiliation that we took in
that lobby is extra.
So when I realized that this
doctor is trying to be rude, in my view, arrogant and not helpful, just to look
at one piece of paper, what shes signing, and his paper was in his hand, just
— he just wanted that paper to be signed somehow. So I figured that the only
way out of this person — because his body language was telling me he — that,
you know, he is not a good person. I — as he was holding the paper like this,
I hold the paper and I pulled it like this. I did not — I believe there is
some remarks that I struggled or something. No, there was no struggle. It was
just I pulled it like that.
…
His
attention was all towards Mrs. Nayyar while Im standing beside her. So I
— when hes putting the face in my wifes — the paper in my wifes face, I
holded it and at same second I pulled it. I wanted to really see what is in
this paper that hes so anxious to want Mrs. Nayyar, my wife, to sign.
When I got that paper in my hand I didnt really read it — read it. I was –
we were under the impression that this is not a good place, so due to what has
happened in I guess 10 minutes or something, I said to him, you know what,
doctor? Go ahead; call the police. Ive got the document.
[253] Dr. Roy
OShaughnessy, another psychiatrist working in the same office, was in the
vicinity during the altercation. According to Mr. and Ms. Nayyar, Dr. OShaughnessy
told Dr. Levin to let it go.
[254] Mr. Nayyar
denied raising his voice. I am satisfied, however, after having observed him in
the witness box and throughout the interlocutory proceedings, that he became
angry as events unfolded at Dr. Levins office and that his anger was
readily apparent to Dr. Levin.
[255] The
Nayyars left Dr. Levins office. On their way home, Mr. Nayyar
instructed his wife to make notes of the events that had just occurred at Dr. Levins
office.
[256] Dr. OShaughnessy
and the receptionist were not called as witnesses by any party.
[257] The
Nayyars were not aware of the contents of the instructing letters sent by
Keyfacts to Dr. Levin prior to the document disclosures made in this
action.
[258] According
to Dr. Levin, his practise, when conducting independent medical
examinations, is to exclude anyone but the examinee (and interpreter, if
necessary) from the actual interview. He finds that permitting others to be
involved in the interview may affect the examinees response. That is not to
say that Dr. Levin will refuse to meet with an examinees family or
friends. He allows 10 minutes at the end of the interview to meet with a family
member or friend, if they insist, to find out if they have something to add.
[259] Dr. Levins
practise is to meet the examinee in the waiting area in order to have them sign
a consent form before taking them into his office for the interview. Although
he does not read through the medical documents provided by the party requesting
the examination prior to the interview, it is Dr. Levins practise to read
through the letters of instruction before meeting the examinee. I find that Dr. Levin
followed his standard practise and read the two letters of instruction from Keyfacts
shortly before Mr. and Ms. Nayyar attended at his office.
[260] Dr. Levin
did not have a full recollection of the incident given that eight years has
passed. He had to rely, in part, upon his notes that he made immediately
following the incident.
[261] Dr. Levin
said that Mr. Nayyar interjected himself at the outset, just after Dr. Levin
asked Ms. Nayyar to sign the consent form. Mr. Nayyar advised Dr. Levin
that he should speak with him and not Ms. Nayyar because he holds her
power of attorney. Dr. Levin said that following Mr. Nayyars
request, he provided the consent form to them to read. He said that Mr. Nayyar
told him that he would answer the questions put to his wife during the
interview because he holds her power of attorney. He confirmed that he would
not give Mr. and Ms. Nayyar his business card because it contained
his office and after hours contact details. He showed Mr. Nayyar his
physicians identification badge instead. Ms. Nayyar, he said, was sitting
in the corner quietly while they were speaking. Dr. Levin declined Mr. Nayyars
request that he and his wife meet with him in his office. He wanted the consent
form signed before he would proceed any further.
[262] Dr. Levins
office rule is that only a person associated with his office may witness the
examinees consent on the form.
[263]
Dr. Levin is concerned that handing his business card to an examinee
may not be a safe thing to do:
Q You said you didnt want them to have a copy
of your business card. Why is that?
A Because it contained personal information for
emergency contacts in after hours, and business card is not for patients for
independent medical examinations. And the format of this assessment is such
that theyre not supposed to contact me after that, and its — the idea of the
interview, I see these patients only once and there is no further contact. And
its very important for my safety as well.
[Emphasis
added]
[264]
Dr. Levins evidence was that he perceived Mr. Nayyar to be
confrontational, hostile, and very intense from the outset. Dr. Levins
evidence was that he did not feel safe around Mr. Nayyar from the outset,
even though he agreed that Mr. Nayyar did not raise his voice until later,
as the altercation over the consent form ensued. Dr. Levin described the
incident in his report to Keyfacts dated February 28, 2002:
Ms. Nayyar arrived at my
Vancouver office accompanied by her husband on February 28, 2002 at 1:10 p.m.
(ten minutes late). They were asked to sit in the waiting area while I was
preparing documents for Ms. Nayyars signature. When I asked her to sign
the consent form for participation in the assessment, her husband requested to
see this form first. He then asked if I could give him my business card. At
that point I explained that I am not a treating psychiatrist for Ms. Nayyar
and that an independent medical examination is a one time assessment and that
therefore will not be any recommendations given directly to Ms. Nayyar and
there I would not anticipate any telephone calls. However, I exhibited to the
couple my forensic hospital identification tag without any telephone numbers. Mr. Nayyar
insisted on having my business card and talking to me in my office. I again
explained that I would not like them to know any information contained on my
business card and indicated that this is a one time assessment. … Mr. Nayyar
appeared uncooperative, controlling, and hostile and therefore I had
reservations about talking to him in my isolated office.
[265]
The discussion escalated between Dr. Levin and Mr. Nayyar
over a 15 to 20 minute period. Dr. Levin admitted that he became
defensive, stating, I would say it was at least 15, 20 minutes of gradual
escalation of this discussion where I was kind of in defence.
[266]
According to Dr. Levins report to Keyfacts, he then told the
Nayyars that if we did not start promptly I would not be able to complete the
assessment in time since I had the next patient at 3:00 p.m.
[267]
There are some similarities between Dr. Levins description of the
tussle over the consent form and the one given by Mr. Nayyar:
Q Did you provide a copy of the form to Mrs. Nayyar?
A No. I had
only one copy, and the — I dont remember exactly how it went from one hand to
another hand. I believe that when Mr. Nayyar refused to sign it and Ms. Nayyar
was not participating at that time in the interview, in the discussion, I had
it in my hands, and he was asking me to have it because he was refusing to
leave. And I said, I cannot — to my recollection, that I couldnt give them
anything from the file, not referral letter — that was a question they were
asking me — not this form, and the — he suddenly took it from my hands and
said, now you can call police and were leaving. And thats how it ended.
[268]
Dr. Levin also admitted that he was the one to initially raise the
notion of calling the police to Mr. Nayyar, a suggestion to which Mr. Nayyar
readily agreed. Dr. Levin agreed that Dr. OShaughnessy was present during
part of the exchange.
[269]
Dr. Levin telephoned Keyfacts immediately after the Nayyars left
his office to seek instructions. He was told to summarize events in a report
and submit it, which he did.
[270]
I do not accept the characterization put on the incident at Dr. Levins
office by Costco and Manulife, i.e., Ms. Nayyar refused to attend the
medical examination. The examination never proceeded for reasons unrelated to Ms. Nayyar.
[271]
Mr. Nayyar travelled to the examination with his wife who was suffering
from pre-existing depression. His relationship with his wife was strained due to
the depression they both suffered from. Mr. Nayyar had yet to receive an answer
from Costco or Manulife to his question regarding the purpose of the
examination. He and his wife understood there was urgency to the examination
because Keyfacts told Ms. Nayyar to cancel a pre-existing dental
appointment. He became agitated, upset, and suspicious by what he perceived to
be Dr. Levins refusal to communicate with him.
[272]
I accept Mr. Nayyars evidence that he did not intend to force
himself into Dr. Levins interview with Ms. Nayyar, but I also find
that Mr. Nayyar would have gladly participated if the opportunity arose.
[273]
I find that Dr. Levins preoccupation for safety was aggravated as
a result of the information about Mr. Nayyar contained in one of the
instructing letters from Keyfacts. He approached the examination apprehending,
consciously or sub-consciously, that the examinees spouse could be abusive. As
a psychiatrist, especially one who practised geriatric medicine, Dr. Levin
should expect to encounter emotional or hostile patients or examinees (or their
spouses) who suffer from depression. He admitted that its part of my job to
encounter anxious and agitated people. His training should have prepared him to
deal with highly distraught patients. I am satisfied that if Dr. Levin had
followed his standard practise and advised Mr. Nayyar that he had set
aside time for him at the end of his interview with Ms. Nayyar to speak
with him about his concerns or any background information he wished to provide,
the examination would have proceeded in an orderly fashion.
[274]
Mr. Nayyar did not shout or threaten Dr. Levin. Dr. Levin
admitted in cross examination that he did not call the police department
because there is no direct threat for my safety. Dr. Levin also admitted
that he did not report his fear to Keyfacts. Instead, he said his report to
Keyfacts was motivated by his concern that Mr. Nayyar had taken the
consent form which did not belong to him:
… my
concern, that he took somebody, — something [the consent form] that doesnt
belong to him from my office, and I had to report about it to somebody whom
this form belongs.
[275]
I am satisfied that Dr. Levins stated fear of Mr. Nayyar from
the outset was caused by his preoccupation for safety and the information
provided by Keyfacts in its second letter of instruction.
[276] Unfortunately,
both Mr. Nayyar and Dr. Levin let their concerns, fears, and
suspicions overtake them, and in the process, they lost sight of Ms. Nayyars
need for assistance.
(c) Events following the Incident at Dr. Levins
Office
[277]
Charlene McQueen telephoned Pat Richmond of Manulife on February 28,
2002 to report what had occurred at Dr. Levins office. Ms. Richmond
made a note of the advice she received. Ms. McQueens reporting did not accurately
describe the version of events set out in Dr. Levins report.
Unfortunately, Ms. McQueens account paints a distorted picture of what
transpired:
Mr. Nayyar attended the IME appointment with his wife.
He was very aggressive with the doctor. He told the doctor he
had Power of Attorney and he would answer all the questions the doctor asked.
The doctor informed Mr. Nayyar that it was his policy to see each patient
individually. Mr. Nayyar was in the doctors face but the doctor held
his ground. After 20 minutes the Nayyars left the office & Mr. Nayyar
took the Authorizations with him. The doctor informed Charlene that Mrs. Nayyar
definitely needs to see a Forensic Psychiatrist. He suggested the next
appointment not be booked with him.
[Emphasis
added]
[278]
I am satisfied that the tenor of Ms. McQueens remarks inflamed the
adverse view of Mr. Nayyar held by Costco and Manulife. Regrettably, her
remarks contributed to the manner in which Manulife subsequently managed Ms. Nayyars
claim.
[279]
Manulife continued to receive information from Dr. Mallavarapu. On February 25,
2002, Manulife received written responses from Dr. Mallavarapu to
questions posed by Mr. ONeill in correspondence dated February 23, 2002.
The answers are underlined below:
How has Mrs. Nayyars progress been with her recovery?
Not much progress — still depressed, sad unhappy
withdrawn, tearful and anxious and emotional No energy. Feels tired. Sleep
disturbed.
…
Can you confirm that Mrs. Nayyar would benefit from
participating in an exercise program?
Yes.
…
Mrs. Nayyar reported that she is not presently attending
counseling. She had attended in the past through her previous insurance
carrier. Would it be beneficial for her to do so at this time? Costco has an
Employee and Family Assistance Program that can be accessed at no cost to Mrs. Nayyar.
Suggest that she continue with Shawn [ONeill].
…
Mrs. Nayyar has expressed an interest in taking a
computer course. Manulife is able to fund this for her at a local community
centre. This may give Mrs. Nayyar an atmosphere to socialize somewhat, and
provide an opportunity to work on her concentration. Is she capable of
participating in this (perhaps once a week for an hour or two at a time)?
Should be able to cope with this.
…
Is Mrs. Nayyar capable of participating in a graduated
return to work plan at this time? …
No.
…
Please enter any further comments you feel are pertinent to Mrs. Nayyars
rehabilitation and return to work planning:
It is important to minimize
the psychological and financial stresses for her to make a reasonable recovery.
[280] Mr. ONeill
was aware in February 2002 that Ms. Nayyars doctor was in agreement that
an exercise program, additional treatment, and the possibility of taking a
computer course was a good plan. Eventually, Costco approved only the computer
course (to be taken at a local community centre).
[281] Mr. ONeill
spoke with the Nayyars on March 12, 2002. Mr. ONeill relayed to Ms. Nayyar
her doctors advice that an exercise program would be beneficial for her and
that she could also participate in a computer course. Mr. Nayyar then spoke
with Mr. ONeill. He asked Manulife to consider reimbursing him for a used
exercise treadmill he had purchased for Ms. Nayyar. He also told him that continued
contact by telephone was stressful for his family. He asked that contact be by
email only and advised that he wanted to wait until the issue with attendance
at the IME was resolved before going forward with anything.
[282]
I do not accept the submission of Costco and Manulife that by those
remarks, Mr. Nayyar intended to block rehabilitation services for his
wife. I am of that view for three reasons.
[283]
First, Mr. Nayyar had been actively seeking rehabilitation
assistance for his wife. A case synopsis prepared by another Manulife
rehabilitation specialist, Laura Williams, dated January 7, 2002, reports that Mr.
Nayyar contacted Manulifes rehabilitation department on December 24, 2001. No
mention was made of Mr. Nayyar seeking to block or delay rehabilitation. Ms. Williams
report states:
Rehabilitation was contacted by Mrs. Nayyars
husband on December 24, 2001 regarding a claims related issue. At that
time, Mr. Nayyar was advised that Rehabilitation would be arranging a
meeting with Mrs. Nayyar to conduct an initial interview.
[284] Second, Mr. ONeills
meeting with Ms. Nayyar at her home in late February was conducted without
any interference from Mr. Nayyar, even though he was reported to be at
home.
[285] Third, by
March, the Nayyars had yet to receive an explanation for the need for a medical
examination. Ms. Nayyars doctor had approved Mr. ONeills initial rehabilitation
plan and only part of it had been approved by Costco. Mr. Nayyar purchased
a used exercise treadmill for his wife to use. Costco and Manulife turned down
his request for reimbursement.
[286]
I do not find Mr. Nayyars remarks to Mr. ONeill to indicate
his attempt to obstruct rehabilitation efforts. Mr. Nayyar was trying to
clarify Manulifes reason for the medical examination in circumstances where minimal
rehabilitation assistance had been provided to Ms. Nayyar by March of 2002.
[287]
In my opinion, Mr. Nayyar was, by early March 2002, entitled to
have become concerned about the motivation of Manulife and Costco in respect of
the management of his wifes disability claim and any rehabilitation assistance
that may be provided. Although Dr. Mallavarapu and Manulifes in-house
psychiatrist, Dr. Bezeredi, were both in favour of a rehabilitation program
that involved exercise, the only rehabilitation service that had been approved was
a computer course.
[288]
The Nayyars were not aware that Manulife had decided in March 2002 to
suspend rehabilitation assistance to Ms. Nayyar while Manulife considered
whether to terminate Ms. Nayyars benefits because of the incident at Dr. Levins
office. The Nayyars were not aware that Ms. Marlowe had written to Mr. ONeill
on March 19, 2002 suggesting that Ms. Nayyar should not be put in a
rehabilitation program until a decision was made concerning termination of her
disability benefits.
[289]
In her correspondence to Mr. ONeill, Ms. Marlowe focused on Mr. Nayyars
conduct:
Sean, to advise you I have
referred the file for a review with the Disability specialists with regards
to Mr. Nayyars decision and behaviour. Once this have been reviewed
and they have some type of conclusion we will advise you regarding. I am not
sure how your rehab plan will affect the managing of her claim. Perhaps we can
wait until we a decisions. I would not like her to be in a programme of some
sort and then the claim be terminated. What is your take on this at this
point. Thanks Lenore.
[Emphasis
added]
[290]
Mr. ONeill responded to Ms. Marlowe, confirming his agreement
with her approach to refrain from offering rehabilitation assistance to Ms. Nayyar.
He wrote:
I agree completely. It would
not be appropriate to do so if there is a decesion [sic] pending. Please
forward to me a copy of the IME physicians report when you get it, and keep me
abreast of any decisions. Has Chris Williams been informed?
[Emphasis
added]
[291]
Ms. Marlowe referred the case to Mr. Picur on March 19, 2002. Her
written comments demonstrate that she had considered whether Ms. Nayyars
disability benefits should be terminated. Ms. Marlowe prefaced her remarks
by noting that Ms. Nayyars claim is extremely complex, with many issues
that are predisposing Ms. Nayyar to her Major Depression., such as
family issues, financial issues and would appear that her husband has a great
deal of control. She went on to identify her concerns to be:
My concern at this point is:
∙ how
would the Power of Attorney carry in this case, legally. Does Mr. Nayyar
have the right to take this action on behalf of wife.
∙ Contractually we have
the right to have any person in respect of whom a claim is being made under the
Plan submit to a medical, physchiatric [sic], psychological, functional,
educational/vacational [sic] examination or evaluation by an examiner selected
by the Administrator. No benefits will be payable if without reasonable cause,
the covered person fails to undergo such examiantion [sic].
[292]
Ms. Marlowe expressed her opinion that Ms. Nayyars disability
benefits should not be terminated:
At this point I would not terminate benefits as the clmnts
intent was to attend the IME. However, would the clmnts husbands [sic] actions
affect the managing of benefits and the claim from here on?
I also spoke to Mike Middleton
with this regards and suggested that the file be discussed with the specialists
and Elsie.
[293] Mike
Middleton is the Manulife employee who liaises between the disability and legal
departments. The specialists referred to are John Picur and Brenda Taylor.
[294]
Mr. Picur read Ms. Marlowes referral memorandum. He sent it
on to Mr. Middleton on March 20, 2002, together with a covering memorandum
setting out his own opinion that Manulife had been prejudiced. Mr. Picur
wrote:
Please see the attached referral from Lenore Marlowe.
I am comfortable with addressing the claim management issues
but would appreciate your advice concerning the legal rights around the IME.
I can understand having a family member present during a
physical examination to assist with the interpretation in the event of language
barriers. However, that does not apply here. Because the IME is psychiatric and
therefore relies on the claimants own reported history, including her feelings
and observed reactions, it is an element of the interview that the claimant
herself answer all questions in a private, safe atmosphere. The presence of a
third party compromises her ability to be forthright.
The examining physician has a right to determine whether the
examination can be conducted in the presence of a third party. Dr. Levin
decided it was not. On that basis alone, I see our right of examination has
been prejudiced.
Do you agree that we are not required to allow a third party
to attend the psychiatric IME?
[Emphasis
added]
[295]
Mr. Picur did not advise Mr. Middleton that it was Manulife
and Costco who insisted that Mr. Nayyar be excluded from the interview.
Nor was Mr. Middleton advised of the inappropriate contents of one of the
two instructing letters sent by Keyfacts to Dr. Levin.
[296]
Mr. Picur asked Mr. Middleton for his opinion concerning the
effect of the power of attorney held by Mr. Nayyar:
I note the Power of Attorney Mr. Nayyar relies on is
four years old. Its provisions seem to be rather vague in providing global
rights to him. I have concerns about the unlimited right to act during any
subsequent mental infirmity. Who decides? What constitutes a mental
infirmity? I note it was signed by a Notary Public rather than a lawyer.
In your opinion, is the Power of
Attorney binding on us?
[297]
Mr. Middleton responded to Mr. Picurs memorandum on March 25,
2002. He agreed with Mr. Picurs assessment regarding Mr. Nayyars
power of attorney and suggested that Ms. Nayyar be advised that the medical
examination was required to assist with the management of her claim:
Thanks for the referral. I agree with your assessment of the
situation regarding our entitlement to examination of the INSURED.
The Power of Attorney is held by the spouse and there does
not seem to be a limit in so far as until we receive evidence that she has
actively revoked/reassigned the Power of Attorney, he may act within its
confines (my understanding – banking, etc).
Per my understanding of my discussion with Elsie, it does not
permit him to insert himself as the examinee for an independent examination
or even attend the examination as a third party.
I would allow one more attempt at IME, outlining
contractual right to examination of the insured as means of management,
noting the Power of Attorney does not give the spouse the right to play a role
in the exam. I would draw attention to the consequences of failing to attend as
far as impact on benefits/ability to establish effective rehab program.
[Emphasis
added]
[298]
Mr. Middletons comments do not stop there. He asked Mr. Picur
why an independent medical examination was required:
? But
why are we doing IME if her own psychiatrist was seemingly on side. ?
[299]
Mr. Picurs answer to that question shows that he did not share Ms. Marlowes
view that the independent medical examination was necessary in order to
determine appropriate treatment for Ms. Nayyar. Mr. Picur sought to
have an independent verification that Ms. Nayyar was disabled. He replied to
Mr. Middleton on March 27, 2002, stating:
IME – reasons are documented to file.
– concerns with effectiveness of
treatment
– independent opinion of medical
condition, cognitive limitations.
[Emphasis
added]
[300] In
submissions, Costco (joined by Manulife) argued that it was appropriate for
Manulife to have sought an independent medical examination for a collateral
purpose, i.e., independent verification of Ms. Nayyars disability despite
coverage having just been admitted. Costco argued that it was appropriate due to
the evolving nature of a disability claim. In my respectful opinion, that
submission ignores the timing of the request for the medical examination and
the circumstances surrounding it. Costco and Manulife accepted Ms. Nayyars
short term and long term disability claims without requiring a medical
examination. They accepted her claims after Manulife conducted a detailed assessment
of the medical evidence. Costco and Manulife chose not to require an
independent medical examination as part of the assessment process. The
medical examination was requested on the same day that Ms. Nayyars claim
for long term disability benefits was accepted. Why would Manulife and Costco
need to arrange a medical examination to independently confirm the diagnosis on
the same day that they accepted Ms. Nayyars claim? A request for a
medical examination to consider potential treatment regimes would be reasonable
in the circumstances. Moreover, the medical examination was not sought in
circumstances where Costco and Manulife could reasonably say that they required
an up to date assessment of the merits of her claim. To the extent that the
request for the medical examination by Dr. Levin involved Mr. Picurs
collateral purpose, it was not reasonable.
[301]
A decision was ultimately reached not to terminate Ms. Nayyars
disability benefits at that time.
[302]
Manulife continued to pay long term disability benefits to Ms. Nayyar.
It did not, however, provide her with any rehabilitation assistance or benefits
(apart from offering a computer course).
[303] On April
26, 2002, Ms. Marlowe wrote to Ms. Nayyar advising that she was
required to attend a second independent medical examination. Ms. Marlowe
did not follow Mr. Middletons recommendation that Ms. Nayyar be told
that the purpose of the examination was to determine an appropriate means to
manage her claim. No explanation was provided to Ms. Nayyar for the
examination.
[304] Ms. Marlowe
also advised Ms. Nayyar that although Mr. Nayyar held her power of
attorney, it did not give him the right to insert himself in the examination.
She explained that Mr. Nayyar had intervened at Dr. Levins office,
and prevented [her] from signing the consent form to participate in the
assessment and requested he be present during the interview. Ms. Marlowe told
Ms. Nayyar that if she failed to attend the next examination, she would be
responsible for any cancellation charges levied by the physician and further,
that this could also impact your eligibility for continuing benefits.
[305] I find
that Mr. Picur never shed his scepticism concerning the merits of Ms. Nayyars
disability claims. Mr. Picur reluctantly agreed to accept Ms. Nayyars
short term disability claim because Manulife did not have any evidence to
contradict Dr. Mallavarapus opinions. His recommendation that Ms. Nayyar
submit to a medical examination as part of the assessment of her application
for long term disability benefits had not been followed. I find that Manulifes
request of Ms. Nayyar to attend a medical examination after the incident
at Dr. Levins office was motivated by his scepticism. I find that Manulifes
request of Ms. Nayyar to attend a medical examination involved an unreasonable
collateral purpose. Manulifes focus had, by that time, turned away from Ms. Nayyar
and on to what it perceived to be Mr. Nayyars misconduct. Manulife put
all rehabilitation assistance on hold. Its request for a medical examination
was, in effect, a reconsideration of its decision to accept Ms. Nayyars
application for long term disability benefits in the face of very clear medical
evidence it had received from Dr. Mallavarapu, Ms. Marlowes own
assessment that Ms. Nayyar was totally disabled from working at her job at
Costco, and Mr. ONeills advice that Ms. Nayyar remained symptomatic
and his recommendations concerning a rehabilitation assistance plan.
[306] Manulife
took steps to arrange a medical examination as quickly as it could be scheduled.
On April 30, 2002, Manulife requested Keyfacts arrange a medical examination
for Ms. Nayyar with Dr. Roy OShaughnessy. The medical examination
was arranged to take place on June 6 at 10:30 a.m. Dr. OShaughnessy
practises with Dr. Levin and witnessed the incident between Mr. Nayyar
and Dr. Levin. Ms. Nayyar was not advised of that appointment.
Manulife cancelled it because it wanted the examination to take place at an
earlier date. It secured one three days earlier, on June 3, with Dr. Jeanette
Smith, a psychiatrist practising in Vancouver.
[307]
Keyfacts sent a letter of instruction to Dr. Smith posing the same
eight questions that were previously sent to Dr. Levin. Neither Keyfacts
nor Manulife asked for Dr. Smiths opinion regarding Mr. Nayyars
involvement in the interview. Keyfacts instructed her to exclude husband from
the interview.
[308]
On May 15, 2002, Ms. Richmond advised Ms. Nayyar, by email,
that an examination had been arranged with Dr. Smith for June 3, 2002 to start
at 9:00 a.m. for three hours. Ms. Nayyar was asked to notify Ms. Richmond
by May 17 of her intention to keep the appointment. She was told to bring all
of her current prescriptions or medication details. Strangely, she was told to
wear comfortable clothing, suggesting, in my view, physical aspects to the
examination. Ms. Nayyar was not told of the purpose of the examination.
[309]
Ms. Richmond subsequently wrote an email directed to Mr. Nayyars
email account on May 17, 2002, at 9:42 a.m., advising the Nayyars again of the
appointment with Dr. Smith for June 3. In that email, she asked for a
response by 2:30 p.m. that day because Dr. Smith has a ten working day
cancellation policy. Ms. Nayyar was advised that If you do not comply
this could affect your benefits.
[310]
Prior to the deadline, at 1:56 p.m. on May 17, Ms. Richmond sent an
email to Mr. and Ms. Nayyar advising them that she had
cancelled the examination with Dr. Smith. She wrote that a new appointment
had been arranged with Dr. Smith on June 13, 2002 at 8:00 a.m.:
Mrs. Nayyar,
As we have not received a confirmation from you re; the
appointment with Dr. Jeannette E. Smith for June 3, 2002 at 9:00am. This
appointment has been cancelled.
We have rescheduled the appointment with Dr. Jeanette E.
Smith … @ 8am.
It is imperitive [sic] that you call the undersigned at
604-664-7124 to confirm your intention to keep this appointment.
Refusing to attend the assessment
may result in benefit declination/termination in accordance with the terms of
your group policy.
[311]
Mr. Nayyar responded the next day, May 18, 2002 by email sent at
12:21 p.m. He said: I still need to speak to someone at the Manulife who
is in charge of secondary medical report. He received a response to that
request from Ms. Richmond on May 21, 2002 advising him to contact Lenore
Marlowe. No other details were provided.
[312]
Mr. Nayyar wrote to Ms. Marlowe on May 22, 2002 requesting an
in-person meeting at their home:
Please visit Annu Nayyar at my
residence to discuss Key fact Occupation. I understand you are my rehab
specialist.
[313]
Ms. Marlowe responded. She told Mr. Nayyar that she was the
claims adjudicator, not the rehabilitation specialist, and that an independent
medical examination was required:
Hi there Mr. Nayyar; I am
in receipt of your e-mail but would ask that you can e-mail me directly. I am
the Disability Adjudicator on your wifes claim and we need to have another IME
done as soon as possible. Thank you
Lenore
Marlowe
[314]
He received a telephone call from Ms. Marlowe on May 22 and an
email from Laura Williams on the same day.
[315]
Mr. Nayyar responded to Ms. Marlowe and Laura Williams. He
requested a meeting with Manulife before his wife attended at another medical
examination. He requested a meeting with the disability adjudicator and the
rehabilitation specialist:
Annu Nayyar like to see you
before she setup an appointment for another IME. She never had chance to see
you. Disability Adjudicator/rehab specialist
[316]
During his discussion with Ms. Marlowe, Mr. Nayyar told her
that he was unhappy with the manner in which Keyfacts was handling matters.
Although he thought he should be permitted to ask questions during a medical examination,
he was willing to comply. He asked for the examination to be conducted by a
doctor of their same culture and language. I accept his evidence at trial that he
wanted his wife examined by a psychiatrist who could understand her.
[317]
In a verbal communication record dated the same date, Ms. Marlowe
recorded her conversation with Mr. Nayyar:
I advised Mr. Nayyar that we require his wife to attend
an IME but should she not attend that this will definitely impact her benefits.
We at Manulife do have the choice to request this examination. Our special
request was that she see the doctor without his presence. He was calm and did
understand what our requirements were, but felt there was no reason why he
should not ask questions during the examination.
He appeared willing to have this done but indicated that
he did not like the way keyfacts handled the situation. He did have a bad
experience with the doctor. I explained that we would still require her to have
the IME and tried to explain that this is an independent doctor who does not
have any type of interest to Manulife Life. He said he would like an IME with a
doctor of the same culture and language.
[Emphasis
added]
[318] Ms. Nayyar
is from the Hindu culture. She was born in Fiji and immigrated to Canada in
1980. She graduated from high school in British Columbia and speaks English. Ms. Nayyar
was asked about her husbands request during cross examination. The best she
could do was to say that it would have been helpful if the examiner could speak
Hindi.
[319]
Ms. Marlowe does not record whether she remarked upon Mr. Nayyars
request. Her memo states:
Before we go ahead with this he would like to send us e-mail
with reference to his concerns. I explained that in 3 days time we would like
to have an answer.
Once I have received his e-mail I
will be discussing this with our Disability Specialist.
[320] I do not
accept Costcos submission that Mr. Nayyars request was a disingenuous
attempt to delay or avoid an independent medical examination. In considering
the entirety of Mr. Nayyars evidence, conduct, and written communications
with Costco and Manulife, I find that his request was driven by his desire to
find an appropriate professional who could help resolve his wifes longstanding
depression (which was a source of considerable ongoing frustration, distress,
and anguish for him).
[321]
The response Mr. Nayyar received from Laura Williams to his request
for a meeting with the rehabilitation and disability specialists came by email sent
May 22, 2002. She advised him that the timing was inappropriate for such a
meeting:
Hi Mr. Nayyar,
You are correct. I am the Rehab Specialist on your wifes
claim since the rehab files in our office have been redistributed recently.
My conducting
a meeting with Mrs. Nayyar is a good idea, but the timing for such a
meeting is not right. Based on my review of your wifes file, it would seem
that there would be little that I could accomplish in a meeting with her at
this point, unless there has been a significant change that has not been
communicated to Manulife. Therefore, I will likely arrange a meeting with
her after the IME report has been received and reviewed.
[Emphasis
added]
[322]
No other reason has been provided for Manulifes decision not to meet
with Ms. Nayyar.
[323]
I find that the position taken by Laura Williams was unreasonable. The
reason given by Ms. Marlowe to Mr. ONeill in March to put
rehabilitation assistance on hold pending Manulifes decision on termination of
benefits no longer applied because Manulife had decided against termination of benefits.
[324]
There was no reason for Costco and Manulife not to pursue rehabilitation
assistance for Ms. Nayyar at this time. Manulife had obtained agreement from Dr. Mallavarapu
concerning Mr. ONeills initial rehabilitation plan. Ms. Marlowes
evidence is that she wanted to have Ms. Nayyar participate in Costcos
return to work program.
[325]
I find that Manulifes focus had, by this time, moved away from
providing rehabilitation assistance to Ms. Nayyar and in assessing
treatment protocols. Its purpose had become Mr. Picurs collateral purpose
– to determine if evidence existed to refute Dr. Mallavarapus opinion
concerning total disability. Ms. Williams response to Mr. Nayyar illustrates
that shift in approach.
[326]
On the same day, Manulife sought to obtain the files from Ms. Nayyars
previous disability carrier without her consent. Ms. Marlowe wrote to
another Manulife employee on May 22 to locate those files:
Hi there Joanne: Could you please
request a file which was previously with Sun Life, this file may be off site.
The clmnts name is Annu Nayyar, Costco – Sun Life. We need to see if we can
locate this file and reference it to our present claim. … Thanks a ton
Lenore.
[327]
The response, sent on May 24, advised:
Hi Lenore….I have looked thru
all the old Sun Life Costco files listed off-site and could not find Annu
Nayyar.
[328]
Ms. Marlowe could not recall if she initiated the request for the
Sun Life file or if it originated from Mr. Picur or Ms. Mighton. In
either case, she wanted to review the file. At trial, Ms. Marlowe could
not identify the authority Manulife had to obtain Sun Lifes file concerning Ms. Nayyar.
[329]
During his discussion with Ms. Marlowe on May 22, Mr. Nayyar
promised to send an email setting out his concerns. He did that on May 30. His
email, emotional in tone, was addressed to various people including Alaina
Kois, Chris Williams, Sean ONeill, Lenore Marlowe, Laura Williams, Pat
McMillan, John Picur, Pat Richmond, Charlene McQueen (of Keyfacts), and Susan
Mighton. Mr. Nayyar complained about Keyfacts role in his wifes claim:
Keyfacts Canada is not only a
psychiatrist office it is a lot more then that. It seems to me that Manulife is
more interested in investigating & background checking & public record
checking etc. of my disability rather assisting me through the hard times. This
attitude is not helping me and my family also, [i]t is like full time job
filling all kinds of forms-reports for Manulife & going to the see Doctors.
[330] Mr. Nayyar
also complained:
(a) that he had yet to receive a
copy of the contract wording that permitted Costco and Manulife to schedule
examinations by an examiner selected by the employer;
(b) about
the adverse experience at Dr. Levins office;
(c) the aggressive and intimidating
approach taken by Keyfacts in letters and telephone calls; and
(d) of
his significant frustration.
[331] Manulife
cancelled the June 13 appointment with Dr. Smith on May 29, 2002. Costco
and Manulife do not take the position that this cancellation should be visited
upon Ms. Nayyar.
[332]
Chris Williams responded to Mr. Nayyars email on behalf of Costco
by email on June 7. It provided reassurance to Mr. Nayyar that nothing
untoward was occurring. He wrote:
In response to your email of May 30th, 2002 I have
some answers to your questions.
Let me begin by acknowledging that you feel like you are
being treated aggressively or intimidated by Manulife and Keyfacts. I can
confirm that Manulife has the right and obligation to ask for an Independent
Medical Exam at anytime. It is very standard that employees are asked to attend
an Independent Medical exam by Manulife. I have the section of our contract
which details this. I can fax it to you but I will need a fax number from you.
If an employee does not attend and comply with an Independent Medical exam
their benefits may be terminated. This is also covered in the contract. Further
to your email, it is very standard in the insurance business and with the WCB
to schedule an independent medical exam with a doctor of the administrators
choice. There is no conflict of interest as Keyfacts is an operation with no
bias towards anyone. There has been no misrepresentation by Manulife as to the
validity and necessity of an Independent Medical Exam.
When an Independent Medical is conducted it is standard to
only have the person being examined in the office with the doctor. All
IMEs are conducted in this way for all employees.
Unfortunately, when an employee is off from work there is
some paperwork to be filled out and that paperwork will continually need to be
provided to substantiate the claim. There is no way to get around the
completion of paperwork on an ongoing basis.
As far as Keyfacts goes, they will be responding to
your concerns themselves. I am not privy to the conversations that went on
between you and them.
If you have any questions or concerns please feel free to
contact me by email or at 604-444-9463. If you could send me a fax number I
will send you a copy of the contract wording you have asked for.
[Emphasis
added]
[333]
There was no evidence to support Mr. Williams advice to Mr. Nayyar
that it is an industry standard to exclude anyone but the claimant from the
interview process. Also, there was no evidence of any response sent by
Keyfacts.
[334]
Ms. Kois said that she was not aware that Mr. Nayyar was unhappy
with Keyfacts. She admitted in cross examination, however, that it was
reasonable in the circumstances for Mr. Nayyar to ask for a company other
than Keyfacts to be involved in the handling of his wifes claim.
[335]
Mr. Nayyar and Mr. Williams also spoke by telephone on June 7.
The response Mr. Nayyar sent to Mr. Williams following their
conversation was neither threatening nor obstructive. It was brief:
Hi Chris,
Thanks for your response &
good talking to you.
[336]
The substance of their discussion is recorded in an email sent by Mr. Williams
to Lenore Marlowe on the same day. In it, Mr. Williams confirmed that
efforts would be made to arrange the examination with a doctor closer to the
Nayyars home:
I spoke with Bob Nayyar today and
he is willing to have an IME done for his wife. I told him that it would be
a different doctor than last time and that we would try to get a doctor as
close to Surrey as possible. I told him that if he did not comply with
Manulifes request that Annus [sic] payments may stop. He agrees that an IME
needs to be done. He will comply. I also explained that he could not be
present during the IME and that this was standard.
[Emphasis added]
[337]
The approach taken by Mr. Williams to Mr. Nayyars concerns
demonstrates that the Nayyars were prepared to cooperate. A reasoned and
measured approach taken by Mr. Williams with Mr. Nayyar, whom Costco
and Manulife knew to be suffering from depression, resulted in a reciprocal
response.
[338]
No response to Mr. Nayyars May 30 email from Manulife is in
evidence.
[339]
Despite Mr. Williams assurance to Mr. Nayyar, Keyfacts telephoned
Ms. Nayyar four days later, on June 11, 2002, and then followed up with an
email to Mr. Nayyar on June 14, to advise that it had arranged an
independent medical examination with Dr. Smith in Vancouver. The examination
was scheduled for June 24 at 9:00 a.m. Keyfacts enclosed a map to assist Ms. Nayyar
in locating Dr. Smiths office. Even though Keyfacts knew from its earlier
dealings with Ms. Nayyar that she would not drive to the appointment,
there was no mention of taxi fare to be provided. Ms. Nayyar was reminded
to bring her prescription medication and to wear comfortable clothing. A follow
up letter was sent to Ms. Nayyar on June 18.
[340]
On June 11, Keyfacts advised Manulife that Ms. Nayyar would not agree
to attend the appointment at this time. Costco and Manulife have only proven
that this was Mr. Nayyars view at that time. At trial, Mr. Nayyar stated that
this was his position because no effort was being made to comply with the
assurances made by Chris Williams on June 7. Costco and Manulife have not
proven that this was Ms. Nayyars intent.
[341]
Mr. and Ms. Nayyar also suffered from a family crisis that
began on approximately June 11. Their eldest son was involved in a disciplinary
issue at school that was serious enough for him to have to change schools. I
accept Mr. Nayyars evidence that this incident caused significant upset
and stress within the Nayyar household for a few weeks. There is no evidence
that Costco and Manulife were aware of this problem. I have no doubt, however,
that it adversely affected Mr. and Ms. Nayyars ability to
effectively communicate with Costco and Manulife at that time.
[342]
I reject the defendants submission that Ms. Nayyar never intended
to attend any independent medical examination. At no time did she ever refuse
to do so. The conflict had, since the incident at Dr. Levins office,
degenerated into a dispute between Mr. Nayyar and Costco and Manulife.
Unfortunately, Ms. Nayyars needs were no longer at the forefront of
Manulifes efforts. Ms. Nayyar was suffering from severe depression when
Manulife sought to schedule the independent medical examinations. She was (and
remains) highly vulnerable to suggestion. In that state, she lacks the
faculties for analytical and logical reasoning. She was prepared to cancel a
pre-existing dental appointment to attend the medical examination with Dr. Levin.
She was in desperate need of rehabilitation assistance. Internal documents from
Costco and Manulife show that Ms. Nayyar was prepared to attend at and pay for
the costs of an examination after Costco and Manulife terminated her disability
benefits.
[343]
Costco and Manulife also argue that there was no psychiatrist closer to
the Nayyars home. That submission ignores the internal recommendation made by Dr. Bezeredi
to Pat McMillan on December 4, 2001 that Ms. Nayyar should be
referred to the psychiatrist daycare department at Surrey Memorial Hospital for
treatment. Dr. Bezeredis recommendation was not acted upon by Manulife or
Costco.
[344]
Alaina Kois testified that she was not aware of Mr. Williams
advice to the Nayyars. Ms. Kois admitted, however, that Ms. Nayyars
request to have the IME conducted by a doctor of the same culture and language
was reasonable:
Q Do you agree that after all my reasonable
requests in writing to have an IME, which requests were abandoned by Costco?
A No.
Q Please explain in detail.
A From my understanding of being consulted on
the claim there was compliance issues with attending the IME, and there was
more than one attempt to try and have an IME set up after the initial
appointment.
Q So you do agree that my reasonable requests
were there to Costco to have an IME done in Surrey/Delta, close to my home?
A I cant agree because I dont know. I wasnt
managing this, and it would have been Manulife, and we would have been
consulted, but I wasnt involved that closely with a request like that.
Q Do you say if my request was reasonable to ask
Manulife to arrange a doctor of the same culture and language?
A Can you ask your question again?
Q Do you say if my request was reasonable to
ask Manulife to arrange a doctor of the same culture and language?
A I — it would be reasonable. I — to ask
that, to request that.
…
Q Do you agree that Costco responded to my
request that Costco would try to get a doctor as close to Surrey as possible?
A Im not denying it. Chris Williams would have
dealt with that, if that was an issue at the time. I wasnt involved in that
directly.
Q So what you are saying, Ms. Kois, is you
dont know — do you know anything about my file?
A I already mentioned that I was consulted on
it, and I was aware of the claim and some issues with compliance on the IME,
but I wasnt aware with the in and outs in every — every issue with the file.
[Emphasis
added]
[345] Costco and
Manulife submit that Mr. Nayyars request for a doctor closer in location
and of the same culture is disingenuous. They point out that two of the experts
retained on behalf of Ms. Nayyar, Paul Peel (psychologist) and Derek
Nordin, do not speak Hindi. Mr. Peels office is in Surrey and Mr. Nordins
is located on West Broadway in Vancouver.
[346] I do not
accept that submission. I find that Mr. Nayyar was highly motivated to
obtain medical assistance for his wife by a doctor who could understand her.
His distrust of Keyfacts and its choice of doctors arose from the incident at Dr. Levins
office.
[347] The
defendants submission also ignores Chris Williams assurance to Mr. Nayyar
that he would try to locate a doctor to conduct the independent examination who
practises closer to their home. Their submission also overlooks Alana Kois
admission that the Nayyars request for the medical examination to be conducted
by a doctor of the same culture and language was reasonable.
[348] Quite
apart from Mr. Nayyars own concerns about Keyfacts, I have determined
that any reasonable person would have cause to be distrustful of Keyfacts role
in the process given the nature of its letters of instructions to Dr. Levin.
[349]
Ms. Nayyar did not attend the examination with Dr. Smith on
June 24, 2002. An internal document prepared by Ms. Marlowe states that Mr. and
Ms. Nayyar each left telephone voice messages for Ms. Marlowe on June
24, requesting that she return their calls. Ms. Marlowe tried to return
their calls and left messages in return that she said were not returned. Ms. Marlowe
instructed Keyfacts, on the same day, not to reschedule the appointment and to
close its file.
[350]
Manulife received further medical information from Dr. Mallavarapu (set
out in a Rapid Re-employment Program document used by Costco). He wrote that Ms. Nayyar
was not able to work due to depression. He reported that her cognitive/mental
impairments were moderate for concentration and interaction.
[351]
Ms. Marlowe sent an undated note to Mr. Picur requesting his further
assistance. Ms. Marlowe recommended that Ms. Nayyars benefits be
terminated or suspended for failing to attend the medical examination with Dr. Smith
on June 24. She referred to it as the third examination:
John, as you have been involved in this claim and appreciate
your assistance I once again require some help.
The clmnt failed to keep her third IME appointment and I
would like to terminate/suspend benefits. Costco, Chris is aware of this.
I have drafted another letter and
would ask that you review this and also to advise me further claim management.
[352]
Mr. Picurs notes on the memorandum are dated July 17, 2002. He
advised Ms. Marlowe that the claim should be terminated effective 24 June
2002. He also instructed Ms. Marlowe not to offer an appeal:
Claim is to be terminated
effective 24 June 2002. Do not offer appeal. There is a claim
overpayment of $453.20. Lets discuss the letter.
[Emphasis
added]
[353]
When asked to explain who instructed him not to offer Ms. Nayyar an
appeal, Mr. Picur said:
A Nobody told me.
Its just that that was you know, that was my notification to you that thats
it, you know; theres nothing more to say, and were not going to debate this,
you know, forever and ever.
[354] Ms. Marlowe
sent a letter to Ms. Nayyar dated July 24, 2002 advising that her
disability benefits had been terminated. She explained the basis for the
decision as follows:
(a) Ms. Nayyar
failed to attend the medical examination with Dr. Smith on June 24;
(b) a
previous appointment with Dr. Smith, scheduled for June 3, had been
cancelled because Ms. Nayyar was not able to attend; and
(c) the
Plan gave Costco the right to require Ms. Nayyar to attend a medical
examination and the right to terminate benefits if she failed to do so.
[355]
In addition, Ms. Marlowe requested that Ms. Nayyar reimburse
Manulife for an overpayment of $453.04 as well as Dr. Smiths cancellation
fee of $530.
[356]
An internal document prepared the next day by a different Manulife
employee (on behalf of Ms. Marlowe) confirmed Costcos agreement to
terminate Ms. Nayyars benefits.
(d) July 25, 2002 to June 23, 2003
[357]
Ms. Kois telephoned Mr. Picur on August 3, 2002 to explain
that Costco was trying to determine how to proceed because Ms. Nayyar was
absent from work. She wanted to be certain that Costco was notified that Ms. Nayyar
had failed to attend the medical examination with Dr. Smith; she was told
that Chris Williams was aware of it.
[358]
Less than a month later, on August 19, 2002, Costco received further
advice from Dr. Mallavarapu, on Costcos Rapid Re-employment Program form,
that Ms. Nayyar was not capable of performing her job duties. He also
advised that she suffered from moderate cognitive/mental impairment in
analytical reasoning and learning new material, and severe impairment in
concentration, comprehension, and social interaction.
[359]
Costco received updated advice from Dr. Mallavarapu on September 27,
2002, again on a Rapid Re-employment Program form, advising that Ms. Nayyar
was not capable of performing her job duties. He also advised that she suffered
from moderate cognitive/mental impairment in comprehension as well as severe
impairments in concentration, learning new material, and social interaction. Dr. Mallavarapu
wrote:
This patient is still depressed.
She could consider starting gradual return to work in 8 weeks time.
[360]
Mr. Nayyar sent an email to Ms. Marlowe dated October 1, 2002,
pointing out that they had never received a response to Mr. Nayyars email
of May 30, 2002, but only a demand for reimbursement. The Nayyars asked
Manulife to reconsider the claim, and if they would not, to advise of the
appeal process:
Please reconsider medical examination preferable in
Surrey/Delta/New Westminster area. Also No Keyfacts. Thats what I trying to
explain to you over the phone and through my correspondence since I had
unhealthy experience with Keyfacts Company one thing you may explain why the
second appointment with the same company when I had bad experience with same
company.
[Emphasis
in original]
[361]
Mr. Picur responded by letter addressed to Ms. Nayyar on
October 24, 2002. A copy was sent to Chris Williams. Mr. Picur wrote that Mr. Nayyars
May 30 email had been responded to by Mr. Williams:
In the letter, it is stated we
have not yet responded to your letter (actually, an e-mail) of 30 May 2002.
Your e-mail was addressed to several people. You received a prompt and thorough
response from Mr. Chris Williams, Disability Manger – Western Canada for
Costco Wholesale. There is nothing further for us to add. I refer you back to Mr. Williamss
response.
[362] Mr. Picurs
response overlooks Mr. Williams assurance to the Nayyars (of which
Manulife was aware) that he would attempt to have the medical examination
performed by a doctor located closer to where they lived. Mr. Picurs
response also fails to address Manulifes failure to take any steps to give
effect to that assurance.
[363]
Mr. Picur reiterated Manulifes demand for reimbursement of the
overpayment:
Ms. Marlowe has previously
explained, in detail, the reasons for the termination of your claim. I refer
you to her letter of 24 July 2002. The same letter explains why your claim is
overpaid. Therefore, you can expect we will continue to demand repayment until
the overpayment has been fully reimbursed.
[364]
He also wrote that Manulife was not prepared to accept Ms. Nayyars
request to reschedule a medical examination. His refusal to consider that
request is predicated on the presumption that Ms. Nayyar did not attend
two rescheduled medical appointments. From his language, I infer that those
were the two appointments scheduled with Dr. Smith on June 3 and 24, 2002:
You request that we consider scheduling another Independent
Medical Examination for you. I must remind you that we previously rescheduled
appointments twice for you, in good faith. You were fully informed in letters
of 14 February 2002, 26 April 2002, 15 May 2002 and 18 June 2002 of the
potential implications of failure to keep the appointment. You were also
advised of the need to notify well in advance if you were unable to keep an
appointment. Nevertheless, you failed to attend both rescheduled appointments,
without notice.
You have had ample notice and
opportunity to fulfill your responsibility to attend an Independent Medical
Examination. Therefore, we are not prepared to consider your request now.
[365] Mr. Picurs
response fails to recognize that the first appointment with Dr. Smith was
cancelled by Keyfacts prior to the deadline it set for the Nayyars response.
It also ignores Manulifes disregard for Mr. Williams assurance that I
have discussed in previous paragraphs.
[366]
Mr. Picur concluded by stating that the matter was at an end:
Your claim was closed in accordance with the terms of the
disability plan provisions. In not attending the independent medical
examination, you have lost your entitlement to further disability benefits.
Therefore, there is no basis for a further consideration of your clam and there
are no overdue payments to be made.
This is
our final decision in this matter. We will not further debate this with you,
either by telephone or in correspondence. Your claim file is closed with this
letter.
[Emphasis added]
[367]
Mr. Williams began to have doubts. He telephoned Mr. Picur on
October 24, 2002 to discuss rehabilitation assistance for Ms. Nayyar. Mr. Picur
recorded their discussion in an internal memorandum of the same date:
I got a call from Mr. Williams at 12:15p. He had read my
letter to Ms. Nayyar.
We discussed the fact that Costco
might like to arrange for a rehabilitation visit by one of our Rehabilitation
Specialists, on an extra-contractual (consulting) basis. Costco are still prepared
to provide assistance for Ms. Nayyar to return to work. However, we agreed
any such arrangements will be done by Costco outside of the disability plan. Our
claim decision will stand.
[Emphasis
added]
[368]
Ms. Nayyar called Ms. Marlowe on November 13, 2002 and then Ms.
Kois shortly thereafter. She offered to reimburse the overpayment as well as Dr. Smiths
cancellation fee, and she asked for an independent medical examination to be
scheduled.
[369]
Ms. Nayyar sent reimbursement for the overpayment to Manulife on
November 20, 2002. She made a further request that the medical examination be
scheduled. Ms. Marlowe made Mr. Picur aware of Ms. Nayyars
reimbursement.
[370]
Ms. Kois telephoned Ms. Marlowe on November 18, to relay that
she had received a similar request from Ms. Nayyar (to schedule an
independent medical examination and to pay the cancellation fee). Ms. Kois
sought Manulifes input. Ms. Marlowe told her that she would discuss it
with Mr. Picur.
[371]
Manulifes documents also show that Ms. Kois spoke with Mr. Picur
on November 19, 2002. In his memo, he wrote that they agreed Ms. Nayyar
must provide her proposal in writing, in a document with an original signature
(not e-mail or fax). We would consider the request once we had a chance to
review exactly what she proposes.
[372]
On the same day, Dr. Mallavarapu sent a further Rapid Re-employment
form to Manulife advising that Ms. Nayyar could return to her job on reduced
hours – 4 per day. He also reported that Ms. Nayyar had mild
cognitive/mental impairments in concentration, learning new material, and
social interaction.
[373]
Subsequently, on November 27, Mr. Picur enquired of Mr. Middleton
if Manulife had to accede to Mrs. Nayyars request for an IME:
Please note the attached request from Ms. Nayyar,
following on my letter of 24 October 2002.
You will also note Alaina brought this matter briefly
following a discussion concerning other matters. At the time, I did not have
the file and did not remember what I had said in my letter. Alaina said Ms. Nayyar
had offered to pay for the IME if we set it up. I do not see that offer in Ms. Nayyars
letter.
I think my letter of 24 October 2002 was plain in advising we
would not consider her request further. I intend to reaffirm this. In
your opinion, do we have an obligation to accede to Ms. Nayyars request
for an IME?
[Emphasis
added]
[374] An
internal Manulife document dated November 28, 2002 discloses that Manulife
considered joint funding with Costco of a medical examination of Ms. Nayyar
on specific terms. One of those terms required Mr. Nayyar not to interfere
with the process and not to attend the interview. The document, which counsel
suggest was written by Mr. Middleton, recommends that eligibility for Ms. Nayyars
claim be reviewed once the report from the examination is received.
[375] That
advice was not followed. Instead, Mr. Picur wrote to Ms. Nayyar on
December 5, 2002 and advised her that there was no need for an independent
medical examination and no basis upon which to reinstate her disability
benefits:
You [sic] request that we schedule an Independent Medical
Examination, reinstate your claim and pay past benefits. Ms Marlowe has
referred your request to me.
Your claim was terminated because you had failed to attend
prior appointments for Independent Medical Examinations. The detailed reasons for
our decision were provided to you in Ms. Marlowes letter of 24 July 2002
and my letter of 24 October 2002.
With regard to your current request, I must advise that
because your claim is terminated, we have no need for an Independent Medical
Examination now. You should be aware that an Independent Medical Examination
scheduled now would be of no value in establishing your eligibility for past
benefits.
[Emphasis added]
[376] Mr. Picur
invited Ms. Nayyar to submit medical records, at her own expense, from her
family doctor and treating specialist from January 2002 to date, in order that
Manulife could consider whether the evidence demonstrates that you have
maximized your medical treatment and any opportunity to return to work and could
consider whether her failure to attend the medical examinations as scheduled
has prejudiced our ability to manage your claim.
[377]
Mr. Picur had also telephoned Chris Williams the day before, on
December 4, to advise him that Manulife did not require a medical examination.
In his memorandum to file dated December 5, 2002, Mr. Picur wrote:
I spoke with Chris Williams at 9:55am this morning concerning
the possibility of Costco agreeing to fund an IME for Ms Nayyar. I advised him
Manulife did not require one for claim purposes because the claim was closed.
Chris advised that they saw no
value in having an IME at this time. We discussed the fact it would not change
the prior claim status. They had just received an RRP that clears Ms. Nayyar
for part-time return to work. They expect her to return to work shortly.
[378]
In submissions, Costco argued that it was, by this time, no longer
necessary for a medical examination because Dr. Mallavarapu cleared Ms. Nayyar
for return to work, albeit on reduced hours. I accept that to be Mr. Williams
purpose in rejecting Ms. Nayyars request for an examination in December
2002. I do not, however, find that to have been the basis of Mr. Picurs
decision (he relied on the reasons set out in his prior correspondence to Ms. Nayyar).
[379]
Mr. Williams was now content to accept Dr. Mallavarapus opinion
(provided in the context of Costcos rapid re-employment program). Mr. Williams
expected Ms. Nayyar to return to her job on a part time basis. I find that
when Ms. Nayyar returned to work in December 2002, she was still suffering
from depression, unable to carry out the essential duties of her job, and she was
not able to return to her job on a full time basis. When Ms. Nayyar
returned to Costco, she did so for four hours per day and within the context of
Costcos rapid re-employment program. She was entitled to receive disability
benefits less the hours for which she was paid.
[380] Costco and
Manulife continued to receive medical information concerning Ms. Nayyar
after she returned to her job in December 2002.
[381]
On January 28, 2003, in response to Mr. Picurs invitation to send
further medical records, Mr. Nayyar sent to Mr. Picur, by fax, nine
reports prepared by Dr. Mallavarapu between January 24, 2002 and January
24, 2003. These reports describe an improvement in Ms. Nayyars symptoms
that began, in any meaningful way, in October 2002. Those documents provided Costco
and Manulife with further insight into the nature of Ms. Nayyars
depression. I have summarized them in the next eight paragraphs for the purpose
of illustrating the medical information provided to Manulife as part of Ms. Nayyars
appeal. While those documents were not tendered for proof of the truth of their
contents, they do demonstrate that detailed medical information continued to be
provided to Costco and Manulife.
[382]
On January 24, 2002, Ms. Nayyar was reported as presenting with
logical thinking and oriented to time and place, but otherwise depressed,
extremely anxious with low energy, feeling hopeless, helpless, and despondent, and
suffering disturbed sleep and appetite. Major depression recurrent severe is
the assessment provided by Dr. Mallavarapu.
[383]
On February 25, 2002, Manulife was advised that Ms. Nayyar was
assessed as:
Axis I – Major depression recurrent severe.
…
Axis IV – Severe psychosocial stress.
Axis V – GAF 55.
[384] The same
assessment was made on April 9 and June 18, 2002 although Marital dysfuntion
[sic] was added to Axis I on the April 9 report.
[385]
Some improvement was noted on July 16, 2002. Ms. Nayyar was
reported as feeling a bit better with slight improvement in her mood. Ms. Nayyar
was reported as able to leave the house for a walk in the latter part of the
day. Otherwise, there was no change in her relationship with Mr. Nayyar
who was noted as also suffering from depression. In conclusion, Dr. Mallavarapu
opined:
At present, Annu is showing
slight improvement in her overall functioning but the basic picture is one of
the continued depression.
A similar assessment was
provided in the report dated August 19, 2002.
[386]
On October 8, 2002, Dr. Mallavarapu reported to Dr. Gandhi
that Ms. Nayyar:
… continues to have problems
with her husband. She feels lonely sad and unhappy. She does not see a way out
of her present situation or difficulties. She feels hopeless while at home. She
is afraid to go out and get back to work.
[387] At this
juncture, Dr. Mallavarapu varied his treatment regime that had, to that
time, involved counselling and pharmacotherapy. He suggested that Ms. Nayyar
consider participating in a gradual return to work program in the coming eight
to twelve weeks. He also suggested marriage counseling.
[388]
On November 20, 2002, Dr. Mallavarapu remarked on Ms. Nayyars
improved status. His treatment plan called for her return to work on a gradual
basis:
PRESENT MENTAL STATE
Annu is pleasant and cooperative. She is alert and
responsive. Her orientation is full for time, place and person. Mood is still
depressed but not as bad as before. Energy level has improved. She is not
psychotic or suicidal. Her sleep and appetite have improved.
TREATMENT PLAN
She is advised to continue with
Remeron 60 mg qhs. She could return to work on a gradual return to work program
4 hours a day.
[389]
Subsequently, on January 24, 2003, Dr. Mallavarapu reported
significant improvement in Ms. Nayyars symptoms to Dr. Gandhi. In
his opinion, she should continue working four hours per day:
Mrs. Nayyar is feeling well. She is calm, relaxed and at
ease with herself. Her mood is euthymic. Her energy level is good. Her
concentration has improved. Her memory is intact for past and recent events.
She is getting along well with her husband and her overall functioning is
satisfactory.
This patient is recovering from a
major depression recurrent severe. At present, her overall functioning has
improved and she should continue working 4 hours a day. She will be reviewed at
my office in 4 weeks time. She is advised to keep in touch with you for
ongoing follow-up.
[390]
Subsequently, on January 29, 2003, a note prepared by Dr. Mallavarapu
was sent to Costco, by fax, reporting that he had advised Ms. Nayyar to
return to work for five hours a day, Monday to Friday, between 9:00 a.m. and 2:00
p.m., and that he would review matters in four weeks.
[391]
Costco and Manulife argue that the reason the Nayyars did not complain
about the termination of benefits until October 2002 was because they knew that
Dr. Mallavarapu had told Ms. Nayyar to return to work. Costco and
Manulife also argue that the Nayyars deliberately failed to disclose his
advice. With respect, that submission is not supported by the evidence. Those
documents show that the first advice Ms. Nayyar received from Dr. Mallavarapu
about returning to work was towards the end of September or in early October
2002.
[392]
I reject Costcos suggestion that Mr. and Ms. Nayyar pressed
for an independent medical examination in October in order to shield Dr. Mallavarapus
opinions from being disclosed. Mr. and Ms. Nayyar did not seek to hide
Dr. Mallavarapus advice to her nor did she seek to shield herself from an
independent medical examination. She asked for one in the fall of 2002. Dr. Mallavarapu
continued to provide his opinions to Manulife and Costco, and Mr. Nayyar
sent medical opinion documents to Costco and Manulife in January 2003 in
response to Mr. Picurs December 5, 2002 request for medical information.
[393]
Costco and Manulife also seek to rely on portions of Dr. Mallavarapus
medical documents to demonstrate that Ms. Nayyar was no longer disabled by
October 8, 2002. Their position overlooks their objection to the introduction
of any reports and documents prepared by Drs. Mallavarapu and Gandhi as proof
of the truth of their contents, except for Dr. Mallavarapus January 8th
and May 25th Reports. In the face of their objection having been sustained, it
is inappropriate for Costco and Manulife to seek to rely upon the truth of the contents
of some of those medical documents to support their defence.
[394]
Costco and Manulife assert that Ms. Nayyar was no longer eligible
for benefits under the Plan when she returned to work in December 2002, albeit
on a part time basis because she was working. They rely on an exclusion
contained in the Plan which states:
Periods for Which the Employee is Not Entitled to
Benefits
The Employee is not entitled to benefit payments for any
period that he is:
…
f) working in any occupation,
except as provided for under the Rehabilitation Assistance provision;
[395]
Costcos position is that there is no ambiguity in the contract
language. Costco argues that an employee is entitled to receive benefits if he
or she returns to work only if they do so under the rehabilitation assistance
program. The ambit of that program is set out in Part V of these reasons for
judgment.
[396]
If Costco position is correct, then any disabled employee who tries to
return to work without first obtaining Costcos agreement to participate in the
rapid re-employment program will be denied benefits, even if they work a
fraction of their 8 hour shift.
[397] In Progressive
Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, [2010]
2 S.C.R. 245, Rothstein J. said, at para. 22, that the primary
interpretive principle is that when the language of [an insurance policy] is
unambiguous, the court should give effect to clear language, reading the
contract as a whole
See also Consolidated-Bathurst Export Ltd. v. Mutual
Boiler & Machinery Insurance Co. (1979), [1980] 1 S.C.R. 888.
[398]
In Jackson v. The Standard Life Assurance Company, 2011 BCSC
1487, at para. 19, Halfyard J. summarized the method for interpreting the
meaning of a disputed term in any contract. His summary, derived from the case
authorities, is set out at para. 18:
a) Decide
what is the plain and ordinary meaning of the words used in the disputed term
of the contract. This will most often be the dictionary definition of the words
unless the contract sets out its own definitions.
b) The
intended meaning of the disputed term is to be determined by reading the
disputed word or words in their immediate context and in the context of the
contract as a whole.
c) If
necessary, the court may also consider evidence of the circumstances known to
the parties which existed when the contract was made (the factual matrix).
d) In
construing the meaning of the disputed term, the court should strive to give
meaning to all of the words contained in the term.
e) The
law presumes that the parties intended the legal consequences of their words.
But an examination of the immediate context in which the disputed words appear
or the overall context of the whole contract may lead the court to conclude
that reasonable persons who were making the contract would not have intended
that the disputed term be given its grammatical and ordinary meaning. For
example, the adoption of the ordinary meaning of the disputed term might
conflict with the intent clearly expressed or implied in one or more related
terms of the contract, or might defeat the fundamental objective of the
contract. If that is the conclusion reached by the court, then the ordinary
meaning of the disputed words should be rejected, and the meaning which would
have been intended by reasonable persons in the position of the parties, should
be adopted.
f) If
there is nothing in the other parts of the contract or in the factual matrix
that persuades the court that the parties did not (objectively) intend that the
disputed term of the contract should be given its ordinary meaning, then the
court must adopt and apply the plain and ordinary meaning of the disputed term.
g) However, if in the course of
the above inquiry the court determines that the disputed term of the contract
is reasonably capable of bearing two or more interpretations, then an ambiguity
exists. In such a case, the court will have to determine which of the alternate
meanings was intended by the parties. In deciding that issue, the court may
admit and consider extrinsic evidence of the conduct of the parties leading up
to the contract and their conduct; in performing their contractual obligations.
Additional rules for interpreting contracts can also be applied. In the case of
ambiguous insurance contracts, the court will apply the contra proferentum
rule. Ultimately, the court must decide which of the two or more possible
meanings was (objectively) intended by the parties.
[399]
The eligibility exclusion contained in the long term disability coverage
differs from the exclusion found in the short term disability wording. The wording
of the short term disability exclusion states that an employee is not entitled
to benefits if he or she receives income from any source, including vacation
pay:
Periods for Which the Employee is Not Entitled to
Benefits
The Employee is not entitled to benefit payments for any
period that he is:
…
e) receiving earnings or payments
from any employer, including severance payments and vacation pay;
[400] As I have
stated, an employees eligibility for benefits under the long term disability
provisions of the Plan is excluded where he or she is working in any
occupation. The words working and work are not defined in the Plan.
[401] In my
opinion, the prospect of ambiguity arises given the different approaches taken
to eligibility in the Plan. Does working refer to a mere physical attendance
at the workplace? Is an employee working where he or she is able to perform
some but not all of the essential duties of their pre-disability job? Is a full
time employee to be treated as working when they can return, full time, to
their pre-disability shift?
[402]
Dictionary definitions are of minimal assistance because they point to
physical or mental exertion, on the one hand, and the persons employment or
occupation and proper functioning, on the other.
[403]
The Oxford Canadian Dictionary, sub verbo work defines
work to include:
1 the application of mental
or physical effort to a purpose; the use of energy; … 4 a persons
employment or occupation etc., esp. as a means of earning income …
[404]
Blacks Law Dictionary, 4th ed, sub verbo
work sets out this definition:
WORK. To exert ones self
for a purpose, to put forth effort for the attainment of an object, to be
engaged in the performance of a task, duty, or the like. The term covers all
forms of physical or mental exertions, or both combined, for the attainment of
some object other than recreation or amusement. …
[405]
The more current 9th edition of Blacks Law Dictionary,
9th ed, sub verbo work includes this definition of work:
work, vb. 1. To
exert effort; to perform, either physically or mentally … 2. To
function properly; to produce a desired effect …
[406] Further
questions arise when the purpose of long term disability coverage is considered
as a whole. For example, does Costcos interpretation of eligibility defeat the
fundamental objective of long term disability coverage? As an employer, Costco
should be interested in having disabled employees recover and return to work as
quickly as possible. Since participation in the rapid re-employment program is
at Costcos discretion, a symptomatic employee who bona fide seeks to
return to work on a part time basis based upon medical advice is penalized if
Costcos consent is withheld.
[407]
I do not, however, need to determine the interpretation of working in
the Plan in this case because I have found that Mr. Williams and Costco
accepted Ms. Nayyar in the rapid re-employment program once Dr. Mallavarapu
advised her to return on a part time basis. In an internal document dated May
7, 2003, Manulife took the same view, i.e., Ms. Nayyars return to work in
December 2002 was part of the rehabilitation program:
Given that we GRTW would have
been part of the Rehab program, we will consider payment of LTD benefits under
the Rehabilitation Provision of Plan 99947.
[408] Ms. Nayyar
is therefore entitled to payment of benefits representing the difference
between her part time earnings and the disability benefits she would have
otherwise received while she was participating in that program.
[409]
Ms. Nayyar engaged in part time shifts, ranging between four to six
hours per day, from December 9, 2002 to February 9, 2004. There were
approximately five months during this period where Ms. Nayyar did not work
at all. She then returned to full-time hours between February 10 and May 5,
2004. She did not work thereafter until September 1, 2004. Dr. Gandhi
wrote to Costco on August 15, 2004 advising that Ms. Nayyar was ready to return
to her job on a full-time basis on August 30, 2004. He reported that she no
longer suffered from any cognitive mental impairment.
(e) Ms. Nayyars Appeal
[410]
Ms. Taylor assumed conduct of Ms. Nayyars appeal on February
11, 2003. On June 23, 2003, she advised Ms. Nayyar that her appeal was
being denied.
[411]
Ms. Taylor was tendered as an adverse witness by Ms. Nayyar.
When her examination began, Ms. Taylor was quick to say that she had no
recollection of events. She could add nothing more than the contents of the
documents:
Q Ms. Taylor, you worked on my file in the
capacity of disability specialist along with second disability specialist Mr. Picur;
is that right?
A From the
documents you have provided me as of last week, I have reviewed the
documents and only recall what Ive read this morning of those documents, Mr. Picurs
involvement, from the documents youve provided. I have no recall from just my
memory.
[Emphasis added]
[412]
Ms. Taylor then took a highly technical approach to Ms. Nayyars
questions, expressing concern because the documents that had been provided to
her by the Nayyars prior to trial were not notarized. She was asked about an
internal document with her name on it noting that Ms. Taylor had performed
an in-depth review of Ms. Nayyars claim as part of the appeal process:
Q You conducted an in-depth review of my file;
is that right?
A Were talking about a period of time. Ive
reviewed the documents that were not verified to be notarized copies, but
there are documents in there that are signatures that look familiar to me. And
I do recall a document, from reading this morning, that it so states that — a
document bearing my name that I conducted a full review of the record so
stated in that letter.
[Emphasis
added]
[413]
Ms. Taylor could not explain what she meant by in-depth review.
She stated that she could not recall Ms. Nayyars case. Eventually, when
pressed, she said:
I cant
translate what in-depth meant and what specific documents it entailed. What I
can confirm is that Ive read over a document dated in February that I did an
in-depth review. I know the letter indicated specific documents that had been
submitted. What specific documents I reviewed at that point over and above what
you provided with me [sic], I cannot confirm at this point in time.
Later, she sought to explain her in depth review by simply
reciting the documents listed in her memorandum.
[414]
When pressed in cross examination to confirm that documents were sent to
or by her, she would, at times, only concede that they appeared to be so. For
documents bearing a signature purporting to be hers, she would often state that
it appeared to be hers. The following exchange displays the reticence shown by
Ms. Taylor in answering Ms. Nayyars questions:
THE WITNESS: May I continue? Okay.
The entry
date of April 16th or review date on page 726 to the bottom of 727, by face
value I it bears my signature, so I would say that I authored that entry.
[415]
When re-examined following her cross examination by Ms. Nayyar, Ms. Taylor
demonstrated a recollection of a number of events. The following extracts from
the transcripts provide a useful illustration:
Q Could I ask you to describe in what
circumstances an IME would be recommended or requested.
A From the best of my recollection, it
would have been done in consultation with a medical consultant referral for a
concern that had been brought forward medically by the medical consultant.
Q So is it fair to say, then, that there was a
concern about the treatment that Mrs. Nayyar was undergoing?
A From what I recollect from reading
those documents, it was expressed throughout the documents in 2003 that
treatment rendered and commented on by Dr. Bezeredi, he had some concerns
about it.
Q When you referred to concerns over treatment,
does that accord generally with your experience that if theres a concern over
treatment, that an IME may be required?
A That is one of the factors. But I believe
its the totality of the clinical picture, treatment, response and all
anything medical that I believe if you look at the medical referrals, that
the concerns and the questions addressed to the medical consultant would have
been taken from the context of the medical and other concerns that had been
expressed before. And in 2003, when new information came in, then that would
have, to the best of my knowledge, resulted in a referral to the medical
consultant to comment on what has just been received, correlated to what else
may have been on file or any subsequent comments a medical consultant may have
made in the past.
Q Now, the last bullet point states:
A I recall
from the information that I was provided with in June, it indicated that the
claimant had began, and her doctor had supported, a graduated return to work
starting in December of 2002, starting at four hours a day and increasing, I
believe, to five hours a day in February of 2003, if I recall correctly.
[416]
Like Mr. Picur and Ms. Kois, Ms. Taylor deflected
responsibility for decision making in the management of Ms. Nayyars
claim. She had no difficulty in recalling that Mr. Picur was the senior
disability examiner who was actively involved in the claim, while her role was
limited to the appeal:
Q Mr. Picur was a disability specialist at
the same time as you; right?
A Correct.
Q And it appears as though, from this letter,
that he initially had some involvement in this file with Mrs. Nayyar. Does
that accord with your recollection?
A Yes. My understanding is, if I recall
correctly, Mr. Picur worked very closely with the team of adjudicators
that worked on this account, if I recall correctly.
So in the discussion
record in 318, I believe now, in this letter of December 5th of 2002
appears to be prior to my involvement when the appeal came in in [sic] February
or approximately February of 2003. So it would appear that Mr. Picur
is still involved with the LTD portion of the claim. Because from what I
recall, this is the LTD claim that would have began in December of 2001,
and this would have almost been a year later.
And so thats what I would
deduct from my reading of the material as provided in this letter.
[Emphasis
added]
[417]
I did not find Ms. Taylor to have been a candid witness. She
took every advantage to emphasize her lack of recollection when she answered Ms. Nayyars
questions. She only, reluctantly, agreed that she may have been sent or
received documents despite them having been disclosed as part of Manulifes document
production. She did not readily acknowledge her signature on documents. Ms. Taylor
sought to qualify her answers on the basis that she had not been provided with
notarized documents.
[418]
Yet, she was effusive in her approach to answering questions put to her
by Costcos counsel. Ms. Taylors efforts to distance her involvement from
Ms. Nayyars disability claims prior to the appeal are not credible.
Manulifes documents show that she was actively involved and, like Mr. Picur,
wanted Ms. Nayyar to submit to an independent medical examination as a
condition precedent to her claim for long term disability benefits. For these
reasons, I have chosen not to rely on Ms. Taylors viva voce testimony.
I have, instead, carefully considered her role in Ms. Nayyars claim as
disclosed in Manulifes documents.
[419]
Ms. Taylors reasons for denying the appeal as set out in the
documents are, essentially, two-fold:
(a) Ms. Nayyars failure to
attend independent medical examinations in February and June 2002 prejudiced
Manulifes ability to manage her claim; and
(b) Ms. Nayyars failure to
participate in a designated vocational rehabilitation program between February
and April 2002 adversely impacted upon her recovery and prejudiced Manulifes
ability to manage her claim.
[420]
In her letter to Ms. Nayyar denying the appeal dated June 23, 2003,
she wrote:
Summary
We have determined that your failure to attend the IME in
February 2002 and June 2002 prejudiced the ability for Manulife Financial to
manage your LTD claim. The purpose of the IME was to determine whether there
was a better treatment program for you that would enable you to normal level of
function, including a full-time return to work for Costco Wholesale. It appears
with a more therapeutic treatment regime your recovery would have been
significantly enhanced to allow your return to work prior to December 9, 2002.
There is also a lack of objective evidence to support that your symptoms were
of the nature, severity and frequency to have prevented you from participating
in the designated Vocational Rehabilitation Program in February 2002 to April
2002. Your failure to continue to participate in the Vocational Rehabilitation
Program that had been approved by your Specialist also prejudiced the ability
of Manulife Financial to manage your claim. We feel that you would have been
back to full-time work by or before June 24, 2002 if you had attended the IME,
followed by a more therapeutic treatment plan, and fully participated in the
Vocational Rehabilitation Program that had been developed by Manulife Financial
Rehabilitation Specialists in early 2002.
Functionally, it appears that you are reported to be more
dysfunctional at home than at work from December 9, 2002 to date. It appears
this needs to be examined more closely by your treating sources.
Vocationally, it appears that you have been involved in a
Graduated Return to Program (GRTW) for a period of time that is far in excess
than what is supported by the medical documentation provided to Manulife
Financial to date. The IME would also have allowed Manulife Financial to
establish more realistic dates for your GRTW.
Consequently, the decision to terminate LTD benefits
effective June 24, 2002 was appropriate and consistent with the Provisions of
Plan 99947.
We understand that you were
anticipating a more favorable decision. However, our determination has been
based on pertinent Plan Provisions and relevant medical, functional and
vocational information.
[421] In my
respectful opinion, Ms. Taylors reasons for denying the appeal are not
grounded in the facts for several reasons.
[422] First, Ms. Nayyar
failed to attend only one independent medical examination, scheduled with Dr. Smith
on June 24, 2002, which I have determined was unreasonably scheduled in the
circumstances.
[423] Second, Manulifes
purpose for the independent medical examination with Dr. Levin was not solely
to review and determine treatment; it involved another purpose, i.e., to
determine if Ms. Nayyar was disabled at all. That collateral purpose had
become Manulifes dominant purpose when it scheduled the medical examinations
with Dr. Smith. Ms. Taylor does not mention that purpose in her
correspondence to Ms. Nayyar.
[424] Third, apart
from offering a computer course, neither Costco nor Manulife offered a
therapeutic rehabilitation regime to Ms. Nayyar in spite of the
recommendations made by Dr. Mallavarapu and the initial plan developed by Mr. ONeill.
As well, Manulife stopped its active consideration of any rehabilitation
assistance to Ms. Nayyar in March 2002 while it considered whether to
terminate Ms. Nayyars benefits as a result of the incident at Dr. Levins
office. Once it decided against terminating Ms. Nayyars benefits, Costco
and Manulife declined to provide rehabilitation assistance to Ms. Nayyar that
would assist in the management of her care and promote her return to work.
[425] I also
wish to add my finding that Costco and Manulife have not proven that Ms. Nayyar
failed to comply with Dr. Mallavarapus treatment recommendations apart
from taking a computer course at a community college.
[426]
Fourth, a significant body of medical opinion was sent to Manulife by
Drs. Mallavarapu and Gandhi and the Nayyars over time. Ms. Nayyars
treating doctors continued to provide updated medical opinions to Costco and
Manulife, on an ongoing basis, that Ms. Nayyar was disabled from working. Mr. and
Ms. Nayyar also provided updated information to Ms. Taylor,
responding, in part, to her requests for information.
[427] Updated
information was also provided to Ms. Taylor by Costco. Previously, on March 23,
2003, Ms. Taylor wrote to Chris Williams asking for Costco to provide
Manulife with certain information regarding the extent to which Ms. Nayyar
was working. On March 25, 2003, Chris Williams advised Ms. Taylor that Ms. Nayyars
doctor had not release[d] [her] to full time, and she had not increased her
on the job hours beyond five hours per day. He confirmed that Ms. Nayyar
returned to Costco in the gradual return to work program on December 9, 2002,
for four hours per day, five days per week as directed by her Doctor.
[428] Also, on
March 23, 2003, Ms. Taylor wrote to Dr. Mallavarapu posing specific
questions, wrote to Dr. Gandhi requesting Ms. Nayyars medical
records from January 1, 2002 to date, and wrote to the College of Pharmacists
requesting a printout of all prescription medicines filled by Ms. Nayyar
since January 1, 2002.
[429] Dr. Mallavarapu
responded to Ms. Taylors questions on April 9, 2003 (by letter dated April
7), including his advice that Ms. Nayyar participated in an exercise
program. The College of Pharmacists provided Ms. Taylor with the
prescription records on April 9, 2003.
[430]
Ms. Nayyar also sent a completed claimant questionnaire to Ms. Taylor
on April 14, 2003. In it, she advised Ms. Taylor, inter alia:
An exercise and computer program was discussed by me with my
psychiatrist. Sean ONeil came to my home to discuss Vocational Rehab Plan, but
nothing was materialized, but in between I had to stop due to financial
reasons.
No computer course was taken.
…
I asked my psychiatrist to increase working hours because I
wanted to see if I am able to work more hours and also at the same time I
needed money to support my family. To the best of my knowledge 5 hours started
in february 2003.
I do not work full time due to my
medical condition.
[431] Ms. Nayyar
also provided the following information to Ms. Taylor in the
questionnaire:
(a) she
listed her symptoms from January 1 to December 9, 2002 to be major depression, lack
of confidence, lack of energy, poor concentration, loss of appetite, poor
health conditions, and panic attacks;
(b) her activities, including
social activities, were limited due to depression;
(c) she
was unable to do her household work and required assistance from her husband
and sister-in-law;
(d) she was unable to take
care of the financial needs of my home;
(e) the dates she received
counselling for her depression;
(f) although
she felt a little better about myself, she was still recovering from major
depression; and
(g) in
order to return to alternate work or modified duties, she contacted Costco regarding
transfer to Surrey Costco.
[432] Mr. Nayyar
telephoned Ms. Taylor on May 5, 2003 to request rehabilitation assistance
for his wife and in doing so, provided further information about Ms. Nayyar.
Ms. Taylors note of the conversation records that Mr. Nayyar told
her that: his wifes mental state was unstable; she can function normally for
three to four hours per day and then becomes withdrawn and unfocused; she does
not participate in the normal routine of daily life; Ms. Nayyar is working
to contribute to her familys financial well-being but is likely at her
maximum capacity; and they are struggling in their marriage and do not
communicate. He asked for one-on-one counselling for Ms. Nayyar and assistance
to her to increase her level of social activities and to deal with her
children. Ms. Taylor responded that Manulife would contact him or Ms. Nayyar
on May 6 to provide a status report.
[433] Dr. Mallavarapu
sent a note dated May 5, 2003 advising that Ms. Nayyar is to continue
working five hours per day for the next twelve weeks. Follow-up notes from Dr. Mallavarapu,
dated June 16 and July 4, 2003, were provided to Manulife confirming that Ms. Nayyar
should continue to work five hours per day.
[434]
Fifth, Manulifes internal medical consultant, Dr. Bezeredi,
advised Ms. Taylor of his opinion that Ms. Nayyar had not made a full
recovery. That advice was given in response to the following question posed by Ms. Taylor
on May 6, 2003:
Based on the medical on file,
please indicated if you feel Ms. Nayyar has made a full recovery from a
medical perspective? If not, has the delay been due to medical issues,
including one could anticipate the claimants condition plateauning [sic],
medical resources are required to address persisting symptoms of such severity,
frequency and duration such that Ms. Nayyar is unable to sustain mental
functioning for a normal work schedule, i.e. 8 hours a day, 5 days. Per
week. Please explain.
[435]
Dr. Bezeredi wrote in reply:
I do not feel she made full recovery – the delay is
most likely due to medical issues – treatment does not include counselling
and day hospital motivational aspect and drug Tx as commented previously does
not appear to be effective to bounce mood and energy level back to normal.
[Emphasis added]
[436] Sixth, the
definition of total disability in the Plan does not stipulate, as Ms. Taylors
denial of the appeal suggests, that disability must arise from work-related
conditions.
[437] Lastly, Ms. Taylors
rationale for denying the appeal overlooks the choice made by Costco and Manulife
to accept Dr. Mallavarapus advice in late fall 2002 that Ms. Nayyar
was able to return to her job on a part time basis. Despite earlier misgivings
about Dr. Mallavarapus advice and treatment regime, they were prepared to
accept his opinion at that time.
[438]
Although Ms. Taylors advice that the appeal had been denied was
not communicated to Ms. Nayyar until June 23, 2003, an internal document
demonstrates that Manulife had made that determination by May 9, 2003. An
internal note to file the same day summarizes Manulifes determination based
upon what she perceived to be Ms. Nayyars failure to participate in a designated
rehabilitation program:
Since the last IWCP entry, we
have reviewed MC referral comments of May 6, 2003 and note there is a consensus
of opinion that the medical information does not support a state of impairment
such that the claimant would have been unable to continue in the designated
Rehabilitation program from 2/03.
[439]
Ms. Taylor and other Manulife employees involved in reaching the
consensus referred to held that view even though Manulife had been told by Dr. Mallavarapu
that the treatment program for Ms. Nayyar was appropriate. Ms. Taylor
wrote:
Although the treating
Psychiatrist feels the treatment program from 2/02 was appropriate, the
claimants lack of significant improvement does not support this.
I do not accept that view because it would mean that appropriate
treatment is defined by the result and not in relation to the disease process
itself.
[440]
Further, Ms. Taylors note records Dr. Bezeredis opinion that
any delay in improvement may be attributable to the medication (as opposed to
any conduct on Ms. Nayyars part). He also opined that Ms. Nayyar
requires one-on-one counselling to help her return to her job full time:
The Medical Consultant also
explained that anti-depressant medication of choice probably delayed recovery
as it would not have resulted in increasing energy level or other suppression
of symptoms – the 9 to 2 syndrome could be correlated to this medication. To
enhance successful return to full-time return to work Medical Consultant
concurs that one on one counselling, & marital counselling should be pursued.
[441]
In an internal memorandum sent to Sean ONeill prepared the next day, May 10,
Ms. Taylor expressed her opinion that Manulifes ability to manage the
case had been prejudiced. She wrote:
You had been [sic] approved a Vocational Rehabilitation Plan in
February 2002 which involved:
·
One on one counselling sessions.
·
Exercise program
·
Computer course
·
Graduated Return to Work.
On reviewing the medical records from January 2002 to January
2003 it has been determined that there is medical grounds on which Ms. Nayyar
could not have continued to participate in the GRTW from 2/2002. So by failing
to attend the IME she prejudiced the Manulife Financials case management plan.
As a result, we are maintaining our decision to terminate LTD effective June
24, 2002. See Medical Consultants referral comments of May 6, 2002.
Vocationally, Ms. Nayyar did
return to part-time work on 9/12/02 working 4 hours per day, 5 days per week.
She increased her hours to 5 hours per day in 2/03. No limitations have been
noted by Costco. The primary dysfunction appears to be in Ms. Nayyars
home setting.
I presume that this is the designated rehabilitation
program described by Ms. Taylor.
[442] As she did
in her denial letter of June 23, 2003, Ms. Taylor has overlooked Costcos
and Manulifes failure to provide rehabilitation services to Ms. Nayyar (apart
from offering a computer course) and the medical opinions from Drs. Mallavarapu
and Bezeredi. She has overlooked Costcos refusal to reimburse Mr. Nayyar for
the used treadmill he purchased for Ms. Nayyar to encourage her to exercise. Ms.
Taylor has also overlooked Ms. Nayyars participation in Costcos return to
work program. Instead, it appears that Ms. Taylor chose to accept general advice
from Costco that it had not noted any limitations in Ms. Nayyars job
performance.
[443] On May 7,
2003, Costco decided to provide rehabilitation assistance to Ms. Nayyar on
an ex-contractual basis, outside the Plan. Its funding would support
counselling from an external rehabilitation consultant who would also oversee Ms. Nayyars
efforts to return to work.
[444] Neither
Costco nor Manulife assert in their defence that Ms. Nayyar failed to
accept or comply with any ex gratia rehabilitation service that was
offered. Nor do they assert a failure to mitigate defence.
[445] Ms. Kois
explained at trial that the purpose in the offer was to try and provide
assistance with returning Mrs. Nayyar to the workplace with additional
support, even though typically, it would not be offered after a disability
claim is terminated.
[446] Mr. Nayyar
tendered evidence showing that the external rehabilitation consultant provided Ms. Nayyar
with two cheques dated February 3 and March 11, 2004, totalling $139, on
account of a gym membership for four months. He said that was the extent of the
assistance in terms of an exercise program. Costco and Manulife did not provide
any evidence to the contrary.
[447]
Costco also decided to provide further long term disability benefits to Ms. Nayyar
from December 9, 2002 to March 2, 2003 based upon Ms. Nayyars
participation in the gradual return to work program. Costco accepted Manulifes
recommendation that she be paid for eight weeks. That time frame was determined
by Manulife without reference to Dr. Mallavarapus medical opinions. Ms. Taylor
wrote in an internal memorandum on May 7, 2003 that she believed that the
anticipated duration would not have been in excess of 12 weeks. No basis is
provided for her belief.
[448]
I reject Ms. Kois explanation that Costco took the high road by
offering a top up of Ms. Nayyars salary on an ex gratia basis. In
her evidence, she said:
Q And why did you make an exception for Mrs. Nayyar?
A We do that for
our employees if we need to take the high road on any cases like this where
its in the best interest to get them back to work and pay for the graduated
time theyre on — working reduced hours until they get back to their full
hours and they can make their full paycheque.
[449] I find
that her explanation is not credible. It ignores the facts: Costco seized upon Dr. Mallavarapus
opinion that Ms. Nayyar could return to work in December 2002 and took Ms. Nayyar
back in the graduated return to work program. Further, if Ms. Kois
explanation was correct, then Costco would have agreed to top up Ms. Nayyars
salary until she returned to her job duties on a full time basis on February 10,
2004.
(f) Conclusion
[450]
I find that Ms. Nayyar was disabled within the meaning of the
definition in the Plan when she applied for long term disability benefits. She
also met that definition when she applied for short term disability benefits in
August 2001. I find that Ms. Nayyar continued to meet the definition of
total disability when her disability benefits were terminated effective June
24, 2002, and then for some considerable period thereafter. She was entitled to
be paid long term disability benefits while she was disabled.
[451]
Costco and Manulife had ample opportunity to require Ms. Nayyar to
submit to an independent medical examination as a condition precedent to her application
for long term disability benefits. They chose not to do so. They accepted her
claim based upon their own evaluation of the medical evidence they had
received.
[452]
I reject the defence submission that Ms. Nayyar never intended to
attend a medical examination and that Mr. Nayyar never intended to permit
his wife to attend an examination without his involvement. A reasoned response
from Mr. Williams illustrates Mr. Nayyars ready agreement to comply
even though his question about the purpose of the medical examination was never
answered.
[453]
I find that Ms. Nayyar failed to attend only one medical
examination scheduled on behalf of Manulife, which was the appointment at Dr. Smiths
office arranged for June 24, 2002. Ms. Nayyar attended the examination at Dr. Levins
office. I find that as a result of the instructions and information provided by
Keyfacts to Dr. Levin, the examination lost its independence. The
examination did not proceed because of what I have found to be a communication
breakdown between Mr. Nayyar and Dr. Levin. Keyfacts unilaterally
cancelled the next appointment, scheduled at Dr. Smiths for 9:00 a.m. on
June 3, 2001, prior to the deadline it had given to the Nayyars. Manulife then
cancelled the next appointment scheduled for 8:00 a.m. on June 13.
[454]
The position taken by Costco and Manulife in argument is that the issue
of whether Costco was in breach of its obligations under the Plan when it
terminated Ms. Nayyars benefits should be determined as at July 24, 2002,
even though Ms. Nayyar subsequently pursued an internal appeal at
Manulife. I have looked at the question of breach both from that date and the
date Ms. Taylor denied the appeal since Costco and Manulife could have
remedied the breach of contract and reinstated Ms. Nayyars benefits.
[455]
I find that the appointment scheduled with Dr. Smith for June 24,
2002, was unreasonable in the circumstances. It was pursued for an improper collateral
purpose and it was scheduled without regard for Mr. Williams assurance
that an attempt would be made to locate a doctor closer to home.
[456]
Manulife was in receipt of sufficient information to establish and
implement a rehabilitation program for Ms. Nayyar by February 2002. I do
not accept Manulifes submission that the rehabilitation program was put on hold
because of Mr. Nayyars request to resolve the medical examination issue
first. Mr. ONeills efforts were put in abeyance in March 2002 while
Manulife considered whether to terminate benefits following the incident at Dr. Levins
office. Once it decided against termination, a rehabilitation plan should have
been pursued with Ms. Nayyar.
[457]
I have found that the comments made by Ms. Kois to Manulifes
employees adversely affected the claims handling process. Unfortunately,
Costcos and Manulifes focus quickly turned away from Ms. Nayyar to Mr. Nayyar.
I find that Mr. Picurs early scepticism of the merits of the claim greatly
influenced Manulifes approach to claims handling. In spite of his lack of
recollection about events and documents, Mr. Picur admitted that his
purpose in seeking a medical examination was not focused solely on determining
an appropriate treatment regime to assist Ms. Nayyar to return to work. He
sought independent confirmation of her medical condition and cognitive
impairments even though Manulife had just determined that Ms. Nayyar was
disabled and entitled to benefits under the Plan. I find that Mr. Picur pursued
a collateral purpose once he realized that his prior recommendation that called
for a medical examination was not followed. I am satisfied that Mr. Picurs
scepticism caused Manulife to continually question whether Ms. Nayyar was
disabled and caused it to undertake a course of conduct that inappropriately led
to the termination of Ms. Nayyars benefits.
[458]
Costco and Manulife have not proven that they were prejudiced by the
incident at Dr. Levins office or by Ms. Nayyars failure to attend
the medical examination at Dr. Smiths office on June 24, 2002. Manulife
and Costco were in receipt of a considerable amount of medical information from
her treating doctors. To the extent that a different treatment regime may have
been available to assist in Ms. Nayyars recovery that was not pursued,
responsibility rests with Costco and Manulife. They failed to implement the
advice of their internal psychiatrist, Dr. Bezeredi, who recommended on
December 4, 2001 that Ms. Nayyar attend a daycare program at Surrey
Memorial Hospital. They failed to implement Mr. ONeills initial rehabilitation
plan that had been agreed to by Dr. Mallavarapu. Having accepted Ms. Nayyars
claim for long term disability benefits on February 13, 2002, I find that they
failed to properly and effectively manage Ms. Nayyars case.
[459] Costco and
Manulife chose to suspend rehabilitation assistance once they began to consider
termination of Ms. Nayyars benefits in March 2002. Their approach to Dr. Mallavarapus
opinions has been inconsistent. Despite expressing serious reservations about
his treatment regime and his diagnosis, Costco and Manulife readily accepted Dr. Mallavarapus
recommendation that Ms. Nayyar should return to work in December 2002.
Costco then accepted Ms. Nayyar in its return to work program; later, it rejected
his opinion that she was disabled and could not return to her job duties on a
full time basis.
[460] I find
that Costco did not discharge its good faith obligations to Ms. Nayyar
when it terminated her benefits on July 24, 2002, effective June 24, 2002, and
when Ms. Nayyars appeal was denied almost one year later. Costco, guided
by Manulife, is in breach of contract.
VII. Was Ms. Nayyar Disabled and Eligible
for Benefits Following June 24, 2002?
[461] Although I
have accepted Dr. Mallavarapus evidence that Ms. Nayyar was disabled
due to major depression for a majority of the time between 2001 to present, Ms. Nayyar
must still prove that she was disabled within the meaning of the Plan and Policy
and eligible to be paid benefits following the termination of her benefits
effective June 24, 2002.
[462] I prefer
to analyze Ms. Nayyars claim for benefits in relation to her subsequent
work history as opposed to the specific time periods she asserts in her second
amended statement of claim.
June 24, 2002 to February 9, 2004
[463] I have
found that Ms. Nayyar continued to be disabled within the meaning of the
Plan when she returned to her job, part time, on December 9, 2002 in Costcos return
to work program.
[464] Costco and
Manulife continued to receive medical information concerning Ms. Nayyar.
They were advised that: Ms. Nayyar continued to see Drs. Mallavarapu and
Gandhi for treatment; she was having difficulty coping with her job; and there
were periods where Ms. Nayyar had to remain at home due to her depression.
Manulife was aware on September 30, 2003, that Ms. Nayyar had increased
her dosage of anti-depressant medication. Ms. Nayyar also told Costco that
she was having difficulties performing her job duties.
[465] Costco
allowed Ms. Nayyar to continue to participate in its return to work
program, on part time shifts, until she returned to full time hours (eight per
day) on February 10, 2004. Ms. Nayyar is entitled to receive benefits from June
24, 2002 to February 9, 2004.
[466] Ms. Nayyar
is, therefore, entitled to long term disability benefits from the date her
claim was accepted as effective, i.e., December 5, 2001 until February 9,
2004. That period exceeds the 24-month coverage limit insured directly by
Costco by just over two months.
[467] The Policy
contains rehabilitation assistance provisions that are very similar to those
found in the Plan. For Ms. Nayyars case, there is no meaningful
difference between the Plan and the Policy.
[468] Ms. Nayyars
participation in Costcos return to work program was known to Manulife. It did
not object to her participation beyond December 5, 2003.
[469] I have
rejected Ms. Taylors dismissal of Ms. Nayyars appeal. I find that Ms. Nayyar
was not able to return to full time employment in any occupation prior to
February 9, 2004.
[470] Manulife
ought to have paid Ms. Nayyar benefits when coverage under the Plan came
to an end through until February 9, 2004. Ms. Nayyar is entitled to recover
long term disability benefits against Manulife for the period December 5, 2003
to February 9, 2004. Manulife is in breach of its obligations under the Policy
for failing to pay those benefits.
[471] Costco and
Manulife are entitled to credit, from the amounts they are required to pay, for
the amounts that Ms. Nayyar was paid by Costco when she participated in the
rapid reemployment program.
[472] Otherwise,
Ms. Nayyars claim for breach of contract against Manulife for payment of
benefits for the period covering June 24, 2002 to December 5, 2003 must be
dismissed given its role as Costcos plan administrator: Asselstine v.
Manufacturers Life Insurance Co., 2005 BCCA 292, 254 D.L.R. (4th)
464.
February 10 to May 8, 2004
[473] During
this period, Ms. Nayyar returned to work full eight hour shifts up until
May 5, 2004. She received funeral pay, at eight hours per day, for May 7 and 8.
She is not entitled to be paid benefits for this period.
May 9 to August 31, 2004
[474] Ms. Nayyar
did not work at all during this period.
[475] Dr.
Mallavarapus January 8th Report supports Ms. Nayyars claim that she was not
able to work during this period because she suffered an exacerbation of her
depression in May 2004 with symptoms of severe anxiety and panic arising in
June 2004.
[476] Costcos attendance
records concerning Ms. Nayyar state that she was away from work between
May 12 and August 29, 2004. Her absence is noted as MLOA. At trial, Costcos payroll
clerk, Vivian Lockyear, explained that the acronym means medical leave of
absence. She confirmed that Ms. Nayyars medical leave of absence spanned
May 12 to August 29, 2004.
[477] I find
that Costco accepted Ms. Nayyars absence from work during this period for
medical reasons. Given the episodic nature of Ms. Nayyars depression as
well as the absence of any evidence that any other medical condition was
involved, I am satisfied, on the balance of probabilities that Ms. Nayyars
absence from work was due to her depression.
[478] Ms. Nayyar
is entitled to be paid disability benefits pursuant to the recurrent disability
coverage. That coverage (in the Plan and in the Policy) treats a recurrence
within six months from the same or related causes as those for which long
term disability coverage has been paid under the Plan as a continuation of the
same disability. Ms. Nayyar had returned to work on a full time basis on
February 10, 2004, and went off again just over three months later.
[479]
An employee is not required to submit an application for benefits under
the recurrent coverage provisions. The Plan requires an employee to submit
proof that benefits are payable within 180 days from the end of the qualifying
period. Otherwise, the Plan states that it is at the option of Costco to
require proof that the employee remains disabled where coverage is continued:
Continuing Proof
If benefits are being paid or
coverage continued on a covered person because of disability, the Employer may
require written proof that this person remains Disabled under the terms of this
Plan. This proof will be required as often as may reasonably be necessary.
There is no evidence that Costco asked for such proof, or
that if it did, such request was not complied with.
[480] The Policy
has substantially the same wording as found in the Plan.
[481] I find
that Manulife was aware that Ms. Nayyar was unable to work during this period
and further, that Manulife monitored her status. For example, on August 15,
2004, Dr. Gandhi completed a Costco Functional Abilities Form advising
that Ms. Nayyar could return to work on August 30, 2004. Dr. Gandhis
note dated August 16, 2004 advising that Ms. Nayyar is not able to return
to work due to sickness was provided to Manulife. These documents were
admitted into evidence to show that they were sent to Manulife (but not for
proof of the truth of their contents). Those documents were sent by fax from
Costco to Mike Middleton.
[482] As a
result, Ms. Nayyar is entitled to recover long term disability benefits,
pursuant to the recurrent coverage provisions in the Policy, from Manulife for
the period May 12 to August 29, 2004.
September 1 to December 13, 2004
[483] Ms. Nayyar
returned to her job on a full time basis on September 1, 2004. She remained
working on that basis until December 13. She is not entitled to benefits during
this period.
December 14 to 27, 2004
[484] Ms. Nayyar
did not work during this time. There is no explanation for her absence in the
records, nor did Ms. Nayyar provide one at trial. In the circumstances,
she has not proven that she is entitled to benefits under the recurrent
coverage provisions.
December 28 to 31, 2004
[485] Ms. Nayyar
worked full time shifts during this period. She is not entitled to benefits.
January 1 to February 28, 2005
[486] According
to Costcos attendance records, Ms. Nayyar did not work during this
period. Her absence is unexplained. Ms. Nayyar has not proven that this
absence was related to her depression. She is not entitled to benefits for this
period.
March 1 to June 24, 2005
[487] Ms. Nayyar
returned to work on March 1, 2005 and worked full time, eight hour shifts. She
continued to do so through to June 24. She is not entitled to benefits during
this period.
June 25 to September 7, 2005
[488] Ms. Nayyar
did not work during this period. She was paid vacation pay for four days in
June, much of July and August, and one day in September. Ms. Nayyar did
not apply for benefits. She has not proven that she is entitled to short term
or long term disability benefits during this time.
September 8 to October 25, 2005
[489] Ms. Nayyar
worked full time shifts during this period and is not entitled to benefits.
October 26, 2005 to March 10, 2006
[490] Ms. Nayyar
returned to her job on a part time basis at five hours per day. No explanation
has been provided for her reduction in hours. Ms. Nayyar did not apply for
benefits. She has not proven that she was eligible for benefits during this
period.
March 11 to July 30, 2006
[491] Costcos
attendance records show that Ms. Nayyar did not work from March 11 to
March 26 and that she had requested time off from work. There is no indication
that she was paid.
[492] Ms. Nayyar
returned to her job on part time shifts of four hours per day on March 27.
[493] Ms. Nayyar
signed an application for short term disability benefits on April 18, 2006 and
submitted it thereafter. She sought benefits from March 20.
[494]
Manulife assessed the medical information submitted in support of the
claim. Manulifes disability adjudicator in charge of the claim, Derric Woo,
summarized the medical evidence on May 2, 2006:
APS indicates a diagnosis of Major Depression in Partial
Remission. Tiredness, sad, poor concentration, and inability to cope with
stress are the subjective symptoms included. Clinical findings include patient
looks tired, sad, and gets anxious easily. Medication and counseling is the
treatment plan.
…
FAF [functional ability form]
indicates that the patient gets tired, lethargic, and has headaches in the
afternoon. It recommended the morning shift. Mild cognitive impairments are
noted for all sections.
[495]
Mr. Woo declined the claim on the basis that Ms. Nayyar did
not establish that she met the definition of total disability. He advised Ms. Nayyar
in correspondence dated May 3, 2006:
Unfortunately, your claim has been declined based on the
following information on file.
In order to be entitled to STD benefits, you must meet
certain policy provisions including but not limited to:
Total Disability
Restriction or lack of ability due to
an illness or injury which prevents an Employee from performing the essential
duties of his own occupation.
Medical records suggest you work half time, 5 days a week. In
addition, a doctor note dated March 20, 2006 supports 4 hour days, 5 days/week.
The functional ability form dated April 17, 2006 indicates only mild cognitive
impairments.
Your employer indicates that you did not miss any time off
work, but went from full time 40 hours/day, to reduced hours (4-5 hours/day), working
regular duties.
Based on the information on file,
your claim has been declined, as we are unable to determine that you satisfy
the definition of total disability. You have not missed any time off work, and
have also demonstrated the ability to work 4-5 hours/day. Your condition
appears to cause mild cognitive impairments, which may affect your functional
ability at times. However, it does not appear to inhibit you from performing
the essential duties of your own occupation.
[496] Dr. Mallavarapus
May 25th Report was sent to Manulifes legal department on July 10, 2006, by
her lawyer after Mr. Woo declined the claim. Ms. Nayyars action had
been commenced on her behalf on June 1, 2004.
[497] On July
11, 2006, external legal defence counsel responded to Ms. Nayyars lawyer
asking for particulars to be provided of the period(s) during which your
client alleges that she was disabled and entitled to disability benefits which
were not paid. On the same day, Manulifes legal department also wrote a
letter to Ms. Nayyars lawyer advising that Manulife would object to the
admissibility of Dr. Mallavarapus May 25th Report.
[498] It is
possible to infer from Dr. Mallavarapus May 25th Report that Ms. Nayyar met
the definition of total disability by May 2, 2006. I do not need, however, to
decide that issue. I have determined that Ms. Nayyar was not eligible for
short term disability benefits for this period, but not for the reasons cited
by Mr. Woo. Ms. Nayyars claim was excluded by the eligibility exclusion
contained in the short term disability provisions of the Plan because she was
working part time and receiving income.
[499] Nor is Ms. Nayyar
entitled to long term disability benefits because she returned to work full
time (on July 31, 2006) prior to satisfying the 17-week qualifying period.
July 31, 2006 to March 9, 2007
[500] Dr.
Mallavarapus Jan. 8th Report states that Ms. Nayyar experienced a recurrence
of depression in October 2006 and that she went off work by August 2007.
Although symptomatic, Ms. Nayyar worked full time during this period. She
is not entitled to benefits.
March 10 to April 3, 2007
[501] Ms. Nayyar
did not work at all during this period. Costcos records describe her absence
as justified. There is no evidence to demonstrate that her absence was due to
her depression. As a result, Ms. Nayyar has not proven her entitlement to
disability benefits during this period.
April 4 to July 20, 2007
[502] Ms. Nayyar
worked full time shifts from April 4 to June 28 and then received vacation pay
until July 20. Ms. Nayyar is not pursuing a claim for this period.
July 23, 2007 to January 13, 2008
[503]
Ms. Nayyar was absent from her job during this period. She signed
an application for short term disability benefits on August 3, 2007. The
qualifying period is two days. Manulife denied her claim on September 20 due to
insufficient medical information. Even without that information, and without
addressing whether she was suffering from depression, Manulife took the
position that she was not entitled to benefits because Ms. Nayyars
absence from work was due to personal and family issues as opposed to work
related issues:
I am writing to you as I have received the consultation
report and chart notes on Sept. 11th, 2007, a review of your claim
for Short Term Disability Benefits has been completed and your claim has been
declined as there is insufficient medical information to support your claim for
total disability. It appears that your absence from work is directly related
to personal/family issues, rather than a disabling medical condition. In
addition, please be advised that it is not the intent of the STD plan to cover
absences to avoid issues relating to overwork, or conflicts with co-workers or
management. Further that the medical information must substantiate that you are
disabled from your occupation, not job.
…
It appears that you initially
stopped working due your personal/family issue and indication of work related
stress. Please be advised that while you are overwhelmed by family
situations, however you your absence from work are not medically warranted and
as of August 22nd, 2007, when your father past [sic] away, you should have been
accessing bereavement from your employer. Since, the medical information is not
sufficient to support total disability from an illness or injury such that you
would be unable to meet your own occupation demands, as such, I must discline
[sic] this application for Short Term Disability benefits.
[504] Costco and
Manulife have failed to tender any evidence, let alone prove on a balance of
probabilities, that Ms. Nayyars difficulties at this time were the result
of stress and not the result of a medical condition.
[505] Manulife also
received a functional abilities form completed by Dr. Gandhi on July 29,
2007. In it, he advised Manulife that Ms Nayyar:
(a) was not able to do any
job;
(b) suffered
mild cognitive/mental restrictions in concentration, analytical reasoning,
learning new material, and comprehension;
(c) suffered moderate
cognitive/mental restriction in social interaction; and
(d) was not able to work for
six weeks.
[506] Had that
document been admitted for proof of the truth of its contents, Ms. Nayyar
would have established her entitlement to short term disability benefits for
six weeks.
[507]
In the May 25th Report, Dr. Mallavarapu expressed his opinion that Ms. Nayyar
was at a very high risk for recurrence of her major depression. That report was
admitted for proof of the truth of its contents:
In my opinion, there is only 5% to 10% chance of full
recovery from her depression. Mrs. Nayyar is at a very high risk for
recurrence of her major depression at a future date due to the very fact that
she suffered more than three episodes of depression in the past and she did not
achieve complete resolution of her symptoms over a prolonged period of time.
To complicate the matters, she is also confronted with
moderately severe psychosocial stress involving her relationship with her
husband. Depression makes it very difficult for patients to cope with
increased psychosocial stress and psychosocial stress makes the depression symptoms
worse. This appears to be the case with Mrs. Nayyar.
…
Even with continued ongoing
treatment, she may never be able to reach her pre-morbid level of functioning.
Major depression is a chronic recurring disabling disorder. With best possible
treatments, the recovery/remission rate from major depression recurrent is
guarded.
[508]
He also expressed the opinion that when her father died in August 2007,
Ms. Nayyar suffered a further exacerbation of her symptoms of depression
(that had recurred again in October 2006).
[509]
Costcos attendance records note Ms. Nayyars absence from work
during this period as STD. At trial, Ms. Lockyear explained that this
referred to short term disability:
Q So then turning to the next page is July 2007
to July 2008. For the first part of July up until the 20th there
appears to be 15 vacation days.
A Correct.
Q Those would be paid vacation?
A Yes.
Q And theres STD besides July 23?
A Yes.
Q Thats short-term disability?
A Yes.
Q And it appears that the STD runs until
beginning of January of 2008.
A Correct.
Q Would this be synonymous with a medical leave
of absence?
A Yes.
Q And thats
accurate?
A Yes.
[510] I find
that Costco treated Ms. Nayyars absence as arising from a short term
disability and granted her a medical leave of absence until January 13, 2008.
[511] Having
considered all of the medical evidence admitted for the proof of the truth of its
contents, the assessments of Ms. Nayyars depression carried out by
Manulife over time, and the admissions in Costcos and Manulifes documents (in
particular, Costcos treatment of Ms. Nayyar as absent due to short term
disability), I am satisfied, on a balance of probabilities, that Ms. Nayyar
was suffering from a recurrence of depression identified by Dr. Mallavarapu
in his May 25th and January 8th Reports. I find that she met the definition of
disability within the short term disability provisions of the Plan when she
applied for those benefits. Ms. Nayyar is entitled to short term
disability benefits commencing August 6, 2007 for the coverage maximum of 17
weeks.
[512] The 17
week coverage period for short term disability benefits expired on December 2,
2007. Should Ms. Nayyar receive payment of long term disability benefits from
that date until she returned to work on January 14, 2008 even though she did
not submit an application? I have determined that she should not.
[513]
Ms. Nayyar did not apply for long term disability benefits. In my
opinion, she is not entitled to relief from forfeiture for imperfect compliance
that may be afforded to a beneficiary under an insurance policy pursuant to s.
10 of the Insurance Act. That section provides:
If there has been imperfect
compliance with a statutory condition as to the proof of loss to be given by
the insured or other matter or thing required to be done or omitted by the
insured with respect to the loss, and a consequent forfeiture or avoidance of
the insurance in whole or in part … and the court deems it inequitable that
the insurance should be forfeited or avoided on that ground or terminated, the
court may, on terms it deems just, relieve against the forfeiture or avoidance
…
[514] One of the
factors the Court must consider is whether the forfeiture arises from imperfect
as opposed to non-compliance: Falk Bros. Industries Ltd. v. Elance Street
Fabricating Co., [1989] 2 S.C.R. 778; Provident Assurance Co. v. Adamson,
[1938] S.C.R. 482. Another factor is whether the insurer will suffer prejudice
if relief is granted: Falk Bros.; Pilotte v. Zurich North American
Canada (2006), 80 O.R. (3d) 62, 35 C.C.L.I. (4th) 109 (Sup. Ct. J.) at
para. 70.
[515]
Relief from forfeiture may also be granted pursuant to s. 24 of the Law
and Equity Act, R.S.B.C. 1996, c. 253, which reads:
The court may relieve against all
penalties and forfeitures, and in granting the relief may impose any terms as
to costs, expenses, damages, compensations and all other matters that the court
thinks fit.
[516]
In Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co.,
[1994] 2 S.C.R. 490, Mr. Justice Major described the power to relieve against
forfeiture as follows:
The power to grant relief against forfeiture is an equitable
remedy and is purely discretionary. The factors to be considered by the Court
in the exercise of its discretion are the conduct of the applicant, the gravity
of the breaches, and the disparity between the value of the property forfeited
and the damage caused by the breach: Shiloh Spinners Ltd. v. Harding, [1973]
A.C. 691 (H.L.); Snells Equity (29th ed. 1990), at pp.
541-42.
The Ontario High Court in Liscumb v. Provenzano
(1985), 51 O.R. (2d) 129, affd 55 O.R. (2d) 404 (C.A.), relying on the Shiloh
decision, summarized the governing principles as follows (at p. 137, per
McKinlay J.):
I consider that the following are the appropriate questions
to consider in determining whether there should be relief from forfeiture in
this case: first, was the conduct of the plaintiff reasonable in the
circumstances; second, was the object of the right of forfeiture essentially to
secure the payment of money, and third, was there a substantial disparity
between the value of the property forfeited and the damage caused by the vendor
by the breach?
[517]
In Saskatchewan River, Major J. suggested, without deciding the
point, that a general power existed in the Judicature Act, R.S.A. 1980,
c. J-1 even though a specific power was also provided in the Insurance Act,
R.S.A. 1980, c. I-5. My decision is not impacted by the ultimate resolution of
that issue.
[518]
Ms. Nayyars application for relief from forfeiture does not succeed on
the first test set out in Liscomb, i.e., the reasonableness of her
conduct. Ms. Nayyars failure to apply for long term disability benefits for
this period does not, in my opinion, result from imperfect compliance. Nor is
her present application, brought during the course of the trial, timely. Ms.
Nayyars symptoms did not prevent her from applying for short term disability
benefits on August 3. She was aware, from her prior dealings with Costco and
Manulife, that she was required to submit an application for long term
disability benefits. She also had the benefit of Mr. Nayyars assistance
throughout, and he was certainly well aware of the need to submit an
application. There is no evidence that Ms. Nayyars depression worsened in late
November or early December to the point that she was incapable of pursuing an
application for long term disability benefits. Further, Ms. Nayyar should have
had the benefit of legal advice given that her action for recovery of disability
benefits had been commenced on June 1, 2004. Although it is possible to infer,
from their prior decisions, that Costco and Manulife would have rejected her
claim, that would not, in my opinion, afford Ms. Nayyar a reasonable excuse to
say that she simply gave up because she saw no point in making the application.
[519] In the
circumstances, I do not need to consider whether the insurer would be prejudiced
if relief from forfeiture is granted.
January 14 to April 30, 2008
[520] Ms. Nayyar
was on the job five hours per day except for five days of funeral pay in March
and eight days vacation pay in April.
[521] While it
may be possible to speculate that Ms. Nayyar returned to her job on a
return to work approach, there is no evidence to demonstrate that Ms. Nayyar
returned to work under Costcos return to work program. There is nothing
unusual noted on her attendance records.
[522] Ms. Nayyar
has not proven that her part time hours were due to her depression.
[523] As a
result, I have determined that Ms. Nayyar has failed to establish that she
is entitled to disability benefits for this period.
May 1 to August 10, 2008
[524] Ms. Nayyar
returned to full time work on May 1 and worked on that basis to June 20.
Thereafter, she received vacation pay to August 1. She was not paid until August
11 when she returned to work full time.
[525] Ms. Nayyar
claims for benefits for August 6 – 8. She did not submit an application. Her
attendance records note that her absence was justified; there is nothing to
show that it was for medical reasons.
[526] I have determined
that Ms. Nayyar has failed to prove that she is entitled to benefits for
this period.
August 11, 2008 to December 31, 2009
[527] Ms. Nayyar
returned to work full time on August 11, 2009. She began to receive short term
disability payments commencing January 4, 2010.
[528] Costcos
attendance records in evidence disclose that: Ms. Nayyar received vacation
pay from June 23 to August 1, 2008; she returned to full time work on August
11; and she was paid funeral pay on September 4, 5, and 8. The records for the remainder
of the year were not tendered into evidence.
[529] Ms. Nayyar
is not claiming benefits for this period.
Costcos Performance Appraisal Documents
[530] Costco
relied on four performance appraisal documents concerning Ms. Nayyar in
support of its position that she was capable of performing her job duties and
did not qualify for long term disability benefits subsequent to June 24, 2002.
[531] Those
documents were signed by Costco representatives on June 24, 2003, September 28,
2004, June 8, 2005, and June 22, 2006. I do not find those performance
appraisals to support Costcos defence. The most that can be said about them
from Costcos perspective is that the second appraisal document, completed when
Ms. Nayyar was back at work full time, remarks positively upon Ms. Nayyars
ability to scan products at the cash register at a favourable speed. Other
notes contained in the performance appraisals remark upon Ms. Nayyars:
(a) reticence to communicate
with her employer and Costcos customers;
(b) difficulty in taking criticism
from customers; and
(c) need to improve her
scanning speed.
[532]
I reject Costcos submission that the absence of any indication on these
documents from Ms. Nayyar concerning her difficulties in performing her
job duties supports its defence that she was not disabled. That submission
ignores the medical evidence (admitted for proof of the truth of its contents),
Manulifes own internal assessments that Ms. Nayyar was disabled, the
admissions in Costcos records that Ms. Nayyar was disabled or entitled to
medical leave of absence, and Costcos agreement to accept Ms. Nayyars
return to work under its return to work program. The submission does not take
into account my finding that Ms. Nayyars depression makes her extremely
vulnerable to suggestion.
[533] In
addition, I am not able to evaluate or make findings concerning the process
undertaken for each appraisal because no evidence was tendered in that respect.
[534]
Finally, some of the performance appraisal documents remark adversely upon
Ms. Nayyars many absences from work, her integrity, and her failure to
follow through with commitments. For example, the performance appraisal dated
June 22, 2006 contains this note under the section dealing with her integrity:
Annu was unable to honor her
commitments consistently by not arriving for her scheduled shifts, or on time
for her scheduled shifts. Annu being a long term employee, understands that
when a deadline was given such as reviews, it should be accomplished without
being asked for on several occasions.
Summary
[535] Ms. Nayyar
has established that she was entitled to receive long term disability benefits
during the periods June 24, 2002 to February 9, 2004 and May 12 to August 29,
2004.
[536] I have
also determined that she is eligible for short term disability benefits from July
23, 2007 to January 13, 2008, to the coverage maximum of 17 weeks.
Quantum
[537] All Costco
employees receive regular wage increases, usually in March and in September.
Frequency and amount vary from year to year depending on Costcos current
agreement with its employees.
[538] Costcos
employees at top rate also receive bonuses, usually in June and December.
Bonuses are based on the hours worked. According to Ms. Lockyear, Ms. Nayyar
qualified for bonuses from time to time.
[539] Costco has
at its disposal the records from which it can calculate Ms. Nayyars entitlement
to wage increases and bonuses. Once that information is in hand, Costco should
be in a position to determine the amounts to be paid to Ms. Nayyar for
benefits during the periods in which she is entitled to be paid long term and
short term disability benefits. I am directing Costco to provide that
information to Ms. Nayyar and to me within 21 days.
VIII. Relief
from Forfeiture
[540] In view
of my determination concerning long term and short term disability benefits,
relief from forfeiture arises only in respect of one claim period – December 6,
2007 to January 13, 2008. I have determined that Ms. Nayyar is not entitled to
relief from forfeiture for the reasons I have set out.
IX Damages
for Mental Distress
[541] The Plan
and the Policy are peace of mind contracts. One of their objects was to secure
a psychological benefit that brings mental distress upon breach within the
reasonable contemplation of the parties.
[542] The
evidence concerning the nature of mental distress suffered by Ms. Nayyar
from the termination of her disability benefits is minimal, and comes from two
sources, Ms. Nayyar and Dr. Mallavarapu.
[543] Ms. Nayyars
evidence points to mental distress caused by termination of her benefits as
well as Dr. Mallavarapus advice that she should return to her job even
though she was symptomatic. Ms. Nayyar said that:
(a) she
felt pressured to return to work at Costco even though she was symptomatic;
(b) there were many times
that she could barely function on the job;
(c) she
needed income in order to feed her family because her claims for benefits had
been denied; and
(d) Dr. Mallavarapu
advised her to return to her job part time even though she was symptomatic.
[544]
In his evidence in chief, Dr. Mallavarapu said:
Q Past psychiatric history. Mental state of
mind.
A Past
psychiatric history dates back to 1993, and the history I have mentioned, you
know, earlier. And we did not identify any specific physical problems other
than headaches with you, and you were confronted with severe psychosocial
stress relating to the financial situation, relating to your marriage, relating
to the work. My impression with regard to your work was the depression was
making your coping skills worse. To start with probably you had meagre coping
skills.
[Emphasis added]
[545] No direct
evidence has been led concerning the duration of Ms. Nayyars severe
psychosocial stress concerning her financial circumstances. Given the caution
(set out by Newbury J.A. in Warrington) to be taken in awarding damages
for mental distress, I am reluctant to make inferences concerning duration and
the impact of that stress upon Ms. Nayyar. Although I am satisfied that Ms. Nayyar
suffered mental distress caused by the termination of and subsequent denial of
disability benefits, I am not prepared to make an award beyond nominal damages
given the nature of the evidence. Accordingly, I award the sum of $3,500 under
this head of damage.
X. Breach
of Fiduciary Duty
[546] I agree
with the submission of Costco and Manulife that the duty of good faith
generally ameliorates any requirement to impose a fiduciary duty upon an insurer
to its insured.
[547] In this
case, Costco and Manulife argue that they did not owe Ms. Nayyar a
fiduciary obligation to provide rehabilitation services because the obligation
is at the discretion of Costco. My findings in respect of their failure to
discharge their good faith obligations (including rehabilitation assistance) to
Ms. Nayyar are set out in these reasons for judgment.
[548] While it
is possible for an ad hoc fiduciary duty to arise, I have not been made
aware of any case where it has been imposed.
[549] As a
result of the dicta of Code J. in Schneider, at para. 53, I
agree with the submission advanced on behalf of Costco and Manulife that any
consideration of the existence of an ad hoc fiduciary relationship
should be left for the trial of the bad faith claim.
XI. Bankruptcy
[550] Ms. Nayyar
has failed to prove any connection between her bankruptcy and the handling of
her disability claim. She assigned herself into bankruptcy on April 17, 2001
and was discharged on April 2, 2002. Her bankruptcy issues pre-date Costcos
termination of her long term disability benefits effective June 24, 2002.
XII. Summary
[551] Costco
and Manulife accepted Ms. Nayyars application for long term disability
benefits on February 13, 2002.
[552] I find
that Ms. Nayyar met the definition of total disability within the Plan when
her application was accepted.
[553] Costco was
not entitled to terminate Ms. Nayyars benefits effective June 24, 2002. Costco
is in breach of its contractual obligations to Ms. Nayyar as a result.
[554] Ms. Nayyars
return to her job on a part time basis on December 9, 2002 was accepted by
Costco, to the knowledge of Manulife, within the context of the return to work
provisions of the Plan.
[555] Ms. Nayyar
continued to meet the definition of total disability until she returned to her
job at Costco full time on February 10, 2004, after she was cleared to do so by
her treating psychiatrist.
[556] Ms. Nayyar
is entitled to recover disability benefits from Costco for the period June 24,
2002 to December 5, 2003. Costco is entitled to a credit from the disability
payments owed to Ms. Nayyar for the hours she was paid by Costco during
this period.
[557] Ms. Nayyar
is entitled to recover long term disability benefits against Manulife for the
period December 6, 2003 to February 9, 2004. Manulife is in breach of its
obligations to pay disability benefits to Ms. Nayyar for this period.
Manulife is entitled to a credit from the disability payments it owes to Ms. Nayyar
for the hours she was paid by Costco during this period.
[558] Ms. Nayyar
is entitled to recover long term disability benefits against Manulife for the
period May 12 to August 29, 2004 pursuant to the recurrent coverage provisions
in the policy.
[559] Ms. Nayyar
is entitled to be paid short term disability benefits by Costco for the period July
23, 2007 to January 13, 2008, subject to the 17-week maximum.
[560] Ms. Nayyar
is not entitled to relief from forfeiture in respect of the period December 6,
2007 to January 13, 2008. Otherwise, relief from forfeiture does not arise for
determination.
[561] Costco and
Manulife shall determine and advise of the amounts to be paid to Ms. Nayyar
on account of disability benefits and court order interest within 21 days. Ms. Nayyar
shall provide her response within 21 days thereafter. If the parties agree on
those amounts, then an order should be submitted for entry advising of their
agreement. If the parties cannot agree on the amounts, they should arrange to
appear before me to determine them.
[562] Ms. Nayyar
is awarded the sum of $3,500 for damages for mental distress.
[563] Ms. Nayyar
has failed to prove her claim for damages in respect of her bankruptcy.
[564]
Subject to matters for which I am not aware, Ms. Nayyar is entitled to
her costs. The parties should arrange to appear before me to provide further
submissions in respect of the scale of costs.
P. Walker J.
__________________________________
The Honourable Mr. Justice Paul
Walker