In Rolley v. MacDonell , the defendant brought a motion for leave to rely on surveillance video recordings as substantive evidence. Three rounds of surveillance were carried out over a period of one year.
For a surveillance video recording to be admissible as substantive evidence, it must satisfy the following three-part test:
- Accuracy in truly representing the facts;
- Fairness and the absence of any intention to mislead; and
- Verification on oath by a person capable of doing so.
In addition, the probative value of the evidence must outweigh its prejudicial effect.
The parties disagreed over whether the surveillance videos satisfied at the admissibility test.
With regard to the first part of the test, the judge found that there were various gaps in the surveillance video recordings that were frequent and significant. The recordings depicted anywhere from 15 to 27 to 50 percent of the time during which the plaintiff was engaged in an activity. As a result,they could not be considered fair, accurate, and representative of the events purported to be depicted in the recordings
In assessing the second prong of the test, the judge found that the investigator was forthright in his answers. The investigator was empathetic that it was not his intention to cast the subject in a light favourable to the client that was paying for the surveillance. He also emphasized the practicalities of carrying out surveillance, including the requirement to move about to be able to continue recording a subject. The judge concluded that the investigator did not have an intention to mislead. However, with respect to the second element of fairness, the judge did not find the video recordings to be fair.
For the third part of the test, the judge found that the investigator provided verification under oath of the surveillance conducted. Given that the surveillance evidence did not satisfy the first two parts of the test, the judge did not address the third issue in detail.
The judge did find that two of the videos satisfied the three-part test for admissibility, and considered the probative value versus the prejudicial effect of these recordings. With respect to both, he found that they depicted nothing that challenged, contradicted or impugned the evidence given by the plaintiff’s wife. He, therefore, concluded that both the videos had a minimal probative value.
The judge emphasized that a trial judge must be stringent in his or her gatekeeper role when dealing with surveillance evidence. The judge dismissed the defendant’s motion and denied any entitlement to rely on any portion of the surveillance video recordings as substantive evidence.
The decision suggests that careful consideration be given to the quality of the surveillance video recordings when deciding whether to attempt to rely on the recordings as substantive evidence at trial.[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
Recent work on cases has lead me to resurrect some older loss transfer case law that might still assist practitioners with their current cases. The first is the case from our Court of Appeal in Jevco v. Canadian General, dated August 6, 1993. Jevco sought appeal of the denial of its application to appoint an arbitrator in loss transfer (remember the provisions of automatic appointment in priority disputes do not apply to loss transfer and an Application is necessary where there is no agreement amongst the parties to appoint or whom to appoint). The use to which I again sought it out was regarding how a finding of fault in a related tort matter might affect a loss transfer matter that was subject to the ordinary rules of law, per Rule 5 of Regulation 668, instead of the Rules themselves. Recall the Fault Determination Rules were initially promulgated for property damage claims and are often a bit of a square peg in a round hole and have lead to a lot of litigation over their interpretation in the context of loss transfer. In overturning the original decision that a stay of loss transfer was warranted by reason of the existence of the tort action, Justice Griffiths, at the second paragraph of the Conclusion, and repeated at paragraph four thereof, focussed upon the intended expediency of the scheme and said quite emphatically that “any determination of fault in litigation between the injured plaintiff and the alleged tortfeasor is irrelevant.” Jevco was granted its arbitrator appointment with costs of the appeal but not of the Application, due to its novelty. The citation for the decision is 14 O.R. (3d) 545. There was no appeal taken beyond Ontario’s top Court.
The second case is the February 6, 2008 private arbitration award of Jay Rudolph in Unifund and Axa v. St. Paul. Reference to it is found at #11 of the list of decisions upon the Rudolph Mediation & Arbitration Services Inc. website (see http://rudolphmediation.com/ arbitration-decisions- released-by-j-jay-rudolph/ ). Unfortunately, the index of decisions on the website does not appear to be a complete list of all of Jay’s awards and they are not hyperlinked. Converse to the prior case, this case does permit consideration of a Highway Traffic Act conviction to govern in a loss transfer matter. The case is 25 pages long and too extensive to deal with comprehensively in a short summary. Suffice it to say that in this case accident benefits were being requested from St. Paul by the other two insurers due to the fault for the loss attributed to the driver of its described transport truck. She pleaded guilty to careless driving and both applicants sought to preclude St. Paul, by the flexible doctrine of abuse of process (as distinguished from issue estoppel, collateral attack or res judicata, which focus more on the interests of the parties), from adducing evidence inconsistent with the facts forming the basis for the conviction by way of guilty plea by her lawyer (she was not present at the HTA proceeding). Arbitrator Rudolph relied heavily upon the Supreme Court of Canada case in Toronto v. C.U.P.E., Local 79,  3 S.C.R. 77. In siding with the loss transfer applicants, he found that the three tests (fraud, fresh evidence and fairness) were not met by St. Paul, which would otherwise be reason to relitigate the liability issue and would enhance, not impeach, the principles of economy, consistency, finality and integrity of our judicial system. The HTA proceeding of St. Paul’s insured was admitted by the parties not to have been fraudulent. Fresh evidence must be admissible, discussed at page 21 of the arbitrator’s award, but still might be excluded if the explanation why it was not adduced at first instance is inadequate. Arbitrator Rudolph found St. Paul’s evidence not fresh and, although generally admissible, there was no reasonable explanation why it had not been adduced at the HTA proceeding. Having found as he did, he did not feel impelled to decide if the evidence would have affected the outcome of the HTA proceeding. He makes a particularly insightful comment at the bottom of page 23 why St. Paul should be bound by the conviction, which I invite readers of this summary to review and digest. In the final analysis, St. Paul was bound by the conviction, the facts essential to it and could not lead evidence contrary to those facts. Therefore, albeit subject to the latter, St. Paul was still permitted to lead evidence of the alleged contributory negligence of Unifund’s insured driver. Legal costs, although the party responsible was not specified, presumably followed the cause. St. Paul was responsible for the arbitrator’s account. The award was not appealed.
– Kevin Mitchell[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
On reconsideration of a decision at the License Appeal Tribunal (LAT), Executive Chair Linda Lamoureux has confirmed that an insurer’s deficient notice under Section 38 of the SABS will have strict consequences.
The decision, M.F.Z. v Aviva Insurance Canada, dealt with two claims, which the insurer treated within the Minor Injury Guideline (MIG). When denying a claimant’s application for medical and rehabilitation benefits, Section 38 requires that the insurer’s correspondence include specific information. The LAT has generally followed the FSCO decision of Augustin v. Unifund (2013) when determining the proper content of a Section 38 notice. If the insurer’s denial correspondence fails to satisfy the Section 38 notice requirements, subsection (11) provides for two consequences:
- The insurer is prohibited from taking the position that the insured person has an impairment to which the Minor Injury Guideline applies.
- The insurer shall pay for all goods, services, assessments and examinations described in the treatment and assessment plan that relate to the period starting on the 11th business day after the day the insurer received the application and ending on the day the insurer gives a notice described in subsection (8).
The M.F.Z. reconsideration request raised two distinct legal issues in circumstances where an insurer’s notice fails to comply with Section 38. First, Aviva challenged the finding that the insurer is forever precluded from relying on the MIG after one deficient notice letter. Second, Aviva argued that the disputed OCF-18, for which an improper denial notice was given, should not be automatically payable without consideration as to whether it was reasonable and necessary.
E.C. Lamoureux held that the SABS completely bars an insurer from ever taking the position that the MIG applies following a deficient Section 38 notice. Where deficient notice has been given, E.C. Lamoureux also held that there ought to be no consideration as to whether the disputed OCF-18 was “reasonable and necessary”.
With regards to one of the disputed OCF-18s, E.C. Lamoureux found that the claimant was automatically entitled to the treatment incurred during the period of deficient notice. Although the initial denial was deficient, Aviva’s subsequent letter serving the Section 44 report was proper notice which “cured” the defect. Section 38(11)2 only provides for “automatic” entitlement up to the date the insurer provides proper notice. There was no discussion as to how benefits incurred after the defect is cured are to be treated.
The M.F.Z. decision is being further appealed to the Divisional Court. For the time being, insurers should be aware that the LAT will be strictly applying the consequences outlined in Section 38(11)2. Insurers should always take care when drafting denial letters to ensure compliance with Section 38. However, subsequent correspondence (e.g. a letter providing a copy of the Section 44 report) should also be carefully drafted to fully explain the insurer’s decision. Such letters which arise in the ordinary course of handling may go a long way to minimize the damage flowing from “automatic” entitlement.
See M.F.Z. v Aviva Insurance Canada, 2017 CanLII 63632 (ON LAT), http://canlii.ca/t/h6cfv[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
In the recent decision of Pepper v. Sanmina-Sci Systems (Canada Inc)., the Ontario Court of Appeal dismissed a plaintiff’s long term disability claim as limitation barred, reversing the summary judgment motion judge’s decision. The Court found that the limitations clock began to run once payment of benefits ceased.
The facts of the initial motion were largely uncontested. The plaintiff was receiving long term benefits due to an injury on March 13, 2005. On February 20, 2007 the Insurer advised the plaintiff that effective September 19, 2007, he would no longer qualify for long term disability benefits. The Insurer advised there was no evidence that he had an impairment that prevented him from engaging in “any occupation” that he was reasonably suitable for by training, education, or experience. In good faith, the Insurer agreed to pay benefits until October 31, 2007 to assist the plaintiff with the transition back to work. The Insurer also advised the plaintiff that he could “appeal” the decision by providing more medical documentation. Of importance, the long term disability policy did not contain a specific mechanism or right to appeal. There was also no statutory right to appeal.
The benefits stopped effective November 1, 2007. The plaintiff commenced a claim on February 17, 2010.
The Insurer brought a summary judgment motion to have the plaintiff’s claim dismissed as limitation barred. The plaintiff brought a cross motion for a declaration that he was not limitation barred and to dismiss the Insurer’s limitation defence. The plaintiff’s cross-motion was granted. The Insurer appealed.
On appeal the Insurer was successful. The Court found it was an error in law to not recognize that November 1, 2007 was the date on which the limitation period commenced. Despite the Insurer’s representations that it would continue to review additional documentation if provided, the plaintiff’s claim had been discovered as of November 1, 2007 when the payments stopped. The Court found that once payments had ceased and the Insurer had “closed” the claim, it would have been appropriate to commence an action and accordingly it was “discovered”. The fact that there was no internal appeal process specifically included in the Policy appears to have factored into this. The Court also noted that the plaintiff had retained counsel in January, 2008, suggesting that he did have an appreciation that a lawsuit was appropriate.
As a result, the plaintiff’s claim was dismissed as statute-barred. This decision seems to support my previous comments regarding the efficacy summary judgment motions in long term disability claims, as discussed in blog posts here and here . It appears that in the long term disability setting, barring something exceptional, once an Insurer stops payment and advises that a claim is closed, the clock starts to run.
See Pepper v. Sanmina-Sci Systems (Canada) Inc. , 2017 ONCA 730 (CanLII).[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
In Osmond v Watkins, 2017 ONSC 5729 (CanLII), the defendant successfully brought a summary judgment motion against his contractor. The defendant, Watkins, hired the plaintiff, Osmond, to complete some renovations at his home. While on the roof installing tarpaper, the plaintiff slipped and fell approximately 37 feet onto bricks and debris.
He brought an action against the homeowner, Watkins, claiming the accident was caused by defendant’s negligence and breach of the Occupiers Liability Act. The plaintiff’s examination for discovery evidence was that he was not wearing safety equipment, he was not aware he was supposed to wear safety equipment, and he never turned his mind to using safety equipment. Further, on the motion, the plaintiff led no evidence that his fall was caused by any defect in or lack of repair affecting the premises or any hazardous conditions associated with the premises themselves.
As a result, the court found that the only basis for liability of the defendant would be in negligence for not providing the plaintiff with the necessary safety equipment to perform roofing work on the project. The court relied on an Alberta Court of Appeal decision, Mahe v Boulianne, 2010 ABCA 32 (CanLII), that held where a lay person engages a professional or tradesman, it is presumed that the tradesman knows how to do the work and if the tradesman fails to do the work properly, he cannot blame his customer on the basis that the customer should have known better. The court went on to note that the defendant, as the occupier of premises, must ensure that the premises are reasonably safe. The defendant had no overriding duty to monitor the whether the practices followed by the plaintiff were safe. The defendant’s motion was granted. Had the plaintiff led evidence that he had informed the defendant that he was inexperienced in performing roofing work or that the scope of work was outside of his comfort level, there may have been an issue for trial.
This case confirms that, on summary judgment, unless a plaintiff is able to show, with evidence, that there was a hazard on the premises that caused the accident, a defendant may be successful in having the case dismissed.
See Osmond v Watkins , 2017 ONSC 5729 (CanLII)[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
In a recent decision, the Court of Appeal affirmed that while a Long Term Disability Insurer’s duty of good faith generally includes the duty to act promptly, fairly, and disclose the contents of the policy to their Insured, it does not require the Insurer to take steps to advise their Insured of statutory limitation periods that are exist outside of those within the policy. The decision is Usanovic v. Penncorp Life Insurance Company (La Capitale Financial Security Insurance Company), 2017 ONCA 395.
We previously discussed the details of the summary judgment decision in our post, “LTD Carriers Embrace Hryniak.” At first instance, the Plaintiff argued that because the Insurer never advised him of the statutory two year limitation period, it had breached its duty of good faith and the limitation clock only began to run when the claim was discovered. Justice Broad disagreed and found that there was no duty on the Insurer to advise the Plaintiff of the statutory limitation period and the claim was discovered upon receipt of the termination letter. The Plaintiff appealed. On appeal the Plaintiff focused solely on whether the Insurer’s common law duty of good faith included the duty to advise the Plaintiff of the 2 year limitation period in its termination letter.
The Court of Appeal upheld Broad J.’s decision and provided helpful guidance for LTD insurers. Notably, the Court of Appeal drew a distinction between the duty of good faith in the context of Accident Benefits and LTD Benefits. The Plaintiff attempted to argue that because the Supreme Court of Canada in Smith v. Co-operators General Insurance Co.,  2 S.C.R. 129, had found that Insurer’s in the Accident Benefits context were required to provide their Insured with the relevant time limits that governed the process, a similar duty should apply in the LTD context. Both benefit schemes bear significant similarities as both are first party Insurers, with similar tests for income replacement based on disability. However, the Court of Appeal found that the source of the Accident Benefits Insurer’s duty to advise of the time limits arose from the complex legislative framework that governed them and not the common law. There was no equivalent statutory provision governing LTD Insurers.
The Court found that the Plaintiff was asking the Court impose something beyond the LTD Insurer’s common law duty to disclose the contents of the insurance policy and to go a step further and disclose information outside the policy. The Court noted that no Canadian court had gone so far and in the jurisdictions that require Insurers to disclose limitation periods this obligation had been put in place by the Legislature. Accordingly, the Court commented that while it might be advisable from a practical standpoint to inform an Insured of the statutory limitation period, the role of making this a legal obligation was that of the government of the day, and not the Courts.
Notably, as of July 1, 2016, amendments to the Insurance Act R.S.O. 1990 c. I.8 came into force and requires that all LTD insurers to include the following statement in the policy and certificate:
Every action or proceeding against an insurer for the recovery of insurance money payable under the contract is absolutely barred unless commenced within the time set out in the Limitations Act, 2002.
Overall, this decision is a welcomed one for LTD insurers. The Court has made it clear that the expansion of an Insurer’s duty of good faith beyond the established case law is the responsibility of the Legislature and not the Courts. Although there are significant similarities between Accident Benefits and Long Term Disability claims, the statutory framework is the source of significant differences in the proper termination and handling of benefits. The Court has provided clarity that in the Long Term Disability context, the Insurer’s duty of good faith has not been extended to require informing the claimant of information outside the four corners of the policy. With the amendments to the Insurance Act, the provision of the policy to an Insured will satisfy their good faith obligation to provide information and provide a strong basis for any limitations argument an Insurer may want to raise against out of time claims.
In a decision on a preliminary issue released September 7, 2017, Vice Chair Trojek of the LAT held that a catastrophically impaired Applicant missed the two year limitation period to dispute the Insurer’s refusal to pay housekeeping and attendant care benefits, coming to the same conclusion ADR Chambers came to in a similar case last year (Mayo v. Economical Mutual Insurance Co.,  O.F.S.C.D. No. 342 (QL).
In S.T. v. Economical, the Applicant was involved in a motor vehicle accident on September 12, 2008. Following the accident, the Applicant received various benefits under the SABS, including housekeeping and attendant care benefits. Economical sent the Applicant an OCF-9 near the two year mark advising that no further housekeeping and attendant care benefits would be paid after the 104-week mark. The Applicant submitted an Application for Determination of Catastrophic Impairment almost seven years post-accident. After appropriate assessments were completed, she was deemed to be catastrophically impaired by Economical. After this the Applicant submitted further expenses for housekeeping and attendant care, which were also denied. The Applicant did not dispute the initial denial of housekeeping and attendant care until September 29, 2016.
Various arguments were raised on behalf of the Applicant; however, the main arguments were that there can be no denial prior to entitlement and that the limitation period could not begin to run until the Applicant discovered she was catastrophically impaired . The Applicant argued that since there is no limitation period for applying for catastrophic designation or for disputing an insurer’s denial of a catastrophic application, to accept Economical’s position would be to accept that insurers can create a time limit/limitation period for when an insured must apply for catastrophic impairment determination, which goes against recent decisions such as Guarantee v. Doand Machaj v. RBC.
Economical argued that the Do and Machaj decisions were not relevant to the issue in this case because it was the specific benefits claimed that were denied — not catastrophic designation. The Vice Chair agreed and found that in keeping with the Court’s decisions in Sietzema, Haldenby, and Turner, that the objective of consumer protection must be balanced against other objectives, such as the finality and certainty that limitation periods provide. The Vice Chair also confirmed that the principle of discoverability does not apply in the scheme of statutory accident benefits.
See 16-003034 v Economical Mutual Insurance Company , 2017 CanLII 59507 (ON LAT)[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
In the recent decision of M.P. v. Certas Home and Auto Insurance Company, the License Appeal Tribunal has tackled the issue of whether attendant care expenses are incurred where a claimant’s “professional” attendant care provider is also a family member. Both sections 3(7)(e)(iii)(A) and 3(7)(e)(iii)(B) were in issue.
The Adjudicator held that the claimant’s wife, who was a Health Care Aid and who provided attendant care to the claimant did not do so in the course of her ‘ordinary’ employment because she provided the care to her husband outside her normal working hours. Similarly, the Adjudicator accepted that as the wife’s subsequent period of unemployment was unrelated to the accident as her services performed during that time were also not done in the course of her employment which she would ordinarily have been engaged but for the accident.
In M.P., the claimant’s wife was employed as a Health Care Aid at the time of the accident. It was agreed that her qualifications were sufficient for her to be considered a “professional” attendant care provider. After the accident, she continued to work as a Health Care Aid as she had prior to the accident as well as providing attendant care for her husband outside her normal working hours. Within 18 months of the accident, the claimant’s wife claimed that she had to stop working due to a medical problem she developed due to the increased demands of having to care for her husband. She began providing full-time care to the claimant seven days per week. The insurer argued that she stopped working due to a lack of available work and relied on a letter from the claimant’s counsel which stated as much. As a result there was no proof that she had sustained an economic loss.
According to section 3(7)(e)(iii)(A) of the SABS, an attendant care expense is “incurred” if the person who provided the services did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged but for the accident.
In M.P. during the initial period after the accident until January 2015, Adjudicator Sewrattan found the claimant’s wife did not meet the “incurred” definition because she worked the same hours as she did before the accident and only cared for her husband in her spare time. The Adjudicator concluded that because she cared for her husband outside her normal working hours her services were not performed in the course of the employment, which she would ordinarily have been engaged but for the accident. The Adjudicator relied primarily on the fact that the claimant’s wife continued to work on the same basis after the accident as she had before and that the services to the claimant were provided when she was at home and would have provided the assistance in any event. The Adjudicator cites this as one of the underlying reasons for the changes to the definition of “incurred” that was articulated in Henry v. Gore; namely that the changes were implemented to prevent family members from being compensated for care that would have been provided without compensation in any event.
With respect to the period 18 months after the accident, the claimant argued that as his wife was forced to stop working to care for him when she would have ordinarily been able to work; therefore her services met the definition of “incurred” as per section 3(7)(e)(iii)(A) because they were provided in the course of her employment, occupation or profession in which she would ordinarily have been engaged but for the accident. The Adjudicator rejected the claim that she could not work due to a medical condition caused or exacerbated by caring for the claimant because it was not explicitly stated in her affidavit or corroborated by any medical documents. Moreover, the Adjudicator preferred the evidence relied upon by Certas to support that the claimant’s wife was unemployed due to a lack of work as evidenced by a letter from her husband’s legal counsel. As a result the Adjudicator concluded that the attendant care expenses were not “incurred” as the services provided by the applicant’s wife were not done in the course of her employment, occupation or profession which she would ordinarily have been engaged but for the accident.
According to section 3(7)(e)(iii)(B) of the SABS, an attendant care expense is “incurred” if the person who provided the services sustained an economic loss as a result of providing the goods or services to the insured person. In this case, the Adjudicator found insufficient evidence of such economic loss in light of the factual conclusions drawn.
This decision is a departure from Walsh and Echelon General Insurance Company, FSCO A15-007448 (August 31, 2016) which found that a professional service provider does not need to care for the claimant in his or her pre-accident working hours to meet the definition of “incurred”. In Walsh, the claimant’s wife assisted him with personal care after a motor vehicle accident. At the time she was employed as a personal support worker (PSW) and worked evening shifts. After the accident, she continued to work her evening shifts and cared for her husband during the day. Eventually, her employer granted her request to take an unpaid leave of absence specifically for the purpose of caring for her husband. Arbitrator Drory held that just because the claimant’s spouse was not at work when she cared for her husband did not mean that she was not in the course of the employment, occupation or profession in which she would ordinarily have been engaged.
The M.P. case creates uncertainty about the issue of whether professional caregivers who family members are providing service outside of their normal working hours will satisfy the definition of “incurred”. This decision provides an alternative framework to analyze the definition of incurred as it places a greater emphasis on the premise that people will not be compensated for work that they would have performed in any event without compensation.
See M.P. v. Certas Home and Auto Insurance Company , 2017 CanLII 9810 (ON LAT)[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
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.[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
A FSCO arbitrator has confirmed that the first insurer that receives a completed application for accident benefits is required to adjust and pay the claim, even if the insurer is taking an off-coverage position.
In Cankaya v. Intact / Cankaya v. Unifund, the claimant was working on the engine of a 2001 BMW vehicle he was about to repair at his mechanic shop. The cooling fan or other part of the BMW broke apart and flew into his face. He sustained multiple injuries. He was acting in the course of his self-employment as a garage repairman when the incident occurred.
At the time of the incident, the claimant was insured with Unifund under a standard Ontario Automobile Policy (OAP 1), which insured his personal vehicle. He was also insured with Intact under the standard Ontario Garage Automobile Policy (OAP 4). Both policies were valid at the time of the incident.
The claimant submitted an application for accident benefits to Unifund on January 10, 2014. On March 27, 2014, Unifund advised the claimant that he was precluded from receiving any accident benefits under his policy because of the garage exclusion under section 1.8.4 of the OAP 1.
On April 15, 2014, the claimant’s lawyer wrote to Unifund and advised about the Intact policy. The claimant’s lawyer encouraged Unifund to pursue a priority dispute against Intact, pursuant to O. Reg. 283/95 . Unifund refused to do so.
On June 18, 2014, the claimant submitted an application for accident benefits to Intact. Intact denied the application on the basis that it was not the first Insurer to receive a completed application.
The claimant did not receive any benefits, so he applied for mediation and arbitration at FSCO. A preliminary issue hearing was held to determine a number of issues, the main one being whether FSCO had jurisdiction to determine whether section 1.8.4 of the OAP 1 could relieve Unifund of its obligations to respond/adjust and pay benefits, pursuant to section 2.1 (6) of O. Reg. 283/95. In other words, could FSCO determine coverage or was that issue reserved for a priority dispute?
Priority Dispute Scheme ( in a nutshell)
Section 2.1 (6) of O. Reg. 283/95 requires the first insurer who receives a completed application for accident benefits to respond and pay benefits pending the outcome of any priority dispute with another insurer. In Kingsway v. Ontario (2007), the Court of Appeal stressed that the “pay now, fight later” principle is vital:
Section 2 of regulation 283 is critically important in the timely delivery of benefits to victims of car accidents. The principle that underlies section 2 is that the first insurer to receive an application for benefits must pay now and dispute later. The rationale for this principle is obvious: persons injured in car accidents should receive statutorily mandated benefits promptly; they should not be prejudiced by being caught in the middle of a dispute between insurers over who should pay, or as in this case, by an insurer’s claim that no policy of insurance existed at the time.
Where an insurer receives a completed application and believes that another insurer has priority over it for the claims, O. Reg. 283/95 allows the insurer to compel the other insurer(s) to participate in a priority dispute. The entire procedure is contained in the Regulation and disputes are resolved in private arbitration, pursuant to the Arbitration Act, 1991.
O. Reg. 283/95 has strict timelines: When an insurer receives a completed application for accident benefits, it has 90 days from the date of receipt to investigate priority and to give a target insurer written notice of the dispute, pursuant to section 3. An insurer that fails to give written notice within that 90-day period is barred from pursuing priority against the other insurer, unless it can show, firstly, that 90 days was not enough time to make its determination and, secondly, that it made reasonable investigations during those 90 days. These two “saving provisions” are often difficult to satisfy.
Section 4 requires the insurer giving notice under section 3 to also give the claimant a Notice to Applicant of Dispute Between Insurers form, which is a prescribed document that advises the claimant of the dispute and the name or names of the other insurer(s) who might have priority over the claims. The claimant is given 14 days to object to the transfer of their file. If the claimant objects, he or she becomes a participant in any proceeding to determine priority. The Superior Court held recently that the notice under section 4 must be given within 90 days after the insurer receives the claimant’s completed application for benefits.
Once an insurer gives its written notice, subsection 7 (3) states that any arbitration to decide the issues between the parties must be initiated within one year from the date the insurer paying benefits gave its priority dispute notice.
As noted above, Unifund rejected the application on the basis that the claimant was subject to the garage exclusion under section 1.8.4 of the OAP 1. Having determined that there was no coverage under the policy, Unifund refused to adjust and pay benefits pending the outcome of any priority dispute with Intact. Actually, Unifund refused to initiate a priority dispute against Intact.
Meanwhile, Intact refused to adjust the claim on the basis that it was not the first insurer to receive an application for accident benefits. Essentially, Intact argued that Unifund was the first insurer to receive an application, so only Unifund was compelled to pay now and dispute later.
The first issue was whether FSCO had jurisdiction to determine whether section 1.8.4 of the OAP 1 could relieve Unifund of its obligations under section 2.1 (6) of O. Reg. 283/95. The arbitrator relied on previous FSCO decisions (Vieira and Royal & SunAlliance and Chubb, 2004 FSCO App) and Bianca v. Wawanesa, 2004 FSCO Arb) and held that FSCO did not have jurisdiction to make that decision.
Put another way, FSCO (and the courts, and likely the LAT) often determines whether a particular claimant was involved in an “accident”. This is a general coverage issue that applies to a claimant regardless of where she applied for benefits. If she was involved in an “accident”, she is entitled to benefits from at least one insurer. If she was not involved in an “accident”, she is not entitled to benefits from any insurer. FSCO has jurisdiction to make this determination.
However, where there is no issue as to whether a claimant was involved in an “accident”, any other coverage issues (i.e., whether the claimant is an “insured person” under a particular policy) is determined in a priority dispute between insurers. FSCO does not have the jurisdiction to make that determination.
Although FSCO does not have jurisdiction to determine coverage in a priority dispute, it t is well settled law that FSCO has the jurisdiction to determine whether an insurance company complied with section 2.1 (6) of O. Reg. 283/95. The test is whether there is a sufficient nexus between the claimant and the target insurer. For example, in Vieira, there was a nexus even though the policy under which the application was made was not in force at the time of the accident.
It is easy to see the nexus between Mr. Cankaya and Unifund: At the time of the accident he was a named insured of Unifund. Therefore, Unifund’s obligations under section 2.1 (6) of O. Reg. 283/95 would have been triggered when its insured applied for benefits under his policy. It would be open to Unifund to rely on any exclusions under section 31 of the SABS to deny certain benefits. Unifund could also pursue a priority dispute against another insurer, such as Intact. In this case, it failed to do both.
Consequently, the arbitrator found that Unifund was required to adjust the claims and pay benefits:
Given my findings above in Issue 1, Unifund is obliged to respond and adjust Mr. Cankaya’s application for statutory accident benefits. This finding is necessary so Mr. Cankaya may be treated fairly and receives benefits under the SABS to which he is entitled. As well it is consistent with the purpose and rationale of O. Reg. 283/95.
Except in the most unusual circumstances, any insurer in Unifund’s position should take the safe route: They should accept the application, pay the benefits, and dispute priority.
If Unifund was correct that there was no coverage under its policy, the file would have gone to Intact and Unifund would not be responsible for paying benefits.
However, Unifund failed to pursue priority against Intact, so the merits of the dispute will never be resolved because the priority dispute would be time-barred. Accordingly, Unifund is now saddled with the responsibility to pay benefits indefinitely, regardless of whether priority rested with another insurer.
See Cankaya and Intact, FSCO A14-009220 Unifund Assurance Company v The Dominion of Canada General Insurance Company, 2016 ONSC 4337 (CanLII), <http://canlii.ca/t/gshr3> [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]