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AUTOMOBILE INSURANCE - Compulsory government schemes - Rights and duties of insurer

Thursday, August 24, 2017 @ 8:41 AM  

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Appeal by Aviva Insurance Company of Canada from a decision finding that it had not given proper notice to examine under oath the respondent applicants for statutory accident benefits. The respondents had argued that the insurer was required to provide a “reason” in the sense of a “justification” for its request that they attend examinations under oath. The insurer then brought an application for a declaration that a justification was not required to compel a person claiming statutory accident benefits to attend at an examination under oath, and for an order compelling the respondents to attend examinations. The application judge dismissed the application and issued a declaration that an insurer must provide a “justification” to compel an applicant for benefits to attend an examination under oath if the insurer requested one pursuant to s. 33(2) of the Statutory Accident Benefits Schedule (SABS). The application judge reasoned that the requirement that an insurer provide the actual reason or justification for the examination was in keeping with the insurer’s obligation of good faith and was consistent with the overall statutory scheme. It ensured that insurers did not request examinations under oath as a matter of course.

HELD: Appeal allowed. The application judge's interpretation of s. 33 was reviewable on a correctness standard. In adopting the meaning "justification" for the word "reason", the application judge drew unsupported inferences, employed extraneous considerations, and failed to consider the entire legislative context of s. 33 (4) 3. Reading the words “reason or reasons” in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of the legislature, led to the conclusion that s. 33 (4) 3 of the SABS did not require an insurer to include in its notice to an applicant a justification for its request the applicant attend an examination under oath. The legislative objectives in creating the examination under oath were to reduce insurance costs, address fraud and increase accountability within the system. The application judge erred by reasoning that the use of such examinations might result in an increase in the overall costs of the system. The application judge had no basis whatsoever for assessing how potential savings from the detection and deterrence of fraud and abuse of the system would factor into the overall costs of the system. Requiring insurers to provide justification for examinations under oath was not in keeping with the non-adversarial process intended by the legislature. Requiring an insurer to provide a justification for its request for an examination under oath was not in keeping with the cooperative approach to information sharing throughout the SABS.

Aviva Insurance Co. of Canada v. McKeown, [2017] O.J. No. 3482, Ontario Court of Appeal, R.G. Juriansz, S.E. Pepall and B. Miller JJ.A., July 4, 2017. Digest No. TLD-August212017010