Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on short-term disability insurance benefits after federal eligibility rules changed.

• Insurer and third-party administrator refused payment despite claimant's ongoing medical invalidity.

• Collective insurance policy lacked any exclusion for gaps in Employment Insurance (EI) coverage.

• Court emphasized strict interpretation of insurance contracts in favor of the insured.

• Failure to act in good faith by insurers led to compensatory moral damages.

• Tribunal awarded full unpaid benefits plus damages for emotional and financial distress.

Facts and background

Francis Cayer, a full-time flight director employed by Air Canada, stopped working due to illness on February 23, 2020. Under his collective insurance policy with SSQ, Société d’assurance-vie inc., administered by Manion Wilkins and Associates Ltd, he was entitled to short-term disability benefits amounting to 60% of his salary. The insurer initially paid him for 15 weeks, after a 14-day waiting period, as stipulated in the policy.

Following this period, the next 15 weeks of benefits were expected to be covered by Employment Insurance (EI) under federal law. However, due to temporary changes in the Employment Insurance Act prompted by the COVID-19 pandemic, Cayer was rerouted to receive the Canada Emergency Response Benefit (CERB) instead. Despite his continuous medical condition and inability to work, SSQ and Manion refused to provide further payments during this 15-week period, arguing that CERB now replaced EI coverage.

Court's analysis

The Tribunal reviewed the collective insurance policy and found no exclusion or limitation that justified the denial of benefits simply because EI no longer covered the subsequent 15 weeks. On the contrary, the policy specified that benefits would continue for up to 78 weeks of total disability, provided the claimant remained medically eligible.

Furthermore, the Court noted that insurers cannot rely on unstated exclusions, per the Civil Code of Québec. It highlighted that in insurance law, and particularly for contracts of adhesion, ambiguities must be interpreted in favor of the insured. The Tribunal criticized SSQ and Manion for failing to exercise their duty of utmost good faith, both in interpreting the contract and in handling the claim. The court also cited jurisprudence that underscores the insurer's obligation to seek payment solutions rather than evade liability.

Damages and judgment

Cayer experienced financial hardship and emotional distress after being denied coverage. He relied on family and friends for basic needs, reported shame and anxiety, and submitted medical proof of psychological impact. The Tribunal concluded that the defendants’ conduct breached their contractual obligations and caused Cayer significant harm.

As a result, the Court ordered SSQ and Manion to pay Cayer the outstanding disability benefits totaling $11,550, representing 15 weeks at $770 per week. Additionally, it awarded him $2,000 in moral damages and $217 in court costs. The ruling reaffirmed the legal principle that insurance providers must uphold both the letter and spirit of their contractual obligations, especially when no lawful exclusion justifies a denial of coverage.