Executive Summary: Key Legal and Evidentiary Issues

• Whether the plaintiff was “totally disabled” within the meaning of the LTD coverage on or before his termination date, despite continuing to work up to December 5, 2023.
• Timing of onset of the plaintiff’s disabling anxiety, depression and pain symptoms, and whether they arose during employment or only following the layoff when LTD coverage had already ended.
• Extent to which the medical opinions (psychiatrist, chronic pain specialist, family doctor and psychotherapist) reliably establish disability during the covered period versus disability triggered or aggravated by the termination itself.
• Reliability and credibility of the plaintiff’s evidence, including inconsistencies between his assertion of termination for performance and the settlement documentation characterizing the termination as restructuring.
• Appropriateness of resolving the coverage and disability dispute by summary judgment, given factual conflicts and ambiguities in both contemporaneous records and expert evidence.
• Proper application of the Hryniak v. Mauldin summary judgment framework, including whether the motion judge can fairly determine key factual issues without a full trial or mini-trial.

Facts of the case
The plaintiff, Jayaraj Madhavaraj, was employed by Laurentian Bank for approximately 23 months. His employment was terminated on December 5, 2023, as part of a restructuring. This characterization was reflected both in the termination letter and in a later settlement agreement between the plaintiff and Laurentian Bank. The parties agreed that his employment ceased on December 5, 2023. In March 2024, the plaintiff and Laurentian Bank settled his employment-related claims. Under that agreement, the plaintiff accepted that the reason for termination was restructuring, rather than performance-based dismissal, and his employment end date remained December 5, 2023. The settlement also addressed the continuation and cut-off of certain benefits.

Termination and benefits settlement
Under the settlement, Laurentian Bank agreed that the plaintiff’s health and dental benefits would continue until May 5, 2024. However, the settlement made it clear that short-term disability (STD) and long-term disability (LTD) coverage under the group policy ended on December 5, 2023, the date of termination. Importantly, the settlement agreement specified that it did not affect any potential LTD claim the plaintiff might pursue. In other words, while coverage was confirmed to have ended as of the termination date, the plaintiff’s right to claim under the LTD policy for any disability arising while he was still covered remained expressly preserved. This separation between coverage period and claim rights later became central to the dispute with the insurer.

The LTD claim and denial
On April 4, 2024, several months after his termination, the plaintiff applied to Sun Life Assurance Company of Canada, the LTD insurer under Laurentian’s group plan. In his claim form, he reported that the work environment and the subsequent layoff caused him stress such that he was unable to conduct an effective job search or re-enter the workforce. He described symptoms including stress, anxiety, difficulty focusing on job search efforts and financial insecurity, saying that these issues left him weak and unable to pursue new employment. Sun Life denied the claim. Its position was that a group LTD policy is designed to insure employees who become totally disabled while still employed and covered, not individuals who only become disabled after their employment and coverage have ended. Because the plaintiff was working on December 5, 2023, and had made no contemporaneous disability claim, Sun Life argued that any total disability arose, at the earliest, after termination, by which point LTD coverage had ceased.

Summary judgment motions and legal framework
The insurer brought a motion for summary judgment in the Ontario Superior Court of Justice, seeking dismissal of the plaintiff’s action on the basis that there was no genuine issue requiring a trial. Sun Life emphasized the delay in making the claim, the lack of documented disability complaints while the plaintiff was still employed, and the fact that he was actively working on the day of termination. The plaintiff opposed proceeding by summary judgment at a case conference, but the motion was allowed to go ahead. At the hearing, the plaintiff not only resisted Sun Life’s motion but also advanced a “boomerang” cross-motion for summary judgment in his favour. The court, per Schabas J., considered the Supreme Court of Canada’s guidance in Hryniak v. Mauldin, which states that there is no genuine issue requiring a trial where the motion judge can reach a fair and just determination on the merits because the process allows necessary findings of fact, application of the law and is a proportionate, more expeditious and less expensive route to a just result. The judge also considered the enhanced fact-finding powers under Rule 20.04(2.1), including the ability to weigh evidence and draw reasonable inferences.

Conflicting medical and factual evidence
In resisting Sun Life’s motion, the plaintiff filed evidence describing both physical health issues and increasing stress and anxiety in the final months of his employment, suggesting his disability may have started before his termination even if he did not recognize it at the time. He relied heavily on medical opinions from his family doctor, his psychotherapist and two independent experts: a psychiatrist (Dr. Abrams) and a chronic pain specialist (Dr. Gupta). Dr. Abrams opined that the plaintiff was likely experiencing clinically significant levels of depression and anxiety since at least early 2023 and that he had been disabled from December 5, 2023, to the present, while also noting that his levels of depression, anxiety and cognitive impairment increased following his job loss. Dr. Gupta opined that the plaintiff had been disabled since December 5, 2023, and unable to work thereafter, but he could not pinpoint precise dates on which the various diagnosed conditions arose. The judge found that this evidence, together with the plaintiff’s own account, was enough to show a potential disability arising before termination that he did not fully appreciate at the time, drawing an analogy to MacIvor v. Pitney Bowes, where an employee did not appreciate the significance of an injury during employment. At the same time, the judge identified significant evidentiary problems for the plaintiff. Some expert opinions relied on the plaintiff’s assertion that he was dismissed for poor performance or underperformance, which conflicted with the contemporaneous record (the termination letter and settlement) indicating a restructuring-based termination. This inconsistency raised concerns about the plaintiff’s credibility and the reliability of the information provided to the experts, and thus about the foundations of their opinions. Further, several medical reports linked his anxiety and stress to events “following” the layoff or described his condition as situational stress resulting from the layoff, which tended to support Sun Life’s argument that disability arose after the coverage period ended. Overall, the medical evidence was ambiguous on when, exactly, the plaintiff became totally disabled for purposes of LTD coverage.

Outcome and next steps
After weighing all of the evidence on the summary judgment record, the court held that neither side had met the high threshold required for judgment without a trial. The insurer’s reliance on the timing of the claim, the absence of a contemporaneous disability complaint and the plaintiff’s continued work up to the termination date did not eliminate all genuine factual issues about when disability arose and whether it existed, at least in an unrecognized form, before termination. Conversely, the plaintiff’s evidence, including expert opinions, credibility challenges and inconsistencies with documentary records, did not definitively establish that he was totally disabled on or before December 5, 2023. Schabas J. concluded that he could not make the necessary findings of fact on the paper record, that the evidentiary conflicts were not suitable for resolution through a mini-trial, and that the matter must proceed to a full trial to properly assess credibility, the reliability of documentary evidence and the timing and causes of any disability. As a result, both Sun Life’s motion for summary judgment and the plaintiff’s “boomerang” motion for summary judgment were dismissed. No party was declared substantively successful on the merits, and no monetary award of damages, LTD benefits or quantified costs was made at this stage; the court instead invited written submissions on costs, meaning the total amount, if any, to be ordered in favour of either party cannot yet be determined.