



COURT OF APPEAL FOR ONTARIO

CITATION: Aviva Insurance Company of Canada v. McKeown, 2017
    ONCA 563

DATE: 20170704

DOCKET: C62809

Juriansz, Pepall and Miller JJ.A.

BETWEEN

Aviva Insurance Company of Canada

Applicant (Appellant)

and

Fran McKeown
,
Roland Spencer
, Dolly
    Singroy,
Renelyn Agaloos
, Naoise Hefferon, and Joanne Hacker

Respondents (
Respondents
)

Eric K. Grossman, for the appellant

Valinie (Val) Chowbay, for the respondents

Heard: April 27, 2017

On appeal from the judgment of Justice Wendy M. Matheson of
    the Superior Court of Justice, dated September 26, 2016, with reasons reported
    at 2016 ONSC 6017.

Juriansz J.A.:

A.

Overview

[1]

This appeal is about the nature of the notice an insurer must give in
    order to exercise its statutory right to examine under oath an applicant who
    has claimed benefits under the
Statutory Accident Benefits Schedule
(SABS), O. Reg. 34/10, a regulation under the
Insurance Act
,
R.S.O. 1990, c. I.8
. Section 33 (2) of the SABS provides that
    an applicant for SABS benefits shall submit to an examination under oath if
    requested by the insurer. Section 33 (4) 3 requires an insurer to give the
    applicant reasonable advance notice of the reason or reasons for the
    examination.

[2]

Six applicants for benefits demanded Aviva Insurance Company of Canada provide
    a reason in the sense of a justification for its request that they attend
    examinations under oath. Aviva brought an application in the Superior Court 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 six applicants to attend examinations.

[3]

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 requests one
    pursuant to s. 33(2) of the SABS. She denied Avivas request for an order that
    each of the six applicants for benefits attend for an examination under oath.

[4]

Aviva appeals, but only in respect of three of the six respondents to
    the application. I would allow the appeal, set aside the application judges
    declaration, and replace it with the declaration that an insurer is not
    required to provide a justification for its request that the applicant attend
    an examination under oath. I would grant an order that each of the three
    respondents to the appeal attend an examination under oath.

B.

Decision Below

[5]

The application judge began her analysis by noting the proper approach
    to statutory interpretation. The words of an Act are to be read 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.

[6]

She identified the purpose of the 2003 legislative reform of the
    automobile insurance regime that created the examination under oath (EUO). She
    said the purpose was to address rising auto insurance premiums by putting
    forward a balanced reform package designed to ensure that injured people
    received the care they needed while reducing red-tape, fraud and abuse.

[7]

The application judge briefly considered the entire s. 33, but her
    principal focus was on the requirement in s. 33 (4) 3 that the insurer provide
    reasonable advance notice of the reason or reasons for the examination.

[8]

She reasoned, at para. 80, that: The ordinary meaning of reason is
why
something is happening. It is not the scope of the examination, but why the
    examination is being pursued (emphasis in original). She concluded, at para.
    79, the notice provision is not satisfied by a general statement that the examination
    will be about entitlement to statutory accident benefits or a general reference
    to the purpose and/or scope of the examination. Rather, she issued a
    declaration, at para. 90, that a justification is required to compel a SABS
    claimant to attend an examination under oath under s. 33 of the SABS,
    specifically a reason or reasons that must be disclosed under s. 33 (4) 3 of
    the SABS.

[9]

The application judge found support for her conclusion in an earlier
    decision of the Superior Court:
State Farm Mutual Automobile Insurance Co.
    v. Aslan
, 2016 ONSC 2725, 130 O.R. (3d) 474 (Ont. S.C.). She rejected the
    conclusion of the Financial Services Commission of Ontario (FSCO) arbitrator
    in
Kivell v. State Farm Mutual Automobile Insurance Co.
, [2016] O.F.S.C.D.
    No. 119 (F.S.C.O. Arb.) who found that notice of the general type of questions
    that will be asked at the EUO is sufficient.

[10]

The application
    judge reasoned that the requirement that an insurer provide the actual reason
    or justification for the examination was in keeping with the insurers
    obligation of good faith. The insurer, she said, at para. 81, must have a good
    faith reason to take this additional step and must be prepared to disclose it
    in advance of the examination. She recognized that an insurer would be
    reluctant to give a specific reason in a fraud case, thus losing a tactical
    advantage and possibly hindering the examination. But she rejected this
    concern, at para. 82, because [t]his sort of tactical advantage, based on
    surprise, has been removed from civil litigation. Continuing the analogy to
    civil litigation, she observed that a claimant in a tort action would have
    advance notice of the insurers position through a statement of defence before
    any examination for discovery would take place. And, the applicant would have a
    corresponding right to examine the insurer.

[11]

The application
    judge also found that requiring the insurer to provide its actual reason for
    the examination in advance was consistent with the overall statutory scheme. It
    ensured that insurers did not request EUOs as a matter of course. Permitting
    them to do so would increase the overall cost of the system and reintroduce a
    more adversarial process into what is intended to be an efficient, no-fault
    regime.

[12]

Another reason
    the application judge offered for concluding s. 33 (4) 3 created a substantive
    right was that the required notice should be meaningful to unrepresented
    applicants.

[13]

The application
    judge did not find persuasive the insurers argument that requiring an insurer to
    provide a justification for the examination would result in additional dispute
    and litigation over the adequacy of the reason provided. She was satisfied that
    EUOs would proceed upon insurers conveying to claimants a good faith specific
    reason for them.

[14]

She concluded,
    at para. 87, that in the case before her only general references to the
    purpose and/or scope of the examination were provided to the respondents. They
    were not given notice of the actual reason or reasons that Aviva was pursuing
    an EUO. Therefore, Avivas notices were not compliant with s. 33.

[15]

The application
    judge issued a declaration that a justification is required to compel a SABS
    claimant to attend an EUO, and denied the requested orders that each of the
    respondents attend an EUO.

C.

Fresh Evidence

[16]

The respondents
    sought to place material before this court that had not been before the application
    judge. The material consists mainly of medical reports related to the
    processing of the respondents applications for benefits. The materials do not
    meet the test for admission of fresh evidence articulated in
R. v. Palmer
,
    [1980] 1 S.C.R. 759. I would deny the motion to admit fresh evidence.

D.

Analysis

[17]

The application
    judges interpretation of s. 33 is reviewable on a correctness standard. As I explain
    below, 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.

[18]

In my view,
    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 leads to the conclusion
    that s. 33 (4) 3 does not require an insurer to include in its notice to an
    applicant a justification for its request the applicant attend an EUO.

(1)

The provision

[19]

The text of
    section 33 reads as follows:

33
(1)

An applicant shall, within 10 business days
    after receiving a request from the insurer, provide the insurer with the
    following:

1. Any information reasonably required to assist
    the insurer in determining the applicants entitlement to a benefit.

2. A statutory declaration as to the circumstances
    that gave rise to the application for a benefit.

3. The number, street and municipality where the
    applicant ordinarily resides.

4. Proof of the applicants identity.

(2) If requested by the insurer, an applicant shall
    submit to an examination under oath, but is not required,

(a) to submit to more than one examination under
    oath in respect of matters relating to the same accident; or

(b) to submit to an examination under oath during
    a period when the person is incapable of being examined under oath because of
    his or her physical, mental or psychological condition.

(3) An applicant is entitled to be represented at his
    or her own expense at an examination under oath by such counsel or other
    representative of his or her choice as the law permits.

(4) The insurer shall make reasonable efforts to schedule
    the examination under oath for a time and location that are convenient for the
    applicant and shall give the applicant reasonable advance notice of the
    following:

1. The date and location of the examination.

2. That the applicant is entitled to be represented
    in the manner described in subsection (3).

3. The reason or reasons for the examination.

4. That the scope of the examination will be
    limited to matters that are relevant to the applicants entitlement to
    benefits.

(5) The insurer shall limit the scope of the
    examination under oath to matters that are relevant to the applicants
    entitlement to benefits described in this Regulation.

(6) The insurer is not liable to pay a benefit in
    respect of any period during which the insured person fails to comply with
    subsection (1) or (2).

(7) Subsection (6) does not apply in respect of a
    non-compliance with subsection (2) if,

(a) the insurer fails to comply with subsection
    (4) or (5); or

(b) the insurer interferes with the applicants
    right to be represented as described in subsection (3).

(8) If an applicant who failed to comply with
    subsection (1) or (2) subsequently complies with that subsection, the insurer,

(a) shall resume payment of the benefit, if a
    benefit was being paid; and

(b) shall pay all amounts that were withheld
    during the period of non-compliance, if the applicant provides a reasonable
    explanation for the delay in complying with the subsection.

(9) Clause (2) (a) shall not be interpreted as
    prohibiting an additional examination of the applicant under oath, under
    Ontario Regulation 283/95 (Disputes Between Insurers) made under the Act, at
    the insurers request that is conducted for the purpose of determining who is
    liable under section 268 of the Act to pay statutory accident benefits in
    respect of the accident.

(2)

Grammatical and ordinary sense of the word reasons

[20]

The present
    appeal concerns the interpretation of s. 33 (4) 3 and the meaning of the
    phrase: The reason or reasons for the examination.

[21]

Reason is a
    simple but flexible word used in common parlance. It can mean, as the
    application judge found, a justification for some act or decision. It is used
    in this sense in s. 42 (16) of the SABS. That provision requires an insurer who
    has determined that an applicant is not eligible for attendant care benefits
    for expenses incurred more than 260 weeks after the accident to give the
    applicant notice of its determination, with reasons. In this sense it is used
    most often, as in this example, in the plural as in reasons for decision.

[22]

The word
    reason used in the singular can also simply mean an account or explanation of
    something or some state of affairs. It is used in this sense in s. 64 (17) of
    the SABS. That provision allows an alternative to personal service where for
    any reason, it is not possible to personally deliver the document to the person.

[23]

Due to the
    different meanings associated with the word reason, the grammatical and
    ordinary sense of the word is only the starting point. The word must be
    understood in harmony with the scheme of the Act, the object of the Act and the
    intention of the legislature.

(3)

Purposive analysis

[24]

As outlined in section
    B of this decision, the application judges conclusions were driven by what she
    believed best attained the statutory objective of controlling the cost of
    automobile insurance premiums and providing for benefits to accident victims
    regardless of fault. She concluded, at para. 84, that requiring an insurer to
    give a justification for requesting an EUO ensures that insurers do not
    simply request these examinations as a matter of course, increasing the overall
    cost in the system and re-introducing a more adversarial process into what is
    intended to be an efficient, no fault regime.

[25]

I
    see several problems with this reasoning. In part, this reasoning rests on
    inferences unsupported by the record. In part, this reasoning employs
    extraneous considerations. In the sub-sections that follow, I review the object
    of the Act and intention of the legislature, and identify the errors in the
    application judges conclusions in this regard.

(a)

Object of the Act and the intention of the legislature

[26]

There is no
    dispute that the two main overall objectives of the Ontario automobile
    insurance regime are consumer protection and guaranteed compensation of
    victims:
Smith v. Co-Operators General Insurance Co
.
, 2002 SCC
    30, [2002] 2 S.C.R. 129, at para. 11;
Peixeiro v. Haberman
, [1997] 3
    S.C.R. 549, at paras. 22-24.

[27]

The parties are
    agreed that the legislatures specific purpose in introducing the 2003
    legislative changes, which included the EUO, was to protect consumers from
    rising automobile insurance premiums.

[28]

The legislative
    concern of protecting consumers from rising insurance premiums is manifested by
    the passage of the
Automobile Insurance Rate Stability Act, 1996
, S.O.
    1996, c. 21 and the
Automobile Insurance Rate Stabilization Act, 2003
,
    S.O. 2003, c. 9, and its several amendments.

[29]

After the
    government enacted the
Automobile Insurance Rate Stability Act, 1996
,
    regulations introduced what is now s. 33 (1) of the SABS. Section 33 (1) placed
    a positive obligation on a claimant to provide to an insurer any information
    reasonably required to assist in determining the claimants entitlement to
    benefits and, if requested, to furnish a statutory declaration.

[30]

A
    few years later, the government again addressed increasing insurance premiums
    in Bill 198,
Keeping the Promise for a Strong Economy Act, (Budget
    Measures)
, 2002
, S.O. 2002, c. 22. This omnibus statute introduced
    changes to the automobile insurance system that, again, were primarily intended
    to realize cost savings within the industry. Ontario Regulation 281/03, which
    accompanied Bill 198, introduced the EUO in s. 12. This provision took its
    place as s. 33 (2) of the 2003 version of the SABS.

[31]

The parties
    offered different views of why the legislature introduced the EUO. The
    respondents, in their factum, assert the EUO was introduced specifically as a
    mechanism to allow insurers to gather information directly from claimants in
    cases where it [
sic
] suspected fraud and that the intention of the
    legislature as to the use of the EUO was not only specific to reasons of fraud
    but intended to be limited and specific to questionable or suspicious cases
    rather than broad and general in its application under the SABS.

[32]

The appellant
    offers the broader view that the EUO was created as a distinct mechanism to
    achieve the legislatures goals of reducing insurance costs, addressing fraud
    and increasing accountability.

[33]

The Governments White Paper entitled Automobile Insurance
    Affordability Plan for Ontario: Next Steps (Toronto: Ministry of Finance, July
    2003), the debates in the legislature, and FSCO bulletins do not support the
    respondents narrow view. That said, these materials do show that concern about
    fraud and abuse of the system was a significant factor in the legislative
    changes.
[1]
For example,
FSCO Bulletin No. A-10/03 identifies the EUO as one of the
    measures intended to result in the 
[i]ncrease of
    accountability within the automobile insurance system and reduction of
    potential for abuse of the SABS process and occurrence of fraud. This
    statement accurately reflects what was said in the legislature when Bill 198
    was being enacted.

[34]

I accept the appellants view that

the
    legislative objectives in creating the EUO were to reduce insurance costs,
    address fraud and increase accountability within the system.

(b)

No evidence to support the reasoning that EUOs
    might result in increased costs

[35]

The application
    judge was quite properly concerned with the overall cost of the system. As we
    have seen, reducing costs was a key objective of the legislative changes that
    introduced the EUO.

[36]

However, there
    was no basis in the record that enabled the application judge to draw any
    inferences about the overall cost of the system. Certainly, as respondents
    counsel points out, it may be inferred that the hourly rate of a lawyer who
    conducts an EUO will be greater than that of an adjuster who processes a claim.
    On the other hand, conducting an EUO may well result in quicker and more
    efficient determinations of entitlement by eliminating a prolonged course of claims
    handling by an adjuster.

[37]

The more
    important observation is that 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.

[38]

The court is
    ill-equipped to make assessments of this nature, and certainly without evidence
    before it. What can be said is that the overall costs of the system was of
    great concern to the legislature, and that the legislature created the EUO as
    one mechanism in a major initiative to control the overall costs of the regime.
    The court must give effect to this object of the legislature and the evident
    legislative perspective that EUOs are a mechanism to reduce the overall cost of
    the system. Interpreting the provision on the supposition that EUOs increase
    costs, seems to me to run counter to the legislative objective for creating the
    provision to reduce costs.

[39]

The application
    judge erred by reasoning that the use of EUOs might result in an increase in
    the overall costs of the system.

(c)

Analogies to civil litigation are unhelpful in a statutory regime meant
    to replace tort law

[40]

The application
    judge was correct in observing Ontarios automobile insurance system was and is
    intended to be an efficient, no-fault regime and as non-adversarial as
    possible. However, I do not share her apprehension that unless an insurer is
    required to provide a justification for an EUO, the process would become more
    adversarial. I see the opposite as more likely. If an insurer is required to
    provide a justification for an EUO, claimants could contest the validity of the
    proffered justification. An apt illustration is the application that gives rise
    to this appeal, which involves six claimants who contested the validity of the
    insurers reason for requesting an EUO.

[41]

When engaged in statutory
    interpretation the court must remain focused on the legislative intent. The
    SABS uses a non-adversarial tone in setting out a number of mechanisms to
    facilitate an insurer obtaining the information necessary to determine
    entitlement. The SABS provides the insurer may request a disability
    certificate, a medical examination, and so forth. That same non-adversarial word
    request is used in s. 33 (2). The legislative history reviewed above makes
    clear the EUO was created as an additional mechanism to accomplish the
    legislative objective of the quick and expeditious determination of claims and
    of increasing accountability within the system.

[42]

While
    recognizing the SABS process is intended to be non-adversarial, the application
    judge seemed to reason the civil litigation process should be a model for it. As
    noted above, the application judge considered the argument that an examination
    may be hindered by providing specific reasons, especially in cases of fraud.
    However, she rejected this concern because [t]his sort of tactical advantage,
    based on surprise, has been removed from civil litigation.

[43]

I regard the
    application judges analogy to civil litigation to be misplaced. It does not
    matter that a claimant in a tort action would have advance notice of the
    insurers position through a statement of defence before any examination for
    discovery would take place. Analogies to civil litigation are unhelpful in a
    statutory regime meant to replace tort law because the legislative object of
    the automobile insurance regime is to replace the tort resolution of disputes
    arising from automobile accidents with the process it prescribes. That an
    applicant shall submit to an examination under oath on a proper request of the
    insurer is clearly set out in the regulation. Effect must be given to the
    provision as written rather than attempting to make it comport with the civil
    litigation process.

[44]

Requiring
    insurers to provide justification for EUOs is not in keeping with the non-adversarial
    process intended by the legislature.

(4)

The provision in the context of the scheme of the Act and regulations

[45]

A
    large part of the application judges reasoning was not based on textual
    analysis of s. 33 (4) 3 in its entire context. Rather, in large measure, she
    made her conclusions after engaging in a purposive approach. In the modern
    approach to statutory interpretation, a purposive approach is mandated, but it
    must be applied to the text considered in its entire context:
Bell
    ExpressVu Ltd. Partnership v. Rex
,

2002 SCC
    42, [2002] 2 S.C.R. 559, at para. 26.

[46]

In the
    sub-sections below, I engage in a more complete review of s. 33 (4) 3 in the
    context of the scheme of the Act and regulations.

(a)

The SABS generally requires applicants to provide information to their
    insurers to obtain statutory benefits

[47]

Section 268 of the
Insurance Act

says
    that every motor vehicle liability policy provides specified benefits that are
    set out in the SABS. The SABS requires that every motor vehicle liability
    policy provide certain benefits.

[48]

There is a wide range of benefits: income replacement benefits,
    non-earner and caregiver benefits, medical, rehabilitation and attendant care
    benefits, lost educational expenses, expenses of visitors visiting an insured
    person during treatment or recovery, housekeeping and home maintenance, damage
    to clothing, prescription eyewear, dentures, hearing aids, prostheses and other
    medical or dental devices, fees for preparing disability certificates and
    approving treatment plans, death and funeral benefits, and certain optional
    benefits.

[49]

Each of the many
    different benefits available under the SABS could potentially require much
    detailed information for the insurer to determine entitlement to the benefit.
    The administration of some benefits can continue over a substantial period of
    time.
The specific pre-accident and post-accident information
    required in any particular case will depend on the type of benefit claimed and
    may be extensive and ongoing.

[50]

One theme of the procedures for claiming benefits set out in the
    SABS is that the insured person must cooperate with the insurer so that the
    insurer has the information necessary to determine the entitlement. For
    example, s. 36 (2) of the SABS provides that an applicant for income
    replacement, non-earner, or caregiver benefits, or payments for housekeeping or
    home maintenance services, must provide a disability certificate to the
    insurer.

[51]

Similarly, the SABS creates a number of mechanisms that allow the
    insurer to request information and documentation from the applicant. Generally,
    when the insurer makes a request pursuant to one of these mechanisms the
    applicant is obligated to comply. Section 33, itself, contains one such
    mechanism. Section 33 (1) requires the applicant, within 10 days of a request
    by the insurer, to provide information reasonably required to determine
    entitlement and a statutory declaration of the circumstances giving rise to the
    application for the benefit.

[52]

Read as a whole,
    the SABS creates statutory benefits and
requires applicants to
    take steps to facilitate an insurers determination whether they are entitled
    to the benefits claimed or to their continuation. Thus, requiring an insurer to
    provide a justification for its request for an EUO is not in keeping with the
    cooperative approach to information sharing throughout the SABS.

(b)

In other provisions, the SABS qualifies an insurers
    right to make requests of an applicant

[53]

While a theme throughout the SABS is that an applicant for benefits
    must cooperate with insurers to provide information reasonably necessary to
    determine entitlement, the insurers right to obtain information is
    specifically qualified in some provisions.

[54]

Section 44 allows insurers to require an applicant to be examined by
    a health professional or an expert in vocational rehabilitation. The insurer
    must give the applicant notice of the required examination, which under s. 44
    (5) must include the medical and any other reasons for the examination. The granting
    section, which gives the insurer the right to require an examination, however,
    has a built in qualification that the proposed examination must be reasonably
    necessary. Section 44 (1) allows an insurer to require an insured person to be
    examined by a health professional or vocational rehabilitation expert for the
    purposes of assisting an insurer to determine if an insured person is or
    continues to be entitled to a benefit but cannot do so more often than is
    reasonably necessary. This qualification applies to the first such examination
    required by an insurer, according to the case law developed by FSCO
    arbitrators. See, for example,
Augustin
    v. Unifund Assurance Co.
, [2013]
    O.F.S.C.D. No. 211 (F.S.C.O. Arb.),
at
    para. 37.

[55]

Section 37 allows insurers to request an applicant to submit a new
    disability certificate if an insurer wishes to determine if an insured person
    is still entitled to a specified benefit. Like s. 44 (1), the provision that
    grants this right to insurers has the built-in qualification that the insurer
    may not make the request more often than is reasonably necessary. This
    qualification, too, applies to the first request made for new disability
    certificate.

[56]

These provisions
    may be contrasted with s. 33 (2). If the legislative intention were to require
    an insurer to provide a justification for its request, one would expect the
    granting provision to limit the right to circumstances where an examination is
    reasonably required. This is especially so since s. 33 (2) has two built-in
    qualifications: An applicant is not required to submit to more than one EUO,
    and is not required to submit to an EUO during a period when physically,
    mentally or psychologically incapable of being examined.

[57]

It is
    significant that other provisions require requests the insurer makes to be
    reasonably necessary, but s. 33 (2) does not.

[58]

The mechanism
    provided by s. 33 (2) of the SABS seems akin to the right of an insurer to
    examine an insured person under oath that is provided by O. Reg 777/93. The
    regulation sets out statutory conditions for the purpose of s. 234 of the
Insurance
    Act
that are included in all contracts of automobile insurance. Section 6
    (4) of the regulation provides that the insured shall submit to examination
    under oath. While there are some textual differences, s. 33 (2) also provides
    an applicant shall submit to an examination under oath.

(c)

The notice requirement is set out in a list of other procedural requirements

[59]

I find it
    significant that the requirement to provide notice of the reason or reasons
    for the examination is included in s. 33 (4) and is not included as one of the
    qualifications in s. 33 (2). The other requirements set out in s. 33 (4) are
    what may be described as procedural in nature. The insurer must make reasonable
    efforts to schedule the EUO for a time and at a location that are convenient
    for the applicant. Also, the insurer must provide reasonable advance notice of
    the date and location of the examination, that the applicant is entitled to be
    represented at the EUO, and that the scope of the EUO will be limited to
    matters relevant to the applicants entitlement to benefits. That notice of the
    reason or reasons for the examination is embedded in s. 33 (4) with these
    other matters may be taken as some indication they are of a similar nature.

[60]

Section 33 (4),
    taken as a whole, is not structured to qualify the mandatory language in s. 33
    (2). This implies the reason or reasons an insurer must include in its notice
    are of a procedural nature.

[61]

This does not
    mean the notice provided may be
pro forma

and that an applicant
    cannot contest the adequacy of the notice. An applicant can contest the
    adequacy of the notice in the same way as he or she can contest the convenience
    of the date and location of the examination. However, the room for dispute is
    much reduced from what would be possible if the insurer were required to
    provide a justification for its request.

(d)

There is no redundancy between the requirement for reasons under s. 33
    (4) 3 and the scope of examination under s. 33 (4) 4

[62]

The application
    judge was also concerned that unless an insurer were required to provide the actual
    reason or justification for requesting an EUO, there was the potential for
    redundancy between the reason for the examination addressed under s. 33 (4) 3
    and the scope of the examination under s. 33 (4) 4. I do not share the concern.
    The reasons for the EUO provided under s. 33 (4) 3 may well indicate what is
    within the intended scope of the examination. Section 33 (4) 4, on the other
    hand, bears on what must be excluded from the scope of the examination.

(e)

The scheme already addresses potential abuse of EUOs

[63]

Another reason
    the application judge offered for requiring insurers to provide a justification
    for requesting EUOs is to prevent them from abusing the system by requesting needless
    EUOs as a matter of course. There was no basis in the record to support the
    application judges premise. This was merely a submission by respondents
    counsel. Before us respondents counsel submitted: Today, it is commonly
    discussed and reluctantly accepted by the Plaintiffs bar that blanket EUO
    requests without reason have become standard practice.

[64]

The
    unsupported premise should not have played a role in arriving at the proper
    meaning of reason. When looking at the scheme of the Act and regulations as a
    whole, it is clear that a dissatisfied applicant can allege the insurer lacks
    good faith in processing a claim in a manner already prescribed by the
    legislature.

[65]

The insurers duty to act in good faith applies throughout its
    processing of an application for benefits, and the practices of an insurer are
    subject to the general supervision by the Superintendent:
Financial
    Services Commission of Ontario Act
, 1997
, S.O. 1997, c. 28, s. 5(2)(c). Among the Superintendents broad
    powers in respect of the
Insurance Act
, is the
    power to investigate and sanction Deceptive Acts and Practices (s. 440 of the
Insurance Act
).

[66]

Deceptive acts and practices are proscribed by s. 439 of the
Insurance
    Act
. The list of Deceptive Acts and Practices is set out
    in O. Reg. 7/00, which is entitled
Unfair or Deceptive Acts or
    Practices
. Included in the list is Any examination or
    purported examination under oath that does not comply with the requirements
    under the Act or the regulations. Therefore, this is the legislated route to
    address non-compliant EUOs.

[67]

I might add that the vulnerability of an applicant to a needless and
    abusive EUO is truncated by the legislation. The only possible consequence to
    an applicant who fails to attend an EUO is a suspension of benefits for the
    period of non-compliance (s. 33 (6) of the SABS). The applicant could still
    claim the benefits at arbitration before a FSCO arbitrator at the time these
    disputes arose, or now before the License Appeals Tribunal. See FSCO decisions:
Salah v. State Farm Mutual Automobile Insurance Co
.
,
2005
    CarswellOnt 8338 (F.S.C.O. Arb.)
, and
Balanki v.
    Zurich Insurance Co
.
,
2005 CarswellOnt 2670 (F.S.C.O. Arb.)
.

[68]

I should not be taken to diminish the plight of an applicant whose
    benefits are suspended, but consequences of noncompliance with s. 33 (2) are
    much less onerous than of noncompliance with s. 44 of the SABS, for example. Recall
    that under this provision, an insurer may require an insured person undergo an
    examination by regulated health professionals or vocational rehabilitation
    experts. Section 55 prevents an insured person from proceeding to arbitration
    if they have not complied with an insurers request that they undergo an
    independent medical or vocational rehabilitation examination per s. 44.

[69]

I point this out merely to show an applicant can refuse to attend an
    EUO they regard as needless and abusive and still proceed to arbitration.

[70]

In summary on this point, the scheme already addresses potential
    abuse of EUOs by insurers. Reading in an additional requirement to provide
    notice of justification is not necessary to promote fairness in the scheme.

(f)

FSCO has not interpreted the provision to
    require notice of a justification for an EUO

[71]

As a final note,
    the application judge considered but was not persuaded by the reasoning in
Kivell
    v. State Farm Mutual Automobile Insurance Co
.
, [2016] O.F.S.C.D.
    No. 119 (F.S.C.O. Arb.). In
Kivell
, Arbitrator Mongeon found that s.
    33 (4) 3 did not provide a substantive right to be provided with the reasons as
    to why the insurer wishes to conduct an EUO. He stated that: The reason or
    reasons do not have to be detailed, they merely have to give the Applicant
    notice about the general type of questions that will be asked.

[72]

At the time this
    application was brought, the court and a FSCO arbitrator had coordinate, or
    shared, jurisdiction to determine disputes of this nature. A
n
    insured person could either refer the dispute over claimed benefits for
    mediation and arbitration by FSCO, or could commence an action in the courts under
    s. 281 of the
Insurance Act
.
The court
    need not defer to a tribunal in interpreting the relevant legislation when
    jurisdiction over the legislation is shared:
Rogers Communications
, 2012 SCC 35.
That said, when exercising
    coordinate jurisdiction, a court should proceed with a full appreciation of the
    expertise of the tribunal, especially where the issues to be determined are
    confined to matters of process under the tribunals home statute. The tribunal
    will have institutional expertise concerning such issues and may have developed
    a body of case law that will be of considerable assistance to the court. In
    this case, the application judge took no note of the tribunals expertise in
    the process for determining disputed claims under the SABs.

[73]

The coordinate jurisdiction of the court and the FSCO Tribunal no
    longer exists. Bill 15,
Fighting Fraud and Reducing Automobile
    Insurance Rates Act, 2014
,
S.O. 2014, c. 9,
amended the
Insurance Act
. The former
    s. 281 has been repealed and the present s. 280 (3), which came into force on
    April 1, 2016,
now provides that no person may bring a proceeding in any
    court with respect to the resolution of disputes in respect of an insured
    persons entitlement to statutory accident benefits or in respect of the amount
    of statutory benefits to which an insured person is entitled. Since April 1,
    2016, the License Appeal Tribunal has the exclusive jurisdiction to resolve
    such disputes, subject to appeal or judicial review in the courts. In those
    appeals or judicial reviews the courts will accord the License Appeal Tribunal
    due deference.

[74]

In any event, I regard
    Arbitrator Mongeons interpretation of s. 33 (4) 3 in
Kivell

as
    persuasive. It is consistent with the statutory interpretation analysis that I
    have undertaken in these reasons.

(5)

Conclusion

[75]

For these reasons, I conclude s. 33 (4) 3 does not require an
    insurer to include in its notice of an EUO a justification for its decision to
    request an EUO. A general statement of the purpose of the EUO that gives the
    applicant notice of the general type of questions that will be asked is
    sufficient.


E.

Application to the Present Appeals and Disposition

(1)

Renelyn Agaloos

[76]

Renelyn Agaloos applied for accident benefits from Aviva on May 19,
    2015, arising from an accident on April 25, 2015. A disability certificate (Form
    OCF-3), dated June 12, 2015 was submitted on her behalf stipulating she met the
    disability test for income replacement benefits, non-earner benefits, and
    housekeeping and home maintenance benefits, with an anticipated recovery period
    of more than 12 weeks. Ms. Agaloos did not respond to Avivas request for
    information pursuant to s. 33 (1) of the SABS. Counsel for Aviva wrote to
    counsel for Ms. Agaloos seeking to arrange an EUO. Eventually, Ms. Agaloos provided
    the information Aviva had requested under s. 33 (1). A further course of
    correspondence followed that culminated with Aviva sending a formal notice of
    an EUO on January 7, 2016, informing counsel for Ms. Agaloos that it had
    unilaterally set the EUO for January 27. In part, Aviva stated:

An examination under oath is required in order
    to assist [Aviva], your insurer, in determining entitlement to specified
    benefits, medical and rehabilitation benefits, attendant care benefits,
    housekeeping and home maintenance expenses and costs of examination arising
    from the loss of April 25, 2015. The scope of the examination will be limited
    to matters that are relevant to your entitlement to said benefits.

[77]

Counsel for Ms. Agaloos took the position that the EUO was not
    reasonable and/or necessary. Ms. Agaloos did not attend the examination.

[78]

In my view, the notice satisfied the requirements of s. 33 (4) 3. I
    would issue an order that Ms. Agaloos attend an EUO.

(2)

Fran McKeown and Roland Spencer

[79]

Fran McKeown and Roland Spencer were injured in a motor vehicle
    accident on January 13, 2015, and separately applied for accident benefits on
    February 17, 2015. Aviva sought to arrange an EUO for each of them and their
    solicitor resisted on the basis that they had not been provided with a proper
    reason for the EUOs. The exchange culminated with Aviva providing a formal
    Notice of Examination on November 20, 2015 that stated that the purpose of the
    EUO was to:

evaluate your potential entitlement to
    accident benefits, and specifically your application for Non-Earner Benefits,
    Attendant Care Benefits, Medical Expenses, and the Cost of the Examinations
    including In-Home Assessment and Chronic Pain Assessment.

[80]

The respondents maintained their position that Aviva had not
    provided an adequate reason for the EUO and failed to attend the EUO.

[81]

In my view, the notice satisfied the requirements of s. 33 (4) 3. I
    would issue an order that Fran McKeown and Roland Spencer attend an EUO.

F.

Costs

[82]

The appellants costs of the appeal are fixed in the amount of
    $20,000.00, inclusive of disbursements and applicable taxes. The appellant is
    also entitled to costs of the application, however, as the appeal involved only
    three of the respondents below, I would fix those costs of the application in
    the amount of $5000.00, all inclusive.

Released: SEP July 4, 2017

R.G. Juriansz J.A.

I agree. S.E. Pepall J.A.

I agree. B.W. Miller J.A.





[1]
The legislatures continuing concern about the cost of automobile insurance and
    fraud within the system is indicated by the passage in 2014 of Bill 15,
Fighting
    Fraud and Reducing Automobile Insurance Rates Act, 2014
, S.O. 2014, c. 9.


