CITATION: Akinyimide v. Economical Mutual Insurance Company, 2023 ONSC 5272
COURT FILE NO.: 422/21
DATE: 20230920
ONTARIO
SUPERIOR COURT OF JUSTICE
Divisional Court
Sachs, Backhouse and Schabas JJ.
BETWEEN:
BUKOLA AKINYIMIDE
Appellant
– and –
ECONOMICAL MUTUAL INSUARNCE COMPANY
Respondent
Frank Grande for the Appellant
Nathalie Rosenthall and Nathan Fabiano for the Respondent
Douglas Lee for the Licence Appeal Tribunal
HEARD at Toronto: August 22, 2023
Schabas J.
REASONS FOR DECISION
Background
[1] The appellant, Bukola Akinyimide (“Akinyimide”)[^1], had a car accident in October, 2017. Her insurer, the respondent Economical Mutual Insurance Company (“Economical”), denied her claim for income replacement benefits (“IRBs”) under the Statutory Accident Benefits Schedule O. Reg. 34/10 (“SABS”) on the basis that she had made a “material misrepresentation” in failing to disclose her correct address.
[2] At the time Akinyimide obtained the policy, in February 2016, she informed Economical that she resided in Windsor but was going to move to Toronto for work. The broker advised Akinyimide that this change of address would increase her premium, and Akinyimide then stated that she would continue to reside in Windsor and take a bus to Toronto for work.
[3] On the date of the accident Akinyimide was driving her vehicle in Toronto to attend work. She later admitted that she lived in Toronto from Monday to Friday, and her driver’s licence and other documentation listed her residence as being in Toronto.
[4] In December, 2017, Economical sent Akinyimide a letter increasing her premium to reflect her Toronto residence, from a monthly rate of $188.38 to $347.34. Economical also sought a retroactive payment of over $1,000, apparently reflecting her move to Toronto as of July 2017. The appellant made these payments.
[5] Upon being denied IRBs by Economical, Akinyimide sought relief from the Licence Appeal Tribunal (“LAT”). In a Preliminary Issue Decision dated August 19, 2020, the LAT upheld Economical’s decision, applying s. 31(1)(b) of the SABS which provides:
(1) The insurer is not required to pay an income replacement benefit, a non-earner benefit or a benefit under section 21, 22 or 23, …
(b) in respect of any person who has made, or who knows of, a material misrepresentation that induced the insurer to enter into the contract of automobile insurance or who intentionally failed to notify the insurer of a change in a risk material to the contract.
[6] The LAT found that Akinyimide made a material misrepresentation by failing to disclose her correct address for the purposes of obtaining an insurance policy. Akinyimide was made aware of the importance of providing her correct address to her insurance broker but did not do so. The LAT held that Akinyimide’s misrepresentation induced Economical to enter into an insurance contract at a lower rate than the Appellant would have been eligible for had she provided her correct address.
[7] The Tribunal rejected Akinyimide’s “alternative argument” that Economical had waived its right to rely on her misrepresentation and was estopped from denying her IRBs after it had charged her a higher premium retroactive to July 2017. The LAT refused to apply s. 131 of the Insurance Act, R.S.O. 1990, c. I.8, (the “Act”) holding that the LAT has no jurisdiction to award equitable remedies. Section 131 provides, in material part:
131 (1) The obligation of an insured to comply with a requirement under a contract is excused to the extent that, …
(b) the insurer’s conduct reasonably causes the insured to believe that the insured’s compliance with the requirement is excused in whole or in part, and the insured acts on that belief to the insured’s detriment.
[8] Akinyimide applied for reconsideration which was dismissed by the same LAT adjudicator on May 4, 2021. The adjudicator confirmed his findings respecting s. 31 of the SABS. He stated that s. 131 of the Act did not apply as the SABS constitute a “complete code” for resolving disputes before it, and confirmed his previous finding that the LAT has no equitable jurisdiction. The LAT also rejected an argument that Akinyimide was denied procedural fairness.
Jurisdiction and standard or review
[9] This Court has jurisdiction to hear the appeal on questions of law only: License Appeal Tribunal Act, S.O. 1999, c. 12, Sched. G, s. 11(6). The standard of review on questions of law, including statutory interpretation, is correctness: Canada (Minister of Citizenship and Immigration) v. Vavilov at para. 37 (“Vavilov”). Both parties agree that this is the standard of review to be applied on this appeal.
Issues
[10] Counsel for Akinyimide raised several grounds of appeal. However, the critical grounds advanced in oral argument were:
(a) Whether the LAT erred in law in its interpretation of s. 31 of the SABS;
(b) Whether the LAT erred in law in finding that it could not apply s. 131 of the Act; and
(c) Whether the LAT erred in law in finding that it had no jurisdiction to apply equitable doctrines of waiver and estoppel.
Application of s. 31 of the SABS
[11] In my view the LAT made no error of law in its interpretation and application of s. 31(1)(b) of the SABS. The section provides that the insurer is not bound to pay IRBs if the insured has “made a material misrepresentation that induced the insurer to enter into the contract.” The adjudicator found, quite reasonably, that Akinyimide had done exactly that by misrepresenting her address.
[12] Section 31(1)(b) also provides that the insurer is not required to pay IRBs if the insured “intentionally failed to notify the insurer of a change in a risk material to the contract.” Much of the argument was focused on the mens rea required for this provision, perhaps because in parts of its decisions the LAT referred to this section as well, conflating the two tests in s. 31(1). Nothing turns on this, however, as the LAT made no error in its application of the first branch of the test, concluding at paras. 25 and 41 that Akinyimide made a material misrepresentation about her address which caused Economical to issue a policy at a reduced rate, a conclusion that is well-supported by the evidence.
Application of s. 131 of the Insurance Act
[13] In its Preliminary Decision the LAT rejected the appellant’s argument that Economical had “waived a right and is estopped from denying the IRB because the respondent increased her premium after the applicant notified it of her address change and charged her a higher premium retroactive to July 31, 2017.” (para. 46) Although it referred to s. 131 of the Act, the LAT cited other LAT decisions which held that the LAT “derives its powers by statute” and “lacks the jurisdiction to award equitable remedies” and therefore it could not apply the doctrines of waiver and estoppel (para. 53).
[14] In the Reconsideration Decision, the LAT went further on this point. Relying on s. 280(4) of the Act, which states that disputes over statutory accident benefits “shall be resolved in accordance with the Statutory Accident Benefits Schedule”, the LAT held that the SABS is a “complete code for resolving disputes between insurers and insureds” (para. 30). The LAT then repeated its earlier finding that it had no jurisdiction to award equitable remedies. It made no mention, however, of s. 131 of the Act.
[15] In my view, the LAT erred in law in finding that it could not apply s. 131 of the Act. Section 131 codifies in legislation what are otherwise equitable remedies. The issue, therefore, is not whether judge-made equitable relief can be awarded by the LAT, but whether the LAT can apply s. 131 of the Act, which is statutory relief. The analysis in the Preliminary Decision, which focused on whether the LAT had jurisdiction to award equitable relief, therefore, does not address the right question and the LAT erred in law in finding that, because it does not have jurisdiction to award equitable remedies, it could not apply s. 131.
[16] The Reconsideration Decision implicitly recognizes the weakness of the analysis in the Preliminary Decision and gives an alternative justification, asserting that the SABS is a “complete code” preventing the LAT from applying s. 131 of the Act. relying on s. 280(4) of the Act, which states that disputes over entitlement to IRBs “shall be resolved in accordance with the Statutory Accident Benefits Schedule.” But this too is an error of law by the LAT.
[17] Section 280 of the Act does not oust consideration by the LAT of other sections of the Act. Subsections 280(1) and (2) grant broad jurisdiction to the LAT to “resolve a dispute” “in respect of an insured person’s entitlement to statutory accident benefits.” There is nothing in section 280 that prevents the LAT from considering other sections of the Act, so long as the LAT’s decision is “in accordance with” the SABS.
[18] In ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board), 2006 SCC 4, [2006] 1 SCR 140, at para. 38, the Supreme Court observed that a statutory tribunal “obtain[s] its jurisdiction over matters from two sources: (1) express grants of jurisdiction under various statutes (explicit powers); and (2) the common law, by application of the doctrine of necessary implication (implicit powers).” This is reflected in the Licence Appeal Tribunal Act, 1999, SO 1999, c 12, Sch G, s. 3(2), which provides that, “[e]xcept as limited by this Act, the Tribunal has all the powers that are necessary or expedient for carrying out its duties.”
[19] In ATCO, the Supreme Court stated that determining implicit powers requires consideration of the “larger statutory scheme.” As the Court stated at para. 49:
As in any statutory interpretation exercise, when determining the powers of an administrative body, courts need to examine the context that colours the words and the legislative scheme. The ultimate goal is to discover the clear intent of the legislature and the true purpose of the statute while preserving the harmony, coherence and consistency of the legislative scheme (Bell ExpressVu, at para. 27; see also Interpretation Act, R.S.A. 2000, c. I-8, s. 10 (in Appendix)). “[S]tatutory interpretation is the art of finding the legislative spirit embodied in enactments”: Bristol-Myers Squibb Co., at para. 102.
[20] When engaging in this exercise one must consider the purpose of the legislation. As the Court continued at para. 51 of ATCO, “the powers conferred by an enabling statute are construed to include not only those expressly granted but also, by implication, all powers which are practically necessary for the accomplishment of the object intended to be secured by the statutory regime created by the legislature.”
[21] In this case the purpose of the Act, including the SABS, is consumer protection, and it must be read, interpreted and applied in that way: Smith v. Co-Operator’s General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129 at para. 11; Kellerman-Bernard v. Unica Insurance Company, 2023 ONSC 4423 at para. 24. Section 131 of the Act provides protection to consumers which, in the absence of clear direction to the contrary, can and should be invoked by the LAT in appropriate circumstances. This accords with the point made at para. 73 of ATCO that a further consideration in determining jurisdiction is when “the Legislature did not address its mind to the issue and decide against conferring the power upon the Board.” Here, there is no direction against the LAT applying s. 131 of the Act. Indeed, one LAT case recently appeared to accept that s. 131 might apply but did not apply in that case involving repayment provisions that are specifically addressed in the SABS: Thompson v. Aviva Insurance Company, 2023 CarswellOnt 11114 at paras. 20 and 25.
[22] Further, as was discussed during oral argument, if the LAT cannot apply s. 131, the purpose of the section is unclear. It is assumed that the legislature does not pass laws that have no purpose. As the Supreme Court held in R. v. Proulx, 2000 SCC 5, [2000] 1 S.C.R. 61, at para 28, “[i]t is a well accepted principle of statutory interpretation that no legislative provision should be interpreted so as to render it mere surplusage.” The courts do not require s. 131, as they have equitable jurisdiction, and if it is not able to be used by the LAT, then it appears that there is no need for it. Indeed, the finding of the LAT that it cannot award equitable relief appears to be precisely why s. 131 is in the Act – so that the same kind of relief can be applied by the LAT to protect insured persons in appropriate cases.[^2]
[23] Accordingly, the LAT committed an error in law in finding that it does not have the ability to apply s. 131 of the Act.
[24] The LAT also, in my view, “fundamentally misapprehended” the evidence in concluding that, if it had equitable jurisdiction, it would not have applied it: Vavilov at para. 126. The LAT stated, at para. 55 of its Preliminary Decision as follows:
Even if the Tribunal had equitable jurisdiction, I fail to see how the applicant acted to her detriment or in some way changed her position as a result of the respondent taking additional premiums. The change of address occurred after the subject accident and this timing does not weigh in favour of the applicant.
[25] The issue is not whether Economical took the premiums, but rather whether Akinyimide paid them expecting the contract of insurance to be honoured by Economical. Nor do I understand the second sentence of the passage quoted, as Akinyimide changed her address months in advance of the accident; it was when that change of address was disclosed to Economical that she was charged, and paid, the additional premium, including the retroactive premium.
Does the LAT have jurisdiction to apply equitable remedies?
[26] In light of my conclusion that the LAT has jurisdiction to apply s. 131 of the Act, it is not necessary to address this issue.
Conclusion
[27] The decisions of the LAT are set aside. The appropriate remedy is to remit the matter back to the LAT for a new hearing by a different member of the Tribunal.
[28] Economical shall pay costs to Akinyimide in the agreed upon amount of $5,000.
Paul B. Schabas J.
I agree _______________________________
Sachs J.
I agree _______________________________
Backhouse J.
Released: September 20, 2023
CITATION: Akinyimide v. Economical Mutual Insurance Company, 2023 ONSC 5272
COURT FILE NO.: 422/21
DATE: 20230920
ONTARIO
SUPERIOR COURT OF JUSTICE
Divisional Court
Sachs, Backhouse and Schabas JJ.
BUKOLA AKINYIMIDE
Appellant
– and –
ECONOMICAL MUTUAL INSURANCE COMPANY
Respondent
reasons for decision
Schabas J.
Released: September 20, 2023
[^1]: This matter was commenced under the title “B.A. v. Economical Mutual Insurance Company”, which appears to be how it was named before the Licence Appeal Tribunal. The Court questioned the need for anonymizing the title of proceedings in this Court, and no justification was provided. Accordingly, the title of proceedings has been amended to include the appellant’s name.
[^2]: Prior to 2012, s. 131 of the Act required a waiver by the insurer to be in writing, which narrowed a court’s jurisdiction to apply waiver and estoppel. However, in 2012 the section was amended to provide that waiver by an insurer could be established by the “insurer’s conduct”, making it superfluous for court purposes: Strong Action for Ontario Act (Budget Measures), S.O. 2012, c. 8, Sched. 23, s. 5.