Limitation Periods & Denial Of LTD Benefits: The NSSC Decision In Cameron

A recent Supreme Court decision tackled two issues that have proven complex in Nova Scotia law: summary judgment and limitation periods. The Plaintiff in Cameron v Nova Scotia Association of Health Organizations Long Term Disability Plan, 2018 NSSC 90 missed the one-year limitation period for suing the Defendant (the "Plan") after she was denied long-term disability benefits. Justice Rosinski granted summary judgment to the Plan and dismissed the Plaintiff's claim.

Key facts & findings

The Plaintiff applied for LTD benefits in September 2015 (apparently as a result of anxiety disorder). The Plan denied her application by letter dated May 4, 2016. Under the terms of the Plan, as explained in the denial letter, the Plaintiff could either seek a "claim review" or bring a lawsuit in Court.

The Plaintiff chose the latter option. The Plan provided for a one-year limitation period which began to run "from the date of the claim decision" or "claim review decision".

However, the Plaintiff's statement of claim was not filed in the Supreme Court until November 6, 2017 - a year and a half after the claim decision was made and her application was denied.

The Plaintiff raised several arguments to try to circumvent this one-year limitation period.

First, she argued that the two-year limitation period in section 8 of the Limitation of Actions Act, SNS 2014, c 35 applied, instead of the one-year period in the Plan.

The Court rejected this argument. Section 21(1) of the Act states that an agreement can extend but not shorten a limitation period in the Act. However, section 21(2) of the Act preserves shorter limitation periods contained in agreements that were made before September 1, 2015, when the Act came into force. The Plan was dated October 1, 2010, so its one-year limitation period was still valid (although the Court did not explicitly match up the dates).

Second, the Plaintiff argued that she did not have the capacity to start her lawsuit until November 2017. Limitation periods established by the Act "do not run while a claimant is incapable of bringing a claim because of the claimant's physical, mental or psychological condition" (see section 19). But the relevant limitation period was established under the Plan, not the Act, so this provision did not apply.1

The Court also found the Plan did not act in bad faith in communicating the denial, noting that the Trustees had no legal obligation to bring the one-year limitation period to the Plaintiff's...