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January 27, 2010

Painful Symptoms Alone Insufficient to Claim Non-earner Benefits

Mangallon v. T.T.C. Insurance Company Ltd., FSCO A07-001813, December 18, 2009

A FSCO decision recently confirmed the stringent test for entitlement to non-earner benefits.

Ms. Mangallon was injured on October 27, 2005 when the rear doors of a T.T.C. bus suddenly closed on her as she attempted to board. She applied for a non-earner benefit, which T.T.C. refused to pay. T.T.C. argued that the incident was a minor one and did not result in an impairment that affected the claimant’s ability to function to a degree that would qualify her for a non-earner benefit. T.T.C. took the position that Ms. Mangallon’s post-accident headaches, dizziness, whole body pain and depression pre-dated the accident and were due to long standing and serious heart disease, diabetes and depression, which were not related to the accident.

The arbitrator agreed with T.T.C. Arbitrator Sapin held that the test for entitlement to a non-earner benefit is stringent. An impairment sustained in the accident must be one that continuously prevents the insured from engaging in substantially all of the activities in which she engaged before the accident. Arbitrator Sapin quoted from the Ontario Court of Appeal decision in Heath v. Economical stating that where pain is the primary factor, “the question is not whether the insured can physically do these activities, but whether the degree of pain experienced, either at the time, or subsequent to the activity, is such that the individual is practically prevented from engaging in those activities.” Arbitrator Sapin further held that accident related pain, suffering or disability that interferes with daily living or makes it difficult may not be sufficient to qualify a person for a non-earner benefit. This is the case even though such pain might entitle the person to damages for pain and suffering in a tort action. Arbitrator Sapin was not convinced that Ms. Mangallon met the test for non-earner benefits.

By confirming the stringent test for entitlement for non-earner benefits, this decision may serve to limit the number of claims for non-earner benefits, especially in cases where the claimant has substantial pre-accident history and causation of his or her post-accident symptoms is doubtful.

January 20, 2010

Disputes Between Insurers – When does the notice period begin to run?

ING Insurance Company of Canada v. State Farm Insurance Company, [2009] 97 O.R. (3d) 291 (S.C.J.)

This case involved a dispute between insurers as to who was responsible for paying the claimant’s accident benefits. The claimant did not have insurance of her own, but her father had a policy with ING to which she would be entitled if she was “principally dependant” on her father at the time of the accident. State Farm was the at fault party’s insurer. ING initially paid some minor expenses prior to receipt of a completed OCF-1. After receiving the completed application for benefits, ING concluded that the claimant was not principally dependant and sent a Notice to Applicant of Dispute Between Insurers to the claimant and to State Farm within 90 days of the receipt of the OCF-1. Regulation 283/95 provides that the Notice must be sent within 90 days of a “completed application” for benefits. The issue in this case was the meaning of “completed application”. State Farm argued the notice period began earlier than the OCF-1 given ING’s decision to pay benefits; ING argued the applicable date was when the OCF-1 was received.

The court held that the plain language of the Regulation means that the 90 days begin to run when the OCF-1 is received. ING’s decision to pay benefits was the proper thing to do and the purpose of the Regulation is to encourage good claims handling, not penalize insurers.

The interpretation used by the court in this case provides certainty to the 90 day limitation period for serving notice. If the 90 day notice period begins to run at some point prior to the OCF-1 being received, the limitation becomes a more nebulous item and could encourage insurers to avoid making payments until priority disputes are settled. This could disadvantage claimants, contrary to the intentions of the accident benefits scheme. This decision seems to be a sensible way to provide certainty to insurers.

January 13, 2010

Summary Judgment Not Available in Small Claims Court

Caprio v. Caprio, [2009] 97 O.R. (3d) 312 (S.C.J.)

This Small Claims action involved a dispute between family members over whether a grandmother who gave money to her grandson before she died was giving the money as a loan or a gift. The grandson brought a summary judgment motion and sought to have the action dismissed based on affidavit evidence. Deputy Justice Bale refused to grant summary judgment, holding that summary judgment is not available in Small Claims Court. Bale D. J. refused to follow prior decisions where summary judgment had been permitted using section 1.03(2) of the Small Claims Court Rules, which allows a court to refer to the Rules of Civil Procedure where matters are not provided for in the Small Claims rules. The court held that reference to the Rules of Civil Procedure is for minor matters and cannot be used to create a new and substantial procedure in Small Claims, such as summary judgment.

There are cases going both ways dealing with the issue of whether summary judgment is available in Small Claims Court. Given the new increased monetary jurisdiction of Small Claims Court of $25,000.00, this decision has particular importance. There could now be cases that are within the Small Claims Court jurisdiction that were formally within the Simplified Procedure. Cases that would have been in Simplified Rules would have been susceptible to a summary judgment motion; however, if summary judgment is not available in Small Claims Court, the case must now proceed through to trial. There is no mechanism for an earlier resolution of the claim. It may be that the Civil Rules committee should consider whether to clear up this issue by explicitly providing for the existence of summary judgment or prohibiting its use in Small Claims.

January 11, 2010

Caps on General Damages Upheld

Two recent decisions have upheld the cap on general damages in Alberta and Nova Scotia. In Hartling v. Nova Scotia, the Nova Scotia Court of Appeal upheld Nova Scotia’s $2,500.00 cap on “minor injuries”. In Morrow v. Zhang, the Supreme Court of Canada dismissed a leave application from the Alberta Court of Appeal’s decision which upheld Alberta’s Minor Injury Regulation which imposes a $4,000.00 cap on non-pecuniary damages for minor injuries. The Alberta legislation defines minor injuries as sprains, strains and WAD I or II injuries. In both cases, the cap was challenged as violating the Canadian Charter of Rights and Freedoms, alleging discrimination under s. 15 on the basis of physical disability, mental disability and gender. The Courts held that the caps were not discriminatory.

Although these decisions will likely be applauded by those defending claims, they raise interesting questions. Since the caps only apply to non-pecuniary general damages, will courts increase other heads of damages in order to compensate? For example, in Morrow, the trial judge would have assessed the plaintiff’s general damages at $20,000.00 and $15,000.00. The cap would reduce those to $4,000.00, but in another circumstance, would a court increase the amount of pecuniary damages to compensate? One also has to wonder whether physicians treating patients injured in automobile accidents who are aware of the cap on minor injuries might tend to describe them in different ways so as to avoid being caught by the definition. Both the Alberta and Nova Scotia courts discussed the history of the caps and the fact that they were attempts by the legislatures to control escalating automobile insurance costs. The courts seem to be sending a message that they will give effect to the legislature’s intentions with these decisions.

January 6, 2010

Transition Issues with the new Rules

Thanks to a reader of our blog, Ted Key, for bringing this case to our attention: Onex Corporation et al. v. American Home Assurance et al., 2009 CanLII 72052 (Ont. S.C.J.).

This is the first decision we are aware of that addresses the inevitable transition issues that will arise from the new Rules of Civil Procedure that came into effect on January 1, 2010.

The plaintiffs, in an excess insurance case, filed a motion for summary judgment. The defendants then filed for directions to clarify and confirm that the current rules will apply when the summary judgment motion is argued.

The question decided is this: If a motion for summary judgment under rule 20 is filed in 2009 but heard in 2010, after the rule changes take effect, should the matter be heard under the old rule or the new rule?

The judge concluded that the motion should be heard under the new rule.

I'll leave you to read the decision for the details but it includes a helpful analysis of the current rule and lack of transition provisions.

Paragraph 8 of the Endorsement indicates: "In my view, if the legislature had intended that the old rule 20 would continue to apply to summary judgment motions filed before 2010 or that a general “transitional provision” was required, it could have said so. It chose not to do this. It follows, therefore, that the new summary judgment procedure is intended to take immediate effect as of January 1, 2010 and apply to all rule 20 matters before the court, whenever the motion was filed."