Harpreet Grewal v. Peel Mutual Insurance Company, 2021 CanLII 40734

Tribunal File Number: 20-010308/AABS

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

Between:

Harpreet Grewal

Applicant

and

Peel Mutual Insurance Company

Respondent

MOTION DECISION

Decision by:

Craig Mazerolle, Adjudicator

Decision Date:

May 14, 2021

Appearances by:

For the Applicant:

Imtiaz Hosein, Counsel

For the Respondent:

Jonathan Schrieder, Counsel

OVERVIEW

1I have been asked to consider whether the Tribunal’s jurisdiction over accident benefit disputes includes the authority to award the common law remedy of punitive damages. For the following reasons, and despite the applicant’s able arguments, I find the Tribunal does not possess this power.

2The applicant also requested certain productions from the respondent. This relief shall be addressed in a separate motion order.

BACKGROUND

3This proceeding, under the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”)¹, arises out of a motor vehicle accident on November 7, 2016. A hearing is scheduled for October 18 – 20, 2021.

4The issues in dispute include: a Minor Injury Guideline determination, as well as requests for medical benefits, an award, and interest.

5The applicant filed a Notice of Motion (submitted January 26, 2021) seeking the following relief:

i. An order adding a request for punitive damages (in the amount of $150,000.00) to the dispute; and

ii. An order for certain productions from the respondent.

6Following written submissions from both sides, the parties presented oral arguments during a motion hearing held on April 6, 2021. The respondent indicated that it also had production requests for the applicant, but—considering time constraints—it agreed to file a Notice of Motion for these requests.

PUNITIVE DAMAGES AND THE LICENCE APPEAL TRIBUNAL

7Following the 2013 recommendations from Justice Douglas Cunningham, the Legislature used the newly drafted s. 280 of the [Insurance Act]² to provide this Tribunal with sole jurisdiction over accident benefit disputes [subheadings and citations removed]:

280. (1) This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.

(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).

(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.

(4) The dispute shall be resolved in accordance with the Statutory Accident Benefits Schedule.

(5) The regulations may provide for and govern the orders and interim orders that the Licence Appeal Tribunal may make and may provide for and govern the powers and duties that the Licence Appeal Tribunal shall have for the purposes of conducting the proceeding.

(6) Without limiting what else the regulations may provide for and govern, the regulations may provide for and govern the following:

1. Orders, including interim orders, to pay costs, including orders requiring a person representing a party to pay costs personally.

2. Orders, including interim orders, to pay amounts even if those amounts are not costs or amounts to which a party is entitled under the Statutory Accident Benefits Schedule.

8As found by the Court of Appeal for Ontario in Stegenga v. Economical Mutual Insurance Company (“Stegenga”),³ this shift away from the courts was based, in part, on the Legislature’s desire to increase the efficiency of adjudication—a key component of Justice Cunningham’s 2013 report [citations removed]:

The purpose of the amendments that led to the current s. 280 has been described as reducing both insurance rates and insurance fraud, and speeding up dispute resolution, in large part by providing an efficient, fair and accessible mechanism for resolving disputes… The amendments removing disputes from the courts and empowering the LAT to deal with them are among the “cornerstones” of the legislation passed to effect the above purpose…

The purpose of the current s. 280 has two important implications. First, the purpose of reducing insurance rates by providing for efficient dispute resolution through the LAT would not be served by an overly restrictive reading of the LAT’s jurisdiction and the corresponding limit on the court’s jurisdiction. The legislature must be taken to have considered the importance of its objectives of efficiency and cost reduction to outweigh the loss of insured individuals’ access to the courts and to the full range of remedies available there.

Second, while the legislature’s intention that the dispute resolution provisions continue to be a complete code does not, on its own, determine which disputes fall within it, it does suggest that the legislature did not intend the same, similar, or overlapping issues to be adjudicated in more than one forum.⁴

9As will become apparent from the parties’ submissions, the Court of Appeal also used Stegenga to raise certain questions over what powers were and were not provided to the Tribunal during this transfer. Briefly, while the applicant contended that moving to the Tribunal was simply a venue change (with all the court’s powers seamlessly moving as well), the respondent argued that the Legislature limited this body’s remedial powers to those explicitly listed in the Schedule and other regulations. Therefore, with no mention of punitive damages in these enactments, the respondent submitted that the applicant’s request to add damages must fail.

PARTIES’ POSITIONS

10According to the applicant’s reading of Stegenga, it is plain and obvious that the court’s jurisdiction over, and powers related to, accident benefit disputes were transferred to the Tribunal. Or, as cited several times in the applicant’s submissions, the Court of Appeal referred to the overlap of the court’s former and the Tribunal’s present powers as “co-extensive” [emphasis added]:

The balance of s. 280 informs the proper interpretation of the s. 280(1) reference to disputes in respect of entitlement to SABs or their amount. These provisions elaborate on the jurisdiction given to the LAT, and therefore on what falls within s. 280(1). The jurisdiction given to the LAT over those disputes is co-extensive with that removed from the court: ss. 280(2), (3).⁵

11According to the applicant, this “co-extensive” transfer makes sense, as the Supreme Court of Canada requires lawmakers to demonstrate “a clear expression of legislative intent” before a common law rule can be extinguished: see Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp (“Crystal Square Parking”).⁶ There was no such “clear expression” during this transfer, and so the common law power to award punitive damages must still exist.

12Further, the applicant commented that the Tribunal’s statutory remedies, namely, an award under s. 10 of Reg. 664 and the deemed incurred provision under s. 3(8) of the Schedule, do not properly address the mischief at play. These remedies are limited to “objective” displays of unreasonable behaviour, while the case at bar involves the respondent’s subjective, bad faith intentions—an internal state of mind to which only damages can speak.⁷

13Finally, the applicant suggested that the inclusion of damages in the Tribunal’s remedial toolbox would not only satisfy the Schedule’s consumer protection mandate, but also the obligation to ensure equal access to justice under the United Nations Convention on the Rights of Persons with Disabilities (“CRPD”).⁸ Relying on the principle that legislation should be read in accordance with Canada’s international treaties, the applicant submitted that denying access to punitive damages would violate the CRPD’s guarantee at Article 13 that persons with disabilities have “effective access to justice… on an equal basis with others”.

14The respondent opposed the applicant’s motion for several reasons.

15First, the respondent argued that Stegenga makes clear that characterization of a legal claim cannot be used to overshadow the actual substance of the dispute. Put another way, even if the applicant is using the language of common law remedies, the substance of the dispute underpinning this claim is, ultimately, the respondent’s handling of the accident benefit requests. Therefore, since s. 280(3) of the Insurance Act requires any disputes involving accident benefits to be handled by the Tribunal, the Court of Appeal made clear that these disputes will, by extension, be managed solely through the remedial powers available to the Tribunal.⁹ The respondent also pointed to the motion order from Vice Chair Hunter where similar reasoning was used to deny a request to add common law damages, i.e., M.S. v. Continental Casualty Insurance Company (“M.S.”).¹⁰

16Second, the respondent argued that the Court of Appeal reasoned that the Legislature must have been aware of the difference between the remedial powers available to these forums, but still made the change [emphasis added]:

The appellant points out that the remedies the LAT can grant, such as a special award, are different from what a court may award. For example, even if the LAT finds a delay or withholding of benefits that was unreasonable, and in making that determination finds conduct that would at common law amount to bad faith, it could not grant consequential or punitive damages as a court might…

In my view this remedial difference does not bear on the issue of what types of disputes are captured by the grant of authority to the LAT and the parallel prohibition on court proceedings. The legislature made a choice as to what disputes would be within the exclusive jurisdiction of the LAT, and what remedial powers the LAT would have. That was a policy choice it was entitled to make. The Insurance Act and its regulations form a comprehensive scheme for the regulation of insurers and insurance. The legislature must be taken to have armed the LAT with the remedial powers it considered appropriate to deal with improper insurer behaviour, knowing those remedial powers were different from the court’s.¹¹

17Then, based on this assumption that the Legislature understood it was removing damages from accident benefit disputes, the respondent concluded that the Tribunal is not the proper forum for the applicant’s complaints to be heard. That is, while it conceded that the Tribunal’s remedial powers may not be sufficient to address all possible forms of mischief involved in accident benefit disputes, these gaps are policy choices best left to the Legislature.

18In reply, the applicant added that M.S. is not binding. Rather, Stegenga must guide the Tribunal’s decision-making process.

ANALYSIS

19First, I find it is clear the Legislature was aware of the repercussions involved in moving jurisdiction over accident benefit disputes to the Tribunal. Specifically, the paragraphs cited above by the respondent from Stegenga make a compelling case to establish that the Legislature understood the effects of enacting s. 280 of the Insurance Act. Though the applicant correctly points out that this interpretation leaves the Tribunal with significantly lesser, remedial powers than the court, Stegenga concludes that the very fact these powers do diverge must mean that the Legislature both understood the consequences of, and thus allowed for, this change.

20Additional support for this interpretation can then be found in the wording of s. 280(6)2, where the Legislature indicates that powers outside of those included in the Schedule are available to the Tribunal:

(6) Without limiting what else the regulations may provide for and govern, the regulations may provide for and govern the following:

2. Orders, including interim orders, to pay amounts even if those amounts are not costs or amounts to which a party is entitled under the Statutory Accident Benefits Schedule.

This section, therefore, allows the Tribunal to order payments not “entitled under” the Schedule—an allowance the Legislature relied on in creating the award provision under s. 10 of O. Reg. 664.

21Therefore, in line with the reasoning from the Court of Appeal, I find that the enactment of the award provision by way of s. 280(6)2 should be interpreted to mean than that the Legislature understood that the Tribunal’s only monetary remedy outside of the Schedule (apart from costs) is an award. Put another way, by failing to add common law damages to a regulation, the Legislature made it clear that the Tribunal does not possess the power to grant punitive damages.

22In this same vein, I then conclude that the enactment of the award provision under O. Reg. 664 meets the need from Crystal Square Parking for “a clear expression of legislative intent” to extinguish the common law power of damages. In particular, the Supreme Court states that an expression of “intent” is needed, not an express provision removing each specific common law power. Not only is this requirement borne out in the court’s language, but this distinction also makes sense from the perspective of effective legislative drafting. That is, if the courts required the Legislature to pass individual provisions for each extinguished common law power or rule, it would lead to absurd lists of former common law powers peppering every legislative enactment involving the jurisdictions of administrative bodies. Instead, I am satisfied that the Legislature’s intention is clearly expressed by its decision to enact s. 280(6)2, all the while limiting these remedial powers outside of the Schedule to the award provision in O. Reg. 664.

23Similarly, I do not find it necessary to make a ruling on the applicant’s argument that damages capture one’s “subjective” state of mind, while only “objective” withholding is addressed by awards. The Legislature made a clear choice, and it is taken to know the consequences of this action—in this case, the applicant’s contention that awards only provide limited forms of relief.

24I then fail to accept the applicant’s reading of Stegenga, namely the reliance on paragraph 46, cited again for ease:

The balance of s. 280 informs the proper interpretation of the s. 280(1) reference to disputes in respect of entitlement to SABs or their amount. These provisions elaborate on the jurisdiction given to the LAT, and therefore on what falls within s. 280(1). The jurisdiction given to the LAT over those disputes is co-extensive with that removed from the court: ss. 280(2), (3).

The applicant’s heavy reliance on this paragraph makes sense, as—when seen in isolation—the Court of Appeal appears to accept that the entire scope of what was involved in accident benefit disputes at the court was transferred to the Tribunal. That is to say, the duties, responsibilities, and remedial powers now held by the Tribunal are “co-extensive with that removed from the court”.

25However, when read in conjunction with paragraphs where the Legislature is assumed to have understood the remedial differences between these forums, it is clear that the key word in this passage is “jurisdiction”. Put another way, as suggested in the language from ss. 280 (1) – (3) of the Insurance Act, it was only the jurisdiction to hear accident benefit disputes that moved to the Tribunal—not the court’s common law powers.

26I would also note that I do not find the interpretative tools cited by the applicant to be of great assistance, i.e., the consumer protection mandate of the Schedule and Article 13 of the CRPD. Statutory provisions should be interpreted with an eye to upholding the values underpinning Canada’s international agreements,¹² and it is a well-accepted principle of statutory interpretation that legislation must be read in accordance with its underlying goals.¹³ However, I fail to see how the Legislature’s decision not to provide the Tribunal with the power to award damages detracts from either the CRPD or consumer protection. As noted above, this transfer to the Tribunal clearly emanated from the Legislature’s desire to provide efficient adjudication that ensured injured persons would have quick access to treatment and financial supports needed for their recovery. The Legislature was entitled to make this policy decision, and I see no reason why these interpretative tools require me to reach a different conclusion. In fact, when interpreted as a means of promoting efficiency and fairness across the accident benefit regime, the Legislature’s decision can be seen as a means of protecting both the consumer protection mandate and the goals underpinning Article 13.

27In closing, I will note that the removal of common law damages may mean that some insured persons do not have access to a meaningful remedy able to address certain forms of mischief within accident benefit disputes. For example, since no actual benefit is attached to being deemed catastrophically impaired, an unreasonable delay in making this determination would not be captured under the award or deemed incurred provisions, despite the deleterious effects experienced by delayed access to a higher funding limit.

28However, the balancing act between meeting the specific needs of individual applicants and the overall desire for efficiency and fairness across the entire system is not something for an administrative decision-maker like myself to decide. Instead, this delicate weighing of policy concerns and solutions is a task best left for the Legislature.

ORDER

29I dismiss the applicant’s motion to add a punitive damages claim to the application before the Tribunal.

aReleased: May 14, 2021

Craig Mazerolle

Adjudicator

Footnotes

1. 1O. Reg. 34/10.
2. 2R.S.O. 1990, c. I.8.
3. 32019 ONCA 615.
4. 4Ibid, paras. 38 – 40.
5. 5Ibid, at para. 46.
6. 62020 SCC 29, at para. 40.
7. 7Whiten v. Pilot Insurance Co., 2002 SCC 18.
8. 8UN General Assembly, Convention on the Rights of Persons with Disabilities: 24 January 2007, A/RES/61/106.
9. 9Stegenga at para. 48.
10. 10Motion Order released on September 28, 2020 (ON LAT), at para. 13.
11. 11Stegenga, at paras. 51 – 52.
12. 12Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, at para. 114.
13. 13See, e.g., Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC).