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Improperly Accessing Confidential Data Under the Direction of Employer?

 Mar 29, 2018 9:00 AM
by Neil Colville-Reeves

What do you do at work that is considered ‘under the direction’ of your employer?

The answers to this question are endless. A more interesting question: what do you have to be doing at work not to be ‘acting under the direction’ of your employer? That question is at the heart of the decision in Oliveira v. Aviva, a Court of Appeal decision released this week. The applicant sought coverage and a defence for claims brought against her by a hospital patient for damages as a result of applicant’s alleged accessing the hospital records of a patient who was not under her care. The crux of the case turned on whether the applicant (defendant in the lawsuit) was an insured under the policy issued by Aviva. The policy would provide coverage if the allegations in the underlying Statement of Claim alleged conduct took place while the applicant was acting under the direction of the named insured but only with respect to liability arising from the operations of the named insured.

Because the policy provided coverage for ‘invasion or violation of privacy’, also referred to as the tort of intrusion upon seclusion (which would include accessing records in an unauthorized manner) the court held that the policy was by definition intended to cover offensive conduct that would presumably not be authorized by the insurer. In that case, how can coverage be denied for conduct that on the face of it would appear to be covered?

Acting under the direction of the employer relates not to control how the work is done or actual oversight at the moment of the incident (in this case when records were improperly accessed) but rather flows from the relationship generally and ‘control’ over incidental features of the of the employment such as directing when and where to work and having the right to terminate the employment.

Whether the alleged misconduct arose out of the operations of the named insured was also in issue. The insurer argued that hospitals operations are to provide care and because the employee was not within the patient’s circle of care, her conduct did not fall within the operations of the hospital. The court rejected this argument, noting that the ‘operations’ of the hospital included creating, collecting and maintaining medical records. The underlying claim against the applicant (defendant) for which coverage was sought related to allegations about the unauthorized access to those medical records.

Ultimately however, in reading the decision, the irresistible inference is that the court accepted that because the policy covered ‘intrusion upon seclusion’, it could only be read to cover the alleged misconduct. As a result to deny coverage for the very conduct that the policy was intended to cover would be perverse. It is also consistent with the underlying interpretive imperative of insurance policies – coverage should be interpreted broadly and exclusions should be interpreted narrowly.

Oliveira v. Aviva

Neil Colville-Reeves

Neil is a Partner of Samis+Company. Neil focuses exclusively on insurance-related litigation. He has handled a broad range of matters before the Ontario Superior Court of Justice and the Financial Services Commission of Ontario, as well as advocating on behalf of his clients in private arbitrations.

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Courts, Coverage  

Occupiers’ Liability Act Trumps Consumer Protection Act

 Mar 29, 2018 9:00 AM
by Mauro D'Agostino

A three-member panel of the Court of Appeal held that the Consumer Protection Act (CPA), specifically sections 7 and 9, undermine section 3 of the Occupiers’ Liability Act (OLA) and, therefore, cannot be used to void a liability waiver.

This case involved appeals from two separate Superior Court decisions in Schnarr v. Blue Mountain Resorts Ltd. and Woodhouse v. Snow Valley.  At the heart of this case was whether the OLA or the CPA governed the relationship between the parties.  The plaintiffs were pursuing personal injury claims suffered by them while using the premises for its intended purpose - skiing.  Both had signed waivers of liability.

The plaintiffs were successful at the Superior Court in arguing that the waivers of liability under section 3 of the OLA were voided by relying on provisions of the CPA. They argued that, as the plaintiffs are consumers and ski resorts are suppliers, the contracts they entered into are consumer agreements and, therefore, controlled by the CPA rather than the OLA.  A supplier cannot waive liability for services that are not of “reasonable acceptable quality” pursuant to sections 7 and 9 of the CPA.  However, the ski resorts are suppliers under the CPA and also occupiers under the OLA.

As the Superior Court decisions were decisions on motions involving questions of law, the applicable standard of review for the appeals was correctness.  The Court of Appeal overturned both lower level decisions, finding that the plaintiffs were bound by their liability waivers.  This was so whether the plaintiffs’ claims are in tort under the OLA or contract (breach of warranty) under the CPA. 

The CPA and the OLA were found to conflict and be irreconcilable.  The OLA permits an occupier to obtain a waiver of liability (especially important to operators of recreational activities) whereas the CPA precludes a supplier from obtaining a waiver of liability.  The Court preferred the more specific provision of the OLA over the general provisions in the CPA.  The Court found that the OLA was intended to be an “exhaustive scheme” regarding the liability of occupiers to entrants on their premises flowing from the maintenance or care of the premises.  The purpose of the OLA would be undermined if the CPA were to take precedence in such circumstances.  The Court held that the OLA supersedes the CPA.  Therefore, activities occurring on an occupiers’ premises in return for payment are covered by the OLA.  The provisions of the CPA do not apply. 

The matters were remitted back to the Superior Court  to proceed with the OLA as governing the relationship between the parties.

Mauro is a Partner of Samis+Company and practiced exclusively in the areas of accident benefit (arbitrations and litigation) and bodily injury matters arising from motor vehicle accidents, including non-motor vehicle bodily injury claims.

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Failure to Provide Notice to the Insured within 90-days is not Fatal to Priority Dispute

 Mar 27, 2018 3:00 PM
by Mauro D'Agostino

In the decision of The Dominion of Canada General Insurance Company v. Unifund Assurance Company, the Court of Appeal has confirmed that the standard of review applicable in priority disputes is reasonableness.

The decision primarily deals with whether the failure to provide notice to an insured within 90-days of receipt of the OCF-1 precludes the insurer from proceeding with a priority dispute. In this matter, notice was provided to the insured after the priority arbitration had commenced (beyond the 90-day period) but before the arbitration hearing.

At the preliminary issue hearing, Arbitrator Novick decided that the 90-day notice period did not apply to insureds, only to insurers giving notice to other insurers. The Arbitrator held that, while insurers should ideally provide notice to insureds at the same time as notice is given to the other insurer, late notice to an insured is permitted, as long as it provides the insured with the opportunity to participate in the process.

The appeal of the preliminary issue decision was heard by Faieta J. of the Superior Court, who concluded that the applicable standard of review was correctness.  He held that failure of the insurer to provide notice to the insured within the same 90-day notice period was fatal to the priority dispute. 

A three-judge panel of the Court of Appeal reversed the decision of Faieta J. and restored the decision of the Arbitrator.  A reasonableness standard was applied. The Court noted that the Arbitrator was a specialized decision-maker engaged in interpreting her home statute and regulation.

In determining the Arbitrator’s decision was reasonable, the Court of Appeal found that the failure to give notice to the insured within 90 days did not ignore the policy objectives of the Regulation.  It did not affect the insured’s right of prompt receipt of accident benefits, nor did it affect the insured’s participation rights in priority disputes, held to be procedural rights. In addition, the late notice had no impact on the rights of the second insurer in the priority dispute. 

The Court determined that it was up to the Arbitrator to determine whether the notice to an insured was given too late in order for the insured to exercise their participation rights. In the case at hand, the Arbitrator found that as the insured received notice before the actual arbitration hearing commenced and did not object to the transfer of the claim, the late notice was not fatal to the priority dispute. The Court ultimately concluded the Arbitrator’s decision was reasonable – although the notice was late, the lateness was not an impediment to the priority dispute, and the proceeding could continue. 

This case is significant because the Court of Appeal has determined that notice to an insured of the priority dispute in excess of the 90 days is not necessarily fatal to a proceeding. The analysis is now whether the lateness of the notice to the insured precludes their ability to participate in the priority dispute.

Mauro is a Partner of Samis+Company and practiced exclusively in the areas of accident benefit (arbitrations and litigation) and bodily injury matters arising from motor vehicle accidents, including non-motor vehicle bodily injury claims.

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Accident Benefits, Arbitrations, Courts  

Reconciling Inconsistent Policy Documents through Rectification

 Mar 23, 2018 9:00 AM
by Neil Colville-Reeves

Reconciling Inconsistent Policy Documents through Rectification

The recent Court of Appeal decision in Alguire v. Manulife provides a helpful primer (and reminder) on the law of rectification, an equitable remedy not often invoked in insurance related litigation. This case involved a GRIP life insurance policy issued by Manulife to the plaintiff in 1982. The face amount of the coverage was $5,000,000. The policy required large premiums payable up front and reduced premiums payable over time and included a guaranteed paid up value that would ensure a pre-determined coverage amount that was guaranteed even in the event of a default by the insured in paying premiums.  The guaranteed amount was memorialized in a table of non-forfeiture values that would increase over time.  The approved quote for the policy agreed to by the parties included the non-forfeiture table that was based on each $5,000 of the face amount of the coverage. However when the policy was issued the non-forfeiture table was presented based on each $1,000 of the face amount of the coverage. The result was that the paid up value was always 5 times greater than what it was supposed to be and eventually exceeded the face value of the policy by a factor of almost 3. At the time of trial, despite a policy with a face value of $5,000,000 the paid up value which was guaranteed was $13,400,000 instead of $2,680,000. The plaintiff sought a ruling that affirmed the higher paid up value.

The plaintiff attempted to justify his position by testifying that he had specifically requested a policy that would provide ‘inflation protection’. He testified that he reviewed the non-forfeiture table with the (now deceased) broker who expressly represented to him that the non-forfeiture value would eventually exceed the face value of the policy.

At trial, the court held that the parties contracted for a policy with a maximum value of $5,000,000 and the inclusion of the non-forfeiture table that showed a higher amount was clearly an error. As a result the court exercised its discretion to rectify the contract so that is accurately reflected the agreement reached between the parties.  The Court of Appeal agreed noting that in order to rectify the contract Manulife was required to lead evidence to establish that the parties had reached a ‘prior agreement whose terms are definite and ascertainable’.

The court was satisfied that it had done so. The court ultimately considered the notion that a policy with non-forfeiture values that exceeded the face value of the policy to be nonsensical. In addition the non-forfeiture tables had no inflation related pattern which undermined the plaintiff’s position that he had bargained for inflation protection.

Alguire v. Manulife


Neil Colville-Reeves

Neil is a Partner of Samis+Company. Neil focuses exclusively on insurance-related litigation. He has handled a broad range of matters before the Ontario Superior Court of Justice and the Financial Services Commission of Ontario, as well as advocating on behalf of his clients in private arbitrations.

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LAT Holds Attendant Care is not Payable before the Submission of a Form 1

 Mar 21, 2018 1:00 PM
by Alexandra Wilkins

At issue in Applicant and Aviva (2018 Can LII 13190) was whether attendant care was payable for the period of time before the Claimant submitted a Form 1.

The Claimant was injured in a July 1, 2014 accident and sought attendant care expenses in the amount of $1,424.24 per month for the period July 14, 2014 to March 30, 2015. The Claimant Form 1 was not provided to the insurer until October 31, 2014. The Insurer agreed to fund the attendant care for the period after the Form 1 was submitted, but refused to fund the attendant care for the time period before the Form 1 was submitted. Aviva submitted that entitlement arose when it received the Form 1.

The Adjudicator found in favour of Aviva and determined entitlement arose the date the Form 1 was received on the basis of Section 42(5) of the SABS. The Adjudicator noted that the Claimant had opted to provide no submissions refuting Aviva’s position and did not provide any evidence indicating the Form 1 was received earlier. He indicated that incurring attendant care treatment does not automatically entitle an Insured to attendant care benefits. Pursuant to section 19 of the SABS, it is the reasonableness and necessity for attendant care services which entitle an insured to the benefit.

Alexandra practices insurance related litigation with a focus on accident benefits and bodily injury claims. 

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Court of Appeal finds $225,000 General Damages Award to be Reasonable

 Mar 20, 2018 5:00 PM
by Alexandra Wilkins

In Dunk v. Kremer, the 18 year old Plaintiff (Respondent at Appeal) was injured in a motor vehicle accident and suffered a tibia fracture and right talus bone fracture requiring surgery. At trial, the jury awarded damages for future loss of income and cost of medical care, as well as $225,000.00 in general damages. The Defendant (Appellant at Appeal) appealed, among other things, the amount of the general damages award.

Ultimately, the Court of Appeal dismissed the Appeal, noting that the matter was in the trial judge’s discretion and the general damages award was not so inordinately high as to call for appellant intervention. The Court noted the Plaintiff’s young age at the time of the accident, the years of pain she had suffered, the impact of the accident on her day-to-day activities and future plans, as well as that her accident-related injuries were going to cause her significant and serious long-term pain and impairment.

This case also addresses expert reports under Rule 53. Briefly, the Defendant did not indicate they would be calling their expert and provided an unsigned copy of the expert’s report. After hearing the evidence of the Plaintiff’s expert, the Defendant moved for an order permitting it to call their expert. The trial judge ruled that the expert could be called, but that he would be restricted to the four corners of his report and would not be permitted to comment on developments that had arisen after he had prepared his report. This prevented the Defendant expert from commenting on the likelihood that the Plaintiff would develop arthritis in the future that would leave her “quite disabled”. The Defendant appealed on the basis that the ruling prevented their expert from commenting on the oral evidence of the Plaintiff’s expert. Ultimately, the Court dismissed this aspect of the appeal and highlighted that the situation was largely the fault of the Defendant.

Alexandra practices insurance related litigation with a focus on accident benefits and bodily injury claims. 

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What’s In a Name?

 Mar 19, 2018 9:00 AM
by Neil Reeves

What’s In a Name?

Plenty. Particularly if you are an insurer attempting to advance a subrogated claim and your insured is in bankruptcy protection proceedings. This was the circumstance faced by the insurer in Douglas v. Ferguson Fuels. What would have otherwise been a garden variety oil spill subrogated action was complicated by ongoing bankruptcy proceedings involving the insureds. By the time the subrogated claim was issued the insured had made an assignment in bankruptcy. By application of s. 71 of the Bankruptcy and Insolvency Act, the insured’s right of action vested in the trustee once an assignment in bankruptcy was made. The subrogated action was commenced in the name of the insured and the court, applying long standing principles of bankruptcy law held that the claim commenced in the name of the insured was a nullity. Had the claim been brought in the name of the Trustee the insurer would have been entitled to proceed.

There were a number of technical issues argued in relation to the law of misnomer (where the court will substitute the correct party for a party improperly identified) and the distinction between the law of subrogation and assignment.  Ultimately the court determined that the naming of the insured personally instead of the Trustee could not properly be characterized as a misnomer. The action was ultimately dismissed.  Two of the five judge panel dissented on the basis that the insurer should have the opportunity to argue the misnomer issue before the Superior Court motions judge.

The take away: be mindful of the technical consequences of an assignment in bankruptcy as it pertains to advancing subrogated actions.  Although the issue more often arises where a target defendant is in a bankruptcy proceeding (which requires that steps be taken by the subrogating insurer in order to proceed) this case demonstrates that advancing a claim on behalf of a bankrupt insured can be a minefield that requires planning and thoughtful advocacy.

Douglas v. Ferguson Fuels




Star Wars Truisms: Do or Do Not, There is No Try

 Mar 8, 2018 9:00 AM
by Kevin Mitchell

The February 27, 2018 priority preliminary arbitration award of Ken Bialkowski in Aviva v. Intact involves an 18 year old, unemployed passenger in an Aviva insured auto injured on February 3, 2016. The issue was if Aviva’s late notice to Intact could be cured. The merits would suggest the claimant resolved with Aviva, at best, upon occupancy while at the next higher tier with Intact upon dependency.

That the award was rendered in six days is, to my mind, testament to the overarching principles at play despite that this issue is said to largely be a fact driven analysis. Upon my first run through of this case, and before I reached its conclusion, the most recent of the two main authorities relied upon came to mind; Justice Perell’s December 10, 2007 judgment in Liberty v. Zurich. Liberty had made extraordinary efforts to locate and notify a respondent insurer but still gave late notice and fell short at arbitration and on appeal. Ultimately, Liberty was found to have made reasonable efforts but the 90 days was felt to have been a sufficient time within which those efforts should have been made.

With the tools available to it, Aviva’s efforts in the case at hand fell well short in comparison and paragraph 27 of the award advises it failed on both prongs of the test. Recall the onus is on the party seeking to extend the 90 day notice period. Owing to the strictness of the rule’s application, and despite misgivings by or on behalf of the claimant, Aviva’s approach on an ‘escalating scale’ of investigation ‘commensurate with the lack of co-operation’ was in the end not consecrated. It was clear that with a basic factual foundation in hand, Aviva was within about a 24 hour period able to identify Intact and give both it and the claimant notice. Taking well more than 89 days to get to that point was their Achilles heel. With the breadth of insurers to whom a claimant can make a SABS claim, it is not without some understanding why a claimant might simply submit a claim to the insurer in respect of which they are an ‘occupant’. For the insurer first receiving the claim, if the claimant is not your named insured and an occupant of your described auto, it is potentially a lost opportunity not to make an early and robust investigation. Costs followed the cause. May the force be with Aviva if it chooses to appeal.

Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters. 

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“Mandatory” Mediation under Section 258.6(1) of the Insurance Act

 Mar 5, 2018 4:00 PM
by Dan Inkpen

A new motion decision of Justice Firestone could have wide ranging ramifications in terms of the timing of when mediations are typically scheduled.

In Thomson v. Portelance et al., in an effort to be in a position to set their action down for trial early, the Plaintiffs sought to schedule a mediation, pursuant to s. 258.6(1) of the Insurance Act, prior to completion of discoveries. The Defendants resisted this request.

Section 258.6(1) of the Act is a “lesser known” provision providing for mandatory mediation in automobile cases, which states as follows: A person making a claim for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile and an insurer that is defending an action in respect to the claim on behalf of an insured or that receives a notice under clause 258.3(1)(b) in respect of the claim shall, on the request of either of them, participate in the mediation of the claim in accordance with the procedures prescribed by the regulations.

Justice Firestone held that, once a party requests that a mediation be scheduled under s. 258.6(1), the other party cannot delay the scheduling of the mediation until the completion of a specific event in the litigation process, such as discoveries. Once the Plaintiffs requested the scheduling of the mediation, the Defendants had a positive obligation to appoint, schedule, and conduct such mediation within the timeframes and procedures set forth in s. 258.6(1) of the Act and s. 3 of O. Reg. 461/96.

How successful a “pre-discovery” mediation might be, in the likely absence of a lot of information that normally becomes available through the discovery process is, of course, an entirely different issue not addressed by this decision.


Dan's practice areas of interest include accident benefit and bodily injury litigation, loss transfer and priority dispute arbitrations and subrogation litigation.

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