V.A.D. v. Intact Insurance Company, 2020 CanLII 47710

Citation: V.A.D. vs. Intact Insurance Company, 2020 ONLAT 19-003332/AABS

Date: July 14, 2020

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

V.A.D.

Applicant

and

Intact Insurance Company

Respondent

DECISION

ADJUDICATOR: Kimberly Parish

APPEARANCES:

For the Applicant: Stephanie Weir, Counsel

For the Respondent: Megan Murphy, Counsel

HEARD: By way of written submissions

OVERVIEW

1The applicant was involved in an automobile accident on April 19, 2017 and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').¹ The applicant was denied certain benefits by the respondent, Intact Insurance Company (“Intact”) and submitted an application to the Licence Application Tribunal - Automobile Accident Benefits Service (“Tribunal”).

2The parties participated in a case conference on September 12, 2019. Intact raised a preliminary issue at the case conference to determine whether the applicant is statute barred from proceeding with her claim for income replacement benefits (“IRBs”) pursuant to s. 31 of the Schedule. An order dated September 13, 2019 was issued by Adjudicator Harper (“order of Adjudicator Harper”) which noted a preliminary issue hearing shall proceed in writing to determine the preliminary issue and a subsequent hearing would follow to determine the remaining substantive issues in dispute.

3The order of Adjudicator Harper noted that the applicant would provide initial written submissions, the respondent would provide responding submissions, and the applicant could provide a final reply. The applicant provided initial written submissions, dated December 13, 2019 as directed by the order of Adjudicator Harper. The applicant submitted that the respondent raised the preliminary issue in their case conference summary dated September 6, 2019 but failed to provide the particulars or evidence to support the preliminary issue. As a result, the applicant argued that she does not know the case she needs to meet. The applicant further argued that a duty of fairness is owed to her and that for procedural fairness to ensue, she ought to be provided with the particulars of the claim being made against her. The applicant provided extensive case law to support her position.

4I agree with the position put forth by the applicant. While the order of Adjudicator Harper noted the applicant shall provide initial written submissions, I find that since Intact is the moving party who has raised the preliminary issue, they should provide the initial written submissions. I issued an order dated April 22, 2020 which was sent out to the counsel for both parties on that date. The order noted that, to ensure procedural fairness, the respondent’s written submissions dated January 30, 2020 shall be the initial submissions for the preliminary issue hearing. The order further noted the applicant shall file responding submissions by May 29, 2020 and the respondent could file a final reply, if any by June 5, 2020.

5Despite my order being released to the parties on April 22, 2020, the applicant’s counsel did not provide any responding written submissions. On June 8, 2020, I requested the case management officer at the Tribunal contact counsel for both parties by email to confirm by June 10, 2020 that they received my order dated April 22, 2020. The respondent’s counsel confirmed by email on June 8, 2020 that they received my order at 5:08 pm on April 22, 2020 and the applicant’s counsel was copied on that email. The case management officer advised me by email on June 11, 2020 that no response was received from the applicant’s counsel. The Tribunal also did not receive information indicating the email to the applicant’s counsel bounced back or was undeliverable.

6The applicant was provided with an opportunity to provide responding submissions for the preliminary issue hearing and they did not provide any further submissions after their initial written submissions dated December 13, 2019 were received by the Tribunal. I have adjudicated the preliminary issue based upon the information provided.

PRELIMINARY ISSUE

7The preliminary issue as noted within the order of Adjudicator Harper is as follows:

i. Is the applicant’s claim for an income replacement benefit barred pursuant to section 31 of the Schedule?

8The parties conceded the applicant was involved in an accident in Toronto, Ontario on April 19, 2017. Intact’s position is that they properly denied the applicant’s claim for income replacement benefits (“IRBs”) because the applicant has breached s. 31(b) of the Schedule and as a result is statue barred from proceeding with her claim for IRBs.

9The applicant submitted an Application for Accident benefits (OCF-1) initially to Intact on April 26, 2017, and a revised OCF-1 was submitted to Intact on August 23, 2017.² A disability certificate (“OCF-3”) dated April 28, 2017 was submitted by the applicant to Intact to support her entitlement to receive IRBs. The applicant argues that Intact has not paid the applicant IRBs and as a result, has not complied with its obligation under s. 36 of the Schedule. The applicant argues that Intact has not adduced evidence of misrepresentation that is material or an intention to fail to notify the insurer of a material change in risk. The applicant requests a dismissal of the preliminary issue and requests that $4,000.00 in costs be awarded by the Tribunal against the respondent within 30 days of the release of the preliminary issue decision.

10I find on a balance of probabilities, the applicant’s claim for IRBs is barred pursuant to s. 31 of the Schedule. The reasons which support my findings are provided below.

ANALYSIS

11Section 31(1)(b) of the Schedule notes that an insurer is not required to pay an IRB to an applicant if it can be established that the applicant intentionally failed to notify the insurer of a change in a risk material to the contract. Both parties conceded that the evidentiary onus remains with Intact to prove this, and I agree.

12Intact’s position is that it properly denied the applicant’s claim for IRBs as the applicant did not notify Intact that she moved from the province of Quebec to Ontario which resulted in her benefiting from paying a lower annual insurance premium. Intact submitted this failure to notify Intact of the material change in risk precludes the applicant from claiming entitlement to IRBs.

Can an insurer rescind a contract as to be voided ab initio due to a misrepresentation?

13Written correspondence dated June 13, 2017³ was provided from Intact to the applicant which advised her that she was not entitled to an IRB as her policy was voided ab initio. The applicant refutes this and relies on a Court of Appeal decision, Merino v. Ing Insurance Company of Canada⁴. The decision noted that under s. 233 of the [Insurance Act]⁵, a misrepresentation does not render the contract void. The decision further noted it is no longer the law that a misrepresentation renders an automobile insurance contract void. The decision further noted that the contract remains in effect, but the insured’s rights are limited to his or her right to receive statutory accident benefits.

14While the June 13, 2017 written correspondence from Intact noted the applicant’s policy was voided ab initio, it also noted she had coverage for medical and rehabilitation benefits in connection with the accident. The letter specifically noted as her policy was voided ab initio, she was not entitled to receive IRBs. I therefore find the applicant still had access to medical and rehabilitation benefits for injuries she sustained as a result of the accident. However, the scope of the contract was limited by Intact and the applicant was denied entitlement to IRBs pursuant to s. 31 of the Schedule.

Evidence the applicant was residing in Ontario prior to the date of the accident

15The respondent relies on the Toronto Police Services Motor Vehicle Accident Report⁶ (“police report”) which listed the applicant’s residence as an Ontario address. The police report noted an Ontario driver’s licence for the applicant and that Quebec licence plates were registered to the vehicle. The respondent submitted that at the time of the accident, the applicant’s vehicle was registered in the province of Quebec and displayed Quebec licence plates.⁷ I find this evidence supports the applicant had a valid Ontario driver’s licence at the time of the accident which listed an Ontario address for her. The photographs and the police report also provide confirmation that the applicant’s vehicle was registered in the province of Quebec with Quebec licence plates at the time of the accident.

16Both OCF-1’s submitted to Intact noted an Ontario address for the applicant. Sections of the OCF-1 requested the applicant provide the following information: her driver’s licence number, the year, make and model of the vehicle involved in the accident, and her licence plate number. The OCF-1’s noted “To follow” in response. Both OCF-1’s appear to be signed by the applicant and the applicant had retained legal counsel⁸ at the time in which the initial OCF-1 form was submitted to Intact. I find this information supports that the applicant understood the information which she was provided to Intact on both OCF-1’s. There has been no explanation provided by the applicant why she noted “To follow” under the sections which requested her driver’s license number, the year, make, and model of the vehicle involved in the accident, and her licence plate number. This information had already been produced within the police report. From this, I draw an adverse inference because I find this information was available to the applicant and there has been no explanation why this information was withheld on both OCF-1’s. As a result, I accept this information was withheld by the applicant as it would have provided the respondent with information which would have assisted them with determining she was residing in Ontario at a different address from the Quebec address noted on the Quebec insurance policy. At the time of the accident, the Quebec insurance policy was in effect and the applicant’s vehicle was still registered in the province of Quebec. This information would adversely affect the applicant’s entitlement to accident benefits, specifically IRBs.

17Intact relies on a copy of the applicant’s Ontario driver’s which Intact received on May 1, 2017 which noted the date of issuance on the applicant’s driver’s licence as June 6, 2016.⁹ Intact also obtained a copy of a TransUnion credit report which notes since February 2016, she resided at the same address as noted on both of her OCF-1’s and the police report. The respondent referenced what is noted on the Ontario government’s website which notes that new residents to Ontario can use a valid driver’s licence from another province for 60 days. After 60 days, the resident would then be required to switch to an Ontario driver’s licence.¹⁰ The respondent further relies on a sworn statement (“statement”) from the applicant to Intact, dated May 23, 2017 in which the applicant stated she had been living in Toronto with her daughter for the past 6-7 months and that she was planning to move to Toronto to be with her family. The statement further noted that prior to the accident she was previously employed with a [fast food chain] in Quebec and they were in the process of transferring her to Toronto. The statement further noted that she decided to come to Toronto and find a job on her own but could not find better work. The rent was high, and she submitted she wanted to return to Quebec.

The applicant was working in Ontario prior to the date of the accident

18Both OCF-1’s noted under part 8 that the applicant had been working at a [fast food chain] from 2016 to April 19, 2017. The Employer’s Confirmation Form (“OCF-2”), dated May 9, 2017 noted the applicant commenced working at the [fast food chain] on August 27, 2015 and her last day worked was April 19, 2017. While I accept that the applicant may have commenced working at the [fast food chain] prior to the accident in Quebec, the TransUnion report notes she has been residing at the same address as noted on both OCF-1’s since February 2016. Therefore, on a balance of probabilities, I accept that she was working at the [fast food chain] location in Ontario from February 2016 onward.

Would the applicant’s insurance premium have increased if Intact was notified the applicant had moved to Ontario?

19The applicant relies on the court of appeal decision, Sagl v. Chubb Insurance Company of Canada¹¹ which noted that a fact is relevant or material if it influences an insurer in deciding whether to issue the policy or with determining the premium amount. The applicant argues there is no evidence of any admissible statements on behalf of the applicant that would have influenced Intact in determining the amount of the premium, or the extent of the coverage offered.

20Intact refutes this and submits that the applicant’s insurance premium at the time of the accident was based upon her being a resident of Quebec. Intact submitted residents of Quebec involved in a motor vehicle accident are entitled to receive benefits administered through a public plan, Société de l’assurance automobile du Québec (“SAAQ”). Further, Intact submitted Ontario residents can receive no-fault benefits through their automotive insurer which are unavailable to Quebec residents. Intact argues therefore the quantum of the applicant’s annual premium for an Ontario based policy would be higher to account for the increase risk associated with providing no-fault benefits. Intact submitted that if the applicant had notified Intact of the change in her province of residence, there would have been an increase to her annual premiums. Intact noted her annual premium would have increased to $3,218.00 with one million dollars in third party liability insurance, the family protection endorsement of OPCF 44R, and no optional benefits. Intact submitted that the applicant’s annual coverage pursuant to a Quebec based policy from June 2016 - June 2017 was $361.00.¹²

21Intact relies on the Tribunal decision, Aviva Canada and “Mr. P”¹³ in which the adjudicator found that a fact was material if it influenced a prudent insurer to determine the amount of the premium. The adjudicator noted considerations include whether the premium would have increased, if the risk would be accepted, and what would be the extent of the coverage offered.

22I am persuaded by the decision, 16-004349 Aviva Canada and “Mr. P” and agree with Sagl which outlined when a fact was material. The applicant’s non-disclosure that her province of residence had changed in 2016 allowed the applicant to benefit from a substantially lower annual automotive insurance premium. The applicant was issued an Ontario driver’s licence on June 6, 2016. The applicant’s insurance policy renewal with Intact became due in June 2016. There has been no explanation provided by the applicant why she did not advise Intact at that time that she was residing in the province of Ontario. I find the applicant did not turn her mind to notifying Intact that her province of residency had changed and continued to remain silent and then notified Intact after she was involved in the subject accident.

23Therefore, I find on a balance of probabilities that the applicant intentionally failed to notify the insurer of a change in a risk material to the contract and as a result has contravened the requirements set out within s. 31(1)(b) of the Schedule. This finding is based on the information provided within the applicant’s sworn statement which noted she had been residing in Ontario for 6-7 months, which I do not find persuasive. This is because I already accepted the evidence of the TransUnion Report which noted she had been residing in Ontario since February 2016 and the date of issuance of her Ontario Driver’s Licence noted June 6, 2016. I also accept that she was employed and working at a [fast food chain] located in Ontario after February 2016. I find all this evidence supports that the applicant was residing in Ontario since February 2016. Further, the applicant has not provided an explanation for these discrepancies. I find by the applicant remaining silent and not disclosing to Intact that she moved to Ontario sometime in and around February 2016, she benefited from a significantly lower annual insurance premium which was based upon her residing in Quebec.

The applicant’s request for relief from forfeiture

24The applicant submitted:

Despite any as of yet unknown allegations with respect to s.31 of the Statutory Accident Benefits Schedule the applicant should be granted relief from forfeiture. However, as the allegations against the Applicant are unknown, the Applicant is not in a position to argue its position without the evidence in possession of the Respondent.

25The relief from forfeiture is a provision within the Courts of Justices Act (“CJA”).¹⁴ I find section 98 of the CJA does not grant tribunals the jurisdiction to grant relief against forfeiture. Although s.98 of the CJA addresses relief against forfeiture, it specifically notes that a “court” may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just. I interpret this to mean that the legislature did not intend for section 98 to be available to a tribunal as court is explicitly noted while tribunal is not. I have also found that Intact has demonstrated on a balance of probabilities that the applicant did not comply with section 31 of the Schedule as she intentionally failed to notify the insurer of a change in a risk material to the contract.

26I find the applicant’s claim for IRBs is barred pursuant to section 31(1)(b) of the Schedule.

The applicant’s request for costs

27The applicant requested costs be awarded against Intact in the amount of $4,000.00 and relies on section 17 of the Statutory Powers and Procedures Act¹⁵ and Rule 19 of the Tribunal’s Common Rules of Practice and Procedure. Rule 19 states that the Tribunal may award costs against a party who has behaved unreasonably, frivolously, vexatiously, or in bad faith. The applicant argues that Intact has created a delay for the applicant in having a substantive hearing on the matter by bringing the preliminary issue before the Tribunal. Further, the applicant argues that Intact has not provided the proper and any admissible evidence which would allow the applicant to respond to the allegations made by Intact.

28I find the applicant’s request for costs is dismissed without merit. While the original order of Adjudicator Harper noted the applicant shall provide initial written submissions, my order dated April 22, 2020 agreed with the applicant that Intact should provide initial written submissions and the applicant was provided an opportunity to provide responding submissions to Intact’s submissions. The applicant provided no further responding submissions and did provide confirmation if they received my order dated April 22, 2020. The applicant has been unsuccessful at the preliminary issue hearing. I find the preliminary issue was necessary for a determination to be made on whether the applicant could continue with her claim for IRBs.

CONCLUSION

29I find the applicant’s claim for IRBs is barred pursuant to section 31(1)(b) of the Schedule. The applicant is not entitled to its request for costs.

30As noted within Adjudicator Harpers’ order dated September 13, 2019, within twenty days of the release of the preliminary issue hearing decision, the parties will notify the Tribunal in writing of three suitable dates for a case conference resumption which will take place not later than forty-five days following the release of the preliminary issue decision. The case conference resumption will be held to determine the type of future hearing for the remaining issues in dispute and any procedural issues surrounding such hearing.

Footnotes

1. 1O. Reg 34/10.
2. 2Tab 3 of Applicant’s written submissions - OCF-1 dated April 25, 2017 and revised OCF-1 dated July 7, 2017.
3. 3Tab 4 of Applicant’s written submissions – correspondence letter from Intact to the applicant, dated June 13, 2017, at 2.
4. 4Merino v. Ing Insurance Company of Canada, 2019 ONCA 326, at paras 47, 48.
5. 5Insurance Act, RSO 1990, c. 1.8.
6. 6Tab 1 of Respondent’s Preliminary Issue Hearing Document Brief – copy of Toronto Police Services Motor Vehicle Accident Report for the accident which occurred April 19, 2017.
7. 7Tab 2 of Respondent’s Preliminary Issue Hearing Document Brief - photographs from property damage file showing the applicant’s vehicle with Quebec licence plates.
8. 8Tab 4 Respondent’s Preliminary Issue Hearing Document Brief – copy of authorization letter from Campisi LLP that they have been retained as legal counsel for the applicant.
9. 9Tab 7 of Respondent’s Preliminary Issue Hearing Document Brief – copy of applicant’s Ontario Driver’s Licence showing Ontario address and date of issuance.
10. 10Tab C - Respondent’s Preliminary Issue Hearing Document Brief and information is also found on Ontario Government’s website at: https://www.ontario.ca/page/exchange-out-province-drivers-licence.
11. 11Sagl v. Chubb Insurance Company of Canada, 2009 ONCA 388, para 51.
12. 12Tab 17 of the Respondent’s Preliminary Issue Hearing Document Brief – copy of applicant’s insurance policy form with Intact from June 2016 – June 2017.
13. 1316-004349 Aviva Canada and “Mr. P”, 2017 CanLII 148395 (ONLAT), at para 35.
14. 14Courts of Justices Act, R.S.O 1990, C.43, s.98.
15. 15Statutory Powers and Procedures Act R.S.O. 1990, c. S.22.