The recent LAT decision of S.G. and Unifund, 16-000879/AABS by Adjudicator Anna Truong should be seen as a win for proper procedure and that the LAT will follow the Heath analysis of non-earner benefits.
The Applicant was pursuing non-earner benefits, a rehabilitation benefit, a special award, and costs. Prior to the written hearing on November 16, 2016, Unifund raised a preliminary issue seeking to exclude the updated clinical notes of the Applicant’s psychologist and an orthopaedic surgeon report that had not previously been disclosed or produced to Unifund until they were included in the Applicant’s Reply on November 3, 2016. The Case Conference Report required the claimant to submit her submissions no later than October 4, 2016 and a Reply no later than October 31, 2016. The applicant initially provided no explanation as to why her submissions were late.
In deciding to exclude the reports, Adjudicator Truong did not accept the applicant’s argument that she only received the two records on November 1, 2016 and that despite the Case Conference Report’s timelines, she was in compliance with Rule 9.3 as they were disclosed more than 10 days before the written hearing. Adjudicator Truong noted that Rule 9.3 contemplates deadlines imposed by any Order of the Tribunal and noted that the Case Conference Report had the weight of an Order. Therefore, parties were required to comply with the deadlines set out in them. Although the Applicant claimed the Case Conference Adjudicator had indicated that documents could be submitted “within a few days” of the deadline, Adjudicator Truong had no evidence on this point and did not accept the argument.
The Adjudicator also reprimanded the Applicant for failing to raise these two documents at either of the two previous Case Conferences. She found that raising these issues at the Case Conference, “would have allowed the case conference adjudicator and the Respondent to adequately deal with these documents. Waiting until the Reply to disclose these documents for the first time amounts to sharp practice and it is against the Rules.”
In turning to the substantive issue of the non-earner benefit, the Adjudicator appropriately identified the Court of Appeal’s decision in Heath v. Economical as outlining the relevant test for the non-earner benefit. In particular she indicated the following analysis should be followed:
There must be a comparison of the Applicant’s Activities and life circumstances before the accident to those post-accident.
The Applicant’s activities and life circumstances before the accident must be assessed over a reasonable period prior to the accident. The duration is case dependent.
All of the pre-accident activities will be considered but greater weight will be given to the activities of greater importance to the Applicant.
The Applicant must prove that his/her accident related injuries continuously prevent him/her from engaging in substantially all of his/her pre-accident activities. The disability or incapacity must be uninterrupted.
“Engaging in” is a qualitative analysis and requires more than simply going through the motions.
If pain is the primary reason the Applicant cannot engage in activities, the question is whether the pain practically prevents them from performing those activities, rather than physically.
The Adjudicator emphasized that the test requires that the claimant is impaired in substantially all of her pre-accident activities.
The hearing was conducted fully in writing. It does not appear that any affidavit evidence was submitted. The Insurer provided several section 44 reports which indicated the claimant did not suffer a complete inability to carry on a normal life. The Applicant only provided a psychological report, and two disability certificates of the family doctor in support of her claim.
In assessing entitlement, the Adjudicator found that the claimant was a homemaker and mother of four prior to the accident, and continued to be a homemaker and mother of four after the accident. Despite accepting the claimant suffered some impairments, notably a Major Depressive Disorder, the Adjudicator found that the claimant continued to be independent of her personal care, continued to be independent in all housekeeping activities except cleaning the toilet, continued to visit her friends, continued to drive, continued to care for her children, and continued to be able to sit, stand, and walk for 30 minutes at a time.
Adjudicator Truong found that on the balance of probabilities, the Applicant had failed to prove she continued to suffer from a complete inability to carry on a normal life.
She also found that the proposed treatment and assessment plan was not reasonable or necessary as the Applicant made no submissions and pointed to no evidence to support her position. The Adjudicator disagreed with the claimant’s argument that the Tribunal should award the treatment plans on “compassionate grounds” as this was not a remedy available to the Applicant under the Schedule and she failed to point to any legislation or jurisprudence which supported that argument.
In dealing with the request for a Special Award, the Adjudicator noted the Applicant relied on s. 282(10) of the Insurance Act which had since been repealed. However, she addressed section 10 of the Ontario Regulation 664 which dealt with special award. As nothing was found payable, no award could have been sought.
In addressing costs, the Adjudicator noted that the Applicant relied on section s. 282(11) of the Insurance Act which had since been repealed. However, the Adjudicator reviewed Rule 19.1 for awarding costs and noted that costs were an exceptional remedy with a high bar. She declined to award any costs.
In addition to affirming that non-earner benefits remains a high bar to meet, this decision should be seen as a strong message to parties that Case Conferences Reports should be followed and that the LAT may not accept late documents. The Applicant’s failure to comply with the Case Conference timelines resulted in the exclusion of supportive evidence. The Case Conference is a party’s opportunity to address the issues in dispute and raise any pending issues, such as delayed expert reports. Failure to do so may result in significant prejudice to the defaulting party. On all issues, this decision demonstrates that evidence drives the day.
On a parting note, it is worth noting that the LAT continues to treat costs as an “exceptional remedy” that carries a high bar. Although there was no evidence to support costs for the Applicant, it is interesting that despite the finding of sharp practice, which arguably resulted in additional costs for the Insurer, no costs were pursued in relation to the late submission of the report. Going forward, Insurers should consider including a claim for costs in their submissions where one party fails to comply with mandated time lines.
Devan practices insurance related litigation with a focus on accident benefits claims.
I don't think there's a better way to say "I love you" than to give that special someone their very own copy of Auto Insurance Coverage Law in Ontario. For those dark and lonely nights when your loved one wants to read about the meaning of "accident" for third party liability coverage. Or to look up how arbitrators have defined the word "dependant" in section 3 of the Statutory Accident Benefits Schedule. Sometimes your spouse might just want to confirm that they are indeed a "spouse", as that word is defined in section 224 of the Insurance Act. Give your loved one the chance to say:
"I remember one Valentine's Day not too long ago. It was snowy and brisk outside. A Polar Vortex had swept through the city. The day seemed to last forever. I had spilled hot coffee on my new jacket. I was miserable. Alone. Afraid. And then when I got home, I could not believe my eyes! My loved one had bought me my very own copy of Auto Insurance Coverage Law in Ontario!"
Imagine the opportunity to spend a warm summer evening with your loved one, cuddling together on the deck and reading together about uninsured automobile coverage under section 265 of the Insurance Act. The birds begin to sing that sweet summer song. The evening air smells like warm apple pie. And just when the moment couldn't be any more romantic, your loved one reads out loud:
The legislative intent of section 265 is to alleviate the trouble of motorists injured by drivers of uninsured and unidentified automobiles.  The coverage is designed to spread the risk of uninsured drivers among drivers, through insurance policies, and not among the tax base generally, through the Motor Vehicle Accident Claims Fund. 
And then you hear your loved one recite those sexy footnotes:
Barton et al. v. Aitchison et al.,  O.J. No. 3510 (C.A.), 39 O.R. (2d) 282, at para 16.
Bruinsma v. Cresswell,  O.J. No. 770 (C.A.), 114 O.R. (3d) 452, at para 24.
"That's very original", she said sarcastically.
"Stop trying to make me fat", he said depressingly.
In applying s. 9(3) of the Fault Determination Rules to a chain reaction collision involving three moving vehicles and one stopped vehicle, the Superior Court has adopted the Court of Appeal’s analysis of s. 9(4) in State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Co. of Canada to find that there must be a direct impact between a heavy commercial vehicle and the vehicle whose insurer seeks indemnification for loss transfer to apply. The involvement of a fourth “stopped” vehicle in the incident is of no consequence.
Kingsway General Insurance Company v. Dominion of Canada General Insurance Company dealt with a chain reaction involving four vehicles. The first vehicle, insured by Kingsway, was a heavy commercial vehicle (vehicle “C”) which struck a moving passenger automobile (vehicle “B”). Vehicle “B” subsequently struck a second moving passenger automobile, which was insured by Dominion (vehicle “A”). Vehicle “A” then struck a third passenger automobile (vehicle “Z”), the only vehicle which was stopped at the time of the chain reaction.
Dominion paid statutory accident benefits to its insured, the driver of vehicle “A”. On the basis of the involvement of the stopped fourth vehicle in the collision (vehicle “Z”), Dominion sought loss transfer from Kingsway pursuant to the ordinary rules of tort law under s. 5 of the FDRs. Given that s. 9(3) requires all of the automobiles involved in the incident to be “in motion,” Dominion took the position that s. 9(3) did not apply.
At the arbitration level, Arbitrator Novick agreed with Dominion and found that s. 9(3) did not apply on the basis that the fourth vehicle involved in the chain reaction was stopped at the time of the accident. In the absence of specific wording in s. 9(3), she did not accept Kingsway’s argument that the FDRs were required to be approached in “clusters” or “groupings” of three vehicles. Applying the ordinary rules of tort law pursuant to s. 5 of the FDRs, Arbitrator Novick concluded that vehicle “C” was 100% at fault for the collision and that Kingsway was therefore required to indemnify Dominion for all statutory accident benefits it paid out to the driver of vehicle “A”. She added that, even if s. 9(3) did apply, Kingsway would still be required to indemnify Dominion despite the fact that vehicle “C” did not directly collide with vehicle “A”.
In allowing Kingsway’s appeal, the Superior Court adopted the Court of Appeal’s analysis of s. 9(4) in State Farm v. Old Republic that the degree of fault for each collision between two automobiles involved in the chain reaction must be determined without reference to any related collisions involving either of those two automobiles. The Superior Court concluded that it makes no sense to conclude that vehicle “A” was responsible for the whole chain reaction if vehicle “Z” (the fourth vehicle) was moving when it was struck by vehicle “C,” but find that vehicle “B” bears 50% responsibility for the collision with vehicle “A” instead of vehicle “C” if vehicle “Z” was either stopped or not involved.
In reiterating the Court of Appeal’s finding that ss. 9(3) and 9(4) are “parallel provisions [that]… must be read consistently,” the Superior Court concluded that s. 9(3) should only consider vehicles “A,” “B” and “C” as illustrated in the diagram in the FDRs, and not any additional vehicles which may be involved farther down the chain. Applying the standard of review of correctness to the question of law at issue, given that vehicles “A,” “B” and “C” were all in motion at the time of the accident, the Superior Court ruled that the arbitrator erred by refusing to apply s. 9(3) to the collision. Ultimately, the Superior Court accepted the Court of Appeal’s reasoning in State Farm v. Old Republic to conclude that s. 9(3) is not available to apportion liability between vehicles involved in the same chain reaction that do not directly collide.
This decision serves as a strong reminder that, unlike determining liability in tort matters, the loss transfer regime is meant to be applied in an expedient, economical and summary manner. Despite the presence of a fourth vehicle (or more) in the context of chain reaction collisions, the insurer of vehicle “A” still cannot “leapfrog” over vehicle “B” and claim loss transfer against the insurer of vehicle “C”. The involvement of additional vehicles, whether stopped or in motion, does not change the way in which fault is strictly determined under s. 9(3) of the FDRs.
Can an occupier, who is also a "supplier" under the Consumer Protection Act, defeat an Occupiers Liability Act claim by relying on a liability waiver that might violate the CPA?
In the very recent case of Schnarr v Blue Mountain Resorts Limited, the Plaintiff purchased a ski pass from a resort, on the internet. To purchase the pass, he had to execute a comprehensive waiver/release of liability, which he did online. The waiver specifically barred the Plaintiff from pursuing any legal action against the resort whatsoever, including negligence, breach of contract or breach of any statutory or other duty of care.
One day, the plaintiff decided to utilize his ski pass, and headed out on the slopes at the defendant’s ski resort. Unfortunately, the plaintiff was injured while skiing.
The Plaintiff issued a lawsuit against the resort, where he pled breach of deemed warranty pursuant to terms of the Consumer Protection Act (CPA) and negligence under the Occupiers Liability Act (OLA). Section 9(1) of the CPA states: “The supplier is deemed to warrant that the services supplied under a consumer agreement are of a reasonably acceptable quality.” Section 7(1) of the CPA states that: “The substantive and procedural rights given under this Act apply despite any agreement or waiver to the contrary”. The plaintiff argued that, because of sections 9(1) and 7(1) of the CPA, the defendant could not obtain a waiver of its obligations under the CPA to provide services of a “reasonably acceptable quality”.
The plaintiff brought a motion for a finding that section 7(1) of the CPA applied to to vitiate the waiver in its entirety, with the further result that the plaintiff might restore his full rights to sue and to claim damages in negligence for the injuries that he suffered.
The Court delved into the interplay between the OLA and CPA, and the purpose and scope of each statute. The Court noted that on their face, the statutes take different approaches to waivers. This is so because they have very different legislative purposes. Waivers in the OLA are designed to shield occupiers. The rejection of waivers in the CPA is designed to shield consumers. A conflict in the application of both statutes arises when consumers clash with suppliers who are also occupiers.
The Court held that where a waiver is limited in scope to the four corners of what the OLA intended to protect, such waivers would not be impacted by anything in the CPA and would apply with full force. The Court then went on to hold that where a waiver goes beyond the parameters permitted by the OLA and, in particular, includes terms that touch on the deemed warranty anticipated by the CPA, the waiver exceeds the objectives of the OLA and presents with a defect.
Ultimately, the Court cured the defect in the waiver by “reading down” waiver to sever and exclude from its ambit claims that involved the protection of rights under the CPA; the remainder of the waiver remained enforceable, preserving all aspects of the defendant’s waiver that were not affected by the prohibition contained in section 7(1) of the CPA.
This approach allowed the plaintiff to pursue two distinct causes of action: (1) the negligence claim and (2) the breach of warranty. The plaintiff’s negligence claim would be subject to the defendant’s waiver. Consistent with the terms of the CPA, the plaintiff’s breach of warranty claim would not be subject to any waiver.
In sum, the Court took a rather measured approach to the intersection between the OLA and CPA, in the context of an occupier’s liability waiver, by carving into, and chopping up a very broad waiver.
The issue of whether an excluded driver, by virtue of having executed a standard OPCF-28A excluded driver form, is legally also considered to be “any person specified in the policy as a driver of the insured automobile” for the purpose of statutory accident benefits coverage has plagued insurers and lead to numerous priority disputes with little consensus amongst insurers, lawyers or private arbitrators in the industry.
Insurers were provided some guidance when, in early 2016, Justice Wright released her judgment in Dominion of Canada General Insurance Company v. State Farm Mutual Automobile Insurance Company (Unreported, October 2015). According to Justice Wright, the claimant, who was an excluded driver upon his parents’ policy, was “clearly not a driver of an insured automobile and thereby not entitled to coverage”. Justice Wright overturned the underlying award of Arbitrator Bialkowski and created the short-lived precedent that an excluded driver is not equivalent to a “person specified in the policy as a driver of the insured automobile” for the purpose of accident benefits coverage.
However, in the recent judgment of Belairdirect Insurance v. Dominion of Canada General Insurance Company (2017 ONSC 367, January 2017) Justice Akbarali agreed with the analysis of Arbitrator Cooper in his underlying award. Arbitrator Cooper had performed an analysis and concluded that an excluded driver was a “person specified in the policy as a driver of the insured automobile” (or a “listed” driver), which would otherwise have supported Belair’s position. However, he went on to state that he was bound by Justice Wright’s decision and, therefore, found for Dominion. Justice Akbarali stated that she was not so bound. She went on to agree with Arbitrator Cooper’s analysis and stated that an excluded driver was, in fact, an “insured person” and also a “listed driver” for the purpose of accident benefits coverage.
One of the major differences between the ratios of the two Judges appears to be the standard of review applied. Justice Wright applied a standard of correctness, whereas Justice Akbarali applied a standard of reasonableness, further to a decision rendered by the Court of Appeal in the intervening period, namely Intact Insurance Company v. Allstate Insurance Company of Canada (2016 ONCA 609, August 2016).
The judgment of Justice Wright is in the process of being appealed to the Court of Appeal, with a hearing date scheduled in March 2017. Therefore, it is expected that the Court of Appeal will shortly provide the industry with much needed guidance in this area and dispel the current state of confusion.
Julianne's practice areas of interest encompass a wide range of insurance defence matters, including accident benefit litigation and arbitrations, subrogation, bodily injury litigation and priority and loss transfer disputes.
Auto insurance coverage issues can be very obvious – or very discreet. Auto Insurance Coverage Law in Ontario deals with the challenges of addressing the myriad possible issues that can arise in the context of an auto insurance dispute.
Published by LexisNexis, this book is structured to provide a general introduction to insurance coverage and law under the standard Ontario Automobile Policy (OAP 1). The expert authors provide a basic overview of the coverage provided under the OAP 1 as well as an analysis of some of the most common issues encountered, such as determining the scope of coverage and who is covered under the policy.
A detailed perspective
Written in an accessible, easy-to-understand manner, Auto Insurance Coverage Law in Ontario offers a comprehensive guide to insurance coverage principles and Ontario's auto insurance system. Seasoned lawyers and non-legal professionals alike will gain a clear understanding of auto insurance law basics and will benefit from:
An in-depth discussion of what constitutes an automobile under Part IV of the Insurance Act, an issue that can have a significant impact on various coverages under the policy
A summary of the statutory conditions and general exclusions that are found in a typical auto insurance policy as well as some common issues pertaining to those provisions and the circumstances in which they do – and do not – apply
Chapters dedicated to the standard mandatory coverages contained in all motor vehicle liability policies in Ontario and the most common issues related to each of them: accident benefits coverage, third party liability, uninsured automobile coverage and direct compensation for property damage
An examination of the various ways an auto insurance policy can be terminated and the precise procedure for termination depending on the circumstance
A chapter devoted to claims adjusting including some of the potential issues that may arise such as the process by which an insurer receives a claim, conducts investigations and makes a determination on coverage
Case commentaries that discuss the implications of decisions and provide insight that will enable readers to better advise clients and stakeholders
A handy reference
Auto Insurance Coverage Law in Ontario is sure to be a useful resource for anyone providing advice and guidance in this often-complex area of the law, including:
Insurance and personal injury lawyers
In-house counsel for insurance companies
Non-legal professionals such as claims managers, insurance executives, insurance agents, and brokers
Paralegals and law clerks
The book is expected to be available in mid-February 2017. Pre-orders are available from LexisNexis here.
On January 23, 2014, the Supreme Court of Canada released their decision on Hryniak v. Mauldin, 2014 SCC 7, and with it an invitation to the legal profession to utilize summary judgment motions to reduce court costs and promote the efficient resolution of disputes. It certainly seems like long term disability carriers have taken this invitation to heart.
The Supreme Court instructed that summary judgment must be granted where there is no genuine issue requiring a trial. There will be no genuine issue for trial where the motions judge is able to reach a fair and just determination on the merits. Where there is a genuine issue requiring a trial, the judge may invoke new fact finding powers in an effort to come to a just resolution without needing to advance to trial.
In the three years prior to Hyrniak, there were two reported summary judgment motions relating to long term disability claims. In the three years since Hryniak, there have been nine reported summary judgment motions relating specifically to long term disability claims.
With the advent of the Supreme Court’s decision, it is clear that many issues that are presented by LTD claims are amenable to summary judgment motions. It is certainly useful where questions of limitation periods arise. A summary judgment motion allows for these preliminary matters to be addressed without the need of an expensive trial. Of the nine summary judgment motions, seven dealt with the issue of limitation periods. The following three cases demonstrate that the Courts are more than willing to address issues of limitations and policy obligations in a summary manner.
Todd v. Felton Brushes Ltd., 2016 ONSC 5252, was an interesting decision where the Plaintiff was injured in a car accident in 2005 and approved for short term benefits up to a maximum of 17 weeks. The Plaintiff was then subsequently approved for LTD benefits. Eventually, the Plaintiff returned to work on a full time basis. Her LTD carrier informed her they had closed her file. She did not contest this. The Policy was subsequently changed so that only employees working 35 hours per week would receive coverage going forward. At some point after this change the Plaintiff reduced her shifts to 20 hours per week. She was advised in 2007 that she was no longer covered for LTD benefits under the policy. The claimant ceased working for her employer in 2008. She never submitted a subsequent LTD claim. In 2011 she commenced a claim against her LTD carrier and third party administrator for a declaration she was disabled and for damages.
Lofchik J. granted the summary judgment motion and dismissed the Plaintiff’s claim in its entirety. The Plaintiff’s own evidence indicated that her claim was discoverable by March, 2007 at the latest. The Plaintiff was out of time.
Usanovic v. Capitale Life Insurance Co., 2016 ONSC 4624 was a decision of Broad J. dismissing a Plaintiff’s LTD claim as statute barred by a limitation period. The plaintiff was injured in a fall in September 2007 and made a claim for disability benefits. He was approved by the LTD carrier and benefits were paid for a number of years. In early 2012, the LTD carrier made a determination that the Plaintiff no longer met the “any occupation” test based on medical and surveillance evidence. He was given 60 days to appeal the decision and provide new medical evidence. The Plaintiff did not commence an appeal, or subsequent claim, until early 2015. The policy contained a 1 year limitation period on all claims.
Broad J., found that the LTD carrier’s letter of January 12, 2012, was unequivocal and commenced the two year limitation period and therefore the Plaintiff was out of time to bring his claim. More importantly, Broad J. found that there was no obligation in law on the LTD carrier to advise the plaintiff of the applicable limitation period in the Limitations Act. While the LTD carrier has a positive obligation to inform its insured of the nature of the benefits available under the policy, there was a marked difference in advising of the application of law external to the policy such as the Limitations Act.
Although summary judgment motions have proven effective for Insurers to proactively address an otherwise protracted litigation process, they have not been uniformly successful. In Nguyen v. SSQ Life Insurance Co., 2014 ONSC 6405 an Insurer’s summary judgment motion to dismiss the Plaintiff’s action as falling outside various policy or statutory limitation periods was dismissed. The Plaintiff in this case was a Vietnamese man who was largely illiterate and injured in an MVA in late 2009. He was employed at the time of the accident but claimed to be unaware that he had access to a group LTD plan. Perrell J., found that the record supported that Plaintiff was unaware of his entitlement to benefits until 2013 when his lawyer undertook to investigate the availability of an LTD policy through his employer. Given that the Plaintiff was illiterate and his employer had failed to provide the relevant documentation to him as per the Policy, Perrell J. found his claim was not untimely according to his interpretation of Policy. In the event that his claim was untimely, Perrell J. saw fit to grant relief from forfeiture. The motion was dismissed and the issue of the Plaintiff’s substantive entitlement was directed to trial.
Given the proliferation of summary judgment motions since Hryniak, it seems apparent that insurers have been provided an exceptionally useful tool where there are discrete issues that can dispose of an entire claim. Although as Nguyen demonstrates, judges may still be wary to rule in favour of the insurer where there is a sympathetic plaintiff involved and this can have cost consequences. However, overall Insurers have been successful in these motions. While there are risks associated with any motion, Insurers who properly prepare and advance a summary judgment motion will often be rewarded with the resolution of a claim at an early stage without a long and costly trial on all the issues.
 There are significantly more if you include employment law disputes that may involve an LTD component.
Devan practices insurance related litigation with a focus on accident benefits claims.
Depending on the wording of the policy, the Ontario Court of Appeal has affirmed that Long Term Disability Benefit carriers can receive a deduction for any Non-Earner Benefits received by an Insured.
In the decision of Hamblin v. Standard Life Assurance Co. of Canada, released on November 14, 2016, the Court of Appeal dismissed an Insured’s appeal seeking to overturn a determination that her Non-Earner Benefits could be deducted from her weekly LTD payments.
The Appellant, Ms. Hamblin, was involved in two motor vehicle accidents. After the first, she began to receive Long Term Disability payments through her insurer, Standard Life. The Appellant was then involved in a second accident. As she was not working at the time, she elected to receive Non-Earner Benefits through her automobile policy. She also continued to receive her LTD payments from Standard Life.
For reasons that were never explained, the Accident Benefits Insurer never deducted any of the LTD payments from the weekly $185.00 Non-Earner Benefit, despite s. 12(2) of the Statutory Accident Benefits Schedule 2010 which allowed for a deduction in the weekly benefit, “[in] the total of all other income replacement assistance, if any, for the same week.”
Standard Life, upon being notified the Insured was receiving a Non-Earner Benefit, began to reduce their monthly benefit by a corresponding amount. Standard Life relied on a term of the Insured’s policy that allowed the carrier to reduce the monthly LTD payments “by any disability or retirement benefit…payable…under…a provincial auto insurance law.”
Standard Life took the position that they could do this, as long as the automobile Insurer did not deduct the LTD payments from the Non-Earner Benefit first.
The Insured’s counsel claimed that the Court’s decision in Bannon prohibited this sort of deduction. Bannon has stood for the principle that when assessing the deductibility of benefits paid by other compensation schemes, Courts must only deduct like benefits from like, or “apples to apples”. The Insured’s counsel maintained this was not a case of “apples to apples.” Case law had established that Non-Earner benefits were not “income replacement” benefits similar to LTD benefits and therefore could not be deducted from the LTD benefits.
The Court disagreed. They found that unlike the statutorily mandated deductions discussed in Bannon, the wording in the Insured’s policy was clear and unambiguous. The policy allowed for a deduction of any disability payments under an automobile insurance law and was not restricted to income replacement payments. As Non-Earner Benefits were granted where an Insured suffered a complete inability to carry on a normal life resulting from an accident related impairment, they were correctly a disability benefit payable under a provincial auto insurance law.
The Court found the Application judge’s decision was correct, and dismissed the Appellant’s appeal.
Although a bit of an oddity, this case is an important lesson for both AB and LTD insurers. For Accident Benefit carriers it’s a good reminder that temporary disability benefits being received by the insured person in respect an impairment that occurred before the accident are deductible from IRBs and NEBs. For LTD insurer’s, there is now Court of Appeal support that disability payments under ad automobile insurance law includes non-earner benefits. In both cases, a fulsome investigation into an Insured’s other sources of income will avoid double dipping.