Introduction
This section reviews the question of the onus of proof in the claim for disability benefits and also in other related contexts. The issue of onus is more controversial in presenting the claim. It is relatively straightforward on topics such as the assertion of an exclusionary provision, relief from forfeiture, the question of the overlap in severance claims and the duty to mitigate.
The law on the subject of onus of proof is not conclusive, by any means, as the regrettably detailed review below will demonstrate. The question is overly complicated but basically it may be reduced to the familiar concept that the plaintiff should be prepared to prove his case. The case law has established the following summary:
- The burden of proof to establish coverage and a defined disability rests upon the insured as plaintiff.
- The policy wording must be examined in each instance.
- The onus rests upon the insured when the definition of disability is altered to “total disability” at the “any occupation” period.
- Once the insured has presented a prima facie case of total disability, the evidentiary burden shifts to the insurer.
- The insured retains the overall onus to prove the case beyond a balance of probabilities.
- There is no shifting onus, absent particular policy wording as noted in paragraph 2 above, once the insurer has made payments and then subsequently has decided to no longer continue with same.
The case law which follows may be of assistance in the event of a debate on this subject matter. It is regrettably complex. It is very much likely that the above summary, admittedly of some controversy, is correct. Counsel may be wise to follow the above guidelines and proceed to the limitation chapter.
There are other issues discussed with respect to onus, such as the exclusionary provision, relief from forfeiture, subrogated claims, wrongful dismissal double recovery and the duty to mitigate, but these are straightforward and well-known.
There has been some controversy as to whether, once benefits are paid, this burden of proof shifts to the insurer to rationalize the cessation of benefits. The theory of this position is that, once recognized as eligible, it is not the obligation of the plaintiff to prove a continuum of disability.
A line of cases has developed which supports this proposition, the validity of which has been questioned. Care should be taken in reviewing past authorities as there has been a divergence in judicial opinion on this issue.
Mr. Justice Bouck 1 refers to the burden of proof in a disability claim as a difficult issue, which may resolve itself into “a question of policy and fairness based on experience in the different situations”.
In this case itself, the court identified three of the competing arguments on the issue of onus, which are discussed below. The case provides a good review of the arguments and case law on each issue, as well as these words as a cautionary note:
Judges and lawyers sometimes talk about the concept of burden of proof as if it were a simple issue. It is not. Wigmore on Evidence, 3rd ed., vol. 9, p. 266, discusses the general theory in detail over 94 pages. When trying to ascertain the proper test for determining the burden in individual cases, the author says at p. 275 there is not any general solution for all cases: “It is merely a question of policy and fairness based on experience in the different situations.”
No Shifting Onus
The policy wording becomes of paramount importance in determining where the onus lies. Two Court of Appeal decisions 2 were reviewed as a starting point on the topic in what has become a touchstone case.3
Both appellate decisions confirm that it is the plaintiff which bears the onus dealing with total disability “own occupation” claims.
As Mason J. notes, earlier cases had come to such a contrary erroneous conclusion because the policy wording was not given proper scrutiny. Such was the line of cases 4 which held that once total disability had been established, an insurer who then terminated benefits, bore the onus of proof.
Some later cases had continued with this principle on the theory, as Mason J. noted, that otherwise the insured would be required to prove a negative, referring to the need of the insured to prove he or she was not able to take on any other occupation.
Mason J. found that the Fraser case itself was based on an incorrect reading of a precedent case 5 in which the policy wording presumed a total and permanent disability if the insured remained disabled for a set period. It was in this context that the precedent case decided that the onus shifted to the insurer to deny the insured benefits, not simply because it chose to terminate benefits.
Mason J. then looked to the reasons of Matthews J.A. 6 in which he addressed the view of prior cases describing the burden shifting to the insurer who terminated benefits on the theory that to do otherwise would require the insured to prove a negative, as discussed previously, in the context of showing he or she was not able to carry on any other reasonable occupation:
Simply because it is difficult for the insured to prove a negative, is not reason to require the insurer to prove a negative. For, regardless as to which party has the burden here, that party must prove a negative.
Mason J. concluded in such case 7 the policy wording in that case required the burden remain on the plaintiff insured throughout to prove a total disability. That court 8 did not find the burden shifted because the insured had made payments and concluded there was no shift either on the policy wording “or for any other reason”.
Mason J. then refers to the decision of Helper J.A. 9 which stated the basic proposition that the insured must prove coverage, and then prove the breach when the insurer denies or later terminates payments.
There may be “an evidentiary shift” in the burden of proof, once the insured establishes a prima facie case of total disability.
On the facts before Mason J., the parties entered into a rehabilitation agreement which amended the policy provisions. The policy had provided that a totally disabled employee with whom such an agreement was made “will not have his monthly benefits terminated but continued”…..”for up to 24 months”. The policy also provided that if the insured could not continue under the rehabilitation agreement, he would receive regular benefits under the policy.
On these specific facts, the court determined that the insured accepted a status of total disability by entering into the rehabilitation agreement and hence limited its right to require proof of the continuation of total disability.
For these reasons, Mason J. found the onus rested upon the insurer. In this case, the defence itself pleaded it was the plaintiff who had breached the rehabilitation agreement and in so doing recognized the onus was upon it.
The Shifting Onus - Insurer Stops Payments
Many other decisions have found otherwise, holding that the onus did shift once payments had commenced.
In the decision of the Newfoundland Supreme Court in August of 2002, 10 the insurer had commenced payments as of October of 1990 on a five year own occupation cover. The Court agreed with the interpretation offered by Norwood 11 stating the onus shifts, once payments have commenced “in such circumstances”.
Where there is no change in coverage under a policy, it is clear that the insurer must prove, on a balance of probabilities, that the insured is no longer disabled. The insured does not have to prove continued disability. So, if a policy covers only ‘own occupation’ benefits, or a total and permanent disability policy invokes the presumption of permanence, the insurer who has admitted liability has the onus of disproving continued disability or rebutting the presumption of permanent disability.
This passage from Norwood speaks to a policy which covers only “own occupation” benefits or one which “invokes a presumption of permanence” to find the onus shifting once payments have commenced. This statement is to be questioned as the case law takes a divergent path on this conclusion. Norwood looks to the policy as only covering “own occupation” as distinctive. The case law does not uniformly support this.
This position finds support, however in a 1985 decision of the Alberta Queen’s Bench. 12 In this latter case, benefits were paid as total disability for three years and then stopped. On these facts, O’Leary J. found that the burden of proof was then upon the insurer.
A similar conclusion was reached in a 2003 decision of the New Brunswick Queen’s Bench. 13
The trial judge in Inglis quoted from and accepted the decision of the B.C. Supreme Court 14 as stating that it is the insurer’s onus to prove cause to terminate benefits. This, however, was not the conclusion in Malkin. The trial judge in Malkin reviewed the various issues on the matter of onus but decided on none, holding the plaintiff succeeded no matter which test was used.
The Supreme Court of Canada reviewed this subject in its 1993 decision. 15 The issues in Giroux were not quite as straightforward as this topic might desire and the decision lacks clarity.
The case involved an interpretation of Article 12.03 of the Civil Code, which stated to the following effect:
The general rule in respect of evidence in legal proceedings is set out in art. 1203 of the Civil Code of Lower Canada:
The party who claims the performance of an obligation must prove it.
On the other hand he who alleges facts in avoidance or extinction of the obligation must prove them; subject nevertheless to the special rules declared in this chapter.
As a complicating factor, the policy document in Giroux allowed the insurer to suspend payment where the insured failed to provide timely evidence of a continuing disability of a nature to be satisfactory to the insurer. Giroux had failed to submit medical reports to update her status, as had been requested.
The trial judge and the Court of Appeal had determined the onus of proof was upon the plaintiff to prove her claim of disability. Giroux, acting on her own behalf without counsel in the Supreme Court of Canada, submitted otherwise.
The issue in Giroux was one defined as the onus of proof. Gonthier J. set out the issue on which leave was granted:
Where payments have been made under a disability insurance policy, does the onus shift to the insurer to establish that the insured is no longer disabled before payments may be discontinued?
The question posed, hence, contained two questions, namely, who bore the onus of proof, once payments had commenced and secondly, must the insurer wait until it has such affirmative contrary evidence to support the denial before it may terminate such benefits?
The Court, however, found that even if the lower court had correctly determined that it was the insurer which had the onus, it would have made no difference in the outcome, given the weight of the medical evidence.
The Court concluded that it is the insured’s obligation to provide the proof of disability and that where the insured fails to provide such evidence, the insurer can cease payments, not on the grounds of no disability, but rather due to the insured’s failure to provide updated medical reports as required by the contract. Furthermore, the insurer does not have to wait to receive evidence to support the termination of benefits.
There was no basis in law for the insurer to prove the reason to end the disability prior to terminating payments.
The decision is far from a model of judicial clarity. Clearly, the onus decision was based on the workings of the Civil Code. The decision certainly states that in the interpretation of the Code that the insurer has the onus to amend the status quo. It also clearly states that the insured has the obligation to comply with the contractual requirements.
The Alberta Queen’s Bench, 16 in a 2003 decision, reviewed this Supreme Court decision and noted as follows:
Part of the confusion generated by Giroux arises from the statement that “The insured’s contractual obligation to provide evidence of the continuation of the disability must be distinguished from the burden of proof in a judicial context.” Giroux appears to differentiate between:
-
the onus on the insured to meet the contractual obligation of proof of a continuing disability at the insurer’s request and
-
the onus on the insurer for discharging the burden of proof in a judicial context.
The quoted passage above comes from the headnote. The majority opinion did not express these words. The summary of (a) and (b) appears well stated, apart from noting that this was the decision based on the interpretation of the Civil Code and after payments had initially been made.
The trial judge summarized Giroux as allowing the insurer to cease benefits when the insured refused to provide medical evidence. 17
Shifting Onus after Plff Shows Prima Facie Case re Total Disability
The decision of the Baynton J. 18 dealt with the issue of the onus once the insured has proven a medical disability in the “any occupation” period and stated that such burden shifted to the insured at such time:
However, upon the plaintiff establishing total disability by a preponderance of evidence, the onus shifts to the defendant to establish that the plaintiff could work at a reasonable occupation, i.e. one for which the plaintiff is fitted by reason of her education, experience or training and that is similar in remuneration to the occupation held previously by the plaintiff.
This passage was cited with approval in a decision of the Saskatchewan Queen’s Bench in 1999. 19
The Alberta Court of Queen’s Bench 20 came to the same conclusion, namely, once the plaintiff has made out a prima facie case of total disability, then the onus shifts to the insurer to show that there is a specific occupation which the plaintiff is capable of substantially performing.
However, “in so doing, the plaintiff does not have the negative burden of proving that he is incapable of performing each and every conceivable occupation that may be reasonable given his background and experience: Young v. Saskatchewan.”
Such was also the conclusion of the Supreme Court of B.C. 21 Such a view was indeed stated in Malkin, as was referenced, but once again it is to be noted that the court in this case made no final decision on the burden.
The Evidentiary Burden Shifts When Payments Stop
This issue was reviewed in the August 2005 Ontario Superior Court decision. 22 The court reviewed the conflicting authorities and concluded that it is only the evidentiary and not the ultimate onus which shifts once payments have been made and then terminated.
The Evidentiary Burden Shifts on Proof of Total Disability
Mr. Justice Bouck 23 examined the concept of the shifting burden once a prima facie case of disability has been shown by the insured. He referred to other authorities 24 regarding the concept of the burden of proof and that of the shifting duty to call evidence to meet the opponent’s prima facie case.
The same decision then discusses the impact of a prima facie case, once proven.
Bouck J. in Malkin concluded that the defence must only introduce evidence which balances the scales and need not tip same in its favour to meet its defence. As noted immediately below, Malkin chose none of the alternatives as the correct test.
The Supreme Court of B.C. agreed with this analysis as set out above.25
Further, there was no dispute that once the Plaintiff established a prima facie case of entitlement to the total disability benefits the onus then shifted to Sun Life to tender evidence proving a lack of entitlement – that evidence not having to go so far as to outweigh the evidence presented by the Plaintiff but rather just to balance the scales. 26
The Manitoba Court of Appeal 27 came to the conclusion that while the plaintiff remained possessed of the onus of proof, the evidentiary burden shifted once a total disability was proven.
The ultimate onus rests upon the plaintiff to prove the disability but the evidentiary onus shifts after a prima facie case is established by the plaintiff. 28
As to the satisfaction of this onus, the onus then shifts to the insurer to lead affirmative evidence to show “some other reasonable occupation for which he is qualified and able”. 29
The February 2011 Nova Scotia case also dealt with the onus shifting after a prima facie case has been shown by the plaintiff. 30 It is only the evidentiary onus which shifts. The overall burden to prove the case remains on the plaintiff. 31
In that case, dealing with the “any occupation clause”, the court stated that the plaintiff was not required to prove a negative and that the test was a subjective one, reflective of the context of the plaintiff’s educational background and work experience. 32
As noted, 33 where however, the insurer can make out a rational prima facie case for ceasing benefits, the insured may counter this. The trial judge agreed with this analysis, particularly given the duty of good faith of the insurer to investigate and assess the insured’s claim fairly and reasonably.
As stated by the Manitoba Court of Appeal, 34 in the application for benefits under the “any occupation” period, as noted, the onus rests upon the plaintiff to show entitlement. Once a prima facie case has been established, the defence must prove to the contrary.
This was the same conclusion reached by the B.C. Supreme Court dealing with the transition from “own occupation” to “any occupation”. 35 The plaintiff maintained the onus of proof, one which will shift to the defence as an evidentiary burden only once a prima facie case has been established. Once the plaintiff had hence proven enough evidence to “suggest total disability, Great West Life will be called upon to present evidence of other work Mr. Bain can do”.
To the same effect is the 2001 decision of the Queen’s Bench of Alberta.36
This principle is discussed in general terms in an Ontario 1993 decision 37 in which the trial judge speaks with approval to a passage from Schiff’s text, 38 which he titles “tactical shifting”, which in essence is the same concept discussed above. The Court of Appeal agreed with this analysis.
The Supreme Court of Prince Edward Island also considered this issue 39 and agreed with the above concepts, to which the Nova Scotia Court of Appeal agreed.
Insurer Ceases Payments as a Factor
The B.C. Court of Appeal in its 1991 decision 40 also considered the impact of an insurer commencing and ceasing payments. It reviewed many of the cases cited above and noted that in third option referenced in Malkin by Bouck J., the “shifting burden of proof” requiring a prima facie case shown by the plaintiff was not a significant departure from the normal civil onus of proof. It did state that the fact of a commencement and cessation of benefits which “may or may not weigh in the scales against the insurer, depending on the nature of the coverage and the precise wording of the policy”.
Own Occupation to Any Occupation
When the cover changes from “own occupation” to “any occupation”, naturally enough, the onus is on the claimant. This is self-evident but given the earlier case law which had suggested a shifting onus once payments had been extended, it is to be noted that there is ample authority to support the above proposition, as was also the conclusion. 41
It is also of note that in a case occasionally cited to support the shifting onus issue, 42 the definition changed from “own occupation” to “any occupation” which is the point at which the claim was denied.43
Exclusionary Term
The onus rests on the insured to prove that he is disabled within the term of the policy and once proven, the onus rests upon the insurer to show the exclusionary provision applies. 44
Relief from Forfeiture, Waiver & Promissory Estoppel
The plaintiff bears this onus for relief from forfeiture. 45 It should require no authority that the onus for waiver or estoppel is upon the party making such a plea.
Subrogated Recovery
In 1999 the Nova Scotia Court of Appeal dealt with the subrogation issue. 46
The trial judge concluded that once the Trustees proved that the insured received such a settlement from a third party, the onus then rested on the insured to account for the components of the settlement and show that no portion of the sum recovered fell into the subrogation clause. The Court of Appeal affirmed the decision of first instance.
This issue of onus was not discussed in the Ontario decision, 47 although the court appeared by its reasons to put the onus on the insurer. The plaintiff had received a structured settlement sum which allowed for periodic payments. The issue became in the subrogation argument one of whether the plaintiff received full indemnity in the tort claim. The court appeared to put this issue to the insurer.
Wrongful Dismissal & Disability Overlap
The 2011 British Columbia Court of Appeal decision 48 dealt with the issue of a severance payment received from the employer following the settlement of a claim made against the disability insurer. 49
At trial the judge put the onus on the insurer to prove what portion of the wrongful dismissal settlement could be allocated to long-term disability benefits. The onus, the Court of Appeal ruled, should rather be placed upon the plaintiff.
Mitigation
It is clear that the onus of proof is on the insurer, as stated in the 1985 Supreme Court of Canada decision. 50
One would expect that this onus would be twofold, firstly to show a failure to mitigate and secondly to show that but for the failure, there would have been positive results shown. This was exactly the conclusion of the Supreme Court in Janiak.
This would also be consistent with the views of the Supreme Court of Canada 51 in a wrongful dismissal setting, which reflected the traditional view of the common law courts to the mitigation obligation of such a two-fold onus.
The Court of Appeal in 1996,52 reviewed the trial decision 53 in which it was concluded that the plaintiff had failed to mitigate her damage claim. It is discussed in detail in the mitigation chapter below.
The Court of Appeal found that the defence had satisfied its onus of proving a failure to mitigate. The court then posed the question of what followed from that, namely, did the defence that have to prove what the likely success the plaintiff would have achieved, had she been had she compliant with this obligation.
The appellate court looked to Janiak for guidance.
The Court of Appeal apparently was prepared to refuse to follow this direction and stated that such would impose “an unfair, if not impossible, burden on Mr. Kelly” 54 due to the issue in this particular case which was an alleged disability based on chronic pain.
However, the Court found that even though there was no evidence to show how these additional two months would have improved the plaintiff’s recovery, the defence satisfied the onus of proof, a statement which reflected that the defence nonetheless maintained that onus, i.e., to prove how the plaintiff would have recovered. 55
The court referred to the decision of Freeman, J.A. 56 to distinguish Janiak’s direction that the defendant must not only prove a failure to mitigate, but also that such mitigation would have led to positive consequences.
It is questionable that this decision has followed Janiak. It also is debatable that “no evidence” may satisfy the onus.