CITATION: Micanovic v. Intact Insurance, 2022 ONSC 1566
DIVISIONAL COURT FILE NO. 731/21
DATE: 20220315
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Backhouse, Wilton-Siegel and Matheson J.J.
BETWEEN:
Pero Micanovic
Applicant/Appellant
– and –
Intact Insurance
Respondent/Respondent in Appeal
COUNSEL:
D.M. Bryce, for the Applicant/Appellant
I. Ezomo, for the Respondent/Respondent in Appeal
HEARD at Toronto (by videoconference): February 16, 2022
Wilton-Siegel J.:
[1] The appellant in this appeal, Pero Micanovic (the “Appellant”), appeals an order dated August 10, 2021 of adjudicator Craig Mazerolle (the “Adjudicator”) of the Licence Appeal Tribunal (the “LAT”) (the “Order”). The Order required the Appellant to produce to Intact Insurance (the “Respondent”) personal and corporate income and business records of the Appellant’s housekeeper, Ms. Julie Lucic (“Ms. Lucic”), for the purpose of determining whether the Appellant is entitled to payment of housekeeping services provided by Ms. Lucic to the Appellant that were required as a result of his catastrophic injuries.
Jurisdiction of the Court and Standard of Review
[2] This appeal proceeds under s. 11(1) of the Licence Appeal Tribunal Act, 1999, S.O. 1999, c.12 Sched. G. Pursuant to s. 11(6) of that statute, appeals relating to a matter under the Insurance Act, R.S.O. 1990, c. I.8 may be made on a question of law only.
[3] The standard of review on a question of law is correctness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019, SCC 65 at para. 37.
Applicable Law
[4] Under s. 23 of the Statutory Accident Benefits Schedule – Effective September 1, 2020, O.Reg. 34/10 (the “Schedule”), the Appellant is entitled to claim reasonable and necessary additional expenses incurred by him for such services to the extent he can demonstrate a substantial inability to perform housekeeping and home maintenance services that he normally performed before the accident.
[5] Section 3(7)(e) of the Schedule provides that, to be “incurred” in respect of any services, the following requirement must be satisfied:
3(7) For the purposes of this Regulation, …
(e) subject to subsection (8), an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless, …
(iii) the person who provided the goods or services,
(A) did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or
(B) sustained an economic loss as a result of providing the goods or services to the insured person;
Factual Background
[6] The Appellant was injured in a motor vehicle accident on September 12, 2014. He was deemed catastrophically impaired on July 19, 2019.
The Claim
[7] The Appellant submitted an Expense Claims Form in the amount of $26,200 on December 16, 2019 regarding housekeeping services provided to him by Ms. Lucic as his housekeeper from the date of the accident to September 29, 2019. Subsequently, he submitted further Expense Claims Forms dated January 7, 2020 and June 2, 2020 in the amounts of $1,356 and $2,486, respectively, for the months of October 2019 to and including May 2020, collectively. The three Expense Claims Forms (collectively the “OFC-6”) total $30,042.
[8] The Appellant did not specifically indicate in his OCF-6 whether the expenses claimed fell under s. 3(7)(e)(iii)(A) or s. 3(7)(e)(iii)(B) of the Schedule. As set out below, for reasons that are unclear, after receiving the OCF-6, the Respondent, and subsequently its adviser, mainly proceeded on the basis that the expenses claimed represented an economic loss incurred by Ms. Lucic as a result of providing the alleged housekeeping services to the Appellant, which would fall under s. 3(7)(e)(iii)(B).
Correspondence Between the Parties
[9] In letters dated January 2, 2021 and January 21, 2021, the Respondent stated that it understood that the services provided by Ms. Lucic were not performed in the course of her employment, occupation or profession. The Respondent requested information to determine whether Ms. Lucic sustained an economic loss as a result of providing the services to the Appellant. The specific documentation requested was as follows:
- T1 Income Tax Returns of Ms. Lucic for 2013 to 2015 including T4 Statements of Remuneration Paid and Statements of Business Activities and related Notices of Assessment;
- Documentation supporting Ms. Lucic’s earnings from January 2013 to present (that is, pay statements, commission statements, cancelled cheques, etc.);
- A listing of Ms. Lucic’s transactions with agreement and closing dates from January 2013 to present;
- Ms. Lucic’s bank statements from September 12, 2014 to present; and
- Ms. Lucic’s employment file from 2013 to date.
[10] In response, by letter dated February 7, 2021, the Appellant’s counsel advised that Ms. Lucic’s housekeeping services were being provided in the course of her employment, occupation or profession in which she is ordinarily engaged. It also mentioned that Ms. Lucic had been running a cleaning business in a corporation of which she was the managing director (“LucicCo”).
[11] On February 24, 2021, an adviser to the Respondent on this matter wrote to the Appellant stating that it had been engaged by the Respondent to verify if Ms. Lucic incurred an economic loss as a result of providing the housekeeping services to the Appellant. The adviser requested copies of the tax returns and related documentation of Ms. Lucic and LucicCo for the 2013 to 2019 fiscal years.
[12] In response, by letter dated February 28, 2021 to the Respondent, the Appellant’s counsel reiterated the Appellant’s position that Ms. Lucic’s housekeeping services were being provided in the course of her employment, occupation or profession in which she is ordinarily engaged, that is, fell under s. 3(7)(e)(iii)(A) of the Schedule. The Appellant’s counsel further advised that Ms. Lucic personally provided housekeeping services through LucicCo in addition to the other LucicCo employees.
[13] By letter dated March 3, 2021, the Respondent’s adviser acknowledged the Appellant’s position but stated that it had not been provided with sufficient documentation supporting the position that Ms. Lucic was self-employed at the time of the accident. It restated its request for the tax returns of Ms. Lucic and LucicCo for the 2013 to 2019 fiscal years. The Respondent’s position was that details that Ms. Lucic was an owner/operator of a cleaning business before the accident does not evidence Ms. Lucic’s self-employment activities.
[14] By letter dated April 2, 2021, the Respondent’s adviser repeated its request for this tax information from Ms. Lucic and LucicCo. However, it stated that this information was required to verify if Ms. Lucic incurred an economic loss as a result of providing the housekeeping services to the Appellant as a result of his motor vehicle accident, even though it attached its letter of March 3, 2021.
[15] By letter dated April 28, 2021, the Respondent restated its request for the tax information saying simply that it required this tax information in order to determine whether the claimed expenses for housekeeping services were payable.
[16] In a letter dated May 12, 2021, the Appellant’s counsel provided some further information regarding the business of LucicCo and refused to provide the requested tax information. The Appellant’s counsel further restated the Appellant’s position that Ms. Lucic’s housekeeping services were being provided in the course of her employment, occupation or profession in which she is ordinarily engaged.
[17] From the Respondent’s letter dated June 5, 2021, it appears that the Respondent’s adviser sent a further letter dated May 4, 2021 which was not included in the materials before this Court.
[18] By letter dated June 5, 2021, the Respondent referenced its previous requests for information stating that it had not been provided with sufficient documentation supporting the position that Ms. Lucic was self-employed at the time of the accident. The letter repeated the Respondent’s position that details that Ms. Lucic was an owner/operator of a cleaning business before the accident does not evidence Ms. Lucic’s self-employment activities. Significantly, the Respondent further advised that the expenses claimed were not payable and that entitlement to this benefit would remain unpayable until such time as it received the requested tax information of Ms. Lucic and LucicCo.
[19] It is possible that the basis for the Respondent’s demand for the documentation in the letters of March 3, 2020 and June, 2020 reflects an additional factual matter for which the Respondent considers the documentation to be relevant in respect of a claim for economic loss, namely whether Ms. Lucic ever performed any housekeeping services personally. Alternatively, it is possible that the Respondent and the Respondent’s advisor eventually accepted the Applicant’s position and re-framed the demand for the documentation that the Respondent sought in terms of evidence necessary to establish a claim under s. 3(7)(e)(iii)(A). However, it is not necessary to resolve this issue for the reason that, as set out below, the Respondent’s motion materials asserted that the requested documentation was necessary to determine whether Ms. Lucic suffered an economic loss and the Adjudicator proceeded on that basis.
The Production Motion
[20] The Appellant commenced arbitration with the LAT on February 10, 2021 respecting, among other issues, the retroactive housekeeping benefits (the “Arbitration”).
[21] The Respondent brought a motion dated May 17, 2021 (the “Production Motion”) to, among other things, compel production to 2019 of the records of Ms. Lucic sought in the Respondent’s letters dated January 2, 2021 and January 21, 2021 together with the T2 Corporate Income Tax Returns of LucicCo. and related Notices of Assessment for the fiscal years ended from 2013 to 2019.
[22] A schedule to the Respondent’s notice of motion in the Production Motion (the “Notice of Motion”) contained the following statements. First, it indicated that the Appellant’s counsel had advised that Ms. Lucic had provided the housekeeping services as part of the employment, occupation or profession in which she would ordinarily be engaged. Second, the Respondent asserted its position that the Appellant had provided insufficient documentation supporting his position that Ms. Lucic was self-employed as a housekeeper at the time of the accident. Third, in describing the information provided to the Respondent, the schedule also stated that the Respondent had received information “which shows that the alleged housekeeping service provider, Julica Lucic, is an Owner/Managing Director of [LucicCo] along with Pedrag Vojnovic, who reportedly is her husband”. Lastly, the Respondent submitted that the Appellant had failed to provide proof of economic loss pertaining to Ms. Lucic and that “the requested documentation will provide the parties and the Adjudicator with a more complete textual picture as it pertains to the issue in dispute.”
[23] The Appellant’s responding motion materials included the three letters of the Appellant’s counsel described above. Accordingly, the Appellant’s motion materials clearly stated his position that the housekeeping services were provided by Ms. Lucic in the course of her employment, occupation or profession in which she would ordinarily be engaged but for the accident (tracking the language of s. 3(7)(e)(iii)(A) of the Schedule) and, as a result, the documentation requested by the Respondent was not relevant or necessary to determine the issue in dispute.
[24] In its reply submissions, the Respondent restated its position that being the owner/operator of a cleaning business before the accident does not evidence Ms. Lucic’s self-employment activities. The Respondent’s reply submissions then concluded by saying that, taking into consideration that Ms. Lucic was also employed as a mortgage broker since 2012, “the requested productions are required to show proof of economic loss, to assist the Respondent in determining whether the [Appellant’s] expenses for housekeeping and home maintenance were incurred in accordance with the Schedule.”
The Adjudicator’s Decision
[25] The Production Motion was heard as a motion in writing. In his decision dated August 10, 2020 (the “Decision”), the Adjudicator proceeded on the basis that Ms. Lucic was the Appellant’s spouse and that the Appellant’s expense claim was asserted as the economic loss that Ms. Lucic suffered as the Appellant’s spouse in providing housekeeping services to the Appellant. Both presumptions were incorrect. The Appellant was not proceeding on the basis of economic loss. Further, neither party suggested in their submissions that Ms. Lucic was the Appellant’s spouse and she was, in fact, not his spouse.
[26] The Adjudicator stated that the Respondent argued that it required the financial and employment records sought on the motion from the applicant’s spouse to determine whether she experienced an economic loss as a result of providing housekeeping services to the Appellant. The Adjudicator understood the Respondent’s position to be that the documentation provided to date showed that Ms. Lucic owned a cleaning company at the date of the accident but not that she worked as a cleaner in that capacity and that, accordingly, without evidence of economic loss there could be no housekeeping benefit payable. The Adjudicator also stated that the Appellant had argued that “sufficient evidence had been provided to establish an economic loss” and that evidence had been provided to establish that the Appellant’s spouse had worked as a cleaner since 2011. There is no evidence that the Appellant made the former statement.
[27] The Adjudicator concluded that the requested documentation was producible because it was relevant for determination of the Appellant’s entitlement to a household benefit under s. 3(7)(e)(iii)(B) of the Schedule. He stated that, in viewing the Respondent’s requests through the lens of whether they can help the parties make cogent arguments about the spouse’s possible economic loss, he was satisfied that her tax records, pay stubs, employment files etc. all meet the low threshold of relevance.
[28] Pursuant to the Order, the Adjudicator stated that, in light of concerns for the privacy interests of the Appellant’s spouse, he would limit his production order “to only those records that will allow the parties to determine whether the spouse was working as a cleaner at the time of the accident (and, more broadly, whether she experienced an economic loss in providing these services thereafter)”. On this basis the Adjudicator specifically ordered production of “the records related to the spouse’s earnings from her cleaning companies pre- and post-accident … (e.g., personal and corporate tax records)” but excluded the records related to her personal finances more generally. He concluded that, “in carving out this exception, I am satisfied that the parties will have the relevant records they need to [sic] the [Respondent’s] argument about economic loss, all the while balancing the privacy interests of this third party.”
The Issues on this Appeal
[29] This appeal raised two questions:
(1) Whether the appeal is premature; and
(2) If not, whether the Adjudicator erred at law in making the Order.
In the circumstances of this case, the two questions are intimately related.
Is the Appeal Premature?
[30] The Order is an interlocutory order rather than a final order resolving the Appellant’s claim for housekeeping benefits. The Respondent submits that this Court should decline to hear this appeal on the grounds of prematurity and an absence of exceptional circumstances in reliance on the well-established principles most recently articulated in Cura v. Aviva Insurance Canada, 2021 ONSC 2290 at para. 30:
It is a fundamental principle of our legal system as it relates to both litigation before the LAT and similar tribunals, as well as trials in our court system, that decisions made during the course of a proceeding are not subject to judicial review or an appeal until such time as the process itself is complete. This principle is well understood and reflected in the decision of the Court of Appeal in Volochay v College of Massage Therapists of Ontario, 2012 ONCA 541 at para. 69, where the Court of Appeal adopted the rationale for this principle set forth by Stratas J.A. in Canada (Border Services Agency) v. C.B. Powell Limited, 2010 FCA 61, as follows:
Put another way, absent exceptional circumstances, courts should not interfere with ongoing administrative processes until after they are completed, or until available, effective remedies are exhausted.
This prevents fragmentation of the administrative process and piecemeal court proceedings, eliminates the large costs and delays associated with premature forays to court and avoids the waste associated with hearing an interlocutory judicial review when the applicant for judicial review may succeed at the end of the administrative process anyway. Further, only at the end of the administrative process will a review in court have all of the administrative decision-maker’s findings; these findings may be suffused with expertise, legitimate policy judgments and valuable regulatory experience. Finally, this approach is consistent with and supports the concept of judicial respect for administrative decision-makers who, like judges, have decision-making responsibilities to discharge.
[31] I do not agree that we should decline to hear this case for the following reasons.
[32] I accept that, as set out in Cura, it is a fundamental principle in our legal system that, absent exceptional circumstances, courts should not interfere with ongoing administrative processes, including an arbitration, until after they are completed or until available, effective remedies are exhausted.
[33] However, the case law also provides that an interim order can be challenged if it is “fatally flawed”: see Taylor v. Aviva Canada Inc., 2018 ONSC 4472 at para. 19. In this case, as set out below, the Adjudicator made three errors of law. Collectively, these three errors of law render the Order “fatally flawed.” I propose to address these three errors of law and then to address the exceptional circumstances in this case in greater detail.
The Adjudicator Erred at Law in Making the Order
[34] The Adjudicator made the following three errors of law in making the Order.
[35] First, there is no dispute that the Adjudicator erred in proceeding on the basis that Ms. Lucic was the Appellant’s spouse. There is no evidence of any relationship between Ms. Lucic and the Appellant other than as a paid housekeeper.
[36] It is an error of law to make a finding of a material fact where the finding is based solely on a complete absence of evidence: Johannson v. Saskatchewan Government Insurance, 2019 SKCA 52 at para. 25 which cites the following helpful passage of Klebuc C.J.S. from Murphy v Saskatchewan Government Insurance, 2008 SKCA 57, [2008] 7 WWR 401 at para. 5 thereof:
Since the right of appeal is confined to a question of law, neither the right of appeal nor the jurisdiction of the Court extends to a finding of fact. However, a finding of fact may be grounded in an error of law, as will be the case, for example, when a finding: (a) is based on no evidence; (b) is made on the basis of irrelevant evidence or in disregard of relevant evidence; or, (c) is based on an irrational inference of fact. See: P.S.S. Professional Salon Services Inc. v. Saskatchewan Human Rights Commission et al., 2007 SKCA 149, (2007), 302 Sask. R. 161 at paras. 60–65 (application for leave to appeal to S.C.C. filed February 13, 2008). The right of appeal, of course, extends to such errors of law.
[37] As there is no evidence for the finding that Ms. Lucic was the Appellant’s spouse, and indeed evidence to the contrary in the Respondent’s Motion, the Arbitrator erred in law in making this determination in the course of the Decision.
[38] It is quite possible that the Adjudicator would not have viewed the Production Motion through the lens of an economic loss claim if he had not made this erroneous finding. In the absence of a familial relationship of some kind, an economic loss claim in similar circumstances would be out of the ordinary. Nevertheless, as an economic loss claim could in theory be asserted by any third party, I cannot conclude that this error is material to the Order. I also note, however, that the Adjudicator’s error on this matter may also have led him, based on a misguided view, to conclude that the Appellant had control or possession of the records sought on the motion. This error is addressed further below.
[39] Second, the Adjudicator erred at law in requiring the Appellant to provide evidence of economic loss when the Appellant was not asserting such a claim under s. 3(7)(e)(iii)(B) of the Schedule.
[40] In its correspondence with the Respondent, the Appellant consistently asserted its position that it was claiming housekeeping expenses under s.3(7)(b)(iii)(A) of the Schedule and was not claiming payment of these expenses by way of economic loss under s.3(7)(b)(iii)(B). The Adjudicator had this correspondence of the Appellant’s counsel before him in the Appellant’s responding motion materials. The Respondent’s Notice of Motion also contained a statement of the Applicant’s position. This correspondence and the statement in the Notice of Motion should have been determinative for the Adjudicator of the basis of the Appellant’s claim, regardless of the possible alternative position in the Respondent’s motion materials.
[41] This is an error of law that can be expressed in a number of different ways.
[42] To the extent that the Adjudicator’s finding of relevance involved a finding of fact or mixed fact and law, the Adjudicator clearly disregarded the evidence before him that the Appellant was not claiming payment of the housekeeping expenses on the basis of economic loss. As discussed in Murphy, a finding of fact made in complete disregard of the evidence constitutes an error of law. In this case, the evidence of the Appellant’s claim was unequivocal. The Adjudicator disregarded that evidence.
[43] Alternatively, in addressing the relevance of the documentation sought by the Respondent, the Adjudicator misdirected himself by looking at the wrong provision of the Schedule - s.3(7)(e)(iii)(B) rather than s.3(7)(e)(iii)(A). In the further alternative, the error of law can be expressed as the application of an erroneous interpretation of s.23 of the Schedule to require compliance with both s.3(7)(e)(iii)(B) and s.3(7)(e)(iii)(A) in order to qualify for payment of housekeeping expenses. Interpreting the requirements in paragraphs (A) and (B) of s.3(7)(e)(iii) to be conjunctive when the language of that provision is unequivocally disjunctive is a clear error of law.
[44] Lastly, the Adjudicator erred at law in ordering production of personal and financial documentation of a third party in circumstances in which the Appellant had no control over, or possession of, the records and, accordingly, no ability to compel the third party to provide them. While the Appellant’s motion materials before the Adjudicator did not specifically assert that the Appellant did not have control over, or possession of, Ms. Lucic’s personal and financial documentation, the Appellant specifically stated that “the documentation the Insurer seeks is not relevant and its production from a third party is highly prejudicial, invasive and inappropriate.”
[45] The Adjudicator should have been alert to the issue of the Appellant’s ability to satisfy the Order given that Ms. Lucic was a third party to the situation, whether or not the Adjudicator thought the documentation was sought to verify a claim for economic loss or to address Ms. Lucic’s self-employment status as a housekeeper at the time of the accident.
The Exceptional Circumstances
[46] Based on the foregoing, the present circumstances are exceptional and justify judicial intervention at this stage in the Arbitration for three reasons.
[47] First, the Order is “fatally flawed” for the reasons discussed above that collectively have the result that the Order cannot stand. Further, in this case, there are two particularly important consequences described below that flow from the Adjudicator’s errors of law that reinforce the conclusion that exceptional circumstances exist in this case because they result in unfairness in the Arbitration procedure itself.
[48] First, the effect of the Order is to require the Appellant to provide evidence that is not relevant to the basis on which the Appellant asserts his claim. As set out above, the Adjudicator ordered the Appellant to produce evidence that is relevant to a claim asserted under s. 3(7)(e)(iii)(B) of the Schedule; the Appellant asserts his claim under s. 3(7)(e)(iii)(A) thereof. Even if Ms. Lucic were prepared to provide the documentation contemplated by the Order, the Appellant would have to incur an unnecessary and wasteful expenditure to obtain the documentation and to suffer an unnecessarily delay in the resolution of his claim for housekeeping expenses pending receipt and assessment of such evidence by the Respondent.
[49] Second, the Order requires the Appellant to provide personal and financial documentation of a third party. The Appellant has no legal means of compelling Ms. Lucic to provide him with this documentation. Her failure to do so would significantly prejudice, if not wholly exclude, a determination of the Appellant’s claim.
[50] By its letter dated June 5, 2021, the Respondent has already denied payment of the expenses claimed by the Appellant for failure to produce the demanded tax returns and related documentation of Ms. Lucic and LucicCo. The Respondent has also taken the position that the housekeeping expenses claimed to date are not payable and that entitlement to such benefit would remain unpayable until such time as it received the requested tax information of Ms. Lucic and LucicCo.
[51] The Appellant should not be required to await a refusal on the part of Ms. Lucic to provide her documentation. Given the Respondent’s position in its letter of June 5, 2021, it can also reasonably be assumed that, if the Order were to stand, the Respondent would seek a further order of the Adjudicator staying the Appellant’s claim for housekeeping expenses pending production of such documentation.
[52] In all of these circumstances, both the denial of payment of the claimed expenses and any such stay order based on non-production would be grossly unfair to the Appellant. Such actions on the part of the Respondent would necessitate further judicial proceedings which would both be wasteful of judicial resources and entail an unnecessary delay in the resolution of the Appellant’s claim.
Conclusion
[53] Based on the foregoing, the appeal is granted and the Order is set aside. Costs in the agreed amount of $5,800 on an all-inclusive basis are payable to the Appellant.
Wilton-Siegel, J.
I agree _______________________________
Backhouse, J.
I agree _______________________________
Matheson, J.
Released: March 15, 2022
CITATION: Micanovic v. Intact Insurance, 2022 ONSC 1566
DIVISIONAL COURT FILE NO. 731/21
DATE: 20220315
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Backhouse, Wilton-Siegel and Matheson J.J.
BETWEEN:
Pero Micanovic
Applicant/Appellant
– and –
Intact Insurance
Respondent
REASONS FOR JUDGMENT
Wilton-Siegel, J.
Released: March 15, 2022