CITATION: Belec v. Sun Life Assurance Company of Canada, 2022 ONSC 3522  
COURT FILE NO.: CV-20-82562-00CP  
DATE: 2022/06/13  
ONTARIO  
SUPERIOR COURT OF JUSTICE  
)
BETWEEN:  
)
Giulia Belec  
) Joseph Obagi and Elizabeth Quigley, for the  
) Plaintiff  
Plaintiff/Moving Party  
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– and –  
Linda Plumpton, David Outerbridge, Shalom  
Cumbo-Steinmetz, for the Defendant  
Sun Life Assurance Company of Canada  
Defendant/Responding Party  
) HEARD: February 8, 9, and 10, 2022 via  
) Zoom in Ottawa  
R. SMITH J.  
REASONS ON MOTION FOR CERTIFICATION  
Giulia Belec (“Belec”) has brought a motion to certify a class proceeding against Sun Life  
1.  
Assurance Company of Canada (“Sun Life”). Belec claims that Sun Life has erred in calculating  
her long term disability benefits by wrongfully deducting the inflation component (“COLA”) from  
her Canada Pension Plan (“CPP”) and her Public Service Superannuation Act (“PSSA”) benefits.  
2.  
The parties agree that the LTD Policy prohibits Sun Life from deducting the COLA  
increases from any recipient’s CPP or PSSA benefits (sections 9, 4, A, a) and b) of the Policy).  
3.  
Sun Life used a computer program called (“CHESS”) to calculate the amount of long term  
disability benefits that were payable to a recipient. The CHESS program calculated the indexing  
to adjust for inflation (COLA) in each year and deducted “other income” as defined in the Policy.  
The CHESS program’s calculations for Ms. Belec (attached at Schedule “A”) deducted the amount  
Page: 2  
of her CPP and PSSA benefits (“offsets”) including the COLA increases for these two items,  
contrary to the specific terms in the LTD Policy (the “Policy”).  
4.  
Sun Life does not dispute that its CHESS program interpreted the Policy, firstly to apply  
the COLA increase each year to her Gross Monthly Benefit (as argued by the Plaintiff) and then  
deducted the CPP and PSSA amounts including the COLA component for each year. However,  
Sun Life now argues that its CHESS program’s methodology made two errors: a) applying the  
annual indexing to her Gross Monthly Benefit rather than her Net Monthly Benefit; and b)  
wrongfully deducting the Cola increases for her CPP and PSSA benefits. Notwithstanding these  
two alleged errors, Sun Life submits that the Monthly Benefit as calculated by the CHESS  
program, arrived at the correct result.  
5.  
Sun Life argues that the Policy should be interpreted to apply the COLA increases effective  
on January 1 of each year to the net amount of the Monthly Benefit being received for the month  
of December of each year, after deducting all the “other income” she received, including the  
amount of her non-indexed CPP and PSSA benefits.  
6.  
Ms. Belec submits that the annual COLA increases effective on January 1 of each year  
should be applied firstly to her “Gross Monthly Benefit”, namely on 70% of her salary when  
benefits began being paid, indexed each year, before making deductions for “other income”  
received, including her un-indexed CPP and PSSA benefits.  
7.  
The parties have used terms Gross Monthly Benefit and Net Monthly Benefit and so I will  
also refer to these terms even though the Policy only refers to a “Monthly Benefit”. The parties  
agree that the Gross Monthly Benefit is 70% of Ms. Belec’s salary when she commenced receiving  
benefits, increased each year by the COLA percentage. The Plaintiff submits that a correct  
interpretation of the Policy required Sun Life to apply the annual indexing factor to this (gross)  
amount before deducting “other income”.  
8.  
The term “Net Monthly Benefit” is the actual amount received each month in December of  
each year after deducting “other income”, which in Ms. Belec’s case includes her CPP and PSSA  
benefits. Sun Life submits that the term “Monthly Benefit” used in the Policy should be interpreted  
to mean the Net Monthly Benefit for the purpose of indexing the amount payable to her.  
Page: 3  
9.  
The Plaintiff submits that her claim meets the criteria required for certification. She further  
submits that a class proceeding is the preferable procedure to interpret the Policy to determine the  
correct methodology to be applied to index the Monthly Benefits each year for all long term  
disability recipients. Determining this issue for all recipients in one proceeding would promote  
access to justice and make efficient use of judicial resources.  
10.  
Sun Life argues that the Plaintiff does not meet any of the five criteria for certification,  
namely that:  
(a)  
The Plaintiff has failed to plead a reasonable cause of action;  
(b)  
The proposed class definition is overbroad due to class-wide limitation periods and  
is of an indefinite duration as there is no end date;  
(c)  
(d)  
The Plaintiff has not shown “some basis in fact” for the proposed common issues;  
The proposed representative Plaintiff cannot fairly and adequately represent the  
interests of the class; and,  
(e)  
A class action is not the preferable procedure because a decision in a single action  
would be sufficiently binding on all other disability claimants, which would make more  
efficient use of judicial resources.  
Background/Facts  
11. Ms. Belec was employed by the Federal Government of Canada since March 29, 1982. She  
was diagnosed with a major depression and fibromyalgia and started receiving disability benefits  
under Sun Life’s Policy on September 13, 2006. She has continued to receive long term disability  
benefits to the present date.  
12.  
The Policy dates back to April 30, 1997 and was issued by Sun Life to Her Majesty the  
Queen in Right of Canada represented by the President of the Treasury Board.  
13.  
Ms. Belec currently receives LTD benefits under a group life and disability insurance  
Policy bearing Policy number 12500-G entered into between Sun Life and Her Majesty the Queen  
Page: 4  
in Right of Canada Represented by the President of the Treasury Board ("Treasury Board"). Sun  
Life underwrites and administers the Policy for the Treasury Board, which is the Policyholder or  
plan sponsor.  
14.  
The Policy covers eligible federal government employees who are represented in the  
collective bargaining process — i.e., unionized employees of the Government of Canada. Ms.  
Belec is one of these employees.  
15.  
The original Policy number 12500-GD was purchased by the Treasury Board in 1970. It  
was amended from time to time, and in 1997 it was terminated and replaced with the initial form  
of the current Policy bearing Policy number 12500-G.  
16.  
The 2006 Policy was issued on November 10, 2006 with retroactive effect to January 1,  
2006. Prior to the 2006 Policy, the version of the Policy that was in force had an effective date of  
April 30, 1997 (the "1997 Policy"). There are no changes between the 1997 Policy and the 2006  
Policy in the wording of the provisions relating to COLA and its application to the Net Monthly  
Benefit under the Policy.  
17.  
Treasury Board had the ability in 1970, and continues to have the ability today, to specify  
the desired features of its plan. Subject to applicable legal and underwriting restrictions (including  
restrictions against over-insurance, as explained below), the plan sponsor has discretion to control  
the content of the plan. This includes the ability to specify the terms and conditions of the COLA  
that applies to increase LTD benefits from year to year.  
18.  
The Policy was designed with input from union and management representatives within  
the federal government. It continues to be reviewed on a regular basis with union input.  
The Policy  
Payment Of Monthly Benefit  
19.  
At page 9-5 of the Policy, under the heading of “payment of Monthly Benefit” a number  
of conditions are set out as follows:  
Upon receipt of Notice and Proof of Claim that:  
Page: 5  
1. an Employee became Totally Disabled while insured and is under a  
Reasonable and Customary Treatment Program,  
and  
2. Total Disability continued beyond the Elimination period, the Monthly  
Benefit will be paid while the Employee continues to be Totally Disabled,  
subject to the terms and provisions of this Policy.  
[...]  
Benefits are payable monthly in arrears, commencing on the completion of (but  
not payable in respect of) the Elimination period.  
20.  
To summarize, benefits are payable after Sun Life receives the required Notice and Proof  
of Claim and upon the later of: (i) 13 continuous weeks of Total Disability (or 13 weeks within a  
year of being unable to work due to the same cause), and (ii) the exhaustion of all of the plan  
member's sick leave credits and other paid leave, other than vacation leave.  
Insured Earnings  
21.  
The term "Insured Earnings" is defined in the section of the Policy bearing that title at p.  
4-3 as follows:  
For Full-Time Employees:  
The Employee's current annual salary, at the relevant date, as defined in Part II  
of the Public Service Superannuation Act, adjusted to the next higher multiple  
of $250, if not already such a multiple. […]  
Other Income  
22.  
The term "Other Income" is defined in the section bearing that title at p. 9-1 of the Policy.  
The relevant portions are under sections (a), (d) and (f). Sections (d) and (f) relate to the CPP and  
PSSA benefits, which specifically exclude a deduction for indexing increases under these plans.  
The relevant exclusions for “other income” also referred to as “offsets” are as follows:  
(a) compensation or profit from an occupation or business enterprise (subject to  
exceptions where that compensation or profit is from a rehabilitative program  
approved by Sun Life);  
(b) not applicable;  
Page: 6  
(c) not applicable;  
(d) disability benefits provided under the legislation of any government,  
including under the CPP and Quebec Pension Plan ("QPP"), but excluding  
(i)  
the amount of any increases paid under the CPP or QPP as a  
result of the COLA provisions of those plans related to changes to  
the Consumer Price Index ("CPI") for Canada,  
(ii)  
not applicable, and  
not applicable;  
(iii)  
(e) not applicable; and  
(f) income provided through an immediate annuity, annual allowance, or  
deferred annuity payable in respect of the plan member's own service under the  
federal PSSA or Special Retirement Arrangements Act, but excluding the  
amount of any increases paid as a result of the COLA provisions of those Acts  
related to changes in the CPI for Canada.  
Indexation  
23.  
The Policy contains a COLA provision, known as an "indexation" provision, or what the  
PSSA refers to as an "escalation" provision. This provision is found in the section entitled  
"Indexation" (at p. 9-5 of the Policy). The COLA under the Policy is linked to the CPI, with a cap  
at 3% per annum. It states as follows:  
While benefits are payable, the Monthly Benefit will be increased on January 1st  
of each year to reflect any increase which is provided by the escalation  
provisions of the Public Service Superannuation Act. In no event, will any  
increase exceed 3%.  
Analysis  
24.  
Ms. Belec submits that the Policy should be interpreted to apply the COLA indexation on  
January 1 of each year to the Gross Monthly Benefit she received the previous December, that is  
to 70% of her insured earnings indexed each year, and then to deduct any “other income” she  
received each month. The “other income” she received was CPP and PSSA benefits. The COLA  
increases that are applied each year to her CPP and PSSA benefits are not to be deducted. Sun Life  
calculated the indexing on Ms. Belec’s benefits using its CHESS program, which applied the  
Page: 7  
indexing firstly to her Gross Monthly Benefits, but it deducted the COLA increases to her CPP  
and PSSA benefits contrary to the terms of the Policy.  
25.  
Sun Life argues that even if its CHESS program applied the indexation to the Gross  
Monthly Benefit before deducting other income and it wrongfully deducted the COLA increases  
to her CPP and PSSA benefits, it still paid Ms. Belec the correct Monthly Benefit. The CHESS  
printout (attached as schedule “A”) shows the indexing of benefits for Ms. Belec. The printout  
indicates that the indexing increases to her CPP and PSSA benefits were deducted contrary to the  
terms of the Policy. Sun Life’s actuarial report applied the indexing on the net amount, rather than  
the gross amount, that Ms. Belec received and then deducted the amount of her nonindexed CPP  
and PSSA benefits. The actuary concluded that his method produced the same result as that of the  
CHESS program used by Sun Life.  
26.  
The confusion in implementing the indexing provisions to Ms. Belec’s LTD benefits on  
January 1 of each year is caused by the language of the Policy. The Policy sets out six different  
types of “other income”, which are to be deducted from her Gross Monthly Benefit (70% of salary).  
Two of the categories of “other income” defined in the Policy are CPP and PSSA benefits, which  
have their own COLA increases each year. A third category of “other income” to be deducted is  
any compensation from an occupation or business, which would include part-time employment  
income. This category of “other income” does not have any annual COLA increases and the  
amount may vary from month to month.  
27.  
If “other income” was earned from part-time employment in December, which was  
subsequently discontinued, then the intention of the Policy would be to apply the indexing increase  
in January to her Gross Monthly Benefit to avoid having a situation where there would be  
practically no indexing increase on January 1.  
For example, if on December 31, 2006, Ms. Belec’s Gross Monthly Benefit was  
$4,068.75 ($69,750.00 x 70% = $48,825 ÷ 12 = $4,068.75).  
If she had earned $1,000 of income from part time employment in December of  
2006, her Monthly Benefit would be reduced to $3,068.75 for December 2006.  
If the indexing increase of 2.3% was applied to her Net Monthly Benefit  
($3,068.75) then in January of 2007, the amount of her indexing increase would  
Page: 8  
be $70.58 (2.3% x $3,068.75) as opposed to $93.58 (2.3% x $4,068.75) if the  
indexing was calculated on her Gross Monthly Benefit. As a result, if Ms. Belec  
didn’t have any employment income in January and February of 2007 then she  
would receive a Monthly Benefit of $4,139.33 ($4,068.75 + $70.58) if the  
indexing was calculated on her Net Monthly Benefit. If the indexing was  
calculated on her Gross Monthly Benefit, then she would have received an  
increased Monthly Benefit of $4,162.33.  
Where employment or occupational income is deducted as “other income”, the  
intention of the policy would be to apply the indexing increase to her gross  
benefit on January 1 of each year before deducting the employment income that  
would be anticipated for January.  
28.  
In Ms. Belec’s situation, where she ultimately received both CPP and PSSA benefits, which  
each have their own indexing increases, the intention of the Policy terms with regard to indexing  
is unclear. Is the indexing to be calculated on the gross benefit (70% of salary indexed) or on her  
net benefit after deducting the unindexed amount of CPP and PSSA? This is the issue to be decided.  
29.  
The Policy does not specify a different methodology to implement the indexing provisions  
where the offset has its own indexing factor such as for CPP and PSSA. The Policy only provides  
for one method to apply the indexing increase, for both situations where CPP and the PSSA  
benefits which have their own indexing increases, and for the situation where occupational income  
may be being received where there is no indexing.  
30.  
The CHESS, the computer program used by Sun Life to apply the indexing and to calculate  
the Monthly Benefit used the same interpretation of the Policy as sought the Plaintiff, namely it  
calculated the annual indexing increase firstly based on her Gross Monthly Benefit and then  
deducted the “other income”. Sun Life’s CHESS program also deducted the COLA increases to  
both the CPP and the PSSA benefits, which is against the specific terms of the Policy.  
31.  
Sun Life argues that even if the CHESS calculations applied the annual indexing to her  
Gross Monthly Benefit rather than her Net Monthly Benefit, and wrongfully deducted the COLA  
increases to her CPP and PSSA benefits, it came to the right answer anyway. The CHESS  
methodology arrives at the same indexed Monthly Benefit as if the indexing increase was applied  
to her Net Monthly Benefit, which it now argues is the correct interpretation of the Policy. This  
situation of mathematical equivalence occurs where the offsets are for CPP and PSSA, which have  
the same rate of indexing. The methodology proposed by Sun Life does not produce equivalent  
Page: 9  
results if the offset deduction is for occupation or business income which does not have any  
indexing.  
Summary of Positions  
32.  
The Plaintiff claims that Sun Life’s CHESS program has correctly interpreted the Policy  
and applied annual indexing, firstly to her Gross Monthly Benefit, but has breached the Policy by  
wrongfully deducting the COLA increases for both Ms. Belec’s CPP and PSSA benefits.  
33.  
Sun Life acknowledges that its CHESS computer program calculated the annual indexing  
firstly on her Gross Monthly Benefit (as argued by the Plaintiff) and then erroneously deducted  
the COLA increases to Ms. Belec’s CPP and PSSA benefits. However, it submits that it paid the  
correct indexed Monthly Benefit to her in any event. Sun Life argues that the CHESS method of  
calculating the indexed Monthly Benefit came to the same result as if the annual indexing was  
applied to her Net Monthly Benefit, which it argues is the correct interpretation of the Policy. Sun  
Life has filed an expert actuary’s report giving the opinion that the CHESS methodology and  
calculating the indexing increases on the Net Monthly Benefit, both produce the same result where  
the CPP and PSSA benefits are indexed at the same rate. In cross examination the actuary was  
unable to provide a formula or methodology that would produce the same result if the offset was  
for occupation or employment income, which is not indexed.  
Applicable Law  
34.  
In Hollick v. Toronto (City), 2001 SCC 68, at para. 15, the Supreme Court stated that  
the Class Proceeding Act, 1992, S.O. 1992, c. 6 (the “CPA”) was remedial legislation that should  
be given a large and literal interpretation to achieve its three primary objectives:  
1.  
2.  
3.  
The promotion of access to justice;  
Judicial economy; and,  
Modification of the behaviour of actual or potential wrongdoing.  
35.  
The five criteria, that must be met for certification are set out in section 5(1) of the CPA,  
as follows:  
Page: 10  
5(1) The court shall certify a class proceeding on a motion under section 2, 3,  
or 4 if,  
a. The pleadings disclose a cause of action;  
b. There is an identifiable class of two or more persons that would be  
represented by the representative Plaintiff;  
c. The claims of the class members raise common issues;  
d. A class proceeding would be the preferable procedure for the resolution of  
the common issues; and  
e. There is a representative Plaintiff who,  
i. Would fairly and adequately represent the interests of the class;  
ii. Has produced a plan for the proceeding that sets out a workable  
method of advancing the proceeding on behalf of the class and of  
notifying class members of the proceedings; and  
iii. Does not have, on the common issues for the class, and interest in  
conflict with the interests of other class members.  
36.  
Section 6 of the CPA states that the court shall not refuse to certify a proceeding as a class  
proceeding on any of the following grounds:  
(1)  
The relief claimed includes a claim for damages that would require individual  
assessment after determination of the common issues.  
(2)  
(3)  
(4)  
The relief claimed relates to separate contracts involving different class members.  
Different remedies are sought for different class members.  
The number of class members or the identity of each class member is not known.  
Page: 11  
(5)  
The class includes a subclass whose members have claims or defences that raise  
common issues not shared by all class members.  
37.  
Section 6 of the CPA states that it is not a bar to certification if the class members’ damages  
will require individual quantification or if it is necessary to create subclasses.  
38. In Hollick at paras. 20 and 25, the Supreme Court of Canada stated that the representative  
Plaintiff must show some basis in fact for each of the certification criteria, as set out in section 5 of  
the CPA, as outlined above.  
39.  
In Pro-Sys Consultants Ltd. v. Microsoft Corp., 2013 SCC 57, [2013] 3 S.C.R. 477, the  
Supreme Court emphasized that the certification stage does not allow for an extensive assessment  
of the evidence, nor of the complexities and challenges that a Plaintiff may face in establishing  
their case at trial.  
Cause of Action  
40.  
The Plaintiff claims that Sun Life has breached the terms of its LTD Policy by deducting  
the COLA increases to her CPP and PSSA benefits, when this is specifically prohibited in the  
Policy in section 9, Other Income, 4B, and 6. The Plaintiff also claims for punitive damages.  
41.  
Sun Life submits that the Plaintiff has not pleaded the material facts necessary to disclose  
a reasonable cause of action, specifically, the alleged breach of contract.  
42.  
In Cloud v. Canada (Attorney General) (2004), 2004  45444 (ON CA), 73 O.R.  
(3d) 401 (C.A.), the Ontario Court of Appeal affirmed that the “plain and obvious” test established  
in Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959, applies to determine  
if a cause of action has been pleaded. As in a Rule 21 motion, when determining whether the  
Plaintiffs have pleaded a cause of action, all of the facts pleaded are assumed to be proven, claims  
that are unsettled in the jurisprudence should be allowed to proceed, and the pleadings should be  
read generously to allow for inadequacies due to drafting frailties and the Plaintiff’s lack of  
discovery information.  
Page: 12  
43.  
At paragraph 14 of her statement of claim the Plaintiff pleaded that since April 30, 1997,  
the Defendant has failed to pay the class members the cost of living increase to which they are  
entitled under the terms of the Policy.  
44.  
Paragraph 16 of the Plaintiff’s claim also states as follows:  
The Defendant has misled all of the Class Members by paying them only a  
portion of the cost of living increase to which they were entitled. The  
Defendant did so by limiting the cost of living increase to the net monthly  
disability benefit payable to any given Class Member after applying specified  
deductions thereto when they knew, or ought to have known, that the cost of  
living increase is to be calculated against the gross monthly disability benefit  
payable before any specified deductions are applied.  
45.  
Sun Life is fully aware of that the Plaintiff is alleging that it breached the Policy by  
calculating the cost of living increases on the net monthly disability benefit when the Plaintiff  
claims it should have calculated the indexing increase firstly based on the Gross Monthly Benefit.  
46.  
The Plaintiff has also provided some evidence of a basis in fact as it has presented Sun  
Life’s CHESS computer calculation that shows that it calculated the indexing increases to Ms.  
Belec’s disability benefits on her Gross Monthly Benefit rather than on the Net Monthly Benefit.  
The CHESS computer printout also demonstrates that it wrongfully deducted the COLA indexing  
increases to her CPP and PSSA benefits, contrary to the specific terms of the Policy.  
Punitive Damages  
47.  
The Plaintiff claims punitive damages on the grounds that Sun Life knowingly breached  
the terms of the Policy, willfully concealed and misled class members that it was paying cost of  
living increases in accordance with the terms of the Policy, and breached its duty of good faith.  
The Plaintiff pleaded that this amounts to reprehensible conduct which deserves to be punished.  
48.  
In Whiten v. Pilot Insurance Co., 2002 SCC 18 at para 36, the Supreme Court stated that  
punitive damages could be awarded in exceptional cases, namely for “malicious, oppressive, and  
high-handed” misconduct that “offends the court’s sense of decency”.  
49.  
At this point, the pleadings are deemed to be proven but the Plaintiff has not presented any  
evidence of a basis in fact to support the pleading that Sun Life knowingly breached the Policy or  
Page: 13  
concealed from or misled class members that it was not paying cost-of-living increases in  
accordance with the Policy. If such evidence is subsequently discovered, then the claim may be  
amended.  
50.  
Sun Life’s CHESS computer program calculated Ms. Belec’s annual indexing increase  
based on her Gross Monthly Benefit, which is the manner that the Plaintiff argues is the correct  
interpretation. However, Sun Life deducted the indexed increases to her CPP and PSSA amounts  
contrary to the specific provisions of the Policy. Sun Life now argues that while the CHESS  
methodology to calculate her indexing increases was wrong, it arrived at the correct result in any  
event. Sun Life argues that the correct approach is to interpret the Policy to apply the indexing  
annual increase to her Net Monthly Benefit.  
51.  
The Policy does not specify whether the annual indexing increases should be calculated on  
the Gross Monthly Benefit or the Net Monthly Benefit, which makes it possible for two different  
interpretations of the Policy.  
52.  
Sun Life gave all recipients a booklet each year advising them that it calculated the  
indexing increase on the Net Monthly Benefit that they received. While Sun Life’s interpretation  
of the Policy may be incorrect, it did not conceal the method it used to calculate the indexing  
increases. As a result, the Plaintiff would not have any possible chance of success to establish  
abusive, oppressive, or high-handed conduct that offends the court’s sense of decency on the  
evidence presented.  
Disposition of Cause of Action  
53.  
I find that the Plaintiff has introduced evidence of some basis in fact and pleaded a  
reasonable cause of action by claiming that Sun Life breached the terms of the terms of the Policy  
by calculating the annual indexing increases to her the Monthly Benefits based on her Net Monthly  
Benefit instead of her Gross Monthly Benefit. The Plaintiff has also claimed that Sun Life has  
breached the terms of the Policy by deducting the COLA increases to her CPP and PSSA benefits.  
54.  
For the reasons given above I do not find that the Plaintiff has introduced evidence of some  
basis in fact to support the claim for punitive damages at this time.  
Page: 14  
Class Definition  
55. In Sun‑Rype Products Ltd. v. Archer Daniels Midland Company, 2013 SCC 58 (),  
[2013] 3 SCR 545, at paras 57-58 the Supreme Court stated that the purpose of the class definitions  
is:  
(a)  
(b)  
To identify those persons who have a potential claims for relief;  
To define the parameters of the lawsuit, to identify those persons who are bound by  
its result, and  
(c)  
Describing who is entitled to notice of the action. The class definition should allow  
for a class member to self identify – to determine if they are in fact a member of the class.  
56.  
57.  
The Plaintiff initially proposed the following class definition:  
Any and all persons who are currently, or were at any time subsequent to April  
30, 1997, in receipt of long term disability benefits, payable by the Defendant  
under the terms of the Policy, and whose disability benefits were reduced by  
reasons of a specified deduction under the Policy.  
Sun Life objected to the definition on the grounds that the class definition was overbroad  
because it included plan members with statute barred claims, there was no end date, it included  
plan members whose Monthly Benefit was never subject to indexing, and it did not refer to a  
specific section in the Policy.  
58.  
The Plaintiff has submitted a revised class definition in its amended litigation plan which  
addresses some of Sun Life’s objections and defines the class more narrowly as follows:  
Any and all persons who received disability benefits under Sun Life Assurance  
Company of Canada number 12500-G (“the Policy”) from April 30, 1997 up to  
the date of certification whose disability benefits were increased by indexation  
and reduced by (“other income”).  
59.  
The proposed amended class definition addresses two of Sun Life’s objections, namely  
there is an end date and it limits membership to individuals whose benefits were indexed and  
reduced by (“other income”) as defined in the Policy. Otherwise, there is no substantive change to  
the proposed class definition.  
Page: 15  
60.  
Sun Life submits that the class definition is still overbroad because it includes individuals  
whose claims are statute barred, either by the limit of 2 years in Ontario or 2-6 years in other  
provinces. Alternatively, it submits that the temporal boundary could be defined by reference to  
the ultimate limitation period of 15 years as set out in s. 15 of the Limitations Act, 2002 for Ontario  
residents. This approach was adopted by the Court of Appeal of Amyotrophic Lateral Sclerosis  
Society of Essex (ALS) v. Windsor (City), 2015 ONCA 572 at para 43.  
61.  
In the ALS Society decision, the Court of Appeal stated as follows at para. 41:  
However, the case law is clear: where the resolution of the limitation issue  
depends on a factual inquiry, such as when the Plaintiff discovered or ought to  
have discovered the claim, the issue should not be decided on a certification  
motion.  
62.  
Based on the ALS Society decision, I find that the class definition should have a temporal  
limit defined by reference to the ultimate limitation period of 15 years as set out in s. 15(2) of the  
Ontario Limitations Act. This results in membership in the class commencing on January 20, 2005.  
The limitations issue in general and specifically for residents of provinces other than Ontario may  
be addressed after the common issue is decided as ordered in Fehr v. Sun Life Assurance Company  
of Canada, 2018 ONCA 718.  
Disposition of the Class Definition  
63.  
The class definition is approved as follows:  
All persons who received long term disability benefits under Sun Life Assurance Company of  
Canada Policy Number 12500-G (the “Policy”) between January 20, 2005 and the date of  
certification where disability benefits were increased by indexation and reduced by “other  
income”.  
Common Issues  
64.  
The Plaintiff proposes the following three common issues:  
Page: 16  
(a)  
Has Sun Life breached the Policy of insurance by failing to index disability benefits  
and/or by deducting indexation increases on “other income” contrary to the terms of the  
Policy?  
(b)  
In the event that Sun Life has breached the Policy of insurance by failing to index  
disability benefits properly and/or deducting indexation on “other income” improperly,  
what methodology should be applied to determine the correct calculation of benefits?  
(c)  
Should punitive or exemplary damages be awarded, and if so, what is the  
appropriate quantum of these damages?  
65.  
Section 1(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”) requires that the  
claims of class members raise common issues and defines “common issues” as follows:  
(a)  
(b)  
Common but not necessarily identical issues of fact; or  
Common but not necessarily identical issues of law that arise from common but not  
necessarily identical facts.  
66.  
At paragraph 18 of Hollick, the Supreme Court held that for an issue to be common, it must  
be a substantial ingredient of each class member’s claim. The Plaintiff must adduce evidence to  
show some “basis in fact” that the issues are common.  
67.  
In Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, at para. 39, the  
Supreme Court stated that the underlying question is whether the resolution of its proposed  
common issues will avoid duplication of fact finding or legal analysis.  
68.  
In Western Canadian Shopping Centres Inc., at paras. 39 and 40, the Supreme Court set  
out the following factors to be considered:  
(a)  
(b)  
The commonality question should be approached purposedly;  
An issue will be “common” only where the resolution is necessary to the resolution  
of each class member’s claim;  
Page: 17  
(c)  
It is not necessary that class members be identically situated vis-à-vis the opposing  
party;  
(d)  
It is not necessary that common issues predominate over non-common issues.  
However, the class member’s claims must share a substantial common ingredient to justify  
a class action. The court will examine the significance of the common issues in relation to  
the individual issues; and  
(e)  
Success for one class member must mean success for all. All members of the class  
must benefit from the successful prosecution of the action, although not necessarily to the  
same extent.  
69.  
Sun Life argues that the Plaintiff has not put forward any evidence of a basis in fact to  
support the proposed common issues. I do not agree with this submission because the Plaintiff has  
put forward evidence from Sun Life’s CHESS computer printout, which calculated the annual  
indexing based on the Gross Monthly Benefit from 2007/2013 to 2019, a period of at least twelve  
years, which is the interpretation of the Policy that the Plaintiff submits is correct. This evidence  
supports the Plaintiff’s claim that the correct interpretation of the Policy is to apply the indexing  
increase on January 1 of each year, firstly to the Gross Monthly Benefit and then subsequently to  
deduct any “other income” received.  
70.  
Sun Life’s CHESS printout is also evidence that Sun Life deducted the indexed increases  
for Ms. Belec’s CPP and PSSA benefits contrary to the specific terms of the Policy.  
71.  
The Plaintiff initially proposed 5 common issues and then in its factum for the certification  
motion, increased the number of common issues to six and following the certification hearing has  
submitted 3 proposed common issues in her revised litigation plan. Notwithstanding the revisions,  
the Plaintiff has not changed the substance of the proposed common issues. The Plaintiff has  
always alleged that the Policy should be interpreted to calculate the indexing increases, firstly on  
her Gross Monthly Benefit and that Sun Life wrongfully deducted the COLA increases on her CPP  
and PSSA benefits.  
Page: 18  
72.  
This issue was argued by both parties in their factums and based on the evidence they  
presented over 3 days during the hearing of the motion for certification and Sun Life’s motion for  
summary judgment. Sun Life has not been taken by surprise by the various formulations of the  
common issue made by the Plaintiff.  
73.  
In the event the action is certified, Sun Life seeks to add a further common issue to address  
the limitations issues. Sun Life has not produced any basis in fact that the limitation issue is  
common. Such an issue would involve an individual inquiry which would make the proposed class  
proceeding unmanageable. As a result, Sun Life’s proposed limitation questions are not certified  
as common issues.  
74.  
Proposed common issues #1 and #2 are essentially the same. The first proposed common  
issue addresses interpreting the terms of the Policy involving indexing when “other income” is  
deducted and the second proposed common issue addresses the methodology to calculate the  
indexing of benefits in accordance with the Policy. The first issue requires an interpretation of the  
intention of the parties to determine whether Sun Life breached the Policy and the second question  
asks the court to decide the correct methodology to be used to calculate indexing increases to the  
Monthly Benefit when other income is being deducted. The two proposed common issues can be  
combined.  
75.  
The issue of whether Sun Life has breached the Policy in the manner that it interpreted the  
indexing provisions, when calculating the amount of the indexing increase to the Monthly Benefit,  
is common to all members of the proposed class. Success for one member on this issue would  
mean success for all class members.  
76.  
As such, I am satisfied that the Plaintiff’s proposed issues #1 and #2 are common issues. I  
do not approve issue #3 on the issue of punitive damages as a common issue for the reasons given  
under the Cause of Actions section as I found that that there was no evidence of a basis in fact to  
support a claim for punitive damages with any chance of success at this time.  
Disposition of Common Issues  
77.  
Proposed common issues #1 and #2 can be combined as follows:  
Page: 19  
Has Sun Life breached the terms of the insurance Policy by failing to index  
increases to the Monthly Benefit in accordance with the terms of the Policy or  
by deducting indexation increases on “other income” contrary to the terms of the  
Policy? If so, what is the correct methodology to be used to calculate the annual  
indexation increase to the Monthly Benefit where “other income” is deducted?  
Preferable Procedure  
78.  
Section 5(1)(d) of the CPA requires that a class action be the preferable procedure for the  
resolution of the common issues.  
79.  
In Pro-Sys, at para. 38, the Supreme Court held that two concepts underly the preferability  
analysis, namely whether the class action would be a fair, efficient and manageable method of  
advancing the claims and second, whether a class action would be preferable to other reasonably  
available means of resolving the claims.  
80.  
In Cloud, at paras. 41 and 73, the Supreme Court held that the preferability analysis is  
conducted through the lens of three goals: access to justice, judicial economy and behaviour  
modification and by taking into account the importance of the common issues to the claims as a  
whole including the individual issues.  
81.  
Sun Life submits and argued at the certification motion that the preferable procedure would  
be to have individual actions to determine the correct interpretation of the Policy. Sun Life also  
argued that all other potential claims would follow the result of a single action and as a result this  
approach would dispose of all other potential actions.  
82.  
Sun Life further submits that a summary judgment in a single action would decide the  
common issue for all the members of the class and as a result would increase judicial economy.  
83.  
In Bywater v. Toronto Transit Commission (1998), 27 C.P.C. (4th) 172 (Ont Gen Div.),  
Winkler J. (as he then was), the Defendant submitted that an admission of liability, as it related to  
the proposed representatives Plaintiff’s case, would be binding on all other members of the  
proposed class. Winkler J. held that the admission of liability with regards to the Plaintiff’s case  
was no more than a bare promise which was not binding on all of the other members of the class.  
Page: 20  
He held that granting certification promoted judicial economy because it bound the Defendant to  
its promise with all class members. I find that the same reasoning applies in this case.  
84.  
A decision on the summary judgment motion may have persuasive value for subsequent  
claims but the principles of res judicata would not apply because the parties would not be the same.  
85.  
I am satisfied that judicial economy will be enhanced if the issue of the interpretation of  
the Policy to determine the correct methodology to be followed to implement the annual indexing  
of benefits when some “other income” is being deducted is done in one legal proceeding. Having  
a single trial to decide the common issue, rather than have many legal proceedings to determine  
the same common issue, would promote judicial economy and access to justice.  
86.  
Interpreting the indexing provisions of the long term disability Policy for many disabled  
individuals would also enhance access to justice. This is especially so where the individual class  
members are very vulnerable due to their long term disability which prevents them from being  
able to work.  
87.  
The final factor is behaviour modification. This factor is given lesser weight as Sun Life  
has an arguable position that the indexing increases should be applied to the Net Monthly Benefit  
as opposed to the Gross Monthly Benefit. The Policy does not state whether the indexing increase  
was to be applied to the gross or Net Monthly Benefit. If the evidence discloses that Sun Life knew  
that it was not applying the increase in accordance with the Policy or if it knowingly wrongfully  
deducted the COLA increases to Ms. Belec’s CPP and PSSA benefits as the CHESS printout  
discloses, then this factor would be given greater weight.  
Disposition of Preferable Procedure  
88.  
For the above reasons, I find that a class proceeding is the preferable procedure to decide  
the common issue for all class members in one legal proceeding, which will promote judicial  
economy and access to justice to this vulnerable group.  
Representative Plaintiff  
Page: 21  
89.  
Sun Life submits that Ms. Belec is not a suitable representative Plaintiff because when  
cross examined, she was unable to explain the theory of her claim based on a mathematical  
analysis. I find that this is not surprising as Sun Life had to hire an actuary to perform the  
equivalency calculations. In addition, very competent counsel for both parties spent three days on  
these motions to explain the “simple math” and why the methodology used by Sun Life was correct  
or incorrect. Ms. Belec is aware that she is claiming that her long term disability benefits were not  
correctly indexed by Sun Life, which is the essence of her claim.  
90.  
Ms. Belec seeks to represent a group of vulnerable individuals who are all unable to work  
as a result of a long term disability. Ms. Belec has engaged competent counsel and has brought  
this motion for certification as a class proceeding.  
91.  
The approval of a representative Plaintiff must be approached with the main objectives of  
the Class Proceedings Act in mind, namely with the objective of promoting access to justice and  
promoting judicial economy. The amount of each individual’s claim may not be that large making  
it uneconomic to advance a claim on an individual basis as proposed by Sun Life.  
92.  
I find that the proposed representative Plaintiff, with the assistance of her counsel, is able  
to fairly and adequately represent the interests of the class. The claim has been vigorously  
presented to date and there is no evidence that this will not continue. Ms. Belec is interested in  
pursuing the litigation and her limitations in understanding the exact nature of the legal argument  
or the mathematics involved  
93.  
Disposition of Representative Plaintiff Issue  
94. For the above reasons, Ms. Belec is approved as the representative Plaintiff for the  
This is not grounds to disqualify Ms. Belec from acting as the representative Plaintiff.  
proposed class.  
Proposed Litigation Plan  
95.  
The parties are not in agreement concerning the terms of the proposed litigation plan. I  
make the following decisions and comments about the proposed litigation plan:  
Page: 22  
II. CLASS DEFINITION  
The class definition is amended as set out in this decision.  
III. COMMON ISSUES  
The common issues are amended as set forth in this decision.  
IV. DISCLOSURE REGARDING IDENTITY AND CONTACT  
INFORMATION OF THE CLASS  
The Plaintiff seeks disclosure of the number of class members and all of their  
contact information. Sun Life objects on the grounds that the request is an  
overbroad intrusion on class member’s privacy and exceeds what is necessary to  
give notice to the class.  
The information sought to be disclosed as set out in the litigation plan IV. a), and  
b(i), (ii), (iii), (iv) and (v) is all relevant information to allow class counsel to  
give notice and communicate with class members. The information sought under  
the above subsections shall be provided to counsel for the class members, some  
of whom may decide to opt out. Sun Life has all of this information and  
providing the disclosure sought is not an unreasonable intrusion on the personal  
privacy of class members.  
V. NOTICE OF CERTIFICATION  
The Plaintiff’s proposed method to establish the content of the Notice and the  
method to be used to give notice, namely by mail or e-mail as set out in V. (1-6)  
is approved.  
VI. DOCUMENT PRODUCTION AND EXAMINATION FOR  
DISCOVERY  
Sun Life objects to the Plaintiff’s discovery proposals and submits that it is  
premature to include the extent of documentary productions and discovery at this  
time.  
The parties shall attempt to agree on a discovery plan in accordance with the  
Rules within 60 days of the Plaintiff giving notice to the Defendant of the names  
of the class members who have opted out. If the parties are unable to agree to a  
discovery plan then a case conference may be held to decide any unresolved  
issue.  
VII. MEDIATION  
Page: 23  
Mediation is not mandatory in class proceedings but may be discussed by the  
parties.  
VIII. DETERMINATION OF COMMON ISSUE  
When discovery is completed either party may request a case conference to set  
a trial date to decide the common issue, to schedule a pre-trial conference, and  
to obtain direction directions regarding the trial or for any other matter.  
IX. DETERMINATION OF INDIVIDUAL ISSUES  
After a determination of the common issue, either party may request a case  
conference to determine how to decide any individual issues.  
Disposition  
96. The motion for certification is granted and the litigation plan is approved in accordance  
with this decision.  
Costs  
97.  
The Plaintiff may make submissions on cost within 20 days, the Defendant shall have 20  
days to respond and the Plaintiff shall have 10 days to reply.  
Mr. Justice Robert Smith  
Date: June 13, 2022  
Page: 24  
Page: 25  
CITATION: Belec v. Sun Life Assurance Company of Canada, 2022 ONSC 3522  
COURT FILE NO.: CV-20-82562-00CP  
DATE: 2022/06/13  
ONTARIO  
SUPERIOR COURT OF JUSTICE  
Giulia Belec  
Plaintiff/Moving Party  
– and –  
Sun Life Assurance Company of Canada  
Defendant/Responding Party  
REASONS ON MOTION FOR CERTIFICATION  
Justice Robert Smith  
Released: June 13, 2022  


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