Vaillancourt v. Intact Insurance Company, 2021 CanLII 104550

Citation: Vaillancourt v. Intact Insurance Company, 2021 ONLAT 19-009063/AABS

Release date: 10/20/2021

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:

Darrin Vaillancourt

Applicant

and

Intact Insurance Company

Respondent

DECISION AND ORDER

ADJUDICATOR:

Monica Chakravarti

APPEARANCES:

For the Applicant:

Darrin Vaillancourt, Applicant

Lane Foster, Counsel

Mark Elkin, Counsel

For the Respondent:

Patrick Brennan, Counsel

HEARD:

September 8, 2021 and written submissions

OVERVIEW

1The applicant was involved in a motor vehicle accident on July 26, 2017 and sought benefits including income replacement benefits from the respondent pursuant to the Statutory Accident Benefits Schedule-Effective September 1, 2010¹ (the “Schedule”). The respondent denied the applicant’s benefits and income replacement benefits (IRBs) on the basis that the applicant did not have the proper insurance in place in order to access these benefits. The applicant then applied to the Licence Appeal Tribunal (the “Tribunal”) for the resolution of the preliminary issue of whether the applicant had the proper insurance in place.

ISSUES IN DISPUTE

2The preliminary issue in dispute is

a. Does the exclusion in s. 31(1)(a)(i) of the Schedule apply?

RESULT

3For the reasons noted below the exclusion of s.31(1)(a)(i) does not apply to the applicant’s dispute.

ANALYSIS

4Section 31(1) states

The insurer is not required to pay an income replacement benefit, a non-earner benefit or a benefit under section 21, 22, or 23,

(a) In respect of a person who was the driver of an automobile at the time of the accident,

(i) If the driver knew or ought reasonably to have known that he or she was operating the automobile while it was not insured under a motor vehicle liability policy

5The onus is on the respondent to show that the exemption in s.31(1)(a)(i) above applies and thus prove on a balance of probabilities that the applicant knew or ought reasonably to have known that on July 27, 2016 he was operating his motorcycle while it was not insured under a motor vehicle liability policy.

6The respondent submits that “the above (section 31(1)(a)(i)) requires knowledge on the part of the applicant of the insurance on the subject motorcycle at the material time or in the alternative what an ordinary, rational person of the age, education and background of the applicant, in the circumstances, ought reasonably have known about insurance coverage on the subject motorcycle.”

7The respondent provided the F.S.C.O decision of Batoor v State Farm Mutual Automobile Insurance Co² (Batoor). While I am not bound by the holding, I do find it helpful in the analysis as a guide to the examination of “knew or ought reasonably to have known”.

8Batoor makes is clear at paragraph 76 that the test to apply to the knowledge portion of s. 33(1)(a)(i) is subjective and not objective. It is what the applicant knew or ought reasonably to have known and not what an ordinary person ought to have known.

9In Batoor the arbitrator applied an objective test because the applicant in Batoor was not able to provide direct evidence of his knowledge due to having no memory of the events that surrounded his dispute. However, the arbitrator confirmed that the use of the objective standard of an ordinary rational person was used only because of the inability to obtain direct evidence from the applicant. This is not the case here and thus the subjective test of what the applicant ought reasonably to have known will be used and the alternative test of “what an ordinary rational person…” does not apply as this is not a case where the applicant is unable to provide direct evidence.

10In keeping with Batoor, in applying the subjective test it also does not matter whether the applicant was wrong or made in error in his knowledge of his insurance coverage, what matters is what the applicant himself understood the coverage to be. This applies both to the “knew” portion of s.31(1)(a)(i) and the “ought reasonably to have known” portion.

11Batoor at paragraph 77 also notes that the applicant is not required to investigate his insurance coverage:

Note s.31(1)(a)(i) does not use the words “…could reasonably have known…” The plain language of the test does not require the Applicant to find out, or investigate, the insurance coverage. It simply explores what he knew…

12Therefore, the test to be applied that is in keeping with the wording in s.31(1)(a)(1) and as set out in the Batoor case is the subjective understanding of what the applicant knew or ought reasonably to have known about his insurance coverage and specifically the liability policy and/or coverage.

Background and Position of the Parties

13The undisputed facts are that the applicant was involved in a motorcycle accident on July 26, 2017.

14The applicant is married and has two children, who at the time of the accident were all drivers and at some point, insured with the respondent. The applicant in dealing with his insurance coverage for the motorcycle that was involved in the accident, the other family vehicles, and insuring other family members dealt with the brokerage firm of R.K. Mooney and the brokers Mr. Mooney and Ms. Clark.

15Between March of 2016 until November of 2016 the motorcycle was insured and included motor vehicle liability or liability coverage.

16The disputed facts arise as of November 7, 2016 when the applicant requested a change to his insurance coverage because the motorcycle was in storage and not being driven. In the late spring/early summer of 2017 the motorcycle was taken out of storage without the insurance coverage being changed back. Unfortunately, the applicant met with an accident causing injuries and an inability to work. The applicant applied for accident benefits and the respondent took the position that there is no entitlement to certain benefits including income replacement benefits (IRBs) because the applicant was the driver of a motorcycle which at the time of the accident did not have a liability policy or liability coverage on the motorcycle.

17The applicant agrees that he was the driver of the motorcycle and there was no liability coverage at the time of the accident, however the applicant submits that his knowledge of no liability policy came after the accident occurred and not at the time of the accident.

18The parties agree that in order for the applicant to be disentitled to certain accident benefits under the Schedule the respondent has the onus of showing on a balance of probabilities that pursuant to s.31(1)(a)(i) that the applicant knew or ought to have known that he was driving an automobile that was not insured under a motor vehicle liability policy at the time of the accident.

19The respondent submits that on November 7, 2016 the applicant sent an email to the broker asking the respondent to adjust the coverage of the motorcycle because the vehicle was placed in storage for the winter. The broker, on behalf of the insurer thereby responded by confirming that there was no “road coverages” on the motorcycle. The respondent submits that the term “road coverages” is the coverage that was removed from that applicant’s motorcycle and means all insurance that would be typical and necessary for driving the motorcycle on the road. The respondent submits that the applicant knew or ought reasonably to have known that no road coverages meant there was no liability coverage.

20The respondent also submits that applicant would have reasonably known that there was no liability policy on the motorcycle because he was told that there was no liability slip available because there was no road coverage.

21Lastly the applicant knew or ought to have reasonably known that there was no liability policy because the certificate of insurance issued on or about November 7, 2016 stated that there were no premiums payable for liability insurance and therefore there could not be liability insurance on the motorcycle. Further a second certificate of insurance dated December 9, 2019 as well noted that there were no payments for liability coverage on the motorcycle.

22The applicant agrees that there was no liability coverage that he discovered after the accident. He submits that the did not know or even ought to have reasonably known this prior to the accident. The applicant submits that the removal of the liability coverage was done without his consent or instruction to his broker, secondly, he was never told that the liability coverage was removed and the consequences of removal and lastly had he known he would have immediately rectified the situation.

23Based on the evidence noted below, I find that the respondent has not met its burden to show that the applicant knew or ought to have reasonably known there was no liability insurance prior to the accident. The applicant was aware road coverages were removed however as noted in Batoor section 31(1)(a)(i) does not require the applicant to investigate his coverage, it simply explores what the applicant knew.

24Based on the evidence and reasons below I find that on a balance of probabilities that the applicant did not know, nor should he have ought reasonably to have known that there was no liability coverage on the motorcycle.

The Applicant did not know about the removal of liability insurance

25The respondent has not proven on a balance of probabilities that the applicant knew the liability coverage was removed from his policy, and the respondent has not shown met its evidentiary burden to show that it was reasonable for applicant to interpret the adjustment to coverage meant to him that he was removing the liability policy from his motorcycle.

26On November 7, 2016 the applicant sent the following email addressed to the broker, Mr. Mooney:

My bike is safely tucked away in a secured heated storage for the winter. Can we a[d]just the coverage and get an updated pink slip. The one I have is expired. [sic]

27On November 7, 2016 the broker’s associate, Ms. Clark (a broker as well) responded by stating,

“we will send request to the insurance company to remove the road coverages from the [Motorcycle]…we cannot issue a liability slip for the [Motorcycle] as it has no road coverages.”

28The applicant testified that just prior to the email November 7, 2016 he spoke with the broker Mr. Mooney and told Mr. Mooney that his family was in the process of moving and the motorcycle was going into storage and to drop the collision coverage. The applicant testified that he understood this to mean that if he was involved in an accident that the property damage would not be covered. The applicant testified that it was only collision coverage that he wanted removed as he understood that if he removed anything further that it would cancel the policy of insurance³.

29The broker, Mr. Mooney testified that he recalled one conversation with the applicant in the spring of 2016. He had no recollection of any conversations regarding accident benefits with respect to the motorcycle. Mr. Mooney does not recall any discussions or communications before November 7, 2016.

30The broker, Ms. Clark who acted on the email from the applicant, testified that she understood that there was some prior communication between the applicant and Mr. Mooney, and Mr. Mooney had asked the applicant to put his request for the changes in writing.

31I find the testimony of Mr. Mooney and his denial of having a conversation with the applicant just prior to November 7, 2016 to be unconvincing. Even if I am wrong and the applicant never spoke with Mr. Mooney, I still find the instructions either given orally or given in the email of November 7, 2016 were not to remove liability insurance but to “adjust coverages”.

32The evidence of Ms. Clark is that when she received the email from the applicant to “adjust coverages” she assumed the applicant meant to take off collision and liability coverages.

33The applicant testified that he believed he was removing coverage that dealt with collision. The adjuster who testified on behalf of the respondent confirmed that it was possible to remove collision coverages from the motorcycle and leave the liability coverage in place. Thus, it is reasonable for the applicant to believe that he was adjusting coverage in that only the collision coverage would be affected.

34Based on the above the respondent has not provided evidence to show that the applicant requested the removal of liability coverage.

Meaning of Road Coverages

35In response to the email from the applicant to adjust coverage the broker responds and states that they will contact the insurer/respondent to remove “road coverages” from the motorcycle.

36The respondent submits the term road coverage is in and of itself enough for the applicant to understand that there was no liability coverage. The respondent relies on the testimony of the brokers that terms like road coverages and storage coverage were used for the benefit of the client to help the client understand the adjusting of the seasonal coverage and thus this should have been enough for the applicant to understand that there was no liability coverage. I disagree with this position as the evidence indicates otherwise.

37The respondent relies on the evidence of the applicant’s wife however, again it does not matter what the term road coverages means to her. It does not matter what the term “road coverage” means to the brokers, the respondent or even to the Tribunal, what is at issue is what it means to the applicant.

38Mr. Mooney testified that it was his understanding based on the applicant’s instructions to adjust coverage that the coverages to be removed were collision, liability, accident benefits, direct compensation, and all compulsory coverages. Ms. Clark testified to remove road coverages means to remove liability and possibly collision or comprehensive. Both brokers agreed that this was not explained to the applicant nor does the term road coverages show up in the policies of insurance. Both brokers as well confirm that they did not know the implications of the removal of liability on the access to the accident benefits.

39The applicant’s testimony is that he did not know what road coverages meant nor the consequences of removing them. There is no evidence to refute this testimony.

40Given that the brokers could not provide direct evidence on the meaning of road coverages I find that the respondent has failed to show that the applicant knew or ought to have reasonably known the meaning of the term road coverages. The evidence from both the brokers, the applicant and the applicant’s wife show that the applicant relied on the broker for his insurance needs. To ask the applicant to connect that the removal of road coverages means to remove liability coverage is not reasonable especially when this was not explained to the applicant.

The Liability Slip

41Following the request to adjust the coverage Ms. Clark wrote in the responding email that they could not issue a liability slip because the motorcycle has no road coverages. Again, the respondent must show on a balance of probabilities that the applicant understood or ought to have reasonably understood this to mean that there was no liability coverage on the vehicle at the time of the accident.

42I find that the respondent has not met its onus to show that the applicant connected the lack of road coverage to the lack of a liability slip to a lack of liability coverage on the motorcycle. The applicant in the email of November 7, 2016 requested an updated pink slip. It is unfortunate that instead of the broker clearly stating to its client, the applicant, that he does not have liability coverage on the motorcycle and therefore there is no updated liability slip. The broker instead chose to use the words that there was no road coverages on the motorcycle and therefore they could not issue a liability slip. This is even more confusing based on the applicant’s testimony that when he looked at the pink slip again however, he was mistaken and the pink slip that he believed was “expired” actually was not.

43The applicant testified that he glanced at this responding email and did not read it in detail. The respondent submits that the applicant did not follow up on the above email for an explanation as to “road coverages” and explanation as to why he could not receive a liability slip for his motorcycle or any other concerns.

44In the decision of M.F. v. Belair⁴ the Tribunal dealt with the question of whether the applicant reasonably believed that an insurance policy included a vehicle in question. The Tribunal held that even if the applicant is wrong in that belief, s.31(1)(a)(i) is inapplicable and he is still entitled to automobile accident benefits if his interpretation is reasonable. In keeping with Batoor the applicant does not need to investigate the insurance coverage.

45The evidence as distilled above shows that the applicant asked for coverages to be adjusted, and his email was forwarded to Ms. Clark. Ms. Clark without input from the applicant or without enquiring what is meant by “adjusted” coverages, removed the applicant’s liability coverage.

46The applicant misunderstood what Ms. Clark had done and assumed that there still was proper coverage to drive the motorcycle but no coverage for repairs if the motorcycle was involved in an accident. The applicant testified that the reason for requesting an updated pink slip was because he required a copy to provide to the storage facility. The applicant testified that upon closer inspection that the pink slip/liability slip he already had was actually valid and thus he did not need the updated one. As noted in the motor vehicle accident report the officers who attended the scene had the insurance policy information and there was no ticket or citation provided to the applicant for driving with an expired or invalid insurance.

47Thus, it is reasonable for the applicant to be under the belief that he had the requisite insurance to operate the motorcycle despite the lack of an updated pink slip.

Certificates of Insurance

48The respondent points to the certificates of insurance issued November 7, 2016 and December 9, 2016 sent to the applicant and the respondent submits they show that there is no liability coverage on the motorcycle (the Polaris motorcycle).

49The certificate of insurance of November 7, 2016 is accompanied by a cover page that states:

50Page two following the covering page is the certificate of insurance showing the following:

Automobile #1: Kia Truck Automobile #2: Motorcycle

51The respondent submits that based on the cover page remark reproduced above the applicant should have known that there was no liability coverage and the certificates of insurance showed there was no liability coverage.

52The applicant testified that he did not really read the certificates of insurance and he simply filed them away.

53I find that the respondent has not shown that it is reasonable for the applicant to know that the above noted certificate of insurance means that there is no liability coverage. The certificate of insurance of November 7, 2016 shows credits for both vehicles despite there being no changes to the coverage to the Kia Truck. This certificate does not state that there is no liability coverage on the motorcycle. What it does state that there is no bodily injury and property damage. The respondent has provided no evidence that the applicant knew or ought reasonably to have known that bodily injury and property meant liability coverage.

54The respondent submits that this certificate of insurance and the certificate of insurance of December 9, 2016 also show that there were no liability coverages because it states “N/A” for bodily injury and property and there are no premiums. I note however, that the certificate of insurance from December 9, 2016 list no premiums for either vehicle as reproduced below:

Automobile # 1: KIA Truck Automobile #2 Motorcycle

55I find that the above certificate of insurance is not clear in showing that there is no liability coverage to a person such as the applicant who has no background in insurance and insurance policies.

56Lastly when looking at a previous certificate of insurance dated June 15, 2016 it is important to note that the only indication that there is liability insurance on the motorcycle is because there is “$2,000,000” listed in a box as noted in the certificate of insurance issued June 15, 2016 and there are no premiums noted for the motorcycle despite the fact that the motorcycle at that time had liability insurance.

Automobile # 1: KIA Truck Automobile #2: Motorcycle

57The certificates of insurance in my view are unclear and confusing as even the certificate of June 15, 2016 could be interpreted to mean that there was no liability policy on either vehicle since no premiums were payable by the applicant and only payable by the occasional driver. The parties agree that the June 15, 2016 certificate was valid and contained all available coverages. Thus, I find that the certificates of insurance dated November 7, 2016 and December 9, 2017 carry little weight in showing that the applicant ought reasonably to have known that there was no liability coverage on the motorcycle.

Should the Applicant ought reasonably to have known about the removal of liability insurance?

58The interpretation of the applicant’s reasonable belief that the motorcycle had liability insurance coverage is subjective in that the applicant is able to be wrong as long as his interpretation is reasonable. I find that it was reasonable for the applicant to not know that the liability policy was removed. The applicant did not connect the dots between the removal of road coverages and no updated liability slip to mean there was no liability coverage on the motorcycle. The applicant has admitted, and I accept that at the time of the accident his understanding of insurance coverage was limited. I accept based on the evidence that he relied on his brokers to advise him of the types of coverage he required and the consequences for having inadequate coverage.

59The applicant’s evidence that he was a paramedic and more recently a dispatcher with helicopter emergency ambulances means he knows the types of serious and life altering injuries that are sustained in motor vehicle accidents, and knows that to drive without insurance is not only serious but possibly a criminal offence. The applicant submits that he would never put his job or his family in jeopardy and thus in an attempt to save money it would be unreasonable for him to drive his motorcycle if he knew that if he were injured he would lose income as well as accident benefits. I accept his testimony and find that it assists in showing that the applicant reasonably assumed that the insurance on his motorcycle would not cover expenses of any property damage if an accident had occurred but he reasonably believed that he was driving his motorcycle with liability insurance coverage.

60I accept the applicant’s evidence that he wanted a change in his coverage in order to reduce his premium as the motorcycle was not being driven in November of 2016. However, there is no evidence that the applicant meant that he wanted liability insurance removed from the motorcycle and the evidence is not persuasive to show that he knew or ought reasonably to have known that liability insurance was removed from his motorcycle thereby putting his access to certain accident benefits in peril. The subjective knowledge of the applicant was based on the information he provided to his broker and the information provided to him. The information provided to him was that there were no road coverages which, as explained above, cannot be reasonably interpreted to be reasonable knowledge of the lack of liability coverage.

61Lastly, I find that it is reasonable that the applicant did not know what coverages were removed and did not know that he was driving the motorcycle without liability coverage. Both Mr. Mooney and Ms. Clark testified that they assumed what coverages to remove. Mr. Mooney said that all compulsory insurance was to be removed, Ms. Clark assumed it was liability and collision. If two brokers in the brokerage are not on the same page in terms of the insurance coverage for the motorcycle I do not see how the applicant is supposed to understand that he has no liability coverage on the motorcycle and also given that neither broker told him in language that he would understand. Instead the applicant was told there are no road coverages which neither broker was able to give direct evidence on the meaning of this term and furthermore the respondent’s adjuster testified that it was not term used in policies of insurance.

CONCLUSION AND ORDER

62The respondent has not met its onus to show that the exemption in s.31(1)(a)(i) applies in that the respondent has not proven on a balance of probabilities that the applicant knew or ought reasonably to have known that there was no liability coverage on the motorcycle on the day of the accident.

63Therefore, the applicant may procced with his disputes before the Tribunal.

Footnotes

1. 1O. Reg. 34/10
2. 22016 CarswellOnt 4908, 22 F.S.C.O.A.D.
3. 3Page 61 of the transcript of the applicant
4. 416-002057 v Belair Direct, 2017 CarswellOnt 5068 (LAT) also cited as M.F. v Belair Direct, 2017 CanLii 19200 (ON LAT).