Citation: Phillip v. Intact Insurance Company, 2021 ONLAT 20-000674/AABS - PI

Release date: 10/05/2021

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:

Dwayne Phillip

Applicant

and

Intact Insurance Company

Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR:

Kate Grieves

APPEARANCES:

For the Applicant:

Cary Schneider, Counsel

For the Respondent:

Jeffery Booth, Counsel

Angel Ju, Counsel

HEARD by videoconference:

March 11 and 12, 2021, followed by written submissions

OVERVIEW

1The applicant was involved in an automobile accident on September 12, 2019 and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (“Schedule”). The applicant was denied certain benefits by the respondent and submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”) seeking entitlement to income replacement benefits, the cost of an accounting report, prescription medication, interest and an award per Regulation 664.

2The respondent raised a preliminary issue arose concerning the applicability of s. 31(1) of the Schedule. The respondent submits that the applicant failed to notify the insurer of a change of address from Brantford to Toronto and therefore intentionally failed to disclose a material change in risk to the contract.

3The matter was heard by combination of the applicant’s testimony, his former girlfriend (T.D.), and an underwriting adjuster on behalf of the respondent, followed by written submissions.

PRELIMINARY ISSUE

4The issue to be decided is:

a. Pursuant to s. 31(1) of the Schedule, is the respondent not required to pay an income replacement benefit to the applicant?

RESULT

5Pursuant to s. 31(1)(b), the respondent is not required to pay the applicant an income replacement benefit. I find that the applicant intentionally failed to notify the insurer of a change in risk material to the contract by not disclosing to the respondent that he moved from Brantford to Toronto.

BACKGROUND

6The applicant moved into an apartment with his girlfriend, T.D., in Brantford around late 2016 or early 2017. The applicant tried to obtain tenant’s insurance on the property, but was unable to as he was not listed on the lease. He obtained the relevant automobile policy on February 20, 2017 using the Brantford address.

7On October 1, 2018, the applicant rented an apartment in Toronto. The applicant testified that he spent about 60% of his time at the Brantford address, and about 40% of his time at the Toronto address. He has two sons who reside with their mother in Toronto. He rented the apartment so he would have a location to bring them when he had his children.

8Around May 2019 the applicant and T.D. ended their relationship. The applicant moved out two or three weeks prior to the end of the relationship. T.D. testified that the lease on the apartment expired at the end of May, and she also moved out. However, some of the evidence on file suggests that the Toronto address was the applicant’s primary address earlier: various documents including medical, tax and employment records showed different addresses, and during the Examination Under Oath the applicant provided conflicting evidence regarding what was his primary residence at what time. However, it is clear that the applicant was not living at the Brantford address after May 2019. The applicant confirmed that he never returned to the Brantford address after he moved out in May 2019.

9The applicant was involved in the accident on September 12, 2019.

10On January 22, 2020 the applicant spoke to a representative of the insurance company by telephone. The call was initiated because mail from the insurer to the applicant had been returned to sender. At the hearing, the applicant played the lengthy audio recording into evidence. During the call, the applicant explained that he had been living in Brantford, but had moved to the Toronto address sometime the year before. The customer service representative then told the applicant that his insurance premiums would increase based on the new address information.

11The applicant told the representative that he would move back to the Brantford address. He admitted at the hearing that he was not truthful during the January 22, 2020 telephone call when he said he was moving back. He was injured and unable to work from the accident, felt the representative was not listening to him, and was frustrated that the insurer wanted to charge him more. The applicant canceled the policy with the respondent and obtained a new policy with a different insurer.

LAW AND ANALYSIS

Was the non-disclosed information a risk material to the contract?

12Materiality is not defined in the Schedule. The Court of Appeal in Sagl v. Chubb Insurance Company of Canada held 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.¹ Consistent with Sagl, I am satisfied that the applicant’s change of address was a material risk to the contract. The applicant’s premium was $3,343 for 2019/2020 and $2,754 for 2020/2021 for the Brantford address. The applicant was advised during the January 22, 2020 phone call, the premium would have increased to $5,580 for the Toronto address.

13This conclusion is consistent with previous Tribunal decision that found that a failure to advise of a move from Quebec to Ontario was a material change in risk.²

14The applicant submits that he was not aware that a change of address was a material change in risk, and at no point did the respondent inquire whether there had been a change of address. Although the absence of questions may be evidence that the insurer does not consider a fact to be material, the duty to disclose all material facts applies even in the absence of questions from the insurer.³

Was the failure to disclose intentional?

15I accept that the applicant lived at least 60% of the time at the Brantford address prior to May 2019. However, thereafter the lease expired, the applicant and T.D. were no longer living there. Although the applicant describes his living situation as “complicated”, it is not possible that he could have been living at the Brantford address after May 2019.

16On a balance of probabilities, I find that the applicant intentionally failed to notify the respondent of a change in risk material to the contract – that he had moved to Toronto. The applicant had not been living at the Brantford address for approximately four months prior to the accident in September 2019, and yet he still did not disclose the change of address until January 2020.

17The applicant testified that he did not know that a change in location would result in a change in premiums. I do not find the applicant credible on that point. The applicant admitted that he was not truthful during the January 2020 phone call when he falsely stated that his permanent address was the Brantford address. Further, over the course of his policy, the applicant:

a. Updated his licence when he obtained his G, as he wanted a lower premium.

b. Advised of a change in the usage of his vehicle on the policy, which affected his premium.

c. Substituted multiple vehicles on the policy, which affected his premium.

d. Called about his renewal and inquired about his coverage, and how this would change his premium.

e. Inquired about how his conviction influenced his premium.

f. Called about his renewal and inquired about his coverage.

18The applicant was actively involved with making changes to his policy.

19Furthermore, T.D. testified that the applicant used the Brantford address for the policy when he moved in because “he told me that since he was coming to live with me he had to move it from where it was before”. T.D.’s evidence suggests that the applicant was aware that he had to change his insurance from his prior address to his new address. Although this evidence is hearsay, the Tribunal has broader discretion to consider evidence, and it doesn’t exist in isolation. As noted above, there is corroborating evidence that the applicant knew that changes had to be made over the course of the policy.

20I find that the applicant intentionally failed to disclose material information.

CONCLUSION

21The respondent is not required to pay the applicant an income replacement benefit pursuant to Section 31(1)(b).The applicant intentionally failed to disclose that he had moved from Brantford to Toronto, and that the change of address was a risk material to the contract.

Footnotes

1. 1Sagl v. Chubb Insurance Company of Canada 2009 ONCA 288 at para 51.
2. 2V.A.D. and Intact Insurance Company
3. 3Sagl, supra.