Aviva General Insurance Company v. Maharaj, 2025 CanLII 45332

Citation: Aviva General Insurance Company v. Maharaj, 2024 ONLAT 24-010417/AABS-PI

Licence Appeal Tribunal File Number: 24-01417/AABS

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:

Aviva General Insurance Company

Applicant

and

Nicholas Maharaj

Respondent

PRELIMINARY ISSUE HEARING DECISION AND ORDER

ADJUDICATOR: Melanie Malach

APPEARANCES:

For the Applicant: Geoffrey Keating, Counsel

For the Respondent: Olga Poznyakova, Paralegal

Heard: By way of written submissions

OVERVIEW

1Nicholas Maharaj, the insured, was involved in accidents on February 21, 2016 and March 28, 2017, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”). The insured was denied benefits by Aviva General Insurance Company, the insurer, and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

2The insured submitted two applications (Tribunal file number 18-008717/AABS regarding the 2017 accident and Tribunal file number 18-008710/AABS regarding the 2016 accident). The applications were heard together. With respect to file number 18-008717/AABS, the issues in dispute concerned entitlement to a Non-Earner Benefit (“NEB”) in respect of the March 28, 2017 accident. A decision was issued, dated January 19, 2021 (the “initial decision”), in which the Tribunal found that the insured is entitled to a NEB of $185.00 per week from February 20, 2018 to March 28, 2019. A reconsideration request was made by the insured, and an Amended Reconsideration decision was issued on September 13, 2021, in which the Tribunal found that the insured is entitled to a NEB of $185.00 per week from February 20, 2018 to March 28, 2019 and thereafter in the amount of $320.00 per week and ongoing.

3The insurer filed an application on August 14, 2024, to determine whether section 281 of the Insurance Act applies with respect to the insurer’s suspension of the insured’s entitlement to a NEB based on the insured’s failure to submit an updated Disability Certificate (“OCF-3”) and attend at Insurer’s Examinations (“IEs”). The insured then raised a preliminary issue that the insurer is barred from proceeding to a hearing on this issue based on the doctrine of res judicata.

PRELIMINARY ISSUE IN DISPUTE

4The preliminary issue to be decided is:

i. Is the insurer barred from proceeding to a hearing by the doctrine of res judicata?

RESULT

5The insurer is not barred from proceeding to a hearing by the doctrine of res judicata.

ANALYSIS

The Law

6The doctrine of res judicata prevents a party from relitigating an issue that has already been decided. Both parties cite decisions from the Tribunal and submit that there are four pre-conditions that need to be met for the doctrine of res judicata to apply. While I am aware that numerous Tribunal decisions have referenced a four-point test for res judicata, they are not binding on me, and this would be an error.

7I am bound by the Supreme Court of Canada decisions in Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 (“Danyluk”) and Toronto (City) v. CUPE Local 79, 2003 SCC 63, [2003] 3 SCR 77 (“CUPE Local”), which set out the preconditions that must be established before an adjudicator can determine whether to exercise discretion to apply res judicata.

8At paragraph 25 of the decision in Danyluk, the Supreme Court of Canada determined that there were three pre-conditions for issue estoppel (a branch of res judicata), which are as follows:

i. That the same question has been decided;

ii. That the judicial decision which is said to create the estoppel was final; and

iii. That the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.

9In CUPE Local, the Supreme Court of Canada noted at paragraph 23:

Issue estoppel is a branch of res judicata (the other branch being cause of action estoppel), which precludes the relitigation of issues previously decided in court in another proceeding. For issue estoppel to be successfully invoked, three preconditions must be met: (1) the issue must be the same as the one decided in the prior decision; (2) the prior judicial decision must have been final; and (3) the parties to both proceedings must be the same, or their privies (Danyluk v. Ainsworth Technologies Inc. [2001] 2 S.C.R. 460, 2001 SCC 44, at para. 25, per Binnie J.)…

Parties Positions

10The insurer submits that the principle of res judicata is not applicable to the subject application, on the basis that the same issue has not been previously decided. While the insurer concedes that both the present dispute and the prior dispute involve a question of whether the insured is entitled to a NEB, the basis for the dispute is different. The insurer submits that the issue in the first application before the Tribunal was whether the insured was entitled to a NEB in light of the insurer’s February 14, 2018 denial. In the present application, the question is whether the insurer’s August 17, 2022 suspension of benefits due to the insured’s non-compliance with requests to submit an updated OCF-3 and attend at IEs was valid. The insurer further submits that there is a difference between an insurer concluding that an insured person is not substantially entitled to benefits and an insurer suspending benefits due to an insured person’s non-compliance with the insurer’s request that the insured person submit an updated OCF-3 and attend at an IE assessment.

11The insured submits that the doctrine of res judicata applies to the issue of entitlement to NEBs. The insured argues that while the factual circumstances surrounding the present dispute and prior dispute may differ, the core issue of both disputes remains the same: entitlement to NEBs. The insured submits that the doctrine of res judicata applies not just to the specific facts of a case, but to the underlying issues that have already been adjudicated. The insured relies upon the four conditions set out in the decision in Rahnema v. Unifund, 2023 CanLII 77314 (ON LAT) (“Rahnema”). The insured submits that the parties are identical in both applications, the prior application fell within the jurisdiction of the Tribunal to determine the issue regarding entitlement to NEBs; the prior decision was based on the merits; and the prior decision was a final judgment.

Res Judicata does not apply

12I find that the insurer is not barred from proceeding to a hearing on the basis of the doctrine of res judicata.

13The first precondition set out in Danyluk is whether “the same question has been decided”. I find that the issue raised by the insurer in the present application is different than the issue raised in the initial decision. The initial decision dealt with the procedural breach of the insurer’s obligations under the Schedule, while the current application deals with the suspension of benefits by the insurer due to the insured’s failure to submit an OCF-3 and attend IEs. While both issues deal with the applicant’s substantial entitlement to NEBs, the questions are not the same.

14In the initial decision, I find that the Tribunal held that the insurer breached its obligation under s. 36(5) and 37(1)(b) of the Schedule, as it failed to give the applicant the required notice explaining that the insurer requires an examination under section 44 relating to the specified benefit. The Tribunal further found that when the insurer stopped the NEBs on February 20, 2018, it did not adequately explain under s. 37(2) why the benefit was being terminated. The Tribunal concluded that no valid denial of the NEB was ever provided in accordance with s. 37 of the Schedule. NEBs were ordered to be paid.

15I find that following the Tribunal’s initial decision, the insurer reinstated NEBs. On July 21, 2022, the insurer requested an updated OCF-3 and requested that the applicant attend for IE assessments. The letter advised the insured that his benefits would be suspended if he did not submit an updated OCF-3 by August 16, 2022. The insured did not submit an updated OCF-3 and refused to attend at the scheduled IE assessments. By letter dated August 17, 2022, the insurer advised the insured that his benefits were suspended effective August 17, 2022. The subject application was then commenced by the insurer. The issue in dispute is whether the insurer’s suspension of the insured’s NEB was valid.

16The insured argues that since the initial Tribunal decision concluded that the insured was entitled to a NEB, this equates to a determination that the doctrine of res judicata is applicable to any future denial of the insured’s entitlement to a NEB. However, I disagree because the respondent has an ongoing duty to adjust the file and has a right to request an updated OCF-3 or an IE under the Schedule to determine ongoing entitlement. The finding in the initial decision that the applicant was entitled to an NEB does not mean that the insurer cannot subsequently deny the insured’s entitlement to future NEBs.

17Based on the facts and evidence before me, I find that the prerequisites for issue estoppel have not been met, and as such, the doctrine of res judicata does not apply. While the two applications involve the same parties, and both deal with the insured’s entitlement to NEBs, they engage different questions. In the circumstances, it would be procedurally unfair to prevent the insurer from proceeding to a hearing.

ORDER

18The insurer is not barred from proceeding to a hearing by the doctrine of res judicata.