ACCIDENT BENEFITS NEWSLETTER - MARCH 2005

Catherine Zingg

Greenhalgh v. ING Halifax Insurance Company (SCC, March 2005) - The Supreme Court of Canada dismissed the plaintiff’s motion for leave to appeal with costs. The Ontario Court of Appeal had held that the plaintiff’s catastrophic impairment due to frostbite was not the result of an “accident” as defined in s. 2(1) of the SABS /96. The plaintiff’s car had stalled in the country on a winter’s night. Together with her passenger she walked from the accident site, become lost, fell into a river and lost her boots. Subsequently her legs had to be amputated below the knees.

Gipson and Pilot Insurance Company, Brockville Court File No.: 03-0856, January 25, 2005, O.S.C. - The applicant, Justin Gipson, was rendered a paraplegic in a single vehicle accident on November 3, 2001. At the time of the accident he was the holder of an Ontario Class G2 driver’s licence which was not expired, cancelled or under suspension. His blood alcohol concentration was above zero, but he was not charged or convicted of a criminal offence. By way of a “Special Case”, under Rule 22 of the Rules of Civil Procedure, the parties submitted the following question for the opinion of the Court:

Does a combination of:

(a) Section 30(1)(b) of the Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, O.Reg. 403/96 (“the revised qualified-to-drive exclusion’); and

(b) Section 6(1)of the Drivers’ Licences Regulation, O.Reg. 340/94 (“the zero tolerance condition”)

exclude the applicant from receiving non-earner benefits and any other benefits under sections 20, 21 and 22 of the SABS to which he is otherwise entitled (“the claimed benefits”)?

Judge Belch ruled that the answer to the question was, “No”. In reaching this conclusion, he found that s.32(9) and the revised criminal offence exclusion requires a conviction for a criminal offence and not a breach of a Provincial Act or Regulation before the benefits sought are out of reach. The Court also found that exclusionary clauses are to be interpreted narrowly and in favour of an insured. The judge also relied on the decision of Youden v. Economical Insurance Company (1996) O.J. No. 2044, where it was stated, “this is remedial legislation...in this context the legislation should be interpreted broadly and liberally” (p.4).

Novakovic and Coseco Insurance Co./HB Group/Direct Protect, A04-000733, February 22, 2005 - The applicant was not precluded from proceeding to arbitration by operation of s.31 and s.32(1) of the Schedule. The applicant, at the age of 14, was struck by a car while he was a pedestrian. Through an interpreter, the applicant and his mother testified that they believed it was their pediatrician’s opinion that the symptoms suffered by Mr. Novakovic following the accident related to puberty, not the accident (p.4). Other reasons given for the failure to notify the insurer of the accident until October 2002 were that the parents were unaware that benefits might be available to them through the father’s insurance; suspicion of authority and fear of deportation. The family had immigrated from Bosnia. In her reasons Arbitrator Ashby stated:

The provisions of subsection 32(1) of the Schedule sets a time period within which notice must be given to the insurer, while the provisions of section 47 of the Limitations Act set the date upon which the notice period starts for the then minor applicant, Mr. Novakovic. I find this to be analogous to the circumstances in Murphy v. Welsh; Stoddard v. Watson (1993) 2 S.C.R. 1069. There is no obvious inconsistency between the two statutes. In not enacting either an exemption to section 47 of the Limitations Act or using clear wording to restrict its application, I find that it was intended that section 47 postpones the rights of a minor, pursuant to the Schedule, until he reaches the age of majority. To conclude otherwise would be contrary to the finding of the Supreme Court in Smith v. Co-Operators General Insurance Company, (2002) S.C.R. 129 that a purpose of the Insurance Act was consumer protection (p. 12-13).

Thus, the Arbitrator concluded that the Limitations Act operates to postpone the notice period set out in s.32(1) of the SABS /96 to the date upon which a minor reaches his or her eighteenth birthday. Mr. Novakovic’s birthday was on June 14, 2001. Therefore he still missed the time limits under 32(1) by not notifying Coseco of his potential claim until October 17, 2002. As Mr. Novakovic and his mother did not heed the advice from several sources to consult a lawyer, the Arbitrator found that he failed to notify Coseco as soon as practicable following his eighteenth birthday. However, it was found that in the circumstances, he had a reasonable explanation pursuant to s.31(1) in that he was an immature and unsophisticated 21 year old whose parents had not applied for benefits on his behalf between March 1998 and his eighteenth birthday on June 14, 2001.

Gurney and Allstate Insurance Company of Canada, A04-000142, February 15, 2005 - On November 16, 1996 the applicant was injured in a motor vehicle accident. At 104 weeks post accident, Allstate denied Mr. Gurney’s claim for medical rehabilitation and housekeeping expenses and the indexation of his income replacement benefits. At the time of the accident, the transitional coverages under section 70 of the SABS /96 were in effect. Mr. Gurney had received a brochure from Allstate which gave him two options. The first option was to “do nothing until your next policy renewal date” and the second was to “ move to the new plan prior to your scheduled renewal date”. In reviewing the brochure, Arbitrator Miller found that pursuant to s.27(1)(5) Allstate was required to offer Mr. Gurney the optional benefit of indexation when he opted for option one, but failed to do so (p.7). However, she found that as the Schedule does not speak to a remedy for this problem, she was without jurisdiction to do anything about it. With respect to medical and rehabilitation benefits, it was held that the temporal limits do not apply to s.70(3) of the Schedule. Accordingly, Mr. Gurney was entitled to claim supplementary medical and rehabilitation benefits for a period in excess of 104 weeks post accident. In making this finding, the arbitrator distinguished the decision on State Farm and L.F., P-002777, December 12, 1997 (appeal). She stated:

In conclusion, I find the IBC brochure a significant piece of evidence which was not before the Director’s Delegate in L.F when she interpreted the less than clearly drafted s.70. I find that the insurance industry’s brochure lends support to the interpretation that temporal limits do not apply to subsection 70(3). I also find the IBC brochure, which includes the offer made by Allstate to Mr. Gurney and its other insureds in paragraph E under Option 1, supports the Arbitrator’s reasoning in L.F. and adheres to the legislative purpose of subsection 70(3) to compensate an insured for a decrease in benefits in mid-contract (p.23).