Supreme Court of Canada
Paul Revere Life Insurance Co. v. Sucharov,  2 S.C.R. 541
The Paul Revere Life Insurance Company Appellant;
Gershon David Sucharov Respondent.
File No.: 16945.
1983: October 13; 1983: December 15.
Present: Laskin C.J. and Ritchie, Dickson, Estey and McIntyre JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR MANITOBA
Insurance—Disability insurance policy—Total and partial disability—Inability of the insured to engage in his regular occupation.
The insured was the owner-manager of his own general insurance brokerage business. In April 1976, he applied for benefits under a total disability insurance policy issued to him by the appellant insurance company in December 1973.
A majority judgment of the Manitoba Court of Appeal affirmed a judgment of Solomon J., holding that the respondent was entitled to recover for total disability and not simply for partial disability under the insurance policy. Hence this appeal to determine whether the courts below applied the wrong legal test to distinguish total disability from partial disability.
Held (Ritchie J. dissenting): The appeal should be dismissed.
Per Laskin C.J. and Dickson, Estey and McIntyre JJ.: Provisions relating to total disability are not the same in different insurance policies and each policy has to be considered on its own. Here the policy provided quite clearly that total disability, before the insured reached 55 years of age, did not mean that he had to be so totally disabled as to be unable to work in any gainful occupation. In this context, an owner-manager was totally disabled from performing his work as such when he was unable to perform substantially all of the duties of that position, as proven by the medical evidence which was not disputed. There should not be any reformulation of the policy by introducing ability to do work other than the regular occupation of the insured.
[Harding v. Prudential Insurance Co. of America (1940), 7 I.L.R. 227, referred to.]
APPEAL from a judgment of the Manitoba Court of Appeal (1981), 13 Man. R. (2d) 32,  I.L.R. 789 affirming an appeal from a judgment of Solomon J. (1981), 8 Man. R. (2d) 349,  I.L.R. 357. Appeal dismissed, Ritchie J. dissenting.
R. Stephenson and D. Rosin, for the appellant.
Michael Green, for the respondent.
The judgment of Laskin C.J. and Dickson, Estey and McIntyre JJ. was delivered by
THE CHIEF JUSTICE—The appellant insurer appeals from an adverse majority judgment of the Manitoba Court of Appeal which affirmed a judgment of Solomon J., holding that the respondent was entitled to recover for total disability and not simply for partial disability under a policy of insurance. Monnin J.A. (as he then was) dissenting would have allowed the insurer’s challenge to the judgment of the trial judge.
There are concurrent findings of fact in this case with which this Court rarely interferes, even if there is merely a majority support for the findings below. The central issue in the appeal here is whether the Courts below, and especially the majority of the Court of Appeal, applied the wrong legal test to distinguish total disability from partial disability. If there is no error in that respect, the appeal must fail.
The insurance policy applicable to this case dealt with total and partial disability as follows: Total disability means
that, as a result of such injury or sickness, the Insured is completely unable to engage in his regular occupation; however, after Monthly Indemnity has been payable hereunder during any continuous period of disability to the Insured’s fifty fifth birthday or for a period of sixty months, whichever is the longer, then during the remainder, if any, of the period for which Monthly Indemnity is payable, “total disability” shall mean complete inability of the Insured as a result of such injury or sickness to engage in any gainful occupation for which he is reasonably fitted by education, training or experience, giving
due consideration to his economic status at the beginning of disability.
Partial disability means
…the inability of the Insured to perform the regular daily duties of his occupation at least one-half of the time usually required in that occupation or the inability to perform one or more of the important regular duties of his occupation.
The Trial Judgment
Solomon J., the trial judge, dealt with the legal issue as follows:
I think that the law relating to total disability provisions in insurance policies is quite clear. The plaintiff must prove that he is totally unable to perform the duties covered by the insurance policy. It should be noted that provisions relating to total disability are not the same in different insurance policies and because of such different provisions, judicial decisions are different. They have to reflect the actual provisions in the insurance policy under consideration.
I now want to deal with the provisions contained in the insurance policy before this Court. I find that the plaintiff in this case must show that in July, 1977 he was suffering from continuous sickness which required the regular and personal attendance of a licensed physician and that such sickness caused him to be totally disabled and completely unable to engage in his regular occupation of being owner-manager of his own general insurance brokerage business in order to become entitled to receive benefits under said insurance policy.
Total disability in this insurance policy is so well defined that it left no room for speculation as to what risk was covered by the provisions of the policy. Total disability provisions were to insure plaintiff’s ability to discharge his duties in his regular occupation as the owner-manager of his own general insurance brokerage business. Total disability, as used in this policy in respect of a period before plaintiff reached the age of 55 years, did not mean that plaintiff had to be so totally disabled as to be unable to work in any gainful occupation. The policy covered the risk of plaintiff’s ability to manage his own business and not his ability to be a salesman or a bookkeeper in the insurance business. My interpretation of what is covered by the policy before the plaintiff reached 55 years of age is strengthened by the
provisions in the policy in respect of the period after the plaintiff reached 55 years of age. The insurance policy provides quite clearly that during the later period, the plaintiff will have to prove that he is not able to obtain any similar gainful employment before he could claim indemnity under the policy. In other words, defendant stated quite clearly in this insurance policy that after the plaintiff reaches 55 years of age, proof that he is not able to manage his own business will not be sufficient. He will have to prove that he is not able to pursue any other similar gainful employment before he can claim indemnity. Had it been the intention to include other gainful employment during the first period, the defendant could have very easily provided for the same. In the absence of such provision, I find that the plaintiff has to prove only that he was unable to manage his own insurance brokerage business to become entitled to indemnity under the policy.
The medical evidence in this case persuaded the trial judge that there was total disability within the meaning of the policy. He concluded that
…the plaintiff is suffering from continuous sickness which requires regular and personal attendance of licenced physicians, and that such sickness causes him to be totally disabled to engage in his regular occupation of being an owner-manager of his own general insurance brokerage business.
The Court of Appeal
Hall J.A., who spoke for the majority of the Court, assessed the issue as follows:
The regular occupation of the insured may reasonably be described as owner-manager of a general insurance brokerage business. The issue, therefore, is whether, on the facts, the insured as a result of sickness, was completely unable to engage in that occupation.
He held that there was no demonstrable error by the trial judge in construing the scope of the coverage and, further, that there was no error on either the factual or legal side of the issue. Addressing himself to the legal question, Hall J.A. considered and rejected the contentions of the insurer in the following words:
The main thrust of the argument advanced by counsel for the insurer is that the sickness of the insured did not completely prevent him from engaging in his insurance business. He could sell insurance, make phone calls and attend to bookkeeping. Therefore, he was not totally disabled. In my opinion, that argument fails for the simple reason that it is a reasonable interpretation of the insuring agreement that total disability coverage is provided when, as here, the insured is completely unable to engage in his regular business as an owner-manager of an insurance brokerage business. That he may be able to carry on some of the tasks of running that business in no way detracts from the essential point that for the period in question, he was completely unable to perform the whole of his regular occupation.
An attack was made on that sentence of the reasons of Hall J.A. where he said “not total ability but substantial ability is the test”. The insurer produced a list of activities which the insured was required to perform, as demonstrated by the evidence, and listed them as follows:
Servicing existing policies
Receiving policies and checking their accuracy
General office administration
Managing staff of two
In its view, the insured’s testimony was sufficient to preclude him from having total disability. The items listed against him were as follows:
…he is not precluded by reason of his medical condition from renewing existing policies; that he can market homeowner’s policies without any problem and that any difficulties encountered in marketing commercial risks is due to competition in the industry; he can handle administrative duties such as bookkeeping and ordering stationery; and in October, 1978, when examined for discovery, he was satisfied that his medical condition did not preclude him from selling new policies.
The insurer contended that the proper test was whether the insured was unable to perform the material duties of his occupation. It would segment the duties and put particular assessments upon them. This, however, ignores the medical evidence, which is not disputed, and which clearly shows that his attempts to carry on as owner-manager have brought on attacks of stress and nervousness bordering on hysteria (to use the words of Hall J.A.).
To put the matter another way, an owner-manager is totally disabled from performing his work as such when he is unable to perform substantially all of the duties of that position.
In Couch on Insurance (1983), 2d (Rev. ed.) §53:118 there is the following relevant paragraph:
The test of total disability is satisfied when the circumstances are such that a reasonable man would recognize that he should not engage in certain activity even though he literally is not physically unable to do so. In other words, total disability does not mean absolute physical inability to transact any kind of business pertaining to one’s occupation, but rather that there is a total disability if the insured’s injuries are such that common care and prudence require him to desist from his business or occupation in order to effectuate a cure; hence, if the condition of the insured is such that in order to effect a cure or prolongation of life, common care and prudence will require that he cease all work, he is totally disabled within the meaning of health or accident insurance policies.
The insurer sought to rely on propositions set out in Harding v. Prudential Insurance Co. of America (1940), 7 I.L.R. 227, a judgment of the late Chevrier J. of the Ontario Supreme Court. There the policy specified total and permanent disability, either physical or mental from any cause whatsoever to such an extent that the insured is rendered wholly, continuously and permanently unable to engage in any occupation or perform any work for any kind of compensation of financial value during the period of his lifetime. This is a different policy from that involved in the present case but on the evidence the plaintiff in the Harding case succeeded. The Court in that case
adopted a canon of reasonable construction and, indeed, a principle of contra proferentem. In so far as there is any difference in the policy, the present one is more favourable to the insured.
In his dissent, Monnin J.A. (as he then was) took a different view of some of the medical evidence. He concluded that:
At no time—except during the periods of hospitalization and convalescence—can it be said that this plaintiff was completely unable to engage in his regular occupation. His own doctors stated that he could perform some duties and that preferably he should change his line of work. Plaintiff asserted that he could individually perform most of the tasks which he previously performed.
Monnin J.A. applied not quite the same legal test that was employed by Hall J.A. There was a significant difference as I read his reasons, which were as follows:
An insured is completely disabled from performing his regular occupation if he is unable to perform the substantial duties of the job which he has to perform. A person who is advised by his personal physician, that he can do other work and that he should change the nature of his employment is not totally disabled. By his own admission this plaintiff can perform most of his duties but not all of them collectively. That is not total disability.
The difference resides, in my view, in the assessment of the medical evidence and in what seems to me a reformulation of the policy by introducing ability to do work other than the regular occupation of the insured.
In my opinion, the appeal fails and must be dismissed with costs.
The following are the reasons delivered by
RITCHIE J. (dissenting)—This is an appeal, brought with leave of this Court from a judgment of the Court of Appeal for Manitoba (Monnin J.A. dissenting) affirming a judgment rendered at trial by Solomon J. of the Court of Queen’s Bench of that Province whereby he found the plaintiff
(respondent) to have been “totally disabled” by sickness within the meaning of that phrase as it is defined in the “Professional Executive” policy of insurance issued by the defendant to the plaintiff with effect as of July 1st, 1977 up to and including April 30th, 1981 upon which the present action is brought by the plaintiff.
I have had the privilege of reading the reasons for judgment prepared by the Chief Justice of this Court and I note that his affirmation of the judgment of the Court of Appeal for Manitoba is predicated in large measure on the ground that:
There are concurrent findings of fact in this case with which this Court rarely interferes, even if there is merely a majority support for the findings below.
This finding is followed in the reasons for judgment of the Chief Justice with the following comment:
The central issue in the appeal here is whether the Courts below, and especially the majority of the Court of Appeal, applied the wrong legal test to distinguish total disability from partial disability. If there is no error in that respect, the appeal must fail.
The outcome of this appeal falls to be determined, in my view, by the true meaning to be assigned to the phrase “total disability” as defined by the policy above referred to and, as the Chief Justice has indicated, the test to be applied in determing this issue, is a legal test. The evidence as to the plaintiff’s physical condition is not seriously disputed. He was a highly strung individual and it is apparent that the stress involved in managing his insurance company, coping with his matrimonial difficulties and persisting in a way of life which included the consumption of very considerable quantities of liquor, all combined in his suffering from hypertension which varied in intensity and, periodically interfered with his carrying out some of the functions of manager of his own general insurance brokerage business. In the result he was able to carry out most of his duties individually but unable to cope with them all collectively. In the course of his dissenting reasons, Monnin J.A. accurately summarized the plaintiffs
(respondent’s) own evidence in this regard as follows:
In his testimony plaintiff claimed that he was able to perform individually most of the duties of a general manager and president, but that he was not able to cope with them collectively to effectually discharge his duties as a general manager of the business.
There is no doubt in my mind that the disability so described manifests a very substantial disability but the disability against which the insurance is provided in this case is “total disability” as described in the policy itself and reproduced in the reasons for judgment of Chief Justice Laskin and reads in part as follows:
…the Insured is completely unable to engage in his regular occupation;
I am unable to satisfy myself that an insured who incorporates in his claim under this policy the statement that he is able to perform individually most of the duties of a general manager can be said to be completely unable to engage in that occupation.
The use of the word “completely” in the above definition appears to me to preclude recovery by an insured under this policy for “total disability” when he is able to perform individually most of the duties of his regular occupation. To my mind the word “completely” imports reference to an inclusion of each individual part making up the totality described.
Mr. Justice Hall, however, speaking on behalf of the majority of the Court of Appeal, adopted a test for which no provision whatever is made in the policy when he said “not total ability but substantial ability” is the test and it was by applying that test that the Court of Appeal reached its conclusion that the claimant was entitled to recovery under his policy.
I agree with Mr. Justice Hall that by applying the test so adopted, the conclusion must follow that the insured was “substantially disabled” but I can find no basis for the substitution of this test
for that which the policy so clearly provides. In the result I would allow this appeal for the reasons given by Monnin J.A. in his dissenting judgment.
If these reasons should prevail, the appellant should be entitled to its costs throughout.
Appeal dismissed with costs, RITCHIE J. dissenting.
Solicitors for the appellant: Aikins, MacAulay & Thorvaldson, Winnipeg.
Solicitors for the respondent: Thompson, Dorfman, Sweatman, Winnipeg.