In McDonald v. Aviva Insurance Company, 2024 ONSC 6030, the appellant was in a motor vehicle accident and was said to have been catastrophically impaired to the point where he was immobile, non-verbal and dependent on others for all acts of daily living.
The respondent, Markham, Ont.-based Aviva Canada, was his insurer. According to facts detailed in the decision, the appellant submitted a treatment and assessment plan to the respondent before being discharged from the hospital that totalled $924,671, which included the cost of a new home, renovations and a wheelchair-accessible vehicle, and later for the difference in apartment rental to provide more appropriate housing. The court noted that the appellant was currently living in undignified circumstances.
The respondent initially denied the treatment plan, saying it exceeded policy limits. However, the court noted that the appellant was actually entitled to insurance coverage of up to $3 million. The respondent relied on s. 16 of the Statutory Accident Benefits Schedule (SABS) in denying the treatment plan, which provides that the insurer is not liable to pay for a new home in excess of the value of the insured’s existing home.
When the appellant disputed Aviva's decision, the insurer later agreed to pay the claimed benefits. It did not specify why it changed its mind but said that it came to the decision after seeking legal advice. This occurred before a Licence Appeal Tribunal hearing regarding the benefits.
The appellant sought an additional special award under s. 10 of Regulation 664 of the Insurance Act. The adjudicator agreed to the special award because the respondent had unreasonably withheld or delayed payments that the appellant was entitled to, pursuant to SABS.
“The Adjudicator found that the Respondent’s handling of this matter stemmed from behaviour that was excessive, imprudent, stubborn, inflexible and unyielding,” the court wrote.
“The Adjudicator found that the Respondent had blatantly failed to adjust the file with due diligence, was indifferent to the vulnerability of the Appellant and failed to afford the Appellant the consideration and dignity that he deserved. The Adjudicator found the need for a strong message of deterrence.”
A special award was granted to some but not all the benefits. The adjudicator said an additional report on housing benefits was needed before an award on the amount could be made, also relying on s. 16. The appellant then appealed the tribunal decision and reconsideration decision denying the special award on housing benefits.
The superior court found that the adjudicator erred in interpreting s. 10 because it does not require that the amount of the benefit be adjudicated if the respondent has agreed to pay the claimed amount.
“Section 10 provides for a special award when an insurance company unreasonably withholds or delays payments, as it did in this case,” it wrote. “The nature of the legislation as consumer protection legislation is particularly important because a special award is intended to address and deter this poor behaviour by insurers. Section 10 special awards only arise when an insurer has behaved so unreasonably as to justify the payment of an amount in addition to the SABS benefits.”
Section 10 refers to the “amount” that the person was entitled to at the time of the award. The ordinary meaning of this would not mandate an adjudication under SABS in the case where the amount had been agreed on. The court ruled that the grammatical meaning of the regulation, the Act itself and the intention of the legislature did not support the LAT's “narrow, technical and inefficient interpretation.”
The appeal was allowed by Justices Wendy Matheson, Harriet Sachs and David Jarvis with costs to the appellant of $15,000. Part of the adjudicator’s decision denying the special award for housing was set aside and the matter was remitted back to the tribunal to determine the special award based on the agreed amounts.
Counsel for the appellant were Doug Wright and Aryeh Samuel of Sokoloff Personal Injury Lawyers.
Counsel for the respondent were Noella Thompson, Kimberley Tye and Hussein Pirani of Aviva Trial Lawyers.
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