CANADIAN CASES on the LAW of INSURANCE Fifth Series/Cinqui`Eme S´Erie Recueil De Jurisprudence En Droit Des Assurances

CANADIAN CASES ON THE LAW OF INSURANCE Fifth Series/Cinqui`eme s´erie Recueil de jurisprudence en droit des assurances

VOLUME 49 (Cited 49 C.C.L.I. (5th))

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[Indexed as: Felix v. Insurance Corp. of British Columbia] Marnetta Lynn Felix, Appellant (Plaintiff) and Insurance Corporation of British Columbia, Respondent (Defendant) British Columbia Court of Appeal Docket: Vancouver CA41588 2015 BCCA 394 Saunders, Bennett, Stromberg-Stein JJ.A. Heard: May 25, 2015 Judgment: September 23, 2015 Insurance –––– Automobile insurance — Extent of risk — Terms of art — “Ownership, use or operation” –––– Plaintiff was driving vehicle with boyfriend in front passenger seat — Boyfriend grabbed steering wheel, plaintiff lost control and vehicle left highway and came to rest overturned — Boyfriend was killed in accident — Plaintiff suffered significant injuries — Plaintiff brought action against boyfriend’s estate and was awarded damages of $791,950 as well as costs in amount of $71,292.63 — Plaintiff brought action to recover from insurer total amount of $863,242.63, plus post-judgment interest — Action was dismissed — Plaintiff appealed — Appeal allowed — Given legislative history, scheme, factual context and jurisprudence, passenger was insured under Insur- ance (Vehicle) Act — Interpretation was consistent with legislative intent and other provisions of Act — Act indemnified insured for third-party liability when injury related to insured’s “use” of vehicle — “Use” was general enough to include passenger passively using motor vehicle for transportation — Clear and unbroken chain of causation existed from passenger’s “use” of vehicle to plaintiff’s injuries. Cases considered by Bennett J.A.: Amos v. Insurance Corp. of British Columbia (1995), [1995] 9 W.W.R. 305, 127 D.L.R. (4th) 618, 10 B.C.L.R. (3d) 1, [1995] I.L.R. 1-3232, 186 N.R. 150, 31 C.C.L.I. (2d) 1, 63 B.C.A.C. 1, 104 W.A.C. 1, 13 M.V.R. (3d) 302, 2 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[1995] 3 S.C.R. 405, 1995 CarswellBC 424, 1995 CarswellBC 1142, [1995] S.C.J. No. 74, EYB 1995-67067 (S.C.C.) — considered Cella (Litigation Guardian of) v. McLean (1997), 101 O.A.C. 76, 148 D.L.R. (4th) 514, 1997 CarswellOnt 2142, [1997] I.L.R. I-3465, 44 C.C.L.I. (2d) 214, 34 O.R. (3d) 327, 29 M.V.R. (3d) 292, [1997] O.J. No. 2439 (Ont. C.A.) — referred to Gravel v. St. Leonard (City) (1977), [1978] 1 S.C.R. 660, 17 N.R. 486, 1977 CarswellQue 51, 1977 CarswellQue 51F (S.C.C.) — considered Herbison v. Lumbermens Mutual Casualty Co. (2007), 2007 SCC 47, 2007 CarswellOnt 6628, 2007 CarswellOnt 6629, 53 C.C.L.I. (4th) 31, 52 M.V.R. (5th) 35, (sub nom. Lumbermens Mutual Casualty Co. v. Herbison) [2007] I.L.R. I-4651, 87 O.R. (3d) 399 (note), 230 O.A.C. 386, 368 N.R. 292, 286 D.L.R. (4th) 592, (sub nom. Lumbermens Mutual Casualty Co. v. Herbison) [2007] 3 S.C.R. 393, [2007] R.R.A. 823, [2007] S.C.J. No. 47 (S.C.C.) — considered Milligan v. Dryburgh (1985), [1985] I.L.R. 1-1960, 1985 CarswellOnt 999, [1985] O.J. No. 527 (Ont. H.C.) — referred to Niedermeyer v. Charlton (2014), 2014 BCCA 165, 2014 CarswellBC 1136, [2014] B.C.J. No. 763, 57 B.C.L.R. (5th) 71, [2014] I.L.R. I-5600, [2014] 7 W.W.R. 753, 64 M.V.R. (6th) 183, 374 D.L.R. (4th) 79, 355 B.C.A.C. 136, 607 W.A.C. 136, 11 C.C.L.T. (4th) 60 (B.C. C.A.) — followed R. v. Canadian Pacific Ltd. (1995), 41 C.R. (4th) 147, 17 C.E.L.R. (N.S.) 129, 99 C.C.C. (3d) 97, 125 D.L.R. (4th) 385, (sub nom. Ontario v. Canadian Pacific Ltd.) 183 N.R. 325, (sub nom. Ontario v. Canadian Pacific Ltd.) 24 O.R. (3d) 454 (note), (sub nom. Ontario v. Canadian Pacific Ltd.) 82 O.A.C. 243, (sub nom. Ontario v. Canadian Pacific Ltd.) 30 C.R.R. (2d) 252, (sub nom. Ontario v. Canadian Pacific Ltd.) [1995] 2 S.C.R. 1031, 1995 Cars- wellOnt 968, 1995 CarswellOnt 532, (sub nom. Ontario v. Canadian Pacific Ltd.) [1995] S.C.J. No. 62, EYB 1995-67436 (S.C.C.) — followed Reliance Petroleum Ltd. v. Stevenson (1956), [1956] S.C.R. 936, [1958] I.L.R. 1-238, (sub nom. Stevenson v. Reliance Petroleum Ltd.) 5 D.L.R. (2d) 673, 1956 CarswellOnt 83, [1956] S.C.J. No. 68, [1956] I.L.R. 127 (S.C.C.) — followed Rizzo & Rizzo Shoes Ltd., Re (1998), 1998 CarswellOnt 1, 1998 CarswellOnt 2, 154 D.L.R. (4th) 193, 36 O.R. (3d) 418 (headnote only), (sub nom. Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re) 221 N.R. 241, (sub nom. Adrien v. Ontario Ministry of Labour) 98 C.L.L.C. 210-006, 50 C.B.R. (3d) 163, [1998] S.C.J. No. 2, (sub nom. Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re) 106 O.A.C. 1, [1998] 1 S.C.R. 27, 33 C.C.E.L. (2d) 173, 36 O.R. (3d) 418 (note), 36 O.R. (3d) 418 (S.C.C.) — followed Rossy c. Westmount (Ville) (2012), 2012 SCC 30, 2012 CarswellQue 5524, 2012 CarswellQue 5525, (sub nom. Rossy v. Westmount (Ville de)) 346 D.L.R. (4th) 1, [2012] I.L.R. I-5301, 31 M.V.R. (6th) 1, (sub nom. Rossy v. Felix v. Insurance Corp. of British Columbia 3

Westmount (City)) 431 N.R. 43, 95 C.C.L.T. (3d) 1, 10 C.C.L.I. (5th) 171, (sub nom. Westmount (City) v. Rossy) [2012] 2 S.C.R. 136 (S.C.C.) — considered Vytlingam (Litigation Guardian of) v. Farmer (2007), 2007 SCC 46, 2007 Cars- wellOnt 6626, 2007 CarswellOnt 6627, 53 C.C.L.I. (4th) 1, 52 M.V.R. (5th) 1, (sub nom. Citadel General Assurance Co. v. Vytlingam) [2007] I.L.R. I- 4645, 87 O.R. (3d) 400 (note), (sub nom. Vytlingam v. Farmer) 230 O.A.C. 364, (sub nom. Vytlingam v. Farmer) 368 N.R. 251, 286 D.L.R. (4th) 577, (sub nom. Citadel General Assurance Co. v. Vytlingam) [2007] 3 S.C.R. 373, [2007] S.C.J. No. 46, [2007] R.R.A. 825 (S.C.C.) — considered Watts v. Centennial Insurance Co. (1967), 62 W.W.R. 175, [1969] I.L.R. 1-220, 65 D.L.R. (2d) 529, 1967 CarswellBC 133 (B.C. S.C.) — referred to Statutes considered: Insurance (Motor Vehicle) Act, R.S.B.C. 1979, c. 204 s. 79 — considered Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 Generally — referred to s. 21 — considered Interpretation Act, R.S.B.C. 1996, c. 238 Generally — referred to s. 8 — considered Regulations considered: Automobile Insurance Act, S.B.C. 1973, c. 6 Regulation 1, B.C. Reg. 428/73 Generally — referred to Pt. VI — referred to s. 1.02(75) — considered s. 6.01 — considered Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 Insurance (Vehicle) Regulation, B.C. Reg. 447/83 s. 63 [am. B.C. Reg. 380/2000] — considered s. 63 “insured” (a) — considered s. 63 “insured” (b) — considered s. 64 — considered s. 64(a) — considered s. 66 — considered s. 66(a) — considered

APPEAL by plaintiff from decision reported at Felix v. Insurance Corp. of British Columbia (2014), 2014 BCSC 166, 2014 CarswellBC 261, [2014] I.L.R. I-5558, 30 C.C.L.I. (5th) 270, [2014] 8 W.W.R. 563, 63 M.V.R. (6th) 239, 59 4 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

B.C.L.R. (5th) 203, [2014] B.C.J. No. 182 (B.C. S.C.), which dismissed action to recover from insurer total amount of $863,242.63 plus post-judgment interest.

D. MacAdams, Q.C., M.J. Thornton, for Appellant G.P. Brown, Q.C., for Respondent

Bennett J.A.:

1 The appellant, Marnetta Felix, was severely injured in a motor vehicle accident in 2006. After receiving a judgment against the estate of Kevin Hearne, she brought an action for indemnity against the Insurance Corporation of British Columbia (“ICBC”). The trial judge dismissed the claim for indemnity indexed at 2014 BCSC 166 (B.C. S.C.). Ms. Felix has appealed from that decision. This appeal turns on the statutory interpretation of several provisions of the former Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 [Act].

Background 2 On July 8, 2006, Ms. Felix was at a soccer game with her boyfriend, Kevin Hearne. At the conclusion of the game, Mr. Hearne became intoxi- cated, and argumentative. Ms. Felix decided that they should leave, and took the driver’s seat of her automobile. Mr. Hearne got into the front passenger seat. 3 They left the soccer grounds and drove towards Highway 1. Twice en route, Mr. Hearne grabbed the steering wheel, but immediately let go. These actions did not affect the direction of movement of the vehicle, and Ms. Felix thought that he was trying to scare her. 4 They entered Highway 1, heading east towards Chilliwack. Suddenly, Mr. Hearne grabbed the steering wheel again, but this time did not let go. The vehicle crashed because of his action. Mr. Hearne died in the crash. Ms. Felix was seriously injured. 5 Ms. Felix sued Mr. Hearne’s estate, and although notified of the action, ICBC did not participate. Ms. Felix received a judgment for damages in the sum of $791,950 plus $71,292.63 in assessed costs. 6 Ms. Felix then brought the within action against ICBC to recover the judgment plus interest. She sought indemnity for the Estate of Kevin Hearne from ICBC for her loss. Felix v. Insurance Corp. of British Columbia Bennett J.A. 5

7 The applicable provisions of the former Act are sections 63, 64 and 66 of the Revised Regulation (1984), B.C. Reg. 447/83 [Revised Regula- tion]: 63 In this Part, “insured” means (a) a person named as an owner in an owner’s certificate, (b) an individual who, with the consent of the owner or while a member of the owner’s household, uses or operates the vehicle described in the owner’s certificate, ... 64 Subject to section 67, the corporation shall indemnify an insured for liability imposed on the insured by law for injury or death of another or loss or damage to property of another that (a) arises out of the use or operation by the insured of a vehicle described in an owner’s certificate ...... 66 Indemnity under this Part is extended to a passenger in a vehicle described in an owner’s certificate who, by operating any part of the vehicle while the vehicle is being operated by an insured, causes (a) injury or death to a person who is not an occupant of the vehicle ... 8 The issues before the trial judge were whether Mr. Hearne was an “insured” under Ms. Felix’s policy, and if so, whether his “use” of the vehicle caused her injuries. 9 The trial judge examined the applicable provisions of the Act, and ss. 63, 64 and 66 of the Revised Regulation, set out above. He concluded that Mr. Hearne’s act of grabbing the steering wheel did not constitute operation of the vehicle within the meaning of s. 64. He found that Mr. Hearne did not intend to take control or intend to aim the vehicle in any particular direction. He found that the action “interfered with the operation of the vehicle by Ms. Felix, but was not operation in itself” (para. 49). 10 He concluded that, if he were to consider only ss. 63 and 64, he would find “that Mr. Hearne, as a passenger, was making use of the vehicle, and was doing so with the consent of the owner, Ms. Felix” (para. 50). He found that the term “use” in the sections, was general enough to “cover the passive use of a vehicle by a passenger as a means of convey- ance”, and that Mr. Hearn’s conduct fell within the scope of the sections. He also found support for this conclusion in the argument that not finding “use” in these circumstances would have a chilling effect on the 6 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

“designated driver”, the person who remains sober and drives the drunks, reducing accidents caused by drinking and driving (para. 54). 11 He concluded that the causation test was met, in that Mr. Hearne’s negligent conduct was directly related to his “use” of the motor vehicle as a passenger (paras. 51-52). 12 The trial judge, however, found that he could not consider ss. 63 and 64 without considering s. 66. He found that his conclusion, as noted above, would be “incompatible” with s. 66, which extends indemnification to passengers in a vehicle who cause injury or death to a person not occupying the vehicle (para. 56). He concluded that his interpretation would render s. 66 redundant, and therefore in conflict with the accepted terms of statutory interpretation. As a result, he ultimately concluded that Mr. Hearne did not “use” the vehicle within the meaning of s. 64, and dismissed the action.

Position of the parties on appeal 13 Ms. Felix submits that the trial judge did not properly apply the principles of statutory interpretation. She submits that an overview of the history of the legislative changes, the purpose of a comprehensive, compulsory insurance scheme and the proper application of the principles of statutory interpretation must lead to a finding of indemnity on the part of ICBC. 14 While supporting the outcome, ICBC does not agree with the reasoning or the fact-finding made by the trial judge. ICBC submits that the trial judge’s finding that Mr. Hearne could “use” the vehicle by passively riding in it (para. 50) is an error in law; and the finding that Mr. Hearne’s interference with the operation of Ms. Felix’s vehicle cannot be sepa- rated from the fact he was a passenger (paras. 51-52), is an error in law.

Issues on appeal 15 The parties frame the issues on appeal somewhat differently. Ms. Fe- lix states three errors: that the trial judge erred in finding that Mr. Hearne was not engaged in the “use” of the vehicle within the meaning of s. 64; that the trial judge erred in “overlooking the harmonious contributions” of ss. 63 and 64 and the separate, but congruent source of indemnity for passengers provided by s. 66; and erred in his application of the principles of statutory interpretation. 16 ICBC framed the issues in this way: whether an individual qualifies as an insured under s. 64(a) of the Revised Regulation (1984) under the Felix v. Insurance Corp. of British Columbia Bennett J.A. 7

Insurance (Motor Vehicle) Act merely by riding as a passenger in an insured vehicle; and whether s. 64 provides indemnity against third party legal liability to a passenger in a motor vehicle who deliberately inter- feres with the operation of the vehicle by grabbing the steering wheel without consent and without an intention to take control of the vehicle or aim the vehicle in any particular direction or alter its course of travel? 17 In my view, the issues should be framed as: i) does a passenger in a motor vehicle “use” the vehicle as the word is defined in the Insurance (Motor Vehicle) Act, when travelling from point A to point B?; and if so, ii) in the context of the facts of this case, is there some nexus or causal relationship between Ms. Felix’s injuries and the use of her vehicle by Mr. Hearne?

Discussion i) Does a passenger in a motor vehicle “use” the vehicle as the word is defined in the Insurance (Motor Vehicle) Act, when travelling from point A to point B? 18 The claim for indemnity is made pursuant to s. 21 of the former Act: 21 (1) Even though he or she does not have a contractual relationship with the corporation, a person having a claim against an insured for which indemnity is provided by an owner’s certificate under a plan or part of a plan is entitled, on recovering judgment against the insured or settlement with the corporation, to have the insurance money payable under a plan or part of a plan applied toward his or her judgment or the settlement and toward any other judgments or claims against the insured covered by the indemnity; and he or she may, if a settlement is not made, on behalf of himself or herself and all persons having judgments or claims, maintain an action against the corporation to have the insurance money so applied. 19 Sections 63, 64 and 66 of the Revised Regulations are set out above. 20 As noted in Gravel v. St. Leonard (City) (1977), [1978] 1 S.C.R. 660 (S.C.C.), at 667, “prior enactments may throw some light on the intention of the legislature in repealing, amending, replacing or adding to [a statute].” The history and evolution of the development of the relevant legislation is set out below. 21 Effective January 1, 1974, Regulation No. 1 Pursuant to the Automo- bile Insurance Act was enacted providing for a universal, compulsory automobile insurance program. Part VI of Regulation No. 1 dealt with 8 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

third-party legal liability. It included a definition of “insured”: “every person who operates or drives...with...consent”. The regulation also included a general indemnity provision, s. 6.01, providing indemnity to an “insured”. Regulation No. 1 Pursuant to the Automobile Insurance Act, B.C. Reg. 428/73, ss. 1.02(75) and 6.01. 22 Effective March 1, 1975, the definition of insured was amended from “every person who operates or drives... with...consent” to “a [licensed] driver... who operates or drives... with...consent”. Regulation No. 11 Pur- suant to the Automobile Insurance Act, B.C. Reg. 818/74, s. 10 (amending s. 102(75) of the Act). 23 Effective January 1, 1983, Regulation No. 32 provided for extension of indemnity to a passenger on the following terms: 6.05a In addition to the indemnity afforded an insured by this Part, indemnity is also afforded to a passenger in an insured vehicle who, by operating any part of the vehicle while the vehicle is being used or operated by an insured, causes loss or damage to (i) a person who is not an occupant of the vehicle, or (ii) property that is not (1) carried in or on the vehicle, or (2) in the care, custody or control of the insured. Regulation No. 32 Pursuant to the Insurance (Motor Vehicle) Act, B.C. Reg. 543/82, s. 16. 24 Effective January 1, 1984, the definition of the insured was amended from “a [licensed] driver... who operates or drives... with...consent” to “an individual who with...consent... operates the vehicle”. Revised Regu- lations (1984) under the Insurance (Motor Vehicle) Act, B.C. Reg. 447/83, s. 63. 25 Effective January 1, 2001, the definition of insured was amended from “an individual who with consent... operates the vehicle” to “an individual who with consent... uses or operates the vehicle”. B.C. Reg. 380/2000, s. 3 (emphasis added). 26 This is the first appearance of the word “use” in addition to “operates” in this provision. 27 In order to find that ICBC must indemnify the estate of Mr. Hearne, I must find that Mr. Hearne was, pursuant to s. 63(b) of the Revised Regu- lations, “an individual who, with the consent of the owner ... uses or operates the vehicle described in the owner’s certificate”. Felix v. Insurance Corp. of British Columbia Bennett J.A. 9

28 The first question is what does the word “use” encompass within the meaning of the section, and in the context of the Act? 29 The general approach to statutory interpretations is well-known, as stated in Rizzo & Rizzo Shoes Ltd., Re, [1998] 1 S.C.R. 27 (S.C.C.) at para. 21 citing Elmer Driedger, Construction of Statutes, 2nd ed. (To- ronto: Butterworths, 1983) at 87: Today there is only one principle or approach, namely, 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 Parliament. 30 The Interpretation Act, R.S.B.C. 1996, c. 238 states, at s. 8: Every enactment must be construed as being remedial, and must be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects. 31 The scheme of the Act was recently discussed by this Court in Niedermeyer v. Charlton, 2014 BCCA 165 (B.C. C.A.), (decided after this case), at paras. 84-85 and 89-90: [84] That the legislature intended to make the statutory scheme universal seems incontrovertible. Part 1 of the Insurance (Vehicle) Act is titled “Universal Compulsory Vehicle Insurance”. Section 2 of Part 1 states: Corporation to provide universal compulsory vehicle insurance 2. If, under the Insurance Corporation Act, the Lieutenant Governor in Council authorizes the corporation to operate the plan of universal compulsory vehicle insurance, the corporation must operate the plan of universal compulsory vehicle insurance in accordance with this Act and the regulations. [Emphasis in original.] [85] Section 7 of the Act mandates the comprehensive and universal nature of the plan and, in broad terms, addresses the scope of coverage. This section, along with the provisions I will outline below, ex- emplify the intention of the legislature to create a universal insurance scheme to address the identified public policy interest. It reads: 7 (1). Subject to section 2 and compliance with this Act and the regulations, the corporation must administer a plan of universal compulsory vehicle insurance providing coverage under a motor vehicle liability policy required 10 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

by the Motor Vehicle Act, of at least the amount prescribed, to all persons (a) whether named in a certificate or not, to whom, or in respect of whom, or to whose dependants, benefits are payable if bodily injury is sustained or death results, (b) whether named in a certificate or not, to whom or on whose behalf insurance money is payable, if bodily injury to, or the death of another or others, or damage to property, for which he or she is le- gally liable, results, or (c) to whom insurance money is payable, if loss or damage to a vehicle results from one of the perils mentioned in the regulations caused by a vehicle or its use or operation, or any other risk arising out of its use or operation. ... [89] The appellant further points to s. 22 as proof of the government’s interest in all accidents arising out of the use of motor vehicles. That ICBC, an agent of the government, is required under s. 22 to be given notice of any action for damages caused by a vehicle in the province speaks to its interest in ensuring it is involved in all litigation involving motor vehicle accidents. Undoubtedly, this is because the statutory scheme ensures that in a wide range of circumstances, ICBC will be in a position to indemnify the at fault party’s loss: Insurance (Vehicle) Regulation, ss. 64, 76, 148.1. [90] While it is clear that none of these provisions on their own in- validates the exclusion clause here at issue, it is my opinion that the scheme taken as a whole lends support to the appellant’s argument that there is a compelling public policy interest at stake in this case. The public policy embraced by the legislative scheme is to provide a universal, compulsory insurance program as part of the legislature’s efforts to ensure safety on the roads and access to compensation for those who suffer losses when those measures fail. 32 Thus, the legislation needs to be considered in the context of the legislative scheme to “provide a universal, compulsory insurance program... and access to compensation for those who suffer losses” from motor vehicle accidents. 33 In R. v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031 (S.C.C.), the Court examined the meaning of the word “use”, albeit in the environ- Felix v. Insurance Corp. of British Columbia Bennett J.A. 11

mental law context. It said the following regarding the statutory interpretation of the word at paras. 64, and 66-67: The term “use” is not defined in the EPA [Environmental Protection Act]. Nevertheless, I am of the view that judicial interpretation of what constitutes a “use” of the natural environment is easily accomp- lished. Various interpretive techniques are of assistance. First, as I observed in Nova Scotia Pharmaceutical Society, supra, at pp. 647- 48, legislative provisions must not be considered in a vacuum. The content of a provision “is enriched by the rest of the section in which it is found and by the mode of inquiry adopted by courts as they have ruled under it”...... Third, reference may be made to judicial consideration of the term “use” in contexts other than environmental law. On this point, it is worth observing that the “use” concept has been judicially considered and interpreted in a variety of different contexts, examples of which include: “use” of property under the Income Tax Act (Qualico Developments Ltd. v. M.N.R. (1984), 51 N.R. 387 (F.C.A.)); “use” of a patent (Galt Art Metal Co. v. Pedlar People Ltd., [1935] O.R. 126 (H.C.)); “use” of a motor vehicle (Elias v. Insurance Corp. of British Columbia (1992), 95 D.L.R. (4th) 303 (B.C.S.C.), Watts v. Centennial Insurance Co. (1967), 62 W.W.R. 175 (B.C.S.C.)); “use” of a place as a common gaming house (Rockert v. The Queen, [1978] 2 S.C.R. 704); “use” of writing purporting to be an affidavit (Stevenson v. R. (1980), 19 C.R. (3d) 74 (Ont. C.A.)); “use” for human habitation (Conlin v. Prowse (1993), 109 D.L.R. (4th) 243 (Ont. Ct. (Gen. Div.))). A review of these cases indicates that courts have generally looked to dictionary definitions of the word “use” as a starting point in the interpretive process. However, the proper legal interpretation of “use” is context- and fact-specific, and this may require a refinement of the definition in a particular circumstance. ... [Emphasis added.] 34 Thus, in order to interpret the legal meaning of the word “use” the court must perform a contextual and fact-specific analysis. 35 In Amos v. Insurance Corp. of British Columbia, [1995] 3 S.C.R. 405 (S.C.C.), the Court had to decide if the no-fault benefits from ICBC insurance were available for a man who was attacked, and seriously injured, by a gang who tried to enter his vehicle as he was driving. 12 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

36 The Court examined certain provisions and amendments of s. 79 of the Act, which had previously only referred to an accident arising out of the “operation” of a vehicle, but had been amended to include “use” and “ownership”. Referring to Gravel, the Court concluded that the addition of “ownership” and “use” showed a legislative intent to establish a broader coverage than the previous provisions (paras. 13-14). 37 In Amos, the Court set out a two-part purpose and causation test to apply when interpreting the no-fault benefits provisions (then s. 79), at para. 17: 17 In the same way, while s. 79(1) must not be stretched beyond its plain and ordinary meaning, it ought not to be given a technical construction that defeats the object and insuring intent of the legislation providing coverage. The two-part test to be applied to interpreting this section is: 1. Did the accident result from the ordinary and well-known activities to which automobiles are put? 2. Is there some nexus or causal relationship (not necessarily a direct or proximate causal relationship) between the appellant’s injuries and the ownership, use or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous? This two-part test summarizes the case law interpreting the phrase “arising out of the ownership, use or operation of a vehicle”, and en- compasses both the “purpose” and “causation” tests posited in the jurisprudence. 38 The “purpose test” originated in Reliance Petroleum Ltd. v. Steven- son, [1956] S.C.R. 936 (S.C.C.), at 941, and quoted in Amos at para. 18: An analogous “use”, as distinguished from “operation”, is exempli- fied in the case of a bus. The undertaking in such a case includes the entrance and exit to and from the bus of passengers. If the steps are defective and a passenger is injured, could it be said that injury did not arise out of the “use”? The expression “use or operation” would or should, in my opinion, convey to one reading it all accidents resulting from the ordinary and well-known activities to which automobiles are put, all accidents which the common judgment in ordinary language would attribute to the utilization of an automobile as a means of different forms of accommodation or service. 39 The decision in Amos was revisited in Vytlingam (Litigation Guardian of) v. Farmer, 2007 SCC 46 (S.C.C.), and Herbison v. Felix v. Insurance Corp. of British Columbia Bennett J.A. 13

Lumbermens Mutual Casualty Co., 2007 SCC 47 (S.C.C.), released together October 19, 2007. 40 In Vytlingam, two young men dropped boulders on the plaintiffs’ automobile from an overpass causing serious injuries. The plaintiffs sought to recover damages from their insurer under their “inadequate insured motorist” coverage, citing Amos. The Court concluded that while driving to the overpass was ordinary use, the act of dropping boulders on another car was not causally connected to the use of the young man’s vehicle as a motor vehicle. The Court clarified that the Amos purpose test was to exclude non-motor vehicle use from the definition of the word “use” and set out a number of examples to demonstrate this meaning at paras. 19 and 22: [...] The “ordinary and well-known activities to which automobiles are put” limits coverage to motor vehicles being used as motor vehicles, and would exclude use of a car as a diving platform (as above) or retiring a disabled truck to a barn to store dynamite (which ex- plodes), or negligently using the truck as a permanent prop to shore up a drive shed (which collapses, injuring someone). In none of these cases could it be said that the tortfeasor was at fault as a motorist. In none of these cases could it be said that the motor vehicle was being used as a motor vehicle. That is the sort of aberrant situation that the Amos purpose test excludes, and nothing more. Here, as in Amos, it is the causation test that did the work, not the purpose test. ... However, to take another bizarre example for illustrative purposes. If instead of throwing rocks from the overpass Farmer had tried to jump his car at high speed over the interstate highway, Evel Knievel style, and crashed down on the Vytlingam vehicle, the insurer might want to argue that Farmer was not making an “ordinary and well-known” use of his vehicle. However, there is no doubt that Farmer would have been driving the vehicle and driving meets the Amos purpose test. Further, in the language of the OPCF 44R, the Vytlingam’s claim in such a case would have arisen “directly or indirectly from the use or operation” of the tortfeasor’s vehicle being used as a motor vehicle. The OPCF 44R is a big tent and not much will be excluded as aberrant to the use of a motor vehicle as a motor vehicle. 41 It is clear from these decisions that the concept of “use” when it refers to use of a motor vehicle is broadly defined. In my view, being a passenger in a motor vehicle is an “ordinary and well-known” use of a vehicle. I therefore agree with the trial judge that a passenger in a motor vehicle “uses” the motor vehicle when he or she is being transported from A to 14 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

B. Use by a passenger may include other factual contexts, but it is only necessary to address facts presented in this case. 42 I do not, however, agree with his conclusion that s. 66 prohibits this ultimate conclusion on this point, and I will turn to that now. 43 As noted, in Amos the Court concluded that the addition of the word “use” intended broader coverage. 44 Section 66 was introduced into legislation before the 2001 amend- ment adding “use” to the definition of an insured. Section 66 applies to those who are not occupants of the vehicle, and no consent of the owner is required. Section 66 would not grant indemnity for a situation such as this one, nor does it operate to limit the definition of “use”. The addition of “use” is clearly to add broader coverage in order to address a situation not covered by s. 66, including coverage for a person who is an occupant of the vehicle. Adding “use”, which, as I have already noted, has a broader meaning than “operation”, does not render s. 66 redundant. Sec- tion 66 applies to the operation of any part of the vehicle, which, depending on the facts, may or may not be included in s. 63(b). In my view, the provisions are consistent and each may be given meaning. 45 ICBC argues that persons who cause injury negligently, not arising out of their insurance policy, should look to general liability insurance policies for indemnity, and cites a number of cases: Watts v. Centennial Insurance Co. (1967), 65 D.L.R. (2d) 529 (B.C. S.C.); Milligan v. Dryburgh, [1985] I.L.R. 1-1960 (Ont. H.C.), Cella (Litigation Guardian of) v. McLean (1997), 34 O.R. (3d) 327 (Ont. C.A.), for example. These were cases decided under homeowner’s policies, and addressed exclusion clauses regarding the use or operation of motor vehicles. As noted, the definition of the word “use” is to be decided in the contextual and factual circumstances. In my view, these decisions do not assist ICBC. 46 The word “use” is to be considered in the context of the legislative scheme to provide “access to compensation for those who suffer losses” as a result of a motor vehicle accident, along with the legislative history, context and jurisprudence noted above. The word has been given a broad meaning in other judicial authorities. Considering all of these factors, as noted in Rizzo Shoes, I can only conclude that the word “use” in s. 63(b) includes use by a passenger in a motor vehicle when it is used as a motor vehicle. Felix v. Insurance Corp. of British Columbia Saunders J.A. 15

ii) In the context of the facts of this case, is there some nexus or causal relationship between Ms. Felix’s injuries and the use of her vehicle by Mr. Hearne? 47 The Court in Vytlingam addressed the issues of causation at para. 25, and said: For coverage to exist, there must be an unbroken chain of causation linking the conduct of the motorist as a motorist to the injuries in respect of which the claim is made. 48 I would adopt the analysis and rephrase it in this context, as, “For coverage to exist, there must be an unbroken chain of causation linking the conduct of the user as a user of a motor vehicle to the injuries in respect of which the claim is made.” 49 In Amos, the Court said, at para. 26, “Generally speaking, where the use or operation of a motor vehicle in some manner contributes to or adds to the injury, the plaintiff is entitled to coverage.” See also Rossy c. Westmount (Ville), 2012 SCC 30 (S.C.C.) at para. 42. 50 While a passenger, or user, in a moving automobile, Mr. Hearne grabbed the steering wheel causing the accident that led to Ms. Felix’s injuries. It matters not for these purposes that he did not intend to take control of the car. He intentionally (and negligently) grabbed the wheel while he was “using” the vehicle. As a result, Ms. Felix suffered injury. There is, in my view, a clear unbroken chain of causation from his negligent act to her injuries. I would not disagree with the trial judge on this point.

Conclusion 51 In summary, in my opinion, the trial judge erred when he excluded Mr. Hearne as a “user” and therefore not an insured under s. 63(b). I would allow the appeal, set aside the decision of the trial judge, and find that ICBC is liable for indemnification of the Estate of Mr. Hearne for the judgment of Ms. Felix.

Saunders J.A.:

I agree: 16 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Stromberg-Stein J.A.:

I agree: Appeal allowed. Dube v. RBC Life Insurance Co. 17

[Indexed as: Dube v. RBC Life Insurance Co.] Gregory Russell Dube, Plaintiff (Respondent) and RBC Life Insurance Company, Defendant (Appellant) Ontario Court of Appeal Docket: CA C60100 2015 ONCA 641 John Laskin, J.C. MacPherson, J. MacFarland JJ.A. Heard: September 16, 2015 Judgment: September 21, 2015 Insurance –––– Claims — Notice and proof of loss — Relief against forfeiture –––– Employee was injured in car accident, and since then had not returned to work — His employer had group insurance policy with insurer, which provided employees with long term disability benefits — Employee did not give notice or proof of his claim for these benefits within time limits under policy — When insurer denied his claim, employee started action — Insurer brought motion for summary judgment to dismiss action on ground that employee’s claim was made beyond policy’s time limits — Motion judge refused to dismiss action — Instead, motion judge exercised his discretion by making binding determination that employee was entitled to relief from forfeiture of his claim under s. 98 of Courts of Justice Act — Insurer appealed — Appeal dismissed — Mo- tion judge exercised his discretion reasonably in granting employee relief from forfeiture — Motion judge misstated length of breach, but did not err in finding that prejudice to insurer was minimal. Insurance –––– Actions on policies — Practice and procedure — Limitation of actions –––– Employee was injured in car accident, and since then had not returned to work — His employer had group insurance policy with insurer, which provided employees with long term disability benefits — Employee did not give notice or proof of his claim for these benefits within time limits under policy — When insurer denied his claim, employee started action — Insurer brought motion for summary judgment to dismiss action on ground that employee’s claim was made beyond policy’s time limits — Motion judge refused to dismiss action — Instead, motion judge exercised his discretion by making binding determination that employee was entitled to relief from forfeiture of his claim under s. 98 of Courts of Justice Act — Insurer appealed — Appeal dismissed — Motion judge exercised his discretion reasonably in granting employee relief from forfeiture — Motion judge misstated length of breach, but did not err in finding that prejudice to insurer was minimal. 18 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Cases considered: Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co. (1994), [1994] 7 W.W.R. 37, 20 Alta. L.R. (3d) 296, 168 N.R. 381, (sub nom. Maritime Life Assurance Co. v. Saskatchewan River Bungalows Ltd.) [1994] I.L.R. 1-3077, 155 A.R. 321, 73 W.A.C. 321, 115 D.L.R. (4th) 478, 23 C.C.L.I. (2d) 161, 1994 CarswellAlta 744, [1994] 2 S.C.R. 490, 1994 CarswellAlta 769, [1994] S.C.J. No. 59, EYB 1994-66952 (S.C.C.) — referred to Statutes considered: Courts of Justice Act, R.S.O. 1990, c. C.43 s. 98 — considered

APPEAL by insurer from judgment reported at Dube v. RBC Life Insurance Co. (2015), 2015 ONSC 77, 2015 CarswellOnt 69, 2015 C.E.B. & P.G.R. 8113 (headnote only), [2015] I.L.R. I-5690, 44 C.C.L.I. (5th) 110 (Ont. S.C.J.), refusing to dismiss action and determining that employee was entitled to relief from forfeiture of his claim.

Donna M. Kraft, for Appellant Ryan Steiner, for Respondent

Per curiam: A. Introduction 1 The respondent Dube worked for Windsor Essex Community Hous- ing Corporation. In May 2010 he was injured in a car accident, and since then has not returned to work. His employer had a group insurance policy with the appellant RBC Life Insurance, which provided employees with long term disability benefits. 2 Dube, however, did not give notice or proof of his claim for these benefits within the time limits under the policy. When RBC denied his claim, Dube started this action. 3 RBC then brought a motion for summary judgment to dismiss the action on the ground that Dube’s claim was made beyond the policy’s time limits. The motion judge refused to dismiss the action. Instead, he exercised his discretion by making a binding determination that Dube was entitled to relief from the forfeiture of his claim under s. 98 of the Courts of Justice Act. 4 RBC appeals that determination. It concedes that the motion judge could determine on summary judgment whether Dube was entitled to this Dube v. RBC Life Insurance Co. Per curiam 19

relief, but contends that the motion judge erred in granting it. RBC’s appeal thus raises a single issue: did the motion judge exercise his discretion unreasonably in his application of the three-part test for relief from forfeiture under s. 98? In oral argument RBC focused on the second component of the test, the gravity of Dube’s breach of the policy time limits.

B. Discussion (1) The test for relief from forfeiture 5 Under the policy Dube ought to have given notice of his claim within 30 days of his alleged disability (the date of the accident) and proof of his claim no later than one year and 90 days after his disability arose. Dube did not give any notice of his claim until March 2012, and did not give proof of his claim until June 2013. 6 Thus the central issue on the motion was whether Dube was entitled to relief from forfeiture under s. 98 of the Courts of Justice Act, which states: A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just. The relief under s. 98 is both equitable and discretionary. The test for relief is well established. It has three components. The court must consider: • the conduct of the insured applicant • the gravity of the breach • the disparity between the value of the property forfeited and the damage caused by the breach, see: Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490 (S.C.C.).

(2) The motion judge’s decision 7 On the first component of the test the motion judge found that Dube’s conduct was “not unreasonable”. In support of that finding, the motion judge noted that Dube’s employer had incorrectly told him he did not have coverage for long term disability benefits; that Dube was confused or uncertain whether he had this coverage; and that he had complied with numerous requests to provide medical information. 8 On the second component of the test, the motion judge found that RBC suffered minimal or no actual prejudice because of the breach. 20 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

9 On the third component of the test, the motion judge found that because Dube was 43 years old when the accident occurred and long term disability benefits were payable to age 65, the disparity between the value of the property forfeited and the damage caused by the breach was significant.

(3) Did the motion judge misapply the second component of the test for relief from forfeiture — the gravity of the breach 10 RBC accepts that the motion judge stated the test for relief correctly. But it submits that he misapplied the second component of the test, in that he failed to properly assess the gravity of the breach. RBC’s submission has two branches: the motion judge erred by finding that the length of the breach was only six months and 17 days; and he erred in finding that the actual prejudice to RBC flowing from the breach was minimal or non-existent. RBC maintains that it was prejudiced because of its inability to intervene and make its own assessment of Dube’s condition and his prospects for rehabilitation. 11 We agree that the motion judge misstated the length of the breach. His figure of six months and 17 days refers to the period between the last possible date proof of claim could be given (August 2011) and the date Dube first gave notice of his claim (March 2012). As RBC points out, the length of the breach for giving proof of claim was about 22 months (Au- gust 2011 to June 2013). 12 But the critical question on this component of the test is whether RBC was prejudiced by the length of the breach. We are satisfied that the motion judge did not err in finding that the prejudice to RBC was minimal. Or, as he found later in his reasons, even if RBC incurred some prejudice because it could not conduct its own investigations and medical examinations at an early date, that prejudice was outweighed by the harm to Dube from his being unable to pursue his claim. 13 The following evidence supports the motion judge’s findings: (a) In March 2012 when Dube gave notice of his claim, he asked RBC for information concerning his claim, including the application form for long term disability benefits. RBC took over one year to provide this information. (b) RBC had available to it “an abundance of medical information” on Dube from the date of his accident. This information included a comprehensive list of the many medical files and reports on Dube, all of which were available for RBC’s review. And it included an Dube v. RBC Life Insurance Co. Per curiam 21

extensive medical brief containing reports from two physiatrists, one retained by Dube’s accident benefit insurer, and the other retained by Dube’s family doctor, and a report from an occupational therapist. (c) After RBC was given notice of the claim in March 2012, in the following two and a half years it made no requests — none — to examine Dube or to have him assessed. 14 In the light of this evidence RBC cannot realistically claim it was prejudiced by Dube’s failure to give timely notice and proof of his claim. We therefore conclude that the motion judge exercised his discretion reasonably in granting Dube relief from forfeiture. The appeal is dismissed with costs fixed at $12,000 inclusive of disbursements and applicable taxes. Appeal dismissed. 22 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[Indexed as: McGowan v. Lang] Randy Blake McGowan, Appellant (Plaintiff) and James S. Lang, Respondent (Defendant) Alberta Court of Appeal Docket: Edmonton Appeal 1403-0199-AC 2015 ABCA 217 Ronald Berger, J.D. Bruce McDonald, Russell Brown JJ.A. Heard: June 2, 2015 Judgment: June 23, 2015* Civil practice and procedure –––– Service of originating process — State- ment of claim — Manner of service — Time for service –––– Plaintiff suffered personal injuries in motor vehicle accident with defendant — Plaintiff’s lawyer filed statement of claim and forwarded it to defendant’s insurance adjuster W — Lawyer and W carried out settlement discussions, which included voice mail message from W stating that he would file statement of defence if he did not receive certain requested documentation soon — Defendant was not served with statement of claim until 68 days after time for service had expired — Plaintiff successfully applied to extend time for service of statement of claim while defendant’s cross-application for order declaring that statement of claim expired unserved — Defendant’s appeal was allowed — Plaintiff appealed — Appeal dismissed — As matter of interpretation, existence of “special or extraordinary circumstances” warranting extension of time under Rule 3.27(1)(c) of Alberta Rules of Court had to have resulted from defendant’s conduct or from conduct of person not party to action — W’s statement in message did not cause failure on part of plaintiff’s lawyer to serve statement of claim — Chamber judge reasonably concluded that, regardless of special circumstances or of absence of prejudice to defendant, extension of time should not be granted where failure to serve was caused by inadvertence of plaintiff’s lawyer — Deci- sion was justifiable, transparent, intelligible, and fell within range of possible, acceptable outcomes defensible on facts and law — There was ample evidence that failure to serve was caused solely by lawyer’s neglect. The plaintiff suffered personal injuries in a motor vehicle accident with the defendant. The plaintiff retained a lawyer, who filed a statement of claim and forwarded it to the defendant’s insurance adjuster W. The defendant learned of the

* A corrigendum issued by the court on June 24, 2015 has been incorporated herein. McGowan v. Lang 23 claim from W. The plaintiff’s lawyer and W carried out settlement discussions, during which W left a voice mail message stating that he would file a statement of defence if he did not receive certain requested documentation soon. The defendant was served with the statement of claim 68 days after the time for service of the statement of claim expired. The plaintiff successfully applied to extend the time for service of the statement of claim while the defendant’s cross-application for an order declaring that the statement of claim expired unserved was dismissed. The defendant’s appeal was allowed by the chambers judge. The plaintiff appealed. Held: The appeal was dismissed. Per McDonald J.A. (Brown J.A. concurring): W’s actions, including his voice mail message with respect to potential filing of statement of defence, could not be considered as constituting special or extraordinary circumstances so as to justify an extension of time under Rule 3.27(1)(c) of the Alberta Rules of Court. “Special or extraordinary circumstances” was qualified by the language in R. 3.27(1)(c) that required the existence of such circumstances to result solely from the defendant’s conduct or from the conduct of a person who was not a party to the action. W’s statement was not the reason for the failure on the part of the plaintiff’s lawyer to serve the statement of claim; it was a matter that the lawyer had neglected. In any event, the chambers judge concluded that, regardless of special or extraordinary circumstances or of lack of demonstrated prejudice to the defendant, an extension of time for service of a statement of claim should not be granted where the failure to serve was caused by the plaintiff’s lawyer’s inadvertence. The chambers judge’s decision had to be reviewed on the basis of reasonableness, and this conclusion was justifiable, transparent, intelligible, and fell within a range of possible, acceptable outcomes. The chambers judge owed no deference to any factual findings made by the master and, contrary to the master’s conclusion otherwise, the plaintiff’s lawyer never claimed that he relied on W’s message in failing to serve the statement of claim in time. There was no evidence that W had any bearing on the failure to serve the claim and there was ample evidence that the failure was caused solely by the lawyer’s neglect. The takeaway was simply that any lawyer acting for a plaintiff should file the statement of claim in a timely fashion and effect service upon the defendant as expeditiously as possible, even where the insurer had already received or was concurrently receiving a copy of the statement of claim. Per Berger J.A. (dissenting): The master made four critical findings of fact that were not disturbed on appeal. The insurance adjuster W was aware of the claim within days of the collision, was actively assembling information to assess, defend and resolve the claim, and was provided with a copy of the statement of claim shortly after it was filed. The defendant himself received notice of the claim and was personally served within the three month period allowed for an extension under R. 3.26(2) of the Rules. Finally, settlement negotiations were ongoing throughout. The plaintiff and his counsel pursued the claim conscien- 24 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

tiously while attempting to resolve this matter in a timely and cost-effective way as early as possible. On a proper interpretation of R. 3.27(1)(c) of the Rules, the plaintiff applying for an extension need not demonstrate a causal relationship between the wrong complained of and the failure to serve the statement of claim prior to the expiration of time. Furthermore, the requirement of “special circumstances” need not be connected to a “wrong” attributable to the opposite party. W’s representation that he would file a statement of defence if additional documentation was not forthcoming was, together with the totality of the circumstances, sufficient to qualify as “special” as a matter of law. The facts raised a prima facie case of “special circumstances” so as to necessitate a second line of inquiry to guide the exercise of discretion with four factors. The master properly found that the factual matrix amply supported the conclusion that consideration of each of the factors warranted the relief sought by the plaintiff. The appeal should be allowed. Cases considered by J.D. Bruce McDonald J.A.: Bahcheli v. Yorkton Securities Inc. (2012), 21 C.P.C. (7th) 371, 2012 ABCA 166, 2012 CarswellAlta 940, 65 Alta. L.R. (5th) 127, 524 A.R. 382, 545 W.A.C. 382, 43 Admin. L.R. (5th) 74, [2012] A.J. No. 540 (Alta. C.A.) — referred to Boyd v. Cook (2013), 2013 CarswellAlta 82, 2013 ABCA 27, 84 Alta. L.R. (5th) 359, 542 A.R. 160, 566 W.A.C. 160, [2013] A.J. No. 43 (Alta. C.A.) — referred to Marcil v. Ellefson (2014), 9 Alta. L.R. (6th) 428, 2014 ABCA 169, 2014 CarswellAlta 806, 575 A.R. 189, 612 W.A.C. 189, [2014] A.J. No. 527 (Alta. C.A.) — considered New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1, 69 Admin. L.R. (4th) 1, 69 Imm. L.R. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) [2008] 1 S.C.R. 190, 844 A.P.R. 1, 2008 CSC 9, (sub nom. Dunsmuir v. New Brunswick) 2008 C.L.L.C. 220-020, D.T.E. 2008T-223, 329 N.B.R. (2d) 1, (sub nom. Dunsmuir v. New Brunswick) 170 L.A.C. (4th) 1, (sub nom. Dunsmuir v. New Brunswick) 291 D.L.R. (4th) 577, 2008 Car- swellNB 124, 2008 CarswellNB 125, 2008 SCC 9, 64 C.C.E.L. (3d) 1, (sub nom. Dunsmuir v. New Brunswick) 95 L.C.R. 65, [2008] S.C.J. No. 9, [2008] A.C.S. No. 9 (S.C.C.) — followed Nixon v. Timms (2013), 544 A.R. 21, 567 W.A.C. 21, 2013 CarswellAlta 259, 2013 ABCA 84 (Alta. C.A.) — referred to

Cases considered by Ronald Berger J.A. (dissenting): Nixon v. Timms (2013), 544 A.R. 21, 567 W.A.C. 21, 2013 CarswellAlta 259, 2013 ABCA 84 (Alta. C.A.) — referred to in a minority or dissenting opinion McGowan v. Lang J.D. Bruce McDonald J.A. 25

Rules considered by Bruce McDonald J.A.: Alberta Rules of Court, Alta. Reg. 390/68 R. 17 — referred to Alberta Rules of Court, Alta. Reg. 124/2010 Generally — referred to R. 3.27 — referred to R. 3.27(1) — considered R. 3.27(1)(a) — considered R. 3.27(1)(a)(ii) — considered R. 3.27(1)(a)(iii) — considered R. 3.27(1)(c) — considered

Rules considered by Ronald Berger J.A. (dissenting): Alberta Rules of Court, Alta. Reg. 124/2010 R. 3.26 — referred to R. 3.27(1)(c) — considered

APPEAL by plaintiff from judgment reported at McGowan v. Lang (2014), 2014 ABQB 403, 2014 CarswellAlta 1079, 60 C.P.C. (7th) 160, [2014] A.J. No. 697, 35 C.C.L.I. (5th) 285 (Alta. Q.B.), allowing defendant’s appeal from extension of time for service of statement of claim.

C.S. Petersen, for Appellant D.A. Shepherd, for Respondent

J.D. Bruce McDonald J.A., (for the majority): I. Introduction 1 The appellant McGowan appeals the order of the chambers judge wherein she set aside an earlier decision of the master which had granted the appellant an extension of time to serve his statement of claim pursuant to Rule 3.27(1)(c) of the Rules of Court. For the reasons set out below, we dismiss the appeal.

II. Background Facts 2 The appellant suffered personal injuries as a result of a motor vehicle accident with the respondent Lang on February 5, 2010. 3 The respondent Lang notified his insurance broker of the accident three days after the accident. His insurance company assigned an adjuster, Doug Wasson, to investigate the claim. 26 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

4 Between February 2010 and September 20, 2011, Wasson dealt directly with the appellant. By a without prejudice letter dated May 18, 2011, Wasson sent the appellant a settlement proposal. The letter also included a statement advising the appellant of the two year limitation period for claims for bodily injury and advising that if a final settlement had not been reached by February 2, 2012, a statement of claim would have to be filed by “February 2, 2012” and after that date, the claim would expire. 5 The appellant retained a lawyer on September 20, 2011. The lawyer filed a statement of claim on January 27, 2012. In a letter of January 27, 2012, the lawyer forwarded the statement of claim to Wasson and advised a defence was not required at that time. 6 The respondent did not know about the appellant’s statement of claim nor was he served prior to the expiry of the time for service, which was January 27, 2013. The respondent learned of the claim on February 15, 2013 when Wasson advised him. 7 On September 12, 2012, the appellant’s lawyer had sent a without prejudice settlement proposal to Wasson. On September 17, Wasson requested by phone that the lawyer provide substantiation for his settlement proposal. Wasson then made further requests for this information on October 23 and December 18. Around Christmas of 2012, Wasson advised the lawyer by phone that he would file a statement of defence if he did not soon receive documents in support of the damage claim. 8 The respondent was served with the statement of claim on April 5, 2013, 68 days after the statement of claim expired. 9 The appellant filed an application to extend the time for service of the statement of claim on April 5, 2013. The respondent cross-applied for an order declaring the statement of claim expired unserved and striking out the statement of claim.

III. Decision of the Master 10 The master held that time for service could not be extended pursuant to either Rule 3.27(1)(a)(ii) or Rule 3.27(1)(a)(iii) as the appellant’s lawyer was never told that liability was not at issue and the time limit for serving the statement of claim was never waived. 11 Applying Rule 3.27(1)(c), the master found that Wasson’s advice to the appellant’s lawyer that he would file a statement of defence if he did not receive the requested information soon created the impression that McGowan v. Lang J.D. Bruce McDonald J.A. 27

the adjuster was satisfied with service as it stood. While not a standstill agreement as such, the master found that the appellant’s lawyer relied upon the statement. She found the comments made in the context of ongoing negotiations and shortly before the time for service was to expire resulted in special circumstances within the meaning of Rule 3.27(1)(c). She extended the time for service to include April 5, 2013, the date the respondent was personally served. The master dismissed the respondent’s application. 12 The respondent appealed.

IV. Decision of the Chambers Judge 13 The chambers judge allowed the appeal on the basis the master erred in extending the time for service of the statement of claim when there were no special or extraordinary circumstances within the meaning of Rule 3.27(1)(c). 14 The chambers judge held that an application under Rule 3.27(1)(c) requires a two-step process. First, the plaintiff must first bring itself within the requirement that special or extraordinary circumstances exist resulting solely from the defendant’s conduct or from the conduct of a person who is not a party to the action. As part of that first step, the plaintiff must demonstrate that the special or extraordinary circumstances are connected in some way to the lack of service. Second, only after the first step of the analysis confirms the existence of the type of special or extraordinary circumstances contemplated by Rule 3.27(1)(c), can the court go on to consider if it is appropriate to exercise its discretion to extend time for service. At this second step, policy considerations of the limitations legislation and prejudice should be considered. 15 The chambers judge found that the appellant’s lawyer was not careful and neglected to serve the statement of claim when he should have. No limitation period was entered into the file’s diary system. The failure to serve could not be said to have been caused solely by the respondent’s conduct or by the conduct of a person who is not a party to the action. She further found there was no evidence that the lawyer relied on Was- son’s statement that Wasson intended to file a statement of defence if he did not receive the requested information soon. The chambers judge found the lawyer never made a conscious decision to refrain from serving the statement of claim. 16 The chambers judge further held that relief should not be granted under Rule 3.27(1)(c), regardless of special or extraordinary circum- 28 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

stances, on the basis of policy considerations and lack of prejudice to the respondent. She considered Nixon v. Timms, 2013 ABCA 84 (Alta. C.A.) at para 10, and concluded this court could not have intended that extensions for service of a statement of claim under Rule 3.27 should be permitted in circumstances where the failure to serve is caused by plaintiff’s lawyer’s inadvertence — even in those cases where there is no demonstrated prejudice to the defendant were the extension allowed. 17 The chambers judge held the limitations policy and prejudice considerations do not negate the requirement that circumstances must exist resulting solely from the defendant’s conduct or from the conduct of a person who is not a party to the action. If it were otherwise, few cases would be able to meet the requirements of Rule 3.27(1)(c) and the result would be to undermine the legislative intent of the Rule to eliminate procrastination and delay. 18 The chambers judge concluded that the master erred in finding the adjuster’s statement amount to special or extraordinary circumstances as contemplated by Rule 3.27(1)(c). She allowed the appeal and struck the statement of claim as expired unserved.

V. Relevant Rule 19 Rule 3.27(1) provides: The Court may, at any time, grant an extension of time for service of a statement of claim in any of the following circumstances: (a) if a defendant, anyone purporting to be a defendant, or a lawyer or other person purporting to negotiate on behalf of a defendant, has caused the plaintiff or the plaintiff’s lawyer to reasonably believe and to rely on the belief that (i) the defendant has been served, (ii) liability is not or will not be contested, or (iii) a time limit or any time period relating to the action will not be relied on or will be waived; (b) if an order for substitutional service, an order dispensing with service or an order validating service is set aside; (c) special or extraordinary circumstances exist resulting solely from the defendant’s conduct or from the conduct of a person who is not a party to the action.

VI. Grounds of Appeal 20 The appellant raises three grounds of appeal in his factum: McGowan v. Lang J.D. Bruce McDonald J.A. 29

(a) Did the chambers judge err in her interpretation of Rule 3.27(1)(c) by applying the incorrect test in determining whether there were special or extraordinary circumstances? (b) Did the chambers judge err in overturning the master’s finding of fact that the appellant’s lawyer relied on the adjuster Wasson’s comments? (c) Did the chambers judge misapprehend the evidence and fail to consider the appellant’s lawyer’s evidence when determining that there was no evidence of reliance?

VII. Standard of Review 21 Whether the Rules of Court were properly interpreted is reviewed for correctness. Findings of fact are reviewed for palpable and overriding error. Where a chambers judge has exercised discretion, the standard of review is reasonableness: Marcil v. Ellefson, 2014 ABCA 169, 575 A.R. 189 (Alta. C.A.) at para 9.

VIII. Analysis and a Decision a) Did the chambers judge err in her interpretation of Rule 3.27(1)(c) by applying the incorrect test in determining if there were special or extraordinary circumstances? 22 The appellant argues that unlike Rule 3.27(1)(a), Rule 3.27(1)(c) does not require any causal link or reliance on something done by the defendant or another person who is not a party to the action. He submits that the chambers judge injected causation or reliance into the test under sub paragraph (1)(c) for “special or extraordinary circumstances”: doing so renders the difference between sub paragraph (1)(a) and (1)(c) meaningless. The goal of sub paragraph (1)(c) is to cover a broad range of situations that would not satisfy sub paragraph (1)(a), and particularly, to allow for those situations where it would be unfair not to let a plaintiff serve a statement of claim despite the passage of time. 23 In particular, the appellant relies upon Wasson’s voice mail message left on the appellant’s lawyer’s phone advising that he would file a statement of defence if he did not soon receive the documents in support of the damage claim. 24 On the other hand, the respondent argues that the chambers judge correctly articulated and applied the test for granting relief under sub paragraph (1)(c). There has to be some causal connection between the lack of 30 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

service and the special or extraordinary circumstances alleged. The alternative is to permit parties to come to court to seek a remedy which has no connection to the wrong complained of. He submits that no prejudice cannot be the test for a Rule that was intended to be rarely used. 25 The respondent goes on to argue that there was no necessary causal connection between Wasson’s statement and the appellant’s lawyer’s decision not to serve the statement of claim. In fact as noted by the chambers judge, the appellant’s lawyer had confirmed when questioned on his affidavit: (a) the appellant knew where the respondent was living as they were neighbours; (b) prior to the expiry of the statement of claim, he had a copy of the police report which contained the respondent’s address; and (c) no limitation for service of the statement of claim was entered on the file and he did not know why. 26 In this regard, it is instructive to bear in mind the comments of the Alberta Law Reform Institute Consultation Memorandum No. 12.14, in discussing changes to the former Rule 17 where it was stated as follows: The potential problem with having such a general exception, is that judges may use it too loosely and grant extensions in less than exceptional circumstances, thereby undermining the legislative intent of Rule 11 to eliminate procrastination and delay. Any provision will have to be carefully worded to discourage that outcome. 27 As an aside, while the adjuster Wasson did not “cover himself with glory” in his dealings with the appellant’s lawyer, in our view by no stretch of the imagination could his actions constitute “special or extraordinary circumstances”. Specifically we agree that Wasson’s actions in leaving the phone message to the appellant’s lawyer when he did in late December 2012, does not constitute a special or extraordinary circumstance. We also agree that “special or extraordinary circumstances” is qualified by the language in Rule 3.27(1)(c) which requires the existence of circumstances that result solely from the defendant’s conduct or from the conduct of a person who was not a party to the action. Wasson’s statement was not the reason for the failure on the part of the plaintiff’s lawyer to serve the statement of claim; it was a matter that the plaintiff’s lawyer had neglected. 28 More fundamentally, however, is that we are required to review the decision of the chambers judge on the basis of reasonableness: Marcil v. Ellefson. The chambers judge concluded that regardless of special or extraordinary circumstances, an extension of time for service of a statement of claim under Rule 3.27 should not be permitted in circumstances where McGowan v. Lang J.D. Bruce McDonald J.A. 31

the failure to serve is caused by the plaintiff’s lawyer’s inadvertence, even in situations where there is no demonstrated prejudice to the defendants. 29 In our view, the chambers judge’s decision is justifiable, transparent and intelligible. It also “falls within a range of possible, acceptable outcomes which are defensible in respect of the facts of law.”: New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190 (S.C.C.) at para 47. Therefore, this ground of appeal must fail.

(b) Did the chambers judge err in overturning the Masters finding of fact that the appellant’s lawyer relied upon on the adjuster Wassons’ statement? 30 In the alternative, the appellant goes on to argue that if the chambers judge correctly articulated the test under sub paragraph (1)(c), that she erred by not finding reliance or causation relating to the statement made by Wasson to the appellant’s lawyer that Wasson would file a statement of defence if he did not receive documentation to support the claim. The master had found, on the evidence, that the appellant’s lawyer relied on Wasson’s comments and so did not serve the statement of claim. The appellant submits that the chambers judge erred by over-turning this finding of fact by the master. 31 For his part, the respondent argues that the master’s decision is not owed any deference by the chambers judge on appeal. Furthermore, the chambers judge correctly found there to be no reliance; she also found the lawyer gave no evidence that he had relied upon and decided not to serve the statement of claim as a result. The lawyer did not turn his mind to service and instead, focused on obtaining medical information. 32 With respect to the allegation that the chambers judge had overturned a fact finding made by the master, it is trite law that an appeal from a master is de novo and on such appeals no deference is owed: Boyd v. Cook, 2013 ABCA 27 (Alta. C.A.) at p 24: Bahcheli v. Yorkton Securities Inc., 2012 ABCA 166 (Alta. C.A.) at para 30. Therefore the chambers judge was not bound by any finding, fact or otherwise, made by the master. In any event, and quite apart from the appellant’s dubious proposition that a master may find facts at all, nowhere in the evidence does the appellant’s lawyer claim that he relied upon Wasson’s message in failing to serve the statement of claim in time. Therefore, this ground of appeal must fail. 32 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

(c) Did the chambers judge misapprehend the evidence and fail to consider the appellant’s lawyer’s evidence when determining that there was no evidence of reliance? 33 Lastly, the appellant argues that the chambers judge misapprehended his lawyer’s evidence regarding reliance. He submits that Wasson’s direction to collect medical documents to substantiate the claim was sufficient reliance for the lawyer not to take steps to serve the statement of claim. 34 To the extent that discretion to extend time for service is permitted, the respondent submits the chambers judge reasonably exercised her discretion not to grant relief. There was no evidence that Wasson’s statement had any bearing on the failure to serve the claim; indeed there was ample evidence that the failure was caused by the lawyer’s neglect. This is largely a re-hash of the second ground of appeal and is equally devoid of merit. 35 The “takeaway” from this appeal is simply this. A lawyer acting for a plaintiff ought to file the statement of claim in a timely fashion and thereafter proceed to effect service of the statement of claim upon the defendant(s) as expeditiously as possible. After all, the only additional expense that will usually be incurred is the relatively small amount to be paid to the process server. This course of action will provide more time should service become a problem and resort must be made to either Rule 3.26 or other Rules regarding service. We say that service should still be effected even with a claim involving an insurer where the insurer may have either previously or concurrently been provided with a copy of the statement of claim.

IX. Conclusion 36 In the result, we dismiss the appeal and uphold the decision of the chambers judge wherein she struck the statement of claim for having expired prior to service.

Russell Brown J.A.:

I concur: McGowan v. Lang Ronald Berger J.A. 33

Ronald Berger J.A. (dissenting):

37 The appellant sought damages for personal injuries resulting from a motor vehicle accident on February 5, 2010. The respondent notified his insurer, Co-operators General Insurance Company, of the claim. Doug Wasson was the Insurance adjustor for Co-operators. On May 18, 2011, he sent the appellant a settlement proposal. On January 27, 2012, the appellant filed a statement of claim and forwarded it to Co-operators. There was a plethora of contacts between Wasson and the appellant’s counsel in the days and weeks that followed. Just prior to the expiry of the time for service of the statement of claim [pursuant to Rule 3.26], Wasson advised counsel for the appellant that he would file a statement of defence if he did not receive updated medical records in short order. The medical records were not forthcoming; yet, the statement of defence was not filed. The respondent was personally served after the deadline, but within the three month renewal period. 38 Co-operators applied to strike the statement of claim. That application was rejected by the Master who held, inter alia, that Wasson’s indication of the desire to negotiate and his intention to file a statement to defence, was “relied upon by plaintiff counsel who continued to collect the requested medical [documentation]”. Importantly, she held that if the appellant had applied for an extension for the time for service, prior to expiration, it most certainly would have been granted. 39 The Master took account of the wording of r. 3.27(1)(c) and considered the policy aspects of the enactment in the light of Nixon v. Timms, 2013 ABCA 84 (Alta. C.A.). She applied at what I will call the “Sholtz Test” for “special circumstances”. (at paragraph 21 of the appeal record digest, volume 1, tab 2, page F6). 40 The Master’s application of the test to the factual underpinnings, demonstrated inter alia that there was no evidence of procrastination or delay, no evidence of prejudice and given the ongoing negotiation, “special circumstances” was established within the meaning of r. 3.27(1)(c). 41 On appeal, the Queen’s Bench chambers judge held otherwise, holding that r. 3.27(1)(c) required a causal connection between the actions of the defendant, or others on behalf of the defendant, that brought about the failure to serve the statement of claim. 34 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Analysis 42 I confine myself to issue three, identified by the Master as follows: Whether there are any special or extraordinary circumstances resulting solely from the conduct of a person who is not a party to the action that permit the court to extend the time for service (r. 3.27(1)(c)). 43 As I read the Master’s judgment, four critical findings of fact, none of which were disturbed in the Court of Queen’s Bench, governed the adjudication; 1. the insurance adjustor was aware of the claim within days of the collision and was actively assembling the information needed to assess, defend and resolve the claim; 2. the insurance adjustor was provided with a copy of the statement of claim shortly after it was filed; 3. the respondent himself received notice of the claim within nineteen days of the expiration of the time for service; was personally served within sixty-eight days of the expiration, thereby bringing actual service to within the three month period allowed for an extension under r. 3.26(2); 4. “Negotiations were ongoing throughout. Of particular significance is that shortly before the time for service expired, the insurance adjuster advised Plaintiff Counsel that he would be filing a State- ment of Defence if he did not receive the requested medical documents soon. In response, Plaintiff Counsel continued to collect the requested medical documentation. That comment, in the context of ongoing negotiations, is sufficient to create the impression that the adjuster was prepared to continue to negotiate, albeit on his terms. It is also understandable that the comment would create the impression that the adjuster was satisfied with service as it stood and intended to proceed directly to a Statement of Defence. While the comment falls short of being a standstill agreement, it was relied upon by Plaintiff Counsel who continued to collect the requested documentation.”; and [Appeal Record Digest, Tab 2, Page F7, Para. 27] 5. “This claim was pursued conscientiously by the insurance adjuster, the Plaintiff, and Plaintiff Counsel. Moreover, Plaintiff Counsel and the insurance adjuster attempted to resolve this mat- McGowan v. Lang Ronald Berger J.A. 35

ter in a timely and cost-effective way as early as possible, as encouraged by the foundational rules of the Rules of Court.” [Appeal Record Digest, Tab 2, Page F6, Para. 22] 44 I have the advantage of having read, in draft form, the memorandum of judgment of the majority. With great respect, I part company with my colleagues insofar as their interpretation of r. 3.27(1)(c) is concerned. I do so for the following reasons: 1. It is not, as my colleagues contend, a condition precedent to the successful invocation of r. 3.27(1)(c) that the applicant demonstrate a causal relationship between “the wrong complained of” (paragraph 24 of the majority judgment) and the failure to serve the statement of claim prior to the expiration of the time to do so; 2. The requirement of “special circumstances”, need not be connected to a “wrong” attributable to the opposite party; 3. While I agree that the adjustor, Wasson, “did not ‘cover himself with glory’ in his dealings with the appellant’s lawyer”, (para. 27 of the majority judgment), his representation, “reasonably relied upon,” that he would file a statement of defence if the additional documentation was not forthcoming is, together with the totality of the circumstances, sufficient, as a matter of law to qualify as “special”. That which is critical, is to distinguish between “a mere slip or inadvertence” (which will not suffice) and a representation which induces the applicant to be lulled into thinking that, as the Master observed, “... the adjustor was satisfied with service as it stood and intended to proceed directly to a statement of defence”. 45 On those facts, in my opinion, a prima facie case of “special circumstances” is made out necessitating a second line of inquiry, which Master Shultz set out and which I adopt as my own: In determining whether special circumstances exist or whether the Court should exercise its discretion to end the time for service of the Statement of Claim under rule 3.27(1)(c), the Court should: (a) aim to eliminate procrastination and delay in litigation; (b) consider whether there is any prejudice to any of the parties as a result of the limitation issue; (c) determine if the special circumstances result solely from the Defendant’s conduct or from the conduct of a person who is not party to the action; and 36 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

(d) strike an appropriate balance of the interests of the parties in order to achieve the most justice with the least injustice. 46 I agree with the Master that the factual matrix amply supports the conclusion that a consideration of each of those factors on this record warrants the relief prayed for by the appellant. It follows that I would allow the appeal and restore the Order of the Master. Appeal dismissed. Ballantyne v. Saskatchewan Government Insurance 37

[Indexed as: Ballantyne v. Saskatchewan Government Insurance] Rachel Ballantyne, Appellant and Saskatchewan Government Insurance, Respondent Stanley Ballantyne, Appellant and Saskatchewan Government Insurance, Respondent Saskatchewan Court of Appeal Docket: CACV2332, CACV2333 2015 SKCA 38 Jackson, Klebuc, Ryan-Froslie JJ.A. Heard: November 25, 2014 Judgment: April 21, 2015 Insurance –––– Automobile insurance — No-fault benefits — Disability benefits (loss of income payments) — Entitlement — Miscellaneous –––– In- sureds were spouses who were injured in automobile accident and were entitled to benefits under The Automobile Accident Insurance Act — Insurer found that insureds were students and were capable of continuing as such, so that they were not entitled to income replacement benefits — Internal appeal upheld finding — Commission found s. 123(1) of Act only provided income replacement benefits to students whose current studies would prepare them for employment in readily identifiable field, and that insureds’ courses did not train them for any specific job, nor did it relate to their occupation as commercial fishers — Commission determined that goal of achieving grade equivalency sufficient to obtain janitorial work on their reserve was too remote to qualify as employment that current studies would have allowed them to hold — Insureds appealed — Ap- peal allowed, new hearing ordered — Insureds were required to prove entitlement to income replacement benefits and designation as disabled did not entitle them to specific benefits without meeting onus of proof — Commission’s interpretation of s. 123(1) was too restrictive and did not accord with purpose of Act generally no fault injury benefits in particular — Commission’s interpretation of s. 123(1) would exclude from income replacement benefits any student whose current studies did not prepare them for specific type of employment, which did not accord with Act’s definition of employment which covers all types of employment for remuneration — Phrase “to hold employment that student’s current studies would have allowed student to hold” does not require “employment” to be specifically related to “current studies”. 38 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Cases considered by Ryan-Froslie J.A.: Acton v. Britannia (Rural Municipality) No. 502 (2012), 16 C.C.L.I. (5th) 1, [2013] 4 W.W.R. 213, 40 M.V.R. (6th) 234, 405 Sask. R. 180, 563 W.A.C. 180, 2012 CarswellSask 853, 2012 SKCA 127, [2013] I.L.R. I-5376, [2012] S.J. No. 791 (Sask. C.A.) — referred to Caplette v. Saskatchewan Government Insurance (2011), 2011 SKCA 69, 13 M.V.R. (6th) 177, 99 C.C.L.I. (4th) 190, 2011 CarswellSask 397, 334 D.L.R. (4th) 628, 375 Sask. R. 37, 525 W.A.C. 37 (Sask. C.A.) — referred to Collis v. Saskatchewan Government Insurance (1998), 1998 CarswellSask 267, 165 Sask. R. 108, [1998] S.J. No. 123 (Sask. Q.B.) — followed Job v. Saskatchewan Government Insurance (2004), 19 C.C.L.I. (4th) 13, 2004 SKCA 164, 2004 CarswellSask 845, 257 Sask. R. 85, 342 W.A.C. 85, [2004] S.J. No. 740 (Sask. C.A.) — followed Murphy v. Saskatchewan Government Insurance (2008), 61 C.C.L.I. (4th) 172, 310 Sask. R. 149, 423 W.A.C. 149, 2008 SKCA 57, 2008 CarswellSask 269, [2008] 7 W.W.R. 401, (sub nom. Saskatchewan Government Insurance v. Murphy) [2008] I.L.R. I-4695 (Sask. C.A.) — referred to Rizzo & Rizzo Shoes Ltd., Re (1998), 1998 CarswellOnt 1, 1998 CarswellOnt 2, 50 C.B.R. (3d) 163, [1998] 1 S.C.R. 27, 33 C.C.E.L. (2d) 173, 154 D.L.R. (4th) 193, 36 O.R. (3d) 418 (headnote only), (sub nom. Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re) 221 N.R. 241, (sub nom. Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re) 106 O.A.C. 1, (sub nom. Adrien v. Ontario Ministry of La- bour) 98 C.L.L.C. 210-006, 36 O.R. (3d) 418 (note), 36 O.R. (3d) 418, [1998] S.C.J. No. 2 (S.C.C.) — followed Saskatchewan Government Insurance v. Speir (2009), 2009 SKCA 73, 2009 CarswellSask 434, 76 C.C.L.I. (4th) 39, 460 W.A.C. 250, 331 Sask. R. 250 (Sask. C.A.) — referred to Statutes considered: Automobile Accident Insurance Act, R.S.S. 1978, c. A-35 Generally — referred to Pt. VIII — referred to Pt. VIII, Div. 4 — referred to s. 2(1)(p) “employment” — considered s. 100(a.1) “current studies” [en. 2002, c. 44, s. 30(2)] — considered s. 100(p) “student” — referred to s. 113 — considered s. 121 — considered ss. 121-125 — referred to s. 122 — considered s. 123 — considered s. 123(1) — considered s. 156 — considered Ballantyne v. Saskatchewan Government Insurance Ryan-Froslie J.A. 39

s. 171 — considered s. 193(5) — considered s. 194(1) — considered Interpretation Act, 1995, S.S. 1995, c. I-11.2 s. 10 — considered s. 13 — considered

APPEALS by insureds from determination denying income replacement benefits.

Jonathan Abrametz, for Appellants Jane Wootten, for Respondent

Ryan-Froslie J.A.: I. Introduction 1 The appellants, Stanley and Rachel Ballantyne, are spouses of Ab- original descent who live on a reserve in northern Saskatchewan. In 2009 they were injured in a motor vehicle accident and, as a result, were entitled to benefits pursuant to the no fault provisions of The Automobile Accident Insurance Act, RSS 1978, c A-35 [Act]. The respondent, Sas- katchewan Government Insurance [SGI], the Insurer under the Act, determined that Mr. and Mrs. Ballantyne both qualified as students under the provisions of the Act but refused their application for income replacement benefits on the basis their injuries did not prevent them from resuming their studies or engaging in employment that their studies may have entitled them to obtain. The Automobile Injury Appeal Commission [the Commission] upheld that decision. The Ballantynes now appeal the Commission’s decisions to this Court. For the reasons that follow, I find their appeals have merit and therefore would set aside the decisions of the Commission and order new hearings.

II. Background 2 On September 28, 2009, Mr. and Mrs. Ballantyne were struck by a truck while crossing a street. Mr. Ballantyne sustained an injury to his legs and a fractured pelvis. Mrs. Ballantyne suffered a fractured collar bone, a dislocated shoulder and a dislocated hip, which required surgery. She testified that she was in a wheelchair for six months following the accident. 3 Prior to the accident, Mr. Ballantyne was self-employed as a commercial fisher. He worked seasonally during the early spring (May and June) 40 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

and in early fall (late August to October). At the time of the accident, Mr. Ballantyne was registered to attend a pre-trade upgrader program offered through a community college. The course was to run from September 9, 2009 to December 11, 2009. His attendance at that course had been delayed to accommodate completion of the fishing season. Accordingly, at the time he was injured, while he had been accepted into that course, he had not yet commenced attending. 4 At the time of the accident, Mrs. Ballantyne was attending a literacy program offered through the local community college. That course was to run from September 14, 2009 to December 18, 2009. Mrs. Ballantyne had, in the past, assisted her husband in the commercial fishing operation. It was not clear from the evidence whether she was involved in that enterprise at the time of the accident. 5 Mr. Ballantyne testified that fish stocks were declining and he wanted to obtain employment on his reserve. To do so, he had to have at least a grade 10 education and had only completed grade 6. Mr. Ballantyne indicated his goal was to achieve grade 12 and thereafter to obtain “any job” available on the reserve. Mrs. Ballantyne had quit school in grade 5. Her goal prior to the accident was to acquire sufficient education to obtain a janitorial job on the reserve. 6 On October 6, 2009 the Ballantynes applied for benefits pursuant to Part VIII of the Act. SGI accepted they were students within the meaning of the Act and paid each of them a loss of studies benefit based on their attendance at a post-secondary institution for one term. They also received compensation for permanent bodily impairment and a living assistance benefit which compensated them for the cost of hiring someone to perform tasks of daily living. The living assistance benefits were paid to Mr. Ballantyne until February 9, 2010 and to Mrs. Ballantyne until April 2010. 7 The Ballantynes applied for income replacement benefits pursuant to s. 123 of the Act. By letters dated September 15, 2010 to Mrs. Ballantyne and October 12, 2010 to Mr. Ballantyne, SGI denied those benefits on the basis the Ballanytnes’ injuries did not prevent them from resuming their studies or engaging in employment that their studies may have enabled them to obtain. 8 The Ballantynes appealed SGI’s decision to the Commission. Ballantyne v. Saskatchewan Government Insurance Ryan-Froslie J.A. 41

III. Decision of the Commission 9 The Commission denied the Ballantynes’ appeals. It held the onus rested with the Ballantynes, not SGI, to establish they qualified for income replacement benefits. It held that that onus would only shift to SGI if SGI had approved such benefits and then subsequently terminated them. 10 The Commission also determined that the Ballantynes did not qualify under s. 123 of the Act for income replacement benefits for the following reasons: first, their studies were not related to their occupation as commercial fishers; second, they did not prove they were unable to fish because of the accident; and third, they had failed to establish they were unable to hold an employment that their “current studies” would have enabled them to hold. The Commission interpreted s. 123(1) to mean that the “current studies” engaged in by a claimant must qualify him or her for a specific type of employment. Accordingly, the possibility that Mr. Ballantyne’s upgrading course might entitle him to apply for janitorial work on the reserve sometime in the future was too remote to be considered employment his “current studies” might enable him to obtain. The Commission found Mrs. Ballantyne’s literacy course was not related to her employment as a commercial fisher and that she had not established she was unable to do that work because of the accident. In its opinion, s. 123 did not apply to her. 11 Based on its interpretation of s. 123, the Commission enunciated its concern that the Act was deficient because it did not provide income replacement benefits for claimants who are attending basic adult education courses which, although not directly related to a specific type of employment, are nonetheless “gateway educational experiences.” It was obviously troubled by the fact the Ballantynes may not be entitled to benefits available to other students.

IV. Analysis 12 The Ballantynes appeal the Commission’s decisions pursuant to s. 194(1) of the Act, which provides a right of appeal on a question of law only. The standard of review with respect to such appeals is one of correctness (see: Caplette v. Saskatchewan Government Insurance, 2011 SKCA 69, 334 D.L.R. (4th) 628 (Sask. C.A.) [Caplette]; Murphy v. Saskatchewan Government Insurance, 2008 SKCA 57, [2008] 7 W.W.R. 401 (Sask. C.A.)). 42 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

13 The Ballantynes base their appeal on two grounds: (1) the Commis- sion erred by placing the onus on them to establish they qualified for an income replacement benefit pursuant to s. 123 of the Act, and (2) the Commission erred by finding they did not qualify for income replacement benefits. While the second ground of appeal was characterized by counsel for the Ballantynes as a question of mixed fact and law, it turns primarily on the Commission’s interpretation of s. 123(1) of the Act. In this context at least, how s. 123(1) is to be interpreted is a question of law.

1. The Onus of Proof 14 The Ballantynes argue a claimant has the onus of establishing that he or she is disabled within the meaning of the Act and thereafter, the onus shifts to SGI to prove that benefits under the Act are not payable or if paid are no longer required. In my view, this argument is based on a misunderstanding of the principles enunciated in Collis [Collis v. Saskatchewan Government Insurance (1998), 165 Sask. R. 108 (Sask. Q.B.)] and Job [Job v. Saskatchewan Government Insurance, 2004 SKCA 164, 257 Sask. R. 85 (Sask. C.A.)]. In both those cases, SGI paid income replacement benefits to the claimants and then terminated those benefits. Collis and Job held that when an insurer alleges that benefits are no longer payable, it bears the onus of proving that. 15 As a general rule, the onus of establishing entitlement to an insurance benefit in the first instance rests with the claimant (see: Caplette at paras. 25-27). The fact that a claimant is “disabled” and qualifies for one type of benefit under the Act does not automatically mean the claimant qualifies for all benefits under the Act. Consequently, a claimant must establish he or she meets the pre-conditions necessary for entitlement to any benefit they claim. 16 In the case at hand, SGI never accepted that the Ballantynes were entitled to income replacement benefits. Accordingly, the onus rested with the Ballantynes to establish, on a balance of probabilities, that they are entitled to such benefits. The fact they have been accepted as “disabled” for the purpose of receiving a daily living assistance benefit pursuant to s. 156 of the Act does not mean they are entitled to receive income replacement benefits. As counsel for SGI pointed out, a claimant may require assistance with the tasks of daily living (eg., vacuuming, shovelling snow, hauling wood) yet be able to perform the tasks associated with their employment. Ballantyne v. Saskatchewan Government Insurance Ryan-Froslie J.A. 43

17 In my view, the Ballantynes’ first ground of appeal is without merit and I would not give it effect.

2. Interpretation of s. 123(1) of the Act 18 The Commission’s decision that neither of the Ballantynes qualify for income replacement benefits pursuant to s. 123(1) turns largely on its interpretation of that subsection. The relevant portions of s. 123 read as follows: 123(1) If a student is unable because of an accident to hold an employment that the student’s current studies would have allowed the student to hold, the student is entitled to an income replacement benefit pursuant to this section. (2) The insurer shall pay the income replacement benefit pursuant to this section: (a) in the case of a student who, at the date of the accident, was under 16 years of age or studying at the elementary level, commencing on the day that the student reaches 16 years of age; and (b) in the case of a student who, at the date of the accident, is studying at the secondary level or post-secondary level, commencing on the day scheduled at the date of the accident for completion of the student’s current studies. (3) In the case of a student under 16 years of age or studying at the elementary or secondary level, the insurer shall calculate the income replacement benefit pursuant to this section: (a) for the first year following a student’s entitlement to an income replacement benefit, on the basis of a yearly employment income determined on the basis of a 40-hour work week paid on the basis of the minimum wage established pursuant to Part II of The Saskatchewan Employment Act; and (b) for the period following the one-year period mentioned in clause (a), on the yearly employment income equal to a yearly average computed on the basis of the industrial average wage for the 12 months before the July 1 of the year for which the calculation is made. (4) In the case of a student studying at the post-secondary level, the insurer shall calculate the income replacement benefit pursuant to this section on the basis of the yearly employment income equal to a yearly average computed on the basis of the industrial average wage for the 12 months before the July 1 of the year for which the calculation is made. 44 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

(5) Notwithstanding subsection (3), if a student suffers a catastrophic injury as a result of the accident, the insurer shall calculate the income replacement benefit pursuant to this section on the basis of a yearly employment income computed on the basis of the industrial average wage for the 12 months before the July 1 of the year for which the calculation is made. [emphasis added] 19 The leading case with respect to statutory interpretation is the Su- preme Court of Canada’s decision in Rizzo & Rizzo Shoes Ltd., Re, [1998] 1 S.C.R. 27 (S.C.C.) [Rizzo Shoes]. A number of principles set out in that case are applicable to the case at hand, namely: 1. The words of an Act are to be read in their context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, its objects, and the intention of the legislature (See: Rizzo Shoes at para. 87). (See also: Saskatchewan Government Insurance v. Speir, 2009 SKCA 73 (Sask. C.A.) at para 20, (2009), 331 Sask. R. 250 (Sask. C.A.); and Acton v. Britannia (Rural Municipality) No. 502, 2012 SKCA 127 (Sask. C.A.) at paras 16-17, (2012), [2013] 4 W.W.R. 213 (Sask. C.A.) [Acton]). 2. The legislature does not intend to produce absurd consequences. An interpretation can be considered absurd if it leads to ridiculous or frivolous consequences, if it is extremely unreasonable or ineq- uitable, if it is illogical or incoherent or if it is incompatible with other provisions or with the object of the legislative enactment (See: Rizzo Shoes at para. 27). 3. Any statute characterized as conferring benefits must be interpreted in a broad and generous manner (See: Rizzo Shoes at para. 21). This principle is enshrined in s. 10 of The Interpretation Act, 1995, SS 1995, c. I-11.2 (See: Acton at paras. 16-18). 4. Any doubt arising from difficulties of language should be resolved in favour of the claimant (See: Rizzo Shoes at para. 36). 20 In Sullivan on the Construction of Statutes, 6th ed (Markham: Lexis- Nexis, 2014) at 28-29, Ruth Sullivan sets out three propositions that apply when interpreting the plain meaning of a statutory provision: 1. It is presumed that the ordinary meaning of a legislative text is the meaning intended by the legislature. In the absence of a reason to reject it, the ordinary meaning prevails. Ballantyne v. Saskatchewan Government Insurance Ryan-Froslie J.A. 45

2. Even if the ordinary meaning is plain, courts must take into account the full range of relevant contextual considerations including purpose, related provisions in the same and other Acts, legislative drafting conventions, presumptions of legislative intent, absurdities to be avoided and the like. 3. In light of these considerations, the court may adopt an interpretation that modifies or departs from the ordinary meaning, provided the interpretation adopted is plausible and the reasons for adopting it are sufficient to justify the departure from ordinary meaning. 21 In sum, in interpreting s. 123(1) of the Act, the ordinary meaning of the words of that provision must be read in the context of the Act as a whole and in the context of Part VIII in particular. It is also important to keep in mind the purpose of the Act and the legislature’s intention in enacting the provision. The provision is benefit conferring and accordingly must be given a broad and purposive interpretation. It must also be interpreted in a manner that will not lead to absurdities. With this background in mind, I turn to the Commission’s decision in this case. 22 The Commission’s interpretation of s. 123(1) is summarized at paras. 48 and 49 of its decision with respect to Mr. Ballantyne as follows: [48] In the present case, no income replacement was ever paid to the Appellant and in addition, the course of studies, pre-employment upgrading, was neither post secondary studies (although provided by a community college which is defined as a post secondary institution) nor was the Appellant unable because of the accident to hold employment that the student’s current studies would have allowed the student to hold. [49] In this case, the current studies were basic adult education and not related to the student’s occupation as a fisher. The issue as to whether after a number of adult upgrading courses the Appellant might achieve a Grade 10 equivalency and thus be entitled to apply for janitorial work at his First Nation in our view is too remote. There is little evidence this was a real career path for the Appellant. [emphasis in original] 23 The Commission’s interpretation of s. 123 with respect to Mrs. Bal- lantyne’s appeal is found at paras. 50 and 51 of that decision: [50] If the training had been related to the Appellant’s employment as a fisher, she would have been entitled to receive IRB if she could show as a result of the mva [motor vehicle accident] she was not able to perform the employment of a fisher. The onus of proof would be with her. 46 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[51] However, the training was not, and s123 does not apply to the Appellant. 24 In interpreting s. 123, the Commission relied on what they viewed as the ordinary meaning of the words of that section. It found s. 123(1) only provides income replacement benefits to students whose “current studies” would prepare him or her for employment in a readily identifiable field. It concluded that the “upgrading” for which Mr. Ballantyne was registered and the linguistic course that Mrs. Ballantyne was attending did not train them for any specific job, nor did it relate to their occupation as commercial fishers. Consequently, the Commission determined that the Ballantynes’ goal of achieving a grade equivalency sufficient to obtain janitorial work on their reserve was too remote to qualify as “an employment that [their] current studies would have allowed [them] to hold.” 25 In my view, the Commission erred in its interpretation of s. 123(1). Its interpretation is too restrictive and does not accord with the purpose or tenor of the Act generally or Part VIII (no fault injury benefits) in particular. It does not reflect the ordinary meaning of the words used in the section and results in an absurdity which cannot be upheld. Let me explain. 26 The Act covers a broad spectrum of matters. This appeal involves a claim under Part VIII of the Act which provides “no fault” insurance benefits to claimants as a result of bodily injuries arising out of a motor vehicle accident. One benefit provided under Part VIII is income replacement. The purpose of income replacement benefits is to compensate insured persons for actual and future loss of income which results from their injuries. 27 Section 171 of Part VIII makes it clear that the purpose of that Part is to provide fair compensation for those covered by the no fault provisions. It reads as follows: 171 The insurer shall advise and assist every claimant and shall en- deavour to ensure that every claimant is informed of and receives the benefits to which the claimant is entitled. 28 Section 171 imposes a duty on SGI to ensure a claimant receives the benefits to which they are entitled. The importance of that duty is under- scored by s. 193(5) of the Act which states that in dealing with appeals from SGI’s determinations of benefits, SGI’s “finding of facts must be adopted on appeal unless the claimant puts them in issue.” Ballantyne v. Saskatchewan Government Insurance Ryan-Froslie J.A. 47

29 In this case, SGI determined the Ballantynes were students within the meaning of the Act and this finding was not challenged by the Bal- lantynes. The Commission questioned whether that qualification was correct, but it is bound by SGI’s determination. Thus, the issue in this appeal is not whether the Ballantynes were properly qualified as students within the meaning of the Act but rather whether, as students, they are entitled to income replacement benefits. 30 Division 4 of Part VIII deals with income replacement benefits for claimants covered under the no fault system. Section 113 thereof sets out income replacement benefits for all insured persons other than students. Student benefits are set out in ss. 121-125 of the Act. Pursuant to s. 121, a student who is injured in a motor vehicle accident, and who misses school as a result, is automatically entitled to a loss of studies benefit, the purpose of which is to compensate the student for study time lost due to the accident. 31 The Act recognizes that study time is not the only loss a student may suffer. If a student is employed part-time or during school breaks then s. 122 provides income replacement benefits for the inability to perform that employment. The application of s. 122 to the circumstances of this case did not form part of the Ballantynes’ appeals. 32 The Act also recognizes students are (generally) not students forever, that they will enter the workforce at some point and they will presumably earn an income. A delay in completing their current studies, caused by a motor vehicle accident, means the student’s entry into the workforce will also be delayed. This eventuality is covered by s. 123 which deals with a student’s future loss of income once they should have, in the normal course of events, completed their “current studies”. 33 For the purposes of this appeal, it is only the interpretation of s. 123(1) that is in issue. For ease of reference, I will reproduce that subsection, which reads as follows: 123(1) If a student is unable because of an accident to hold an employment that the student’s current studies would have allowed the student to hold, the student is entitled to an income replacement benefit pursuant to this section. 34 A number of the terms used in s. 123(1) are defined in the Act, including “student”, “employment”, and “current studies”. As there is no issue that the Ballantynes are students for the purposes of s. 123, it is unnecessary to consider the definition of “student” for the purposes of this appeal. “Current studies” is defined in Part VIII of the Act while 48 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

“employment” is defined in s. 2 of the Act. Pursuant to s. 13 of The Inter- pretation Act, definitions in an enactment “apply to the whole enactment ... except to the extent that a contrary intention appears in the enactment.” No contrary intention is expressed or implied in the Act and, accordingly, the definition of “employment” found in s. 2(1) applies to s. 123(1). 35 “Employment” and “current studies” are defined as follows: 2(1) In this Act: ... (p) “employment” means the state of being employed for remuneration; ... 100 In this Part: ... (a.1) “current studies” means studies that are part of a program of studies offered by an educational institution at the elementary, secondary or post-secondary level to which, at the date of an accident, a student has been admitted; [emphasis added] 36 It is clear that s. 123 applies to all students regardless of whether they are studying at an elementary, secondary or post-secondary level. It is reasonable to conclude that the phrase “an employment that the student’s current studies would have allowed the student to hold” as found in that subsection should be interpreted broadly. To do so is consistent with the rules of statutory interpretation. 37 Given the definition of “current studies”, the purpose of such studies in the context of s. 123(1) is to improve a student’s qualifications for employment. Depending on the nature of the “current studies”, it may “allow” them to qualify for a specific job. For example, a degree in education would allow one to work as a teacher. It may, however, merely allow the student to enter the workforce at a minimum wage level. For example, a 16 year old with a grade 10 education would only qualify for minimum wage employment. “Current studies” may also “allow” a student to advance in their job or career, for example, where the studies increase their knowledge or skillset. A student’s “current studies” may also relate to the learning of basic skills. It follows learning to speak English may “allow” the student to enter the workforce and obtain employment commensurate with their education and job skills. These are Ballantyne v. Saskatchewan Government Insurance Ryan-Froslie J.A. 49

merely some examples of how “current studies” may “allow” an employment. While “current studies” directed at training students for a specific career clearly fall within the ambit of s. 123(1), so do other studies of a more general nature whose purpose is not to train a student for a particular job but rather to ready them for employment in a more general sense. 38 The Commission’s interpretation of s. 123(1) would exclude from income replacement benefits any student whose current studies did not prepare them for a specific type of employment. This does not accord with the Act’s definition of employment which covers all types of employment for remuneration. Moreover, it would render the provision of income replacement benefits for elementary and secondary students meaningless as their studies, like those engaged in by the Ballantynes, would only allow them to qualify for the possibility of unspecified future employment. It is possible it may also deny such benefits to post-secondary students engaged in general studies such as Arts and Science. Such an interpretation leads to an absurdity and defeats the purpose of Part VIII of the Act and, in particular, the purpose of income replacement benefits for students. 39 In my view, the presence of the article “an” before employment in s. 123(1) does not support the conclusion that the employment must be specific to the current studies. As stated in Rizzo Shoes: where a statutory provision confers benefits on an individual, it must be interpreted in a generous and purposive manner and “[a]ny doubt arising from difficulties of language should be resolved in favour of the claimant” (para. 36). In this case, the Commission adopted a narrow, plain language interpretation and, when faced with ambiguities in the wording of s. 123(1), it resolved those ambiguities in favour of the insurer. 40 In sum, I conclude s. 123(1) applies to all students regardless of the level of their “current studies” (elementary, secondary, or post-secondary) and regardless of the nature of those studies (general or job specific). The phrase “to hold an employment that the student’s current studies would have allowed the student to hold” does not require “an employment” to be specifically related to the “current studies” though in some instances that may in fact be the case. That phrase should be interpreted broadly to mean any employment for remuneration that a student’s “current studies” may assist in qualifying him or her to obtain. 41 In my opinion, the Commission erred in its interpretation of s. 123(1) of the Act and accordingly, the Ballantynes’ appeals must be allowed. 50 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

V. Remedy 42 The Ballantynes requested that this Court declare they are eligible for income replacement benefits pursuant to s. 123 of the Act. I find myself unable to make that declaration for the following reasons: 1. It is not clear from the evidence or the Commission’s findings whether Mrs. Ballantyne was engaged in the commercial fishing enterprise immediately prior to the accident. 2. The material filed on appeal does not include all of the documents filed with the Commission. Of particular importance, is the absence of the medical reports, on task rehabilitation assessments and the finding of permanent disability with respect to both Mr. and Mrs. Ballantyne. This information is critical in assessing if and when income replacement benefits should be allowed. 3. It is not clear from the evidence or the Commission’s findings whether the courses being taken by the Ballantynes were available to them in their remote northern community after the accident. 43 In the circumstances, there is no alternative but to order a new hearing to determine whether, given the broad interpretation to be applied to s. 123(1), the Ballantynes would, in fact, qualify for income replacement benefits. 44 At the hearing of the appeal, this Court raised concerns with respect to the fairness of the proceedings before the Commission as it appears English was not the Ballantynes’ first language. The transcripts of the proceedings before the Commission seem to indicate that the Ballantynes may not have understood many of the questions posed to them. This is particularly true of Mrs. Ballantyne’s testimony. Although this Court reserved the right to call upon counsel to address the issue of hearing fairness, I find it is unnecessary to do so as I have determined the Bal- lantynes’ appeals should be allowed on the basis the Commission erred in its interpretation of s. 123(1) of the Act. I raise it now only to alert the Commission to the possibility that in any future hearing the Ballantynes may require the assistance of an interpreter.

VI. Conclusion 45 I would allow the appeals by Stanley Ballantyne and Rachel Ballan- tyne, set aside the Commission’s decisions and order new hearings. The Ballantynes are entitled to their costs before the Commission. Ballantyne v. Saskatchewan Government Insurance Klebuc J.A. 51

46 The Ballantynes shall have their costs with respect to both appeals based on Column II assessed in the usual way. Because their appeals were heard together, their costs should include only one appearance by legal counsel to present argument.

Jackson J.A.:

I concur

Klebuc J.A.:

I concur Appeal allowed. 52 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[Indexed as: Tien Lung Taekwon-Do Club v. Lloyd’s Underwriters] Tien Lung Taekwon-Do Club, Authentic South Side Taekwon- Do Club and Nicholas Pagnotta, Respondents (Applicants) and Lloyd’s Underwriters (Carrying on Business Under the Name and Style of Sutton Sportscover), Appellant (Respondent) Alberta Court of Appeal Docket: Edmonton Appeal 1403-0105-AC 2015 ABCA 46 Marina Paperny, Peter Martin JJ.A., June Ross J. (ad hoc) Heard: January 8, 2015 Judgment: February 3, 2015 Insurance –––– Actions on policies — Commencement of proceedings — Obligations of insurer — To defend — Miscellaneous –––– Matter arose from incident that occurred wherein plaintiff alleged that he sustained personal injuries during martial arts sparring match with defendant P at club operated by other defendants — Plaintiff alleged that his personal injuries were result of negligence, intentional acts, breach of contracts and vicarious liability of defendants — Defendants’ insurer refused to defend action on behalf of defendants — It claimed that insurance policies excluded from coverage all claims which arose from injuries sustained in match between insured and claimant, regardless of whether they were caused intentionally or negligently — Defendants’ application for declaration that insurer was obliged to defend action was granted — Trial judge found policies excluded from coverage any bodily injury caused or contributed by any insured to any participant and/or any bodily injury caused or contributed by any participant in match or practice in regards to category 4 sports unless specified in declarations — Trial judge found declarations indicated that defendants were named insured for purpose of Sport/Activities - Mar- tial Arts — Trial judge found language of policies was ambiguous — Trial judge found by operation of doctrine of contra proferentem, declaration over- rode exclusion, and matches and practices were reasonably contemplated to be covered under policies — Trial judge found insurer was obligated to defend action on behalf of defendants — Insurer appealed — Appeal dismissed — Trial judge correctly stated and applied applicable legal principles and reached correct interpretation of policy — Policy was ambiguous, should be construed contra proferentem, and insurer was obliged to defend action — Term martial arts in declarations portion of policy as exception rendered relevant exclusion clause inapplicable rather than meaningless. Tien Lung Taekwon-Do Club v. Lloyd’s Underwriters 53

Cases considered: Creston Moly Corp. v. Sattva Capital Corp. (2014), 2014 SCC 53, 2014 CSC 53, 461 N.R. 335, 25 B.L.R. (5th) 1, 373 D.L.R. (4th) 393, [2014] 9 W.W.R. 427, 2014 CarswellBC 2267, 2014 CarswellBC 2268, 59 B.C.L.R. (5th) 1, 358 B.C.A.C. 1, 614 W.A.C. 1, [2014] S.C.J. No. 53 (S.C.C.) — followed Giacomelli v. Scottsdale Ins. Co. (2009), 354 Mont. 15, 221 P.3d 666 (U.S. Mont. S.C.) — referred to Housen v. Nikolaisen (2002), 10 C.C.L.T. (3d) 157, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, 2002 CarswellSask 178, 2002 CarswellSask 179, 2002 SCC 33, 30 M.P.L.R. (3d) 1, 219 Sask. R. 1, 272 W.A.C. 1, [2002] 2 S.C.R. 235, 2002 CSC 33, [2002] S.C.J. No. 31, REJB 2002-29758 (S.C.C.) — referred to ING Insurance Co. of Canada v. Mitsios (2007), 45 C.C.L.I. (4th) 88, 2007 CarswellOnt 478, 84 O.R. (3d) 715, [2007] I.L.R. I-4575, [2007] O.J. No. 338 (Ont. S.C.J.) — followed Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada (2010), [2010] 2 S.C.R. 245, (sub nom. Progressive Homes Ltd. v. Lombard General Insurance Co.) [2010] I.L.R. I-5051, 406 N.R. 182, 92 C.L.R. (3d) 1, [2010] 10 W.W.R. 573, 2010 SCC 33, 2010 CarswellBC 2501, 2010 CarswellBC 2502, 89 C.C.L.I. (4th) 161, 73 B.L.R. (4th) 163, 9 B.C.L.R. (5th) 1, 323 D.L.R. (4th) 513, 293 B.C.A.C. 1, 496 W.A.C. 1, [2010] S.C.J. No. 33 (S.C.C.) — followed Tedford v. TD Insurance Meloche Monnex (2012), 2012 ONCA 429, 2012 Cars- wellOnt 7791, [2012] I.L.R. I-5302, 292 O.A.C. 374, 9 C.C.L.I. (5th) 15, 112 O.R. (3d) 144, 351 D.L.R. (4th) 239 (Ont. C.A.) — followed United States Fire Ins. Co. v. Ohio High School Athletic Assn. (1991), 595 N.E.2d 418, 79 Ohio App.3d 760, 75 Ed. Law Rep. 1178 (U.S. Ohio Ct. App.) — referred to Vallieres v. Vozniak (2014), 2014 ABCA 290, 2014 CarswellAlta 1565, 5 Alta. L.R. (6th) 28, 46 R.P.R. (5th) 176, 377 D.L.R. (4th) 80, [2015] 1 W.W.R. 662, [2014] A.J. No. 964 (Alta. C.A.) — considered

APPEAL by defendant from judgment reported at Tien Lung Taekwon-Do Club v. Lloyd’s Underwriters (2014), 2014 ABQB 146, 2014 CarswellAlta 447, 32 C.C.L.I. (5th) 201, [2014] I.L.R. I-5583, 1 Alta. L.R. (6th) 153 (Alta. Q.B.), granting application for order that insurer defend action.

K.M. Kenny, for Respondents / Applicants D.N. Delagran, for Appellant / Respondent 54 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

The Court:

1 This is an appeal of an Order requiring the Appellant, Lloyd’s Under- writers, to defend the Respondents in an action in the Alberta Court of Queen’s Bench. 2 The Respondents Tien Lung Taekwon-Do Club and Authentic South Side Taekwon-Do Club (“the Respondent Clubs”) are martial arts clubs which instruct and run classes, practices, matches, and other events related to Taekwon-Do. The Respondent Nicholas Pagnotta was employed by the Respondent Clubs as a Taekwon-Do instructor. 3 The Appellant issued insurance policies to the Respondent Clubs. The issue is whether or not a specific exclusion clause, Exclusion N, vitiates the Appellant’s duty to defend the insured Respondents in a Court of Queen’s Bench action.

Facts: 4 On October 21, 2010, the Appellant issued separate insurance policies to the Respondent Clubs. Both policies included coverage for general liability and for errors and omissions. The policies are essentially identical, and the Respondents have relied upon them collectively. 5 On the weekend of March 18-19, 2011, Kevin Birss (“the QB Plain- tiff”) underwent Black Belt testing with the Respondent Clubs. On March 19, 2011, he participated in the sparring component of the testing, which allegedly involved “contact sparring” with the Respondent Pagnotta. In a Statement of Claim filed on February 1, 2012 (“the QB Action”), the QB Plaintiff alleges that he was injured during the “sparring match” with Pagnotta, suffering an acute subdural hematoma, strokes, and ruptures to blood vessels in his brain. The Statement of Claim alleges that the injuries were caused by the intentional acts of Pagnotta, or alternatively, by his negligence in failing to pull his punches or stop the match. It is alleged that the Respondent Clubs are vicariously liable for the actions or omissions of the Respondent Pagnotta, and further that they were negligent or in breach of contract. 6 The Respondents believed the QB Plaintiff’s claims were covered under the policies issued by the Appellant. Accordingly, they requested that the Appellant step in and defend them in the QB Action. 7 However, in a letter dated September 14, 2013, the Appellant denied the Respondents coverage and refused to defend the QB Action. The Ap- Tien Lung Taekwon-Do Club v. Lloyd’s Underwriters 55

pellant claimed it was not required to defend the Respondents, because under Exclusion N, the policies do not apply to: Any Bodily Injury caused or contributed by any Insured to any participant and/or any Bodily Injury caused or contributed by any participant in a match or practice in regards to Category 4 Sports unless specified in the Declarations. 8 Category 4 Sports are defined as “Rugby Union, Rugby League, Soc- cer, Gaelic Football, Canadian or American Football, Ice Hockey, Kick Boxing, Boxing, Martial Arts and all other contact sports.” The “Declarations” include the following: Sport /Activities MARTIAL ARTS ... GENERAL LIABILITY... Sum Insured ... for the conduct of the Sport/Activities detailed above ... ERRORS & OMISSIONS ... Sum Insured ... for the conduct of the Sport/Activities detailed above ... Warranted: ... All participants must sign waiver. No live blades used. 9 The Respondents filed an Originating Application in Queen’s Bench seeking an Order requiring the Appellant to defend them in the QB Ac- tion. The application was heard in Special Chambers. 10 The sole issue before the Chambers Judge and on appeal is whether Exclusion N excludes coverage for bodily injury caused in a practice or match.

Decision Below: 11 The Chambers Judge observed at paras 28-29: In my opinion, the structure of the Policies is awkward and ambiguous in the sense that on one hand, it excludes coverage for “Martial Arts” under the terms in Exclusion “N”, and on the other hand, specifies coverage of “Martial Arts” under the provisions of the declarations (being the specified sport/activities, referenced from Exclusion “N”). [The Respondents] are entitled to the benefit of this ambiguity, based on the contra proferentum rule: Progressive Homes at para 24. In effect, the languages in both Exclusion “N: and the referenced “Declarations” could be simply and reasonably construed together to 56 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

read ... thus: “This Policy does not apply to ‘any Bodily Injury caused or contributed by any Insured to any participant and/or any Bodily Injury caused or contributed by any participant in a match or a practice in regards to Martial Arts unless specified in the Declara- tions’ [and since Martial Arts was specified in the first box of the Declarations as the insured sport/activities, the Policy applies to Mar- tial Arts]. Emphasis in original. 12 The Chambers Judge also noted that the policies were silent in defin- ing what activities were within the meaning and scope of the term Mar- tial Arts, and therefore the Appellant should be held accountable for any ambiguity as to the meaning of that term, again based on the contra proferentum rule as outlined in Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, [2010] 2 S.C.R. 245 (S.C.C.) at paras 22-4 [Progressive Homes]. 13 The Chambers Judge considered evidence filed on the application by the Appellant that the international governing bodies of Taekwon-Do de- fine the activities of the sport as including both “step sparring” (a non- contact activity), and “free sparring” (a contact activity). He agreed with the Respondents’ submission that the Appellant’s interpretation would effectively exempt from coverage “the major activity involved in the Martial Arts sport of Taekwon-Do, being matches and practice”: para 35. At para 36: In this respect, to accept [the Appellant’s] interpretation would lead to an absurd result by first providing insurance coverage on the Dec- larations page of the Policies, and then later in Exclusion “N” to literally exclude from coverage a main component of the activity that [the Respondents] as the insured, have paid their premiums for. 14 The Chambers Judge also found persuasive the fact that the Declara- tions page of the policies requires that waivers be signed by participants and lists “No blades used” as a requirement for signing the policy. At para 37: [I]t can further be seen that the requirement for signing of a waiver and the prohibition of live blades, would appropriately and reasonably be in reference to matches and practices conducted by [the Re- spondents], in the course of operating a Taekwon-Do Club. 15 Based on the above, the Chambers Judge ruled that: • Exclusion N does not apply under the circumstances, as the Decla- rations page of the policies overrides the exclusion; Tien Lung Taekwon-Do Club v. Lloyd’s Underwriters 57

• “matches and practices” were reasonably contemplated to be covered under the policies; and therefore • the Appellant is obliged to defend the Respondents in the QB Action.

Grounds of Appeal: 16 The Appellant submits that the Chambers Judge erred in interpreting Exclusion N in a manner inconsistent with the terms of the policies. Spe- cifically, the Appellant argues that the Court: 1. found ambiguity in the policy wording where none existed; 2. misinterpreted the phrase “unless specified in the Declarations”; 3. incorrectly held that the term “Martial Arts” in the Declarations was an exception to Exclusion N; 4. interpreted the policy in a manner that renders Exclusion N meaningless; 5. assumed facts not in evidence — namely, that the Respondents paid premiums commensurate with the risk of injury during a match or practice; and 6. incorrectly concluded that the wording of Exclusion N would necessarily lead to an absurd result.

Standard of Review: 17 The standard of review in relation to interpretation of a contract was recently reviewed in Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53, 373 D.L.R. (4th) 393 (S.C.C.) [Sattva]. The Supreme Court considered the historical approach under which interpretation of a written contract was treated as a question of law, even where surrounding circumstances were considered in the course of interpretation. The Court rejected this approach, holding that “contractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix”: Sattva, para 50. As such, a deferential standard of review is appropriate, unless an error is made in relation to an extricable question of law: Sattva, paras 52-54, citing Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 (S.C.C.). 18 In Vallieres v. Vozniak, 2014 ABCA 290 (Alta. C.A.) [Vallieres], this Court held that the application of Sattva is limited in relation to standard 58 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

clauses in standard form contracts where interpretation has significant precedential value: Vallieres, paras 12-13. 19 The contractual provision at issue does not appear to be standard in the sense contemplated in Vallieres. There is no evidence that Exclusion N is present in contracts issued by insurers other than the Appellant. The parties have been unable to provide any Canadian jurisprudence dealing with this or a similar provision. The Appellant provided American cases dealing with sports exclusions, but the clauses do not follow the form of Exclusion N in providing that exceptions may be specified in Declara- tions: Giacomelli v. Scottsdale Ins. Co. (2009), 354 Mont. 15 (U.S. Mont. S.C. 2009); United States Fire Ins. Co. v. Ohio High School Athletic Assn. (1991), 79 Ohio App.3d 760 (U.S. Ohio Ct. App. 1991). Given the form of Exclusion N, we note as well that interpretation requires consideration of Exclusion N and the Declarations together. There is certainly nothing in the form of the Declarations to suggest that they are standard in any way. 20 In our view, the particularity of the interpretive issue in this case supports the application of a deferential review as called for in Sattva. That said, the result in this appeal does not depend on the standard of review. We conclude that the Chambers Judge correctly stated and applied the applicable legal principles and reached the correct interpretation of the policy.

Applicable Principles: 21 The parties concur with the principles stated by the Chambers Judge governing the duty to defend, as summarized in ING Insurance Co. of Canada v. Mitsios (2007), 84 O.R. (3d) 715 (Ont. S.C.J.) at para 6, and Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429 (Ont. C.A.) at para 14, (2012), 112 O.R. (3d) 144 (Ont. C.A.). Under these principles, pleadings are liberally interpreted to determine whether the plaintiff’s claim comes within the liability coverage. Once an insured demon- strates that the plaintiff’s allegations bring the claim within the policy coverage, the onus shifts to the insurer to show that the claim falls outside the coverage because of an exclusion clause. If there is an exception to the exclusion, the insured bears the burden of establishing that the exception applies. Tien Lung Taekwon-Do Club v. Lloyd’s Underwriters 59

22 Applicable principles under which insurance policies are interpreted, in particular application of the contra proferentum rule, were summarized in Progressive Homes at paras 22-4: 22 The primary interpretive principle is that when the language of the policy is unambiguous, the court should give effect to clear language, reading the contract as a whole (Scalera, at para. 71). 23 Where the language of the insurance policy is ambiguous, the courts rely on general rules of contract construction (Consolidated- Bathurst, at pp. 900-902). For example, courts should prefer interpretations that are consistent with the reasonable expectations of the parties (Gibbens, at para. 26; Scalera, at para. 71; Consolidated-Bath- urst, at p. 901), so long as such an interpretation can be supported by the text of the policy. Courts should avoid interpretations that would give rise to an unrealistic result or that would not have been in the contemplation of the parties at the time the policy was concluded (Scalera, at para. 71; Consolidated-Bathurst, at p. 901). Courts should also strive to ensure that similar insurance policies are construed consistently (Gibbens, at para. 27). These rules of construction are applied to resolve ambiguity. They do not operate to create ambiguity where there is none in the first place. 24 When these rules of construction fail to resolve the ambiguity, courts will construe the policy contra proferentem — against the insurer (Gibbens, at para. 25; Scalera, at para. 70; Consolidated-Bath- urst, at pp. 899-901). One corollary of the contra proferentem rule is that coverage provisions are interpreted broadly, and exclusion clauses narrowly (Jesuit Fathers, at para. 28).

Analysis: 23 The Appellant’s primary argument is that the phrase in Exclusion N, “unless specified in the Declarations”, unambiguously relates to the pre- ceding term, “match or practice”. Thus, to create an exception to Exclu- sion N, the Declarations would have to specify that the policy provides coverage for injuries sustained in a match or practice. 24 The Appellant’s argument does not reflect the full text of Exclusion N, which excludes liability for injury “in a match or practice in regards to Category 4 Sports unless specified in the Declarations.” Looking at these words alone, the phrase “unless specified in the Declarations” could equally refer to “Category 4 Sports”. In this case, the specification in the Declarations of a particular Category 4 Sport, Martial Arts, would indicate that Exclusion N does not apply. This was the basis of the construction adopted by the Chambers Judge. 60 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

25 Where more than one interpretation is supported by the text of a policy, the court is directed to consider the reasonable expectations of the parties, and to avoid an interpretation that would give rise to an unrealistic result or that would not have been in the contemplation of the parties. The Chambers Justice concluded that the Appellant’s proposed interpretation was not reasonable; that it was in fact absurd, as it would “literally exclude from coverage a main component of the activity that [the Re- spondents] as the insured, have paid their premiums for.” The Appellant submits that the Chambers Judge erred by assuming that the Respondents paid premiums commensurate with the risk of injury during a match or practice; and incorrectly concluded that the Appellant’s interpretation would lead to an absurd result. 26 The very limited evidence of surrounding circumstances provided to the Chambers Judge does not make clear the relative scope of the admitted coverage for liability arising from the conduct of the sport of Martial Arts, and the proposed exclusion for injuries caused or contributed to in a match or practice. The lack of any definition or guidance in the policy as to what is included in these terms contributes to the difficulty. 27 In our view, the Chambers Judge reasonably concluded that the exclusion proposed by the Appellant encompassed a “main component” of the coverage. Whether this would be so significant as to lead to an “absurd result” is perhaps debatable. 28 However, it does not matter. To suggest that the interpretation of the policy hinges on whether the Appellant’s interpretation would lead to an absurd result is to turn the contra proferentum rule on its head. The Re- spondents need only show that there are alternative reasonable interpretations of the policy, both supportable by the text of the policy and the reasonable expectations of the parties. Even assuming that the Appel- lant’s interpretation is reasonable, this does not detract from the Respon- dents’ alternative reasonable interpretation. 29 The Appellant also argues that interpreting the term “Martial Arts” in the Declarations as an exception renders Exclusion N meaningless. We disagree. The interpretation renders Exclusion N inapplicable, not meaningless. Exclusion N expressly provides that it can be rendered inapplicable when so specified in the Declarations. An interpretation that does exactly what is contemplated, can hardly make Exclusion N meaningless. 30 The Appellant’s real objection is that the specification of Martial Arts in the Declarations performs two functions: it both specifies the scope of coverage and the inapplicability of Exclusion N. This is “awkward and Tien Lung Taekwon-Do Club v. Lloyd’s Underwriters 61

ambiguous” as characterized by the Chambers Judge. But an exclusion that expressly contemplates exceptions does not become meaningless because it is excepted. Further, as correctly noted by the Chambers Judge, the Respondents are entitled to the benefit of the ambiguous interplay of Exclusion N and the Declarations 31 We conclude that the Chambers Judge was correct in determining that the policy was ambiguous, that it should be construed contra proferentem, and that the Appellant is obliged to defend the Respondents in the QB Action. 32 The appeal is dismissed. Appeal dismissed. 62 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[Indexed as: Wright v. Sun Life Assurance Co. of Canada] Dr. Robert S. Wright, Plaintiff and Sun Life Assurance Company of Canada and the Prudential Group Assurance Company of England (Canada), Defendants British Columbia Supreme Court Docket: Vancouver C983515 2015 BCSC 776 Adair J. Heard: March 9-13, 16-20, 23-27, 2015 Judgment: May 13, 2015* Insurance –––– Extent of risk (exclusions) — Accident and sickness insurance — Terms of art — “Total disability” –––– In December, 1993, insured dentist suffered injuries in skiing accident — Insured worked until March 1995, when he sold practice and began program in prosthodontistry — In March 1996, insured claimed income replacement benefits under disability insurance policy — Insurer approved claim, effective July, 1996 but demanded further medical and financial information — Insured maintained he was entitled to residual disability benefits as of date of accident — In January, 1998, insurer concluded insured partially disabled from December, 1993 until March 1995 and thereafter totally disabled from own occupation — Insurer refused to pay residual disability benefits due to absence of financial information — Insurer learned that insured had been practicing dentistry and terminated benefits as of October, 2001 — Insured brought action for benefits retroactive to date of accident, aggravated damages and related relief — Insurer brought counterclaim to recover benefits paid from March, 2000 to October, 2001 and for punitive damages — Action and counterclaim dismissed — Insured neither credible nor reliable — Arm fracture suffered by insured in accident had probably healed within eight weeks and was not cause of any ongoing disability or impairment — Accident probably caused aggravation of back problems but there was no medical diagnosis of injury resulting in chronic problems after accident — Insured failed to meet burden in policy of showing that from October 2001 onward he was still under regular care of physician as result of injury — Policy was type that pro- tected an insured against income loss during treatment phase of injury or sickness — Sporadic visits to practitioners and consultation with orthopaedic sur-

* Additional reasons concerning costs at Wright v. Sun Life Assurance Co. of Canada (2015), 2015 BCSC 1899, 2015 CarswellBC 2990 (B.C. S.C.). Wright v. Sun Life Assurance Co. of Canada 63 geon to request report did not qualify as “regular care of physician” — Insured failed to establish that, for period in issue, he was, as result of injury, unable to perform essential duties of his regular occupation and therefore “totally disabled” — Tasks or duties incidental to insured’s pre-accident practice such as orthodontics did not fall into category of “essential” — Claim for residual disability benefits not established — Insured failed to provide sufficient relevant financial information to quantify any such benefits that might be payable from December, 1993 to March, 1995 — Fact that insured was concealing what he was doing was insufficient basis for counterclaim — Evidence concerning what insured was doing and capable of doing from October 2001 to trial was too thin and unreliable. Cases considered by Adair J.: Andreychuk v. RBC Life Insurance Co. (2008), [2009] 3 W.W.R. 73, 446 W.A.C. 86, 265 B.C.A.C. 86, 305 D.L.R. (4th) 110, 58 B.C.L.R. (4th) 299, 2008 CarswellBC 2558, 2008 BCCA 492, 85 B.C.L.R. (4th) 299, 68 C.C.L.I. (4th) 75 (B.C. C.A.) — followed Bradshaw v. Stenner (2010), 2010 BCSC 1398, 2010 CarswellBC 2652, [2010] B.C.J. No. 1953 (B.C. S.C.) — followed Bradshaw v. Stenner (2012), 78 E.T.R. (3d) 41, 33 B.C.L.R. (5th) 45, 18 R.P.R. (5th) 184, 2012 CarswellBC 1936, 2012 BCCA 296, 325 B.C.A.C. 107, 553 W.A.C. 107 (B.C. C.A.) — referred to Ditomaso v. Manufacturers Life Insurance Co./Cie d’Assurance-vie Manufac- turers (2002), [2002] I.L.R. I-4079, 17 C.C.E.L. (3d) 67, 2002 CarswellBC 758, 2002 BCSC 502, 6 C.C.L.I. (4th) 252, [2002] B.C.J. No. 674 (B.C. S.C.) — considered Fidler v. Sun Life Assurance Co. of Canada (2006), 2006 SCC 30, 2006 Car- swellBC 1596, 2006 CarswellBC 1597, (sub nom. Sun Life Assurance Co. of Canada v. Fidler) [2006] I.L.R. 1-4521, [2006] 2 S.C.R. 3, 350 N.R. 40, 227 B.C.A.C. 39, 374 W.A.C. 39, 39 C.C.L.I. (4th) 1, (sub nom. Sun Life Assurance Company of Canada v. Fidler) 2007 C.L.L.C. 210-015, [2006] 8 W.W.R. 1, 2006 C.E.B. & P.G.R. 8202, 57 B.C.L.R. (4th) 1, 53 C.C.E.L. (3d) 1, (sub nom. Sun Life Assurance Co. of Canada v. Fidler) 271 D.L.R. (4th) 1, [2006] R.R.A. 525, [2006] S.C.J. No. 30, EYB 2006-107056 (S.C.C.) — followed Hardychuk v. Johnstone (2012), 2012 CarswellBC 2811, 2012 BCSC 1359 (B.C. S.C.) — referred to Kirkness (Committee of) v. Imperial Life Assurance Co. of Canada (1993), (sub nom. Kirkness Estate v. Imperial Life Assurance Co. of Canada) [1993] I.L.R. 1-2923, 62 O.A.C. 114, 99 D.L.R. (4th) 391, 15 C.C.L.I. (2d) 89, (sub nom. Kirkness Estate v. Imperial Life Assurance Co. of Canada) 12 O.R. (3d) 285, 1993 CarswellOnt 671, [1993] O.J. No. 160 (Ont. C.A.) — considered 64 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Mathers v. Sun Life Assurance Co. of Canada (1999), 1999 CarswellBC 985, 1999 BCCA 292, 9 C.C.L.I. (3d) 151, 5 B.C.T.C. 235, 126 B.C.A.C. 141, 206 W.A.C. 141, [1999] I.L.R. I-3706, [1999] B.C.J. No. 1023 (B.C. C.A.) — considered Nayyar v. Manufacturers Life Insurance Co./Cie d’Assurance-vie Manufactur- ers (2012), (sub nom. Nayyar v. Costco Wholesale Canada Ltd.) 2012 C.E.B. & P.G.R. 8016, 17 C.C.L.I. (5th) 1, 6 C.C.E.L. (4th) 291, 2012 Car- swellBC 3804, 2012 BCCA 501, [2013] I.L.R. I-5368, [2012] B.C.J. No. 2587 (B.C. C.A.) — referred to Plouffe v. Mutual Life Assurance Co. of Canada (2003), [2003] 3 W.W.R. 633, 10 B.C.L.R. (4th) 1, [2003] I.L.R. I-4169, 45 C.C.L.I. (3d) 26, 2003 BCCA 96, 2003 CarswellBC 350, 179 B.C.A.C. 32, 295 W.A.C. 32, [2003] B.C.J. No. 350 (B.C. C.A.) — considered Plouffe v. Mutual Life Assurance Co. of Canada (2005), 31 C.C.L.I. (4th) 287, 2005 BCSC 1531, 2005 CarswellBC 2599, [2005] B.C.J. No. 2382 (B.C. S.C.) — considered Rose v. Paul Revere Life Insurance Co. (1991), 1991 CarswellBC 304, 4 C.C.L.I. (2d) 170, 62 B.C.L.R. (2d) 48, 85 D.L.R. (4th) 433, [1992] I.L.R. 1- 2817, 6 B.C.A.C. 106, 13 W.A.C. 106, [1991] B.C.J. No. 3372 (B.C. C.A.) — followed Roston v. Paul Revere Life Insurance Co. (1996), [1996] I.L.R. I-3301, 1996 CarswellBC 26, [1996] B.C.J. No. 9 (B.C. S.C.) — followed Sucharov v. Paul Revere Life Insurance Co. (1983), 1983 CarswellMan 80, 1983 CarswellMan 188, 3 C.C.L.I. 114, [1983] 2 S.C.R. 541, 5 D.L.R. (4th) 199, 50 N.R. 144, 26 Man. R. (2d) 161, [1984] I.L.R. 1-1732, [1983] S.C.J. No. 86 (S.C.C.) — followed Rules considered: Rules of Court, 1990, B.C. Reg. 221/90 Generally — referred to Supreme Court Civil Rules, B.C. Reg. 168/2009 Generally — referred to R. 11-6(1) — considered

ACTION by insured for unpaid income replacement benefits, aggravated damages and related relief; COUNTERCLAIM by insurer for repayment of benefits and punitive damages.

Dr. Robert S. Wright, Plaintiff, for himself Vincent R.K. Orchard, Q.C., Allison K. Foord, S. Luke Dineley, for Defendants Wright v. Sun Life Assurance Co. of Canada Adair J. 65

Adair J.: Introduction 1 In this action, the plaintiff, Dr. Robert Wright, asserts he is entitled to income replacement benefits under a group policy of insurance (the “Pol- icy”) between the defendant The Prudential Group Assurance Company of England (Canada) (“Prudential”) and the Canadian Dental Associa- tion. Dr. Wright asserts that his entitlement to benefits arises as a result of injuries he suffered in an accident (the “Accident”) while he was skiing on December 18, 1993. Dr. Wright says these injuries rendered him first, residually disabled, and then totally disabled from carrying on his occupation practising dentistry as a general practitioner. The benefits to which Dr. Wright says he is entitled exceed $1.5 million. He seeks judgment for what he claims are the unpaid benefits, as well as aggravated damages and other relief. 2 The defendants say that Dr. Wright’s claim must be dismissed. Among other things, they deny that Dr. Wright has been either totally disabled or residually disabled (as those terms are defined in the Policy) at any time after March 2000. Moreover, in their counterclaim, the defendants seek to recover approximately $100,000 in income replacement benefits paid to Dr. Wright for the period from March 1, 2000 to October 31, 2001, on the grounds that Dr. Wright was not totally disabled during that time and actively concealed and misrepresented his condition and activities to the defendant Sun Life Assurance Company of Canada (“Sun Life”). The defendants say that Dr. Wright’s conduct also justifies an award of punitive damages. 3 I will first set out the main provisions of the Policy, after which I will review the factual background. I will then set out my discussion and analysis of the issues.

The Policy 4 Effective January 1, 1995, Prudential transferred all of its property, assets and liabilities to Sun Life, and since that time Prudential has not carried on any active business. Prudential changed its name to Sun Life in March 1995. Accordingly, effective January 1, 1995, Sun Life assumed all of the duties, obligations and liabilities of the insurer under the Policy. In those circumstances, and although there are two named defendants, I will treat the insurer under the Policy as Sun Life only. 66 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

5 The Policy is a group policy of insurance made in 1992 (and amended from time to time) bearing policy number [#omitted] On occasion, Dr. Wright suggested that the policy documents before the court were incomplete, that (for example) blank spaces on pages were suspicious and that text must be missing. I find there is no reasonable basis for Dr. Wright’s suggestions or suspicions, and that a copy of the complete policy, containing all of the provisions relevant to the issues in this action, is the document that was marked Ex. 94 at trial. 6 There is no dispute that Dr. Wright was a person (referred to in the Policy as a “Participant”) insured under the Policy.

(a) Definitions 7 A number of terms are defined in the Definition section of the Policy, including the following: ACTIVELY AT WORK means being actively at work on a full time basis ... at the relevant person’s normal place of employment and able to perform all the usual duties of the relevant person’s normal occupation. ... AVERAGE MONTHLY EARNED INCOME means Earned Income prior to commencement of disability and shall be determined, as elected by the Participant, by taking either the highest average of any six consecutive months in the 18 month period immediately prior to the month disability commenced, or the highest average of any two consecutive years in the 5 year period immediately prior to the month disability commenced. ... INJURY shall mean a bodily injury. ... PRACTICE OF DENTISTRY A dentist is engaged in the practice of dentistry if he is: 1. practicing dentistry as a general practitioner or a specialist; ... REGULAR OCCUPATION means: (a) in respect of Participants who are engaged in the Practice of Dentistry, any and all occupations involving the Practice of Dentistry carried on or engaged in by a Participant immediately prior to becoming disabled. Wright v. Sun Life Assurance Co. of Canada Adair J. 67

... SICKNESS shall mean sickness or disease which causes a disability while coverage under this policy is in force.

(b) Income Replacement Benefits 8 The “Income Replacement Benefit” provisions the Policy state (in relevant part) as follows: TOTAL DISABILITY PAYMENTS 1. If a Participant becomes Totally Disabled, [Sun Life] will make income replacement payments in accordance with the following conditions and provisions of this policy. ... c) during Total Disability, the Participant must be under the continuing care of a physician. ... PRESUMED TOTAL DISABILITY A Participant will be deemed to be Totally Disabled whether or not he is under the regular care of a physician in the event that Injury or Sickness causes the Participant to totally and irrevocably lose (i) speech, (ii) sight in both eyes, (iii) hearing in both ears, (iv) use of both hands or both feet or (v) use on one hand and one foot. RESIDUAL DISABILITY BENEFITS If immediately following an applicable Elimination Period during which a Participant is Totally and/or Residually Disabled, or immediately following a period during which a Participant receives Total Disability benefits, such Participant continues to be Residually Dis- abled, is under the continuing care of a physician, and as a result thereof he suffers a loss of Earned Income of at least 15% of his Average Monthly Earned Income [Sun Life] will make monthly payments in the amount determined as follows: [formula set out] ... TERMINATION OF PAYMENTS ... 2. Payments under this Income Replacement Benefit will cease on the earliest of the following dates: a) the date on which the Participant ceases to be disabled, ... 68 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

d) the date [Sun Life] deems the Participant has failed to furnish satisfactory evidence of the continuation of disability, or fails to submit to medical examinations as required by [Sun Life], and e) the date the Participant is no longer receiving regular and personal medical supervision and treatment considered satisfactory by [Sun Life].

(c) Own Occupation Option 9 Dr. Wright had elected the “Own Occupation Option” under the Pol- icy. This option defines “Total Disability” and “Residual Disability” for the purposes of this case. 10 For purposes of this option, “Earned Income” was defined to mean: ... income resulting from the performance of personal services by the Participant in his Regular Occupation after the deduction of the usual and customary business expenses incurred in earning such income and before the deduction of any income taxes. It does not include interest, dividends, rents, royalties, annuities, pensions, deferred compensation, wage continuation plans, or any other payments not related to the performance of personal services. 11 The “Coverage” provided under this option is stated as follows: A Participant who is engaged in the Practice of Dentistry may elect the Own Occupation Option which provides that the definitions entitled “Total Disability and Totally Disabled” and “Residual Disability and Residually Disabled” are deleted in their entirety with respect to the Income Replacement Benefit and are replaced with the following: “Total Disability and Totally Disabled” shall mean that, as a result of Sickness or Injury, the Participant is unable to perform the essential duties of his Regular Occupation and is under the regular care of a physician. “Residual Disability and Residually Disabled” shall mean that the Participant is not Totally Disabled but that as a result of Sickness or Injury, he is under the regular care of a physician and has a loss of Earned Income for each month of at least 15% of his Average Monthly Earned Income, resulting from the inability: a. to perform one or more of the essential duties of his Regular Occupation; or b. to perform the essential duties of his Regular Occupation for as much time as those duties usually require. Wright v. Sun Life Assurance Co. of Canada Adair J. 69

12 When I refer in these Reasons to “Total Disability” or “Totally Dis- abled” or “Residual Disability” or “Residually Disabled”, I am referring to the definitions in the “Own Occupation Option” section of the Policy.

(d) Cost of Living Option 13 The Policy provided for optional coverage under a “Cost of Living Adjustment Option,” and Dr. Wright had elected to have this optional coverage. Essentially, it provided that, after a Participant was disabled for a continuous period of 12 months, the benefits otherwise payable would be adjusted to reflect the annual change in the Consumer Price Index. The Policy set out a formula for calculating the “Cost of Living Adjustment.” The “Adjusted Monthly Income Benefit” was defined as “the amount determined by multiplying the Cost of Living Benefit by the Monthly Income Benefit for the Participant.”

(e) Future Insurance Guarantee Option 14 The Policy also provided for another form of optional coverage, the Future Insurance Guarantee Option (the “FIG Option”). Dr. Wright asserts that he elected this coverage, and that Sun Life wrongfully refused to give effect to his election, thus (Dr. Wright says) depriving him of increased income replacement benefits from and after December 21, 1996 (his 45th birthday). 15 Under the FIG Option, the relevant definition of “Option Date” is the “Date of attainment of age 25, 30, 35, 40, 45 or 50 by the Participant.” “Optional Amount” is defined to mean “the amount of additional coverage exercised on any Option Date.” 16 The Policy described coverage under this Option as follows (in relevant part): A Participant may elect the Future Insurance Guarantee Option which permits the Participant to increase the amount of coverage in force under the Income Replacement Benefit by an amount equal to 25% of the amount of coverage then in force rounded to the next higher $100 (if not already a multiple thereof), subject to the following: (a) written application in a form satisfactory to [Sun Life] must be received by [Sun Life] within 60 days after an Option Date; 70 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

(b) the Optional Amount will become effective on the later of the following dates: (i) the relevant Option Date, provided the Participant is Actively at Work on that date; and (ii) the date the written application is received by the Poli- cyholder provided the Participant is Actively At Work on that date; (c) If the Participant is not Actively at Work when an Option Date occurs, then unless within 60 days of such Option Date, the Participant returns to full-time active employment at his normal place of employment and submits written application for insurance under this Option, the relevant Option Date for such Participant will be forfeited.

(f) Claims and General Provisions 17 The Policy also contained provisions regarding Claims and a section of “General Provisions.” 18 With respect to “Proof of Loss,” the Policy provided that: 1. Written proof of loss must be provided to [Sun Life] within 90 days following the beginning of the period for which the Participant is claiming benefits. If it is not reasonably possible for the Participant to comply with the terms of the notice period, written proof must be provided as soon as reasonably possible and in any event within no more than one year from the beginning of the period for which benefits are being claimed. ... 2. At all reasonable times [Sun Life] shall be entitled to have examined by a physician or physicians and/or dentist or dentists designated by it, any person in respect of whom a claim is being made. 3. In addition to any other proof required under this policy, proof satisfactory to [Sun Life] of continued disability may be requested by [Sun Life] at all reasonable times. If [Sun Life] requests any above- mentioned proof, and it is not furnished, ... within a reasonable period of time following such request, it will be deemed that the disability terminated immediately prior to the relevant request. 19 The Policy also contained a “Non-Waiver” provision, which stated: One or more waivers of, or a failure to insist upon, performance or observation of any provision of this policy by [Sun Life] or the Poli- cyholder, shall not be construed as a waiver of any subsequent breach of the same provision.... Wright v. Sun Life Assurance Co. of Canada Adair J. 71

Factual Background (a) Dr. Wright’s circumstances before the Accident 20 Dr. Wright was born in December 1951 in Scotland, and he grew up there. He received his degree in dentistry from the University of Dundee in 1975. He worked for about eighteen months in the United Kingdom (the “U.K.”). He then emigrated to Canada and arrived in B.C. He qualified and became licensed to practice as a dentist here. He opened up his own dental practice in Clearbrook in 1978. After about four years, he moved to a large custom-built building in the Abbotsford area, where he continued his dental practice. According to Dr. Wright, he had a very busy practice, with seven dental chairs and a staff (full and part-time) of fifteen. In 1985, he and his then-wife completed construction of a large custom home in Abbotsford. Thus, by the mid-1980s, according to Dr. Wright, he had a very successful dental practice and, as a result, was able to enjoy a very comfortable standard of living. 21 However, Dr. Wright then became embroiled in high-conflict matrimonial litigation, aspects of which (relating primarily to spousal and child support) continued through 1993 and into 1994. The house in Ab- botsford was sold in the late 1980s. Moreover, a reassessment of Dr. Wright by Revenue Canada in relation to some real estate investments contributed to serious financial problems. 22 By 1987, Dr. Wright was under a great deal of personal and financial pressure, and it was a very stressful time for him. He decided to take a leave of absence from his dental practice, and planned to take a couple of months off, to rest up. Dr. Wright notified his patients of his plans and put a notice in the local newspaper. He did not arrange for a locum to carry on his practice, although he did apparently make arrangements for his patients to be taken care of by other dentists in the area. Dr. Wright then returned to the U.K. There was apparently some uncertainty about whether he was going to return to B.C. During Dr. Wright’s absence, a receiver of the practice was appointed and remained in place for about six months. However, with significant financial help from his brother, Dr. Wright was able to refinance and recover his dental practice from the receiver. 23 Dr. Wright then continued to operate his dental practice, practicing as a general dentist (rather than a specialist). According to Dr. Wright, he was seeing between 30 and 40 patients a day (although there was no independent confirmation of this). He had multiple dental chairs and a size- able staff. I find that the practice description Dr. Wright gave in his “Pre- 72 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

liminary Statement of Claim” (which I refer to in more detail below) is a good summary of the type of work Dr. Wright was doing: restorative and prosthetic dentistry, endodontics, minor oral surgery, sedation and selective orthodontics, plus administrative duties. According to Dr. Wright, his dental practice was very busy and he was doing well financially. 24 However, even after Dr. Wright resumed his dental practice, his business affairs were not altogether uneventful or smooth. For example, Dr. Wright was involved in two court cases. One was an action by a supplier of dental materials, in which Dr. Wright was the defendant. The second was a passing-off action, in which he was the plaintiff and was suing another dentist in the Abbotsford area. 25 Then, at the beginning of April 1993, Dr. Wright made an assignment in bankruptcy. He blamed his former matrimonial lawyer and actions taken by Revenue Canada for his circumstances. The statement of affairs sworn by Dr. Wright disclosed liabilities of $1,061,895 and assets of $529,500. Based on the list of creditors, Dr. Wright’s liabilities were primarily business-related (rather than consumer debt), and included liabilities in relation to the two business-related lawsuits. Dr. Wright’s brother was his second largest unsecured creditor (at about $142,000), after Rev- enue Canada. On the list of secured creditors, Dr. Wright’s brother was shown as being owed about $350,000 out of $548,000, and was the largest secured creditor. Dr. Wright acknowledged that, on December 8, 1993, his bankruptcy trustee opposed his automatic discharge. As of the trial, Dr. Wright had not been discharged from bankruptcy. 26 In late November and early December 1993, Dr. Wright was before the court on the hearing of an application by his former wife to have him found in contempt of court for failing to pay court-ordered spousal and child support over a period of about nine months in 1993. Dr. Wright had been ordered to pay $2,500 a month in spousal support and $900 per month in child support. As of the contempt hearing, the total outstanding was about $30,000. On December 3, 1993, at the conclusion of a 5-day hearing, Dr. Wright was found in contempt by Mr. Justice Warren. On December 13, 1993, Dr. Wright was sentenced by Mr. Justice Warren to 30 days in prison, to be served intermittently on weekends, together with 40 hours of community service. Dr. Wright acknowledged that he never did pay the outstanding support. He tried to borrow the money from his brother, but his brother was unwilling to lend it to him. Wright v. Sun Life Assurance Co. of Canada Adair J. 73

(b) The Accident 27 Nevertheless, according to Dr. Wright, everything was going fine with his dental practice until the Accident on December 18, 1993. 28 Dr. Wright had spent the day skiing. According to Dr. Wright, at about 3 p.m., he was skiing on Blackcomb and came down to the crest of a ridge on the final run down to the parking lot and the base of the moun- tain. As Dr. Wright recalled, he stopped because there was a line-up of skiers. He recalled that he was tired and that, to his left, the ridge dropped off quite sharply. According to Dr. Wright, there was another skier in front of him who did not seem to want to move, and Dr. Wright decided that he had enough room to go around to the left of this skier and continue down the run. However, according to Dr. Wright, just at that point, the skier started to move and there was not enough room for Dr. Wright go to past. As he recalled, he then turned to his right. According to Dr. Wright, his ski tips crossed and he went “head over heels,” and landed on his neck, left shoulder and also his back. Dr. Wright testified that he was knocked unconscious, although he could not say for how long, maybe a few minutes. According to Dr. Wright, when he came to, other skiers were standing around looking at him. His ski poles were still attached to his wrists. According to Dr. Wright, initially, he did not feel any pain, and he worried that he had broken his neck and been rendered quadriplegic. However, as Dr. Wright recalled, after a few moments he was able to move. His skis had come off in the fall. He got up, walked to the bottom of the hill and met up with his then girlfriend (and now wife), Jacqueline. 29 On cross-examination, Dr. Wright denied that the accident occurred when he collided with another skier. According to Dr. Wright, he swerved to avoid the other skier. He rejected the suggestion that he had not been knocked unconscious. 30 Dr. Wright acknowledged that the ski patrol did not attend on him and he did not go to the ski patrol about the Accident. He did not report the Accident to anyone at Whistler/Blackcomb. He did not try and find out the identity of the other skier. He did not go to a medical clinic in the Village of Whistler or seek any medical attention. 31 According to Dr. Wright, after the Accident, he slowly began exper- iencing pain in his arm, neck and back. He and his wife decided they would return home from Whistler. As Dr. Wright recalled, his wife drove. According to Dr. Wright, when he arrived home, the pain was increasing and had become quite intense. 74 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

(c) Following the Accident 32 According to Dr. Wright, on Monday, December 20, 1993, he con- tacted the office of his family doctor, Dr. Douglas Henderson, and made an appointment to see him on December 22. 33 Dr. Henderson was also from Scotland. As of December 1993, he had been Dr. Wright’s family doctor for more than ten years. Dr. Henderson and his family members were also dental patients of Dr. Wright. 34 Dr. Wright saw Dr. Henderson three times in December 1993: on De- cember 22, 29 and 30. December 30, 1993 was Dr. Wright’s very last medical appointment with Dr. Henderson. 35 A bundle of copies of pages from Dr. Henderson’s clinical records relating to Dr. Wright was entered into evidence as Ex. 106. These were not the original records, which (as Dr. Henderson testified) had been de- stroyed after 10 years. Dr. Wright sought to challenge the reliability and completeness of the contents of the bundle on a number of grounds, including that the original records no longer existed and that Dr. Hender- son’s notes were typed, not handwritten. However, Dr. Henderson’s ex- planations about the state of clinical records were reasonable and credible, and I accept them. For example, with respect to the notes being typewritten rather than handwritten, Dr. Henderson explained that his practice (at least in 1993) was immediately to write down by hand what he was told by a patient (and make a note of any significant complaint). He would then have his notes transcribed because he was working in a practice with other physicians and his handwriting was mostly illegible. 36 With respect to Dr. Wright’s visit on December 22, 1993, Dr. Hen- derson recorded a fracture of Dr. Wright’s left humerus (and specifically that an x-ray showed a fracture of the tuberosity) and also “CPX.” In his evidence, Dr. Henderson explained that “CPX” was an abbreviation for “complete physical exam.” Another witness, Dr. Ian Connell (a medical doctor who testified as an expert for Sun Life) confirmed this. Although, in his evidence and in documents he had authored, Dr. Wright often used medical terms, he denied that he understood what “CPX” meant, and he could not recall that one of the reasons for his visit to Dr. Henderson on December 22 was for a complete physical. As Dr. Henderson recalled, the complete physical exam was in relation to Dr. Wright’s renewal or registration of his dental licence in the U.K. I find that one of the reasons for Dr. Wright’s visit to Dr. Henderson on December 22, 1993 was for a complete physical examination, and that Dr. Henderson carried out such an examination. Wright v. Sun Life Assurance Co. of Canada Adair J. 75

37 Of course, on December 22, 1993, Dr. Wright was also seeing Dr. Henderson concerning what had happened to him in the Accident. Dr. Henderson’s notes reflect the history he was given about how the Acci- dent occurred, including that Dr. Wright told him he landed heavily on his left side and was having “a lot of pain.” There is no mention that Dr. Wright suffered a concussion, and Dr. Henderson testified that he would have recorded it if Dr. Wright had reported it to him. This would be consistent with Dr. Henderson’s general practice. Dr. Henderson recorded that (on examination) Dr. Wright had considerable bruising on his left arm, a slightly tender left lateral clavicle and also that Dr. Wright “had very little abduction.” Dr. Henderson encouraged Dr. Wright to use a sling, and wanted him to come back in one week. 38 Dr. Wright returned to see Dr. Henderson on December 29, 1993. Dr. Henderson confirmed the diagnosis of a fracture of the left humerus. He suggested that Dr. Wright attend physiotherapy and that Dr. Wright come back to see him in two or three weeks or sooner if required. Dr. Wright returned on December 30, 1993. Dr. Henderson noted Dr. Wright’s concern about bruising tracking down his left arm and that Dr. Wright had been aware “for the last day or two” of a tender spot at his left elbow. At trial, Dr. Henderson explained that the bruising was coming from the fracture of Dr. Wright’s left humerus. He rejected the proposition put to him by Dr. Wright on cross-examination that there was bruising because Dr. Wright had fractured his wrist. On examination, Dr. Henderson noted that Dr. Wright seemed tender over the left radial head (i.e., at the elbow). He ordered an x-ray, which he expected would probably be normal. He recommended that Dr. Wright continue to use a sling and to see him in “two weeks as advised.” Dr. Wright never returned. The x-ray ordered by Dr. Henderson was normal. 39 According to Dr. Wright, despite suffering from his injuries, he returned to work, although only part-time and despite having his left arm in a sling. He explained that the practice was very busy just before Christ- mas, and he needed to be there to look after patients. With the help of assistants, Dr. Wright did what he could. However, according to Dr. Wright, the pain was becoming worse and he felt that he was unable to perform any procedures at all. He explained that he had to refer many patients out to other dentists, and was unable to accept any new patients. According to Dr. Wright, he continued to “limp along” in his practice. However, according to Dr. Wright, he realized (although without the benefit of any advice from or further examination by a physician) after about six weeks that things were not getting any better. As he recalled, 76 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

he was having considerable pain in his low back and his shoulder, and his left arm was still in a sling. As Dr. Wright recalled, he was also having headaches and neck pain, and finding it very hard to do even the minimum amount of dentistry, although he was trying. According to Dr. Wright, some of his staff began looking for part-time work because he was cutting back, and some of his patients were also going to other dentists. He recalled realizing that if things continued this way much longer, the goodwill and value of his practice would evaporate. He explained that he then decided he better put his practice on the market and sell it, or at least get the process underway. 40 According to Dr. Wright, around this time (about six or so weeks after the Accident), he began thinking very seriously about a career change. He explained that his first thought was to become a medical doctor, but concluded (given his age) it would not be a wise choice. As Dr. Wright recalled, he considered other professions — engineering, law, ar- chitecture, computer science. He concluded that the best choice would be to become a prosthodontist (one of the specialities in dentistry), and also get an education degree, with the idea that he could teach and also work part-time for higher fees than he could charge as a general dentist. He explained that he wanted to cover his options, so that, if he recovered from his injuries, he could continue in a specialty dental practice, and if not, he could teach and do research. 41 According to Dr. Wright, he then applied to be admitted to the Uni- versity of Southern California (“USC”) and was accepted into the program for the term beginning in August 1994. As he recalled, he also located someone who was interested in purchasing the dental practice, however, that fell through. As a result, he was unable to take up the position offered to him at the USC. However, according to Dr. Wright, USC told him that they would make a place for him the following year. 42 Dr. Wright explained that, in 1994, he had been winding down his practice with the anticipated changes in mind. But, since he had been unable to sell the practice, he had to keep going. According to Dr. Wright, he was doing as much as he could to keep expenses down and keep the practice viable so that it could be sold. 43 According to Dr. Wright, in 1994, he was still suffering symptoms in his neck, back, shoulder and arm, which he attributed to the Accident. Although Dr. Henderson had recommended physiotherapy, and Dr. Wright went to the office of a physiotherapist, he never had any treatment because he felt it would be too painful. He did not see Dr. Hender- Wright v. Sun Life Assurance Co. of Canada Adair J. 77

son or any other physician between December 30, 1993 and when he left B.C. for California in 1995. Before the Accident, Dr. Wright had seen a chiropractor, Dr. Turner, from time to time for treatment for low back pain. After the Accident, Dr. Wright saw Dr. Turner twice, once in March 1994 and once in December 1994. The March visit was (according to Dr. Wright) in relation to symptoms Dr. Wright was having in his shoulder, while the December visit was for more general treatment. 44 In early July 1994, Dr. Wright wrote to the Canadian Dental Service Plans Inc. (“CDSPI”), in relation to making a disability claim. CDSPI was the organization that dealt with insurance-related issues for the Ca- nadian Dental Association. Dr. Wright asked to be sent a claims package, a copy of the Policy and “whatever information you can about the claims process.” 45 Dr. Wright’s dental practice in Abbotsford was eventually sold in March 1995 (about March 23). I did not hear any evidence concerning either the asking price or how much it sold for.

(d) Dr. Wright moves to California in 1995 46 Shortly after the sale of the Abbotsford practice, Dr. Wright relocated to California. According to Dr. Wright, he moved to Thousand Oaks, about an hour’s drive from Los Angeles, and began his program at USC. Dr. Wright recalled that, once settled in Thousand Oaks, he saw a doctor, Dr. Napolitano, and told him about his problems. According to Dr. Wright, he asked Dr. Napolitano for a referral to an orthopedic surgeon, and was referred to a Dr. Gross. According to Dr. Wright, Dr. Gross referred him to a chiropractor, Dr. Robert Cassar, and also wanted to have an MRI done. Dr. Wright was put off by the cost of the MRI, but he did see Dr. Cassar. According to Dr. Wright, Dr. Cassar practiced in a clinic with his brothers (also chiropractors) and several physiotherapists. As Dr. Wright recalled, he had chiropractic treatment and physiotherapy at Dr. Cassar’s clinic “for years,” until 2001. According to Dr. Wright, Dr. Cassar also referred Dr. Wright to another orthopedic surgeon, Dr. John Larsen. As Dr. Wright recalled, he saw Dr. Larsen a couple of times or “periodically.” 47 Dr. Wright also attended at the student clinic at the USC from time to time for a variety of ailments. But he acknowledged that staff there were not treating doctors for him in relation to any injuries he sustained in the Accident. 78 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

(e) In March 1996, Dr. Wright submits his claim for benefits under the Policy 48 Dr. Wright’s formal “preliminary statement of claim” (the “Prelimi- nary Statement of Claim”) for income replacement benefits under the Policy is dated March 2, 1996. It was sent under cover of a letter dated the same date from Dr. Wright to CDSPI. I conclude that, by this time, Dr. Wright had been provided with a copy of the Policy because, in his covering letter, he asked a question based on “my reading of the policy.” 49 During his evidence-in-chief, Dr. Wright had admitted into evidence as Ex. 55 the first and second pages, and a page (headed in the top left “Section D”) signed and dated by him, from the Preliminary Statement of Claim. However, I find that the complete document submitted by Dr. Wright as the Preliminary Statement of Claim is what was marked as Ex. 93, minus the two documents headed “Attending physician’s statement of disability.” I find that the physician’s statements were sent separately, by Dr. Henderson and Dr. Turner, respectively. 50 In the Preliminary Statement of Claim, Dr. Wright stated that “Total Disability” commenced on April 15, 1995, and “Partial Disability” commenced in December 1993. I find that Dr. Wright was intending in the Preliminary Statement of Claim to submit two separate claims for benefits: first, for benefits on the basis that, for the period beginning April 15, 1995, he was “Totally Disabled”; and second, for benefits on the basis that, for the period beginning in December 1993, he was “Residually Disabled”, as those terms are defined in the Policy. 51 In response to the question “Condition that prevents you from working,” Dr. Wright provided a lengthy list, beginning with “chronic moder- ate to severe pain in the cervical, thoracic and sacral-lumbar region of the spine,” and including “pain associated with varicose veins behind [the] knee and lower limb of [the] right leg associated with working rheostat foot pedal,” “bursitis of the left shoulder with limited range of motion” and “parasthesia” of the fourth and fifth fingers of the left hand. 52 Dr. Wright stated the following concerning how the Accident occurred: I collided with another skier crossing my tips and going head over heels landing on hard ice on my neck and left shoulder and arm. Wright v. Sun Life Assurance Co. of Canada Adair J. 79

He said nothing about being knocked unconscious. His description of the Accident in the Preliminary Statement of Claim is consistent with the history recorded in Dr. Henderson’s clinical records. 53 The Preliminary Statement of Claim included a section “Determining Pre-disability net earned income,” which was completed by Dr. Wright and which indicated his pre-disability average monthly earned income was $11,382.50. There are also two worksheets headed “Statement of Pre-disability earned Income” dated February 16, 1996 and signed by Dr. Wright. One covers the period from June 1993 to November 1993, and the other covers the period from October 1994 to March 1995. Dr. Wright did not explain, and was not asked, how these work-sheets were completed or what source documents were used to complete them. Fi- nally, there is what appears to be a calculation of post-disability net earned income (using the figures on the October 1994 to March 1995 worksheet), which shows average monthly earned income of $6,533. 54 Ex. 93 also included “Attending Physician’s Statement of Disability” forms completed by Dr. Turner and Dr. Henderson. Dr. Wright agreed that the statement in the form completed by Dr. Turner that “Dr. Wright never discussed his long term plans or disability on the two treatment dates following the accident” was true. On the form completed by Dr. Henderson, he stated a “primary diagnosis” of chronic recurrent back pain. Otherwise, he responded “N/A” or not applicable to many of the questions, on the basis that he had not seen Dr. Wright since December 30, 1993. 55 As of the end of August 1996, Sun Life had not approved Dr. Wright’s claim for income replacement benefits. From correspondence he exchanged with CDSPI in August, September and October 1996, it appears that Sun Life had not been satisfied with the medical information provided from Dr. Henderson and Dr. Turner as part of the Preliminary Statement of Claim. As a result, Dr. Wright made arrangements to see a physician in California (Dr. Larsen) and had obtained a report (dated Au- gust 8, 1996) from him. However as of October 6, 1996, Dr. Wright had not yet provided that report to CDSPI (to be forwarded to Sun Life), despite being told that his claimed disability needed to be substantiated medically. 56 I have no doubt that Dr. Wright understood that his disability needed to be substantiated medically, and I find that was his reason for seeing Dr. Larsen and requesting a report from him. However, his delay in providing the information to CDSPI (for Sun Life) meant that his claim for 80 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Total Disability benefits could not be completely adjudicated. Dr. Wright may have felt that he should be receiving benefits without this information (and his correspondence to CDSPI indicates a high level of frustration and unhappiness with the process). But his own conduct in failing to provide information that Sun Life was entitled to have under the Policy did nothing to facilitate his receipt of benefits. 57 In late October 1996, Dr. Wright received a letter dated October 23, 1996 from CDSPI (what I would describe as essentially a form letter), notifying him that his upcoming birthday (in December) entitled him to apply for coverage under the FIG Option. An application form was enclosed, and the letter stated: If you wish to take advantage of this valuable opportunity, the enclosed application form must be completed and returned within 60 days following your birthday. The letter also stated that “if you are receiving benefits (on claim), you are not eligible for this FIG offer.” 58 On November 27, 1996, Dr. Wright wrote to the President of CDSPI about CDSPI’s October 23, 1996 letter. Dr. Wright stated: I would like to take full advantage of this offer and go on record of making my intention known. However, I would like you to advise me how my current situation impacts on the CDSPI offer. I have now received confirmation from Sun Life that they have received my medical report, but, as yet, no payment. I do not feel that it is appropriate for me to complete my application for the increased benefits until I have a response from you but hope that such a delay will not prejudice me from becoming eligible for increased coverage should a payment be made by Sun Life in the meantime. 59 The Vice-President of CDSPI wrote back to Dr. Wright on November 29, 1996. That letter stated (in part): The letter you received from CDSPI extending an offer under the Future Insurance Guarantee (FIG) option ... is sent to the participants who have this option and are not on claim and receiving benefits. At the time of sending the letter, your file was marked “claim pending” and the benefits had not started to be paid. Just today I have received word that your claim has been accepted. The first payment cheque should be mailed to you within a week. This now nullifies the FIG option unless you return to work within 60 days of December 21, 1996. Dr. Wright acknowledged that he received a copy of this letter. Wright v. Sun Life Assurance Co. of Canada Adair J. 81

(f) Dr. Wright begins receiving Total Disability benefits in December 1996; issues remain regarding his claim for Residual Disability benefits 60 By letter dated December 4, 1996 from Sun Life, Dr. Wright was informed that Sun Life had completed its assessment of his claim and that benefits had been approved to November 23, 1996. A cheque for $20,000 (representing benefits of $5,000 per month) was enclosed. Dr. Wright confirmed that he received this letter. The letter mentions Dr. Larsen’s medical report and explains why (based on that report) June 24, 1996 was established as the “date of disability.” Income replacement benefits commenced effective July 24, 1996. Dr. Wright was advised that subsequent payments “will be issued to you automatically subject to ongoing medical review.” Dr. Wright was asked to provide information to allow Sun Life to establish his pre-disability income and was told: Copies of personal income tax return[s], assessment notice and business income and expense statement must be submitted for the period [you] elect. This information was relevant to Dr. Wright’s claim for benefits from December 1993, on the basis that he was Residually Disabled. 61 Although Dr. Wright was now receiving income replacement benefits, the date of disability (June 24, 1996) that Sun Life had determined (based on Dr. Larsen’s report) was not acceptable to Dr. Wright, at least with respect to his claim for benefits on the grounds that he was Residu- ally Disabled. His view was that the appropriate date was the date of the Accident. 62 In January 1997, Dr. Wright wrote to Dr. Henderson, requesting that he provide another report for Sun Life, with the object of providing Sun Life with the medical information and opinion to justify a date of disability (at the least that Dr. Wright was “Residually Disabled”) as of the Accident. Dr. Henderson’s diagnosis and prognosis were important for Dr. Wright’s claim because he was the physician who examined Dr. Wright immediately after the Accident, and the only physician who had examined Dr. Wright until he arrived in California in 1995. 63 Over the next several months, Dr. Wright and Dr. Henderson corre- sponded with one another on this matter. Dr. Henderson responded to Dr. Wright’s initial request by letter dated January 29, 1997. Dr. Henderson indicated that he felt he could not say more than he already had, since any of Dr. Wright’s ongoing problems were being treated by persons in 82 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

California, and he suggested that Dr. Wright contact them for “a more accurate and useful report.” 64 Dr. Wright wrote to Dr. Henderson again on May 26, 1997. He described (from his perspective) the conclusions that had been reached by Dr. Larsen and Dr. Cassar, and told Dr. Henderson that he had been informed by CDSPI that, if he could obtain a written report from the doctor who examined him after the accident (namely, Dr. Henderson), he should be able to claim benefits (i.e., benefits on the basis of a Residual Disabil- ity) in accordance with the drop in his net income after the Accident. 65 Dr. Wright was also communicating with Sun Life concerning his claim. As of July 1997, Dr. Wright had not provided any income tax returns, notices of assessment or other financial information that Sun Life had requested, apart from the basic information in his Preliminary Statement of Claim. In a letter dated March 20, 1997, Sun Life informed Dr. Wright that the information requested in its December 4, 1996 letter had not been received and renewed its request for this information. 66 By letter dated July 17, 1997, Sun Life repeated its request for financial information so that Dr. Wright’s pre-disability income could be established. Dr. Wright was also informed that Sun Life required financial information from claimants on an annual basis. Dr. Wright was informed that “We are unable to continue to approve benefits to you with this information still outstanding,” and he was requested to provide a copy of his 1996 tax returns and notices of assessment. 67 Sun Life terminated payment of Total Disability benefits in July 1997. 68 Dr. Wright responded to Sun Life’s July 17 letter by letter dated July 26, 1997. He complained that Sun Life’s responses to his letters were “predictably tardy” and delayed the processing of his claim, while “my responses are swift.” He expressed his disagreement with the date of disability (June 24, 1996) that Sun Life had established, and said “I have explained to you on numerous occasions that the date of disability has not been established.” He complained in very strong terms about the termination of benefits. He wrote that “I reject any suggestion that I have been responsible for the delay in the processing of the claim.” Illustrating his concern that the date of disability established by Sun Life would reduce the Residual Disability benefits payable, Dr. Wright said: It is important that I select an income period which will maximize my benefits under the terms of [the Policy]. I shall provide you with financial documentation and select an income period once the date of Wright v. Sun Life Assurance Co. of Canada Adair J. 83

disability is established. Until that date is accepted by your company I cannot do so. Dr. Wright also stated that he was “still not convinced” he was unable to increase his benefits under the FIG Option, and considered that matter still to be open. 69 Sun Life responded by letter dated July 29, 1997, which Dr. Wright acknowledged he received. The letter expressed puzzlement at Dr. Wright’s reluctance to provide the financial information Sun Life had requested, and stated that the time frame selected could be adjusted if the date of disability was amended. The letter acknowledged that it was Dr. Wright’s decision whether to supply the information or not, but stated that benefits could not continue indefinitely while the information was outstanding. 70 By the end of July, Dr. Henderson had not responded to Dr. Wright’s May 26 letter, and Dr. Wright wrote to Dr. Henderson again on July 26, 1997. His tone was no longer friendly; rather, it was threatening. He said that Dr. Henderson’s delay was “holding up over $100,000 in back payments to me when I most need it.” Dr. Wright continued: I sense your reluctance to write a medical report. Doug, it is a double-edged sword and the choice is yours. Either you diagnosed my injury and treated it or you failed to diagnose my injury and treat it. Either my insurance pays or your insurance pays. I could claim from both but provided that I receive the appropriate medical report from you I shall be disinclined to look beyond my own insurance for compensation. 71 Dr. Henderson responded by letter dated August 12, 1997. He apolo- gized for the delay. He repeated that he found it difficult to add to what he had said in the “Attending Physician’s Statement of Disability” he had completed in February 1996. Dr. Henderson observed that Dr. Wright’s last visit to him was on December 30, 1993 and there was no documentation in his chart concerning subsequent problems. He was prepared to provide a letter that summarized his care and involvement with Dr. Wright’s injuries up to the last visit and that made note of Dr. Wright’s subsequent difficulties and treating physicians and chiropractors. Dr. Henderson did this in a letter also dated August 12, 1997, addressed “To whom it May Concern.” 84 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

72 Dr. Wright sent another letter to Dr. Henderson, dated August 20, 1997. Again, the letter was threatening and borderline insulting. It read in part: In order for me to claim retroactive benefits from the date of Dr. Gross’s initial examination (08/22/95) to my initial consultation with you in December of 1993, I require that you provide me with a medical report confirming that the injuries I sustained, compounded with the pre-existing disabilities, would result in my being partially disabled and unable to perform my customary range of physical duties as a dentist. I trust that you will have the wisdom not to be challenging the reports of these highly qualified doctors and will be providing me with your report shortly. 73 On August 30, 1997, Dr. Wright wrote again to Dr. Henderson, responding to Dr. Henderson’s August 12 letter, which Dr. Wright had just received. Dr. Wright said: Unless I receive a letter from you confirming that the injuries sustained would impact on my ability to perform the customary chair- side duties, the insurance company will reject my claim and I shall have to litigate. If I am forced to litigate then I shall have to include you in the lawsuit as you would be interfering with my processing of the claim and indirectly supporting the case of the insurance company. 74 Dr. Wright enclosed a statement he had drafted that he wanted Dr. Henderson to give to Sun Life. Based on the contents of what Dr. Wright drafted, I conclude that, at this point, he had a copy of Dr. Henderson’s clinical records. Contrary to Dr. Wright’s evidence at trial, his description in the statement of the Accident is consistent with the history recorded in Dr. Henderson’s clinical records and with Dr. Wright’s description of the Accident in the Preliminary Statement of Claim. How- ever, one of the things Dr. Wright wanted Dr. Henderson to say was that x-rays showed a compression fracture of the head of the radius. At trial, Dr. Wright was quite insistent that he had suffered such an injury in the Accident. However, no such diagnosis was ever made by Dr. Henderson, who had noted the relevant x-ray as normal. 75 Sun Life wrote again to Dr. Wright on September 2, 1997. The letter informed Dr. Wright that (as far as Sun Life was concerned) the medical information on his file did not support an earlier date of disability. More- over, as of September 1997, Dr. Wright had not provided any of the tax Wright v. Sun Life Assurance Co. of Canada Adair J. 85

returns, notices of assessment or other financial documents Sun Life had requested. 76 Dr. Henderson provided a statement dated September 15, 1997. It said, in part: The above patient attended me at my office ... December 22, 1993 with a history of having been involved in a skiing accident four days previously in which he collided with another skier, landing on his left side follow[ing] which he had a lot of discomfort around his left shoulder and arm. Examination showed a lot of bruising to be present. He was tender over the left lateral clavicle as well as shoulder. X-rays showed lon- gitudinal fracture through the base of the greater tuberosity. The patient was encouraged to use [a] sling and take some time off work and use analgesics that he had available. However, the patient indicated that he had decided to try [to] continue working with the sling. He was advised to return in one week with follow up x-rays. The patient returned December 29, 1993 with x-rays showing no change in position and he was advised to start attending [physiotherapy] in five days time and to return in after a further two to three weeks. The patient returned the following day concerned about ex- cessive bruising tracking down the arm but also had become aware of tender area in the left elbow. An x-ray was carried out to make sure he had no injury to radial head. The x-ray was reported as normal. ... At the time of his last visit as above this patient should be considered as having a partial disability from his skiing accident with subsequent difficulties performing his normal duties as an operative dentist. 77 Dr. Wright sent Sun Life a copy of Dr. Henderson’s letter under cover of a letter dated September 26, 1997. The letter again levelled a variety of complaints against Sun Life, and asserted that Sun Life had failed to pay Dr. Wright benefits of about $100,000. In the letter, Dr. Wright also asserted that he wished to take advantage of the FIG Option. 78 Although, through Dr. Henderson’s September 15, 1997 letter, Dr. Wright had provided Sun Life with medical grounds to say the disability date for his claim for Residual Disability benefits should be in December 1993, Dr. Wright still did not provide any of the financial information that had been requested by Sun Life, and that was relevant to that particular claim. His complaints that Sun Life owed him money and was acting in bad faith were misplaced. 86 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

79 On November 10, 1997, in-house counsel for Sun Life wrote to Dr. Wright concerning his claim for benefits for the period beginning De- cember 1993. The letter is written in the context of the Policy language and definitions, i.e., that “as a result of ... Injury, the Participant ... is under the regular care of a physician.” The letter explained why Dr. Lar- sen’s August 1996 report was of limited assistance in that respect, namely, that Dr. Larsen did not treat Dr. Wright until June 1996. The letter referred to Dr. Henderson’s “Attending Physician’s Statement” and his September 15, 1997 report, but explained that, since Dr. Henderson had not seen Dr. Wright since December 30, 1993, he could not provide Sun Life with information concerning a partial disability at any time thereafter. However, the letter informed Dr. Wright that Sun Life intended to write to Dr. Henderson and Dr. Wright’s other treating physicians to obtain their clinical notes and records. The letter asked Dr. Wright to advise Sun Life “immediately” if he was treated by other medical practitioners between December 1993 and April 1995. 80 The November 10, 1997 letter also reminded Dr. Wright that Sun Life required financial documentation from Dr. Wright and requested copies of his complete income tax returns, financial statements and assessment notices for the years 1993 to 1996. As of November 1997, Dr. Wright had not provided any of this information or documentation to Sun Life. 81 By January 1998, Sun Life had concluded, based on a review of Dr. Henderson’s records, that, from a medical standpoint, Dr. Wright was partially disabled from December 18, 1993 until his practice was sold in March 1995 and thereafter Totally Disabled from his “Own Occupation.” By letter dated January 28, 1998, Sun Life advised Dr. Wright of its conclusions. Sun Life stated further [bold in original]: To complete the adjudication of your claim, Sun Life requires financial documentation, as specified below. Without said information, Sun Life cannot determine the quantum of your partial disability benefits to which you may be entitled should you establish a loss of income of at least 15% between December 1993 and the date you sold your practice. As per the terms of the contract, Sun Life is entitled to the following documents: 1. personal income tax returns for and including the years 1991 to 1995, pages 1-4, inclusive; 2. corporate income tax returns, financial statements and notices of assessment for the years 1991 to 1995, inclusive; 3. if a locum assisted you, then please provide the name of the locum and a copy of any agreements; Wright v. Sun Life Assurance Co. of Canada Adair J. 87

4. partnership agreements, if any, for the years that you were not a sole proprietor. The financial information from 1991 to 1992 will be used to calculate your pre-disability income. Please be advised that you must satisfy the terms of the policy from not only a medical standpoint but also a financial one. 82 However, as of the end of June 1998, Dr. Wright had not provided Sun Life with any of the financial documentation requested, or any other relevant financial information. 83 On July 3, 1998, Dr. Wright wrote again to Sun Life. He asserted that, on his reading of the Policy, he was not obliged to provide Sun Life with any further financial documentation. He repeated his demand for payment of benefits retroactive to December 1993, including (among other things) an adjustment for the FIG Option. 84 Dr. Wright’s reading of the Policy with respect to his obligations and the FIG Option was incorrect. His combative approach was misplaced and unproductive. 85 On July 10, 1998, the writ of summons in this action was filed. 86 Also on July 10, 1998, Dr. Wright’s then-solicitor (Mr. McFee) wrote to Sun Life’s in-house counsel. He stated that Dr. Wright had provided him with a copy of Sun Life’s January 28, 1998 letter. He noted the requests made for financial information and documentation, and indicated that he would follow up with Dr. Wright. In the meantime, Mr. McFee enclosed a copy of an income statement prepared by the accounting firm of Hedden Chong, which covered the six month period ended November 30, 1993, and a copy of Dr. Wright’s corporate tax return (including unaudited financial statements prepared by the accounting firm Lake & Associates) for the period ended August 31, 1994. 87 Mr. McFee (quite properly) acknowledged the need for financial documentation to determine the quantum of Residual Disability benefits. However, he observed that the absence of that information could not justify the termination (in July 1997) of Total Disability benefits. 88 In September 1998, Sun Life paid Dr. Wright’s Total Disability benefits up to date from July 1997 to the end of August 1998. Thereafter, Sun Life paid monthly Total Disability benefits to Dr. Wright up to and including September 2001, and paid benefits for October 2001 on a reservation of rights basis. 88 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

89 In early April 1999, Mr. McFee again wrote to Sun Life’s in-house counsel concerning a variety of matters relating to Dr. Wright’s claims. There is no evidence that, prior to this letter, Dr. Wright either directly (or through Mr. McFee) provided Sun Life with any income tax returns or notices of assessment for either any period prior to the date of disability of December 18, 1993, or after that period. There also is no evidence that any further financial documentation had been provided to Sun Life, in addition to what Mr. McFee had sent under cover of his July 10, 1998 letter. 90 Dr. Wright’s claim for Residual Disability benefits was one of the matters addressed by Mr. McFee in his April letter. He wrote that “[i]n order to establish the residual disability benefit,” he was enclosing another statement of income prepared by Hedden Chong and covering the nine months ended August 31, 1994 and the seven months ended March 31, 1995. The position stated in Mr. McFee’s letter was that, based on the statements provided (under cover of his July 1998 letter and his April letter), Dr. Wright had suffered a loss of earned income greater than 15% of his pre-disability Average Monthly Earned Income, and was thus entitled to a Residual Disability Benefit of $5,000 per month for the period December 18, 1993 to March 24, 1995. Mr. McFee wrote that “With this documentation in hand, I trust you are in a position to pay out Dr. Wright’s residual disability benefit immediately.” 91 However, Sun Life did not pay any Residual Disability benefits to Dr. Wright in response to Mr. McFee’s letter. 92 In the meantime, Dr. Wright was moving ahead with his studies at USC. Dr. Wright was awarded a Master of Science in Education by USC in May 1998. In September 1998, he obtained a Dental License from the State of California, Board of Dental Examiners, giving him the right to practice dentistry in California. With respect to his pursuit to become a specialist in prosthodontics, in August 1999, Dr. Wright was awarded a certificate in prosthodontics by the USC School of Dentistry, having successfully completed a two-year course of study. In February 2000, Dr. Wright was informed by the American Board of Prosthodontics that he had successfully fulfilled the requirements for the Part 1 examination of the Board, and that he would be eligible to take additional part of the examination when he had met the guidelines set by the Board. In August 2000, Dr. Wright received a Master of Science in Craniofacial Biology from USC. Wright v. Sun Life Assurance Co. of Canada Adair J. 89

(g) In late 2000, Sun Life requests additional information from Dr. Wright and subsequently initiates independent investigations of his activities 93 At the end of October 2000, Sun Life wrote to Mr. McFee concerning Dr. Wright’s claims. Dr. Wright recalled receiving a copy of this letter. No additional medical information (that is, whether Dr. Wright was under the regular care of a physician as a result of his injuries) had been provided to Sun Life since 1997, and no additional financial information had been provided since Mr. McFee’s April 1999 letter. Sun Life’s letter stated (among other things) that “[i]n addition to medical proof of ongoing eligibility to receive benefits, we also require financial proof in order to verify that participants are not engaged in their regular occupation.” Sun Life stated that, in order to update Dr. Wright’s file, it required a number of items, including: completion of a supplementary statement of disability by Dr. Wright and “his current attending physician”; names and complete addresses of all physicians consulted by Dr. Wright since April 1997, including dates; details of any of Dr. Wright’s employment activities since April 1997; and complete copies of Dr. Wright’s income tax returns for 1996 to 1999. The letter stated further that benefits for Dr. Wright were approved to November 30, 2000, and that benefits beyond that date would be considered on receipt of the information requested. 94 Dr. Wright completed, signed and sent the supplementary statement of disability (the “Supplementary Statement of Disability”) to Sun Life on December 12, 2000. That same day, Dr. Wright saw Dr. Larsen, whom he had not seen for at least three years (perhaps longer). Dr. Lar- sen completed an “Attending Physician’s Statement of Continuing Disa- bility.” Although Dr. Larsen’s form is dated December 12, 2000, the date of the last visit is stated to be December 12, 2001, an obvious (and somewhat odd) error. The primary diagnosis stated was C5-6 and C6-7 disc herniation, while the secondary diagnosis was thoracolumbar strain. I find that only Dr. Larsen’s 1-page “Attending Physician’s Statement of Continuing Disability” accompanied the Supplementary Statement of Disability. I also find that, if Sun Life had not requested Dr. Wright to provide the Supplementary Statement of Disability, he would not have gone to see Dr. Larsen at all. 95 In the Supplementary Statement of Disability, Dr. Wright stated that he had been unable to do any work from April 1995 to the present. On cross-examination, it was put to him that this was not true. Dr. Wright acknowledged that in the Fall of 1999, he had been working for a short 90 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

time at a dental practice in Newport Beach, California, although he said that he was hired as a prosthodontist, not a general dentist. He also acknowledged that beginning in March 2000, he had been working and earning income as a member of a dental practice (“Crown”) in Monarch Beach, California. However, according to Dr. Wright, he did not consider his work at either of these practices to be relevant to his response in the Supplementary Statement of Disability, because he understood the context of the inquiry to be whether he was able to work as a general dentist. As far as Dr. Wright was concerned, he was not. He was working as a prosthodontist. Therefore, as far as Dr. Wright was concerned, his statement that he had been unable to work since April 1995 was true. Moreover, according to Dr. Wright (although he was being paid and although he had completed his 2-year course of study at USC in 1999), his work at Crown was simply part of his practical training in prosthodontics. 96 In January 2001, Sun Life received a more complete report, also dated December 12, 2000, from Dr. Larsen concerning Dr. Wright. Dr. Larsen’s stated diagnosis was the same as in the “Attending Physician’s Statement of Continued Disability,” namely C5-6 and C6-7 disc herniation and thoracolumbar strain. Dr. Larsen expressed his opinion that Dr. Wright would not be able to practice dentistry in a private setting because he did not believe Dr. Wright would be able to be productive enough to meet his overhead. However, Sun Life took particular note of a statement in Dr. Larsen’s more complete report that Dr. Wright was working “approximately one day per week.” Such information could only have come from Dr. Wright, and I find that this statement was Sun Life’s first indication that Dr. Wright had returned to work practicing dentistry. Sun Life considered the statement in Dr. Larsen’s report inconsistent with what Dr. Wright had stated in the Supplementary Statement of Disability, that he had been unable to do any work since April 1995. 97 Sun Life then initiated an activities investigation. It learned that Dr. Wright was working at Crown, and also learned about a separate practice Dr. Wright had set up, the “Newport Centre for Aesthetic Dentistry.” Ac- cording to the office signage for the Newport Centre, the office hours were weekdays from 8:00 a.m. to 6:00 p.m., and Saturday and Sunday by appointment. Dr. Wright was shown as a “Prosthodontist.” Mr. Robert Kling, who (as of April 2001) was handling Dr. Wright’s claim at Sun Life, concluded from the activities investigation report that, contrary to what Dr. Wright had stated in the Supplementary Statement of Disability, Dr. Wright was in fact working full time at his own clinic. Wright v. Sun Life Assurance Co. of Canada Adair J. 91

98 At trial, Dr. Wright acknowledged that he started construction on the Newport Centre sometime in 2000. Dr. Wright also acknowledged that the build-out and fixturing of the office space cost “over six figures.” According to Dr. Wright, the Newport Centre was intended as a multi- speciality practice, and he was to be the only dentist practicing there. In the result, he operated a solo practice, and there is no evidence he ever had any partners or business associates carrying on business there. Dr. Wright applied for and obtained a business licence for the Newport Cen- tre on January 2, 2001. The description of the business is “Dental Prac- tice,” and the product sold is described as “Dental Services Dentistry.” Despite having a business licence for the Newport Centre in January, according to Dr. Wright, he did not start seeing patients there until about March or April 2001. He agreed on cross-examination that the business hours shown on the office signage were the office hours advertised to the public, although on re-examination, he said that these were simply the days available for appointments. 99 On April 30, 2001, Mr. Kling wrote to Mr. McFee, following up on correspondence sent earlier in the year in which Sun Life had requested information about Dr. Wright’s employment and again requesting copies of tax returns. Mr. McFee responded by letter dated May 11, 2001. Mr. McFee stated that Dr. Wright had not filed tax returns for several years (something Dr. Wright confirmed in his evidence at trial), but enclosed copies of cheques “from his employer.” Mr. McFee also stated that Dr. Wright had worked about one and a half days a week in a “prosthodontics group speciality practice” in South Orange County, and indicated that this work was to facilitate Dr. Wright’s part-time faculty position at the University of California at Los Angeles. 100 Mr. McFee’s letter does not identify by name the “prosthodontic group specialty practice,” and there is nothing on the copies of the cheques enclosed that identified the name or address of that practice, or the account on which the cheques were drawn. As Dr. Wright acknowledged at trial, the cheques (which were payable to him personally) in fact came from Crown, but any identifying information had been hidden. The odd appearance of the cheques raised Mr. Kling’s suspicions, in circumstances where Sun Life already had questions about what Dr. Wright was doing. 101 Mr. McFee’s letter does not mention anything about Newport Centre, certainly not by name. On cross-examination, Dr. Wright said at first that the “prosthodontic group speciality practice” was the Newport Centre, 92 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

because (he said) Crown was a general practice with specialists. But when it was pointed out to him that, if true, the Newport Centre must have been in operation in March 2000, he reconsidered his evidence. 102 In June 2001, Mr. Kling authorized payment of Total Disability benefits to Dr. Wright for the period from March 24, 1995 to July 1996, in the sum of $80,000. At trial, Mr. Kling explained that, while originally Sun Life felt there was insufficient evidence that Dr. Wright was under the regular care of a physician for this period, Sun Life had already accepted that Dr. Wright was Totally Disabled while he was studying at USC and there did not seem to be a good reason not to pay for this period. A cheque for $80,000 was sent to Mr. McFee in trust for Dr. Wright. 103 Although Dr. Wright formally pleaded (in his further amended statement of claim (the “Amended Statement of Claim”), para. 25) the fact that this payment was made, at trial, he steadfastly insisted that, because Sun Life had not produced a cancelled cheque to him, he was not satisfied the payment had been made. In view of the pleadings, and based on the evidence at trial, there can be no doubt, and I find, that Sun Life made the payment of $80,000 in Total Disability benefits to Dr. Wright in June 2001, covering the period from March 24, 1995 to July 1996. 104 On June 18, 2001, Mr. Kling wrote to Mr. McFee, in response to Mr. McFee’s May 11 letter. I find that Dr. Wright probably received a copy of Mr. Kling’s letter. Mr. Kling asked for details about the dental procedures Dr. Wright was performing or felt capable of performing, and whether any of these were similar to what he was doing in September 1993. Mr. Kling also wanted to know when Dr. Wright would be filing a tax return. 105 By October 2001, Mr. Kling had not had a response to his June 18, 2001 letter. He had initiated another activities investigation concerning Dr. Wright’s activities at the Newport Centre in particular, and retained the services of a private investigator. On October 4, 2001, Mr. Kling wrote again to Mr. McFee, following up on his June 18 letter and requested a response by October 30, 2001. 106 On October 30, 2001, Mr. McFee sent a response to Mr. Kling. Mr. McFee enclosed a statement prepared by Dr. Wright of his “Pre-disability Professional Practice,” his “Post-disability Professional Practice,” and his “Academic Responsibilities.” I will refer to this as the “Pre and Post- disability Statement.” No financial or income information was included with the letter, although Mr. McFee indicated that Dr. Wright was in the process of preparing tax returns for 1999 and 2000. Thus, as of October Wright v. Sun Life Assurance Co. of Canada Adair J. 93

30, 2001, the only financial information Dr. Wright had provided to Sun Life since April 1999 were copies of the cheques from Crown. 107 According to Dr. Wright, he prepared the Pre and Post-disability Statement much earlier than October 2001, and testified that he believed he prepared it around late June 2001. He explained that, because the Newport Centre practice had only been in operation for a few months at that stage, the description reflected more what he envisaged or anticipated his practice being, rather than what it was. However, that is not how the description reads, and I do not find his evidence credible. Rather, I see it as an attempt by Dr. Wright to minimize what he was doing and able to do at the Newport Centre. The Statement has no qualifying language (apart from the repetition of the adjective “limited”) to indicate that this is what Dr. Wright is projecting for the practice. In- stead, the description uses terms such as “now accounts for” and “now comprise.” On cross-examination, Dr. Wright acknowledged that he did not identify the Newport Centre by name anywhere in the Statement. It is also not identified by name in Mr. McFee’s letter. The description in Mr. McFee’s letter (apart from the mistaken use of the word orthodontics, rather than prosthodontics) implies that it is the practice — namely Crown — where Dr. Wright had been working since March 2000. Dr. Wright did not disclose how long he had been carrying on his post-disability professional practice. 108 Of course, as a result of the activities investigations, Sun Life was aware that the Newport Centre had been in existence since at least March 2001 and advertised regular office hours Monday through Friday. Sun Life also had some information (through the private investigator) about what Dr. Wright was doing there. 109 Dr. Wright took very great offence to the activities investigations. However, he either simply did not respond to Sun Life’s inquiries about what he was doing, or when he did, the response was virtually guaran- teed to raise questions (for example, the odd-looking cheques enclosed with Mr. McFee’s May 11, 2001 letter). There was nothing unreasonable in Sun Life taking steps to find out independently what Dr. Wright was doing, with a view to making a determination whether Dr. Wright continued to be Totally Disabled. 110 On October 31, 2001, Mr. Kling sent a letter to Mr. McFee in response to Mr. McFee’s October 30 letter. Among other things, Mr. Kling advised that Dr. Wright’s October 2001 benefits cheque was being issued on a reservation of rights basis. On the basis of what he had been in- 94 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

formed (including through the Pre and Post-disability Statement), Mr. Kling concluded that Dr. Wright had retained the functional capacity to perform the essential duties of his occupation as a general dentist, and no longer qualified for income replacement benefits under the Policy. Mr. Kling acknowledged that he made that determination without requiring that Dr. Wright attend an independent medical examination and without discussing Dr. Wright’s claim with a dentist. 111 By letter dated December 5, 2001, Mr. Kling wrote to Mr. McFee and advised that Sun Life was terminating Dr. Wright’s income replacement benefits. No payments have been made to Dr. Wright under the Policy since October 2001.

(h) After termination of benefits 112 According to Dr. Wright, he carried on business at the Newport Cen- tre until 2003, when he closed the practice. He explained that he was unable to operate profitably. However, Dr. Wright filed tax returns only sporadically (and the returns in evidence are, at best, incomplete), and there is no independent evidence (even in the form of a notice of assessment) concerning the revenues and expenses of the Newport Centre or any other professional practice carried on by Dr. Wright. There is, therefore, nothing to corroborate Dr. Wright’s evidence and no reliable evidence on which to draw conclusions about Dr. Wright’s financial circumstances. 113 After closing the Newport Centre, Dr. Wright then moved back to the U.K. According to Dr. Wright, for a year, he was in considerable pain and did not feel he was capable of working. However, he was not under the regular care of a physician. Rather, he visited medical clinics from time to time, when he felt he needed some medical attention for this or that. As Dr. Wright recalled, at one point, on his request, he was given a referral to an orthopaedic surgeon, Dr. John Vanhegan. He then saw Dr. Vanhegan from time to time. For example, at one stage, Dr. Wright consulted Dr. Vanhegan because he believed he might be suffering from carpal tunnel syndrome. Otherwise, while in the U.K., Dr. Wright’s visits to physicians tended to be for routine matters. There is no indication he sought treatment for anything related to injuries suffered in the Accident. 114 While in the U.K., and again with the assistance of his brother, Dr. Wright set up a practice in London, called “American Dentistry in London.” According to excerpts from the website Dr. Wright created for the business, he offered services as a “Specialist in Cosmetic, Implant & Wright v. Sun Life Assurance Co. of Canada Adair J. 95

Aesthetic Reconstructive Dentistry,” and noted his speciality training in prosthodontics. The items of service listed include many that, according to Dr. David Thorburn (Dr. Wright’s expert in dentistry), would be procedures performed in a general dentistry practice. Not surprisingly, there was nothing in the website excerpts that suggested Dr. Wright suffered from any physical impairments that might affect his ability to carry out the treatments offered to the high level of excellence described. 115 However, once again, American Dentistry in London was not a financial success. According to Dr. Wright, he was unable to attract enough patients to operate profitably. However, his evidence is uncorroborated by any reliable evidence. The practice was closed, and Dr. Wright returned to the U.S. in 2011. Dr. Wright accepted a position at a practice called the Institute of Aesthetic Dentistry, near Sacramento. However, although according to Dr. Wright he was happy working there, he stayed for only a short time (about two months) as a result of a conflict with an endodontist. Dr. Wright then accepted a position at a dental practice in Wisconsin. However, again, that lasted only for a relatively short time. According to Dr. Wright, he was unable to keep up the pace the work demanded. 116 In 2013, Dr. Wright joined the faculty of the University of Saskatche- wan College of Dentistry in Saskatoon, in a full-time position as a prosthodontist. Dr. Wright is on a 3-year contract in a tenure-track position. 117 According to Dr. Wright, he continues to suffer a number of physical problems and pain. It is unclear whether he has a regular family physician in Saskatoon, although from his evidence, Dr. Wright saw a Dr. Hel- frich on a number of occasions. However, to the extent that Dr. Wright has seen medical practitioners in Saskatchewan, there is no admissible evidence that, in relation to such visits, he is under the regular care of a physician “as a result of” any injuries he suffered in the Accident, and no admissible evidence that any of these medical practitioners has made a diagnosis of a current condition that was caused by injuries Dr. Wright suffered in the Accident and that might result in Dr. Wright being either Totally Disabled or Residually Disabled. 96 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Discussion and Analysis (a) Comments on the witnesses (i) Dr. Wright’s credibility 118 Dr. Wright’s credibility and reliability are significant issues in this case. 119 The Accident occurred over 20 years ago. With respect to Dr. Wright’s injuries from the Accident, there is very little objective evidence. The medical evidence (from Dr. Henderson and Dr. Keith Chris- tian, one of Sun Life’s experts) strongly suggests that Dr. Wright ought to have recovered from the fracture to his left humerus within a period of months. The medical opinions (for example, Dr. Larsen’s reports to Sun Life) on which claims decisions were made were based at least in part on Dr. Wright’s subjective reporting of pain and discomfort. With respect to Dr. Wright’s pre-Accident income (an important issue in relation to his claim for Residual Disability benefits), there is no reliable, contemporaneous, independent evidence: no income tax returns, no notices of assessment. From the time Dr. Wright submitted the Preliminary Statement of Claim, Sun Life asked for this information. It was never produced. The Hedden Chong income statements sent to Sun Life under cover of Mr. McFee’s July 10, 1998 letter were unaudited and based on information from Dr. Wright. Dr. Wright is the only person who testified about what he was doing at Crown, the Newport Centre and American Dentistry in London, and the only person who testified about why the Newport Cen- tre and the London clinic were not successful. Dr. Wright firmly believes the reason lies in the injuries he suffered in the Accident. 120 In closing submissions, Sun Life mounted a strong attack on Dr. Wright’s credibility. Mr. Orchard submitted that Dr. Wright was one of the most secretive, suspicious individuals one could ever encounter. He submitted that, during cross-examination, Dr. Wright was argumentative, evasive, employed a selective memory and was prone to giving speeches. In short, Sun Life’s position is that Dr. Wright’s version of events (except to the extent he made statements against his interest) completely lacks the hallmarks of credibility, and that his credibility was so under- mined that no reliance can be placed on his evidence. 121 One of the leading cases discussing the assessment of credibility is Madam Justice Dillon’s decision in Bradshaw v. Stenner, 2010 BCSC Wright v. Sun Life Assurance Co. of Canada Adair J. 97

1398 (B.C. S.C.), aff’d 2012 BCCA 296 (B.C. C.A.). Madam Justice Dil- lon wrote, at para. 186: [186] Credibility involves an assessment of the trustworthiness of a witness’ testimony based upon the veracity or sincerity of a witness and the accuracy of the evidence that the witness provides [citation omitted]. The art of assessment involves examination of various factors such as the ability and opportunity to observe events, the firm- ness of his memory, the ability to resist the influence of interest to modify his recollection, whether the witness’ evidence harmonizes with independent evidence that has been accepted, whether the witness changes his testimony during direct and cross-examination, whether the witness’ testimony seems unreasonable, impossible, or unlikely, whether a witness has a motive to lie, and the demeanour of a witness generally (Wallace v. Davis, [1926] 31 O.W.N. 202 (Ont.H.C.); Farnya v. Chorny, [1952] 2 D.L.R. 152 (B.C.C.A.) [Farnya]; R. v. S.(R.D.), [1997] 3 S.C.R. 484 at para.128 (S.C.C.)). Ultimately, the validity of the evidence depends on whether the evidence is consistent with the probabilities affecting the case as a whole and shown to be in existence at the time (Farnya at para. 356). 122 Credibility and reliability are different: see, for example, Hardychuk v. Johnstone, 2012 BCSC 1359 (B.C. S.C.), at para. 10. A witness whose evidence on a point is not credible cannot give reliable evidence on that point. On the other hand, a credible witness may provide unreliable evidence. 123 I have concluded that Dr. Wright is neither a credible nor a reliable witness. I will, relatively briefly, explain my reasons. 124 I am going to begin with Dr. Wright’s position concerning the payment by Sun Life of $80,000 in benefits in June 2001. Dr. Wright simply would not accept that this payment had been made unless someone produced a cancelled cheque to him. His position was, without a cancelled cheque, how could he be sure? Dr. Wright’s stubborn refusal to accept the fact that Sun Life had made this payment is inexplicable on any ra- tional basis, and damaged his credibility. The clear implication of Dr. Wright’s evidence — that no payment had been made — was both unlikely and unreasonable, in the face of other evidence and the pleading of fact in his Amended Statement of Claim that it had been. Yet, Dr. Wright would not yield. 125 There were other occasions when Dr. Wright strongly resisted agree- ing with the highly probable. For example, he would not agree that he received a letter from Sun Life dated July 17, 1997 (Ex. 79), even though 98 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

he sent a letter (Ex. 80) that is obviously responding to the July 17 letter. He would not agree that the finding of contempt made against him by Mr. Justice Warren was based on his failure to pay spousal and child support. Rather, he repeatedly stated that, as best he could recall, he always paid the child support ordered. However, his statement concerning payment of child support is irreconcilable with the amount of the arrears (which Dr. Wright did not dispute). In my opinion, Dr. Wright’s testimony that he always paid his child support was improbable and unlikely, and a clear example of selective memory. Moreover, I am unable to draw the inference that Dr. Wright could not accurately recall the basis on which he had been found in contempt of court in early December 1993, but could accurately recall (in 2015) details concerning the Accident. These are significant events that happened within a few weeks of one another. 126 With respect to the Accident, Dr. Wright testified at trial that he swerved to avoid running into another skier and was (among other things) knocked unconscious. On cross-examination, he firmly resisted the propositions that he collided with another skier (rather than swerving to avoid him) and that he was not knocked unconscious. However, Dr. Wright’s own description of the Accident in his Preliminary Statement of Claim was that he collided with another skier and made no mention that he was knocked unconscious. When the contradiction between what he reported in his Preliminary Statement of Claim and his evidence at trial was put to Dr. Wright, he said that his use of “collided” was a “poor choice of words.” 127 In this case, nothing turns on whether Dr. Wright swerved to avoid someone or collided with someone; Dr. Wright still could have been hurt regardless. And nothing turns on whether Dr. Wright was in fact knocked unconscious in the Accident, since he does not assert any disability as a result. However, Dr. Wright’s evidence about walking down the ski hill, not reporting the Accident to anyone and not seeking any medical attention while in Whistler makes his evidence concerning being knocked unconscious seem improbable. 128 However, what is significant to me is Dr. Wright’s insistence that the Accident occurred in the manner he described at trial, and his resistance to the possibility that his memory, after all this time, might not be accurate. These examples illustrate features of much of Dr. Wright’s evidence that, in my view, impairs his credibility and reliability, namely: a desire on the one hand to minimize his personal responsibility for acts or Wright v. Sun Life Assurance Co. of Canada Adair J. 99

events, and, on the other hand, a desire to maximize the negative consequences he believes he suffered and place himself in what he perceives to be the position most advantageous for his case. In my opinion, these features strongly influenced Dr. Wright’s evidence at trial. These examples also illustrate Dr. Wright’s strong resistance to making what are reasonable concessions, which he nevertheless perceives are not in his self-interest, as well as selective memory. When I assess Dr. Wright’s credibility, I consider his inability to concede he might be mistaken about something (where there are reasonable grounds to concede) to be a negative factor. 129 Dr. Wright’s evidence about his thinking and ultimate decision in early 1994 to embark on retraining and a career change also seems improbable. I am asked to infer that the reason was because of the injuries Dr. Wright suffered in the Accident, rather than other events (such as his bankruptcy or the continued disputes concerning support payments or pre-existing physical problems) in Dr. Wright’s life that could have made carrying on his dental practice difficult or undesirable. However, as described by Dr. Wright, the decision is remarkable both for how swiftly it was made (although Dr. Wright continued to carry on with his practice for about another year), and for the fact that Dr. Wright (according to his testimony) made it without consulting a single medical doctor to see whether his injuries should be considered career-ending or whether there was treatment available. In my opinion, it also reaffirms that Dr. Wright had (and has) a very high level of confidence in his own views, and was unlikely to accept advice or opinions from others unless he agreed with them. Among other things, this could make care by a physician problem- atic. I have concluded this feature also makes Dr. Wright an unreliable reporter of facts that were or are inconsistent with his own fixed views. 130 When Dr. Wright was asked on cross-examination about the office hours shown for the Newport Centre, he agreed that these were the hours advertised to the public, although he said later that the hours shown were simply hours when appointments were available. However, the Newport Centre signage drew a clear distinction between normal hours, and hours “by appointment only.” To assert (as Dr. Wright did) that everything was by appointment only, and there were no regular business hours, is simply not compatible with what he agreed was displayed to the public. It is an attempt by Dr. Wright to avoid the logical and reasonable inference from a reliable piece of evidence. I conclude, however, that Dr. Wright perceived it to be in his interests to give an explanation that was neither reasonable nor credible. 100 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

131 My final example concerns Dr. Wright’s evidence when he was being cross-examined on Mr. McFee’s May 11, 2001 letter, where Mr. McFee refers to the (unidentified) “prosthodontic speciality practice.” At first, Dr. Wright testified that this was the Newport Centre. However, when the logical consequences of his evidence — that the Newport Centre must therefore have been in operation in 2000 — were pointed out to Dr. Wright, he changed his evidence. Again, this illustrated to me that Dr. Wright had a great deal of difficulty resisting the influence of what he perceived to be his personal interest, and confirmed to me that it would be dangerous to place much weight on his uncorroborated testimony. 132 There is another factor that has lead me to conclude I must be quite cautious before placing much weight on Dr. Wright’s uncorroborated evidence. Dr. Wright demonstrated a deep suspicion and distrust of insurance companies and Sun Life in particular, and high level of disdain for the claims process. Making an insurance claim can be frustrating, but Dr. Wright’s conduct appeared to me to go far beyond any reasonable expression of frustration, especially since Dr. Wright was himself the cause of some of the problems and delays. His feelings of suspicion and disdain were illustrated (for example) in much of the correspondence Dr. Wright personally sent to CDSPI and Sun Life. They were illustrated by Dr. Wright’s refusal to accept that Sun Life had paid $80,000 in benefits in June 2001 unless he was shown a cancelled cheque. Although it prejudiced his claim for Residual Disability benefits, Dr. Wright never did provide the full financial documentation and information Sun Life requested because he did not consider he should be obligated to, and what he did provide (for example, the cheques from Crown) was incomplete. I am therefore left with concerns that Dr. Wright would feel justified in concealing information, engaging in selective memory and not telling the whole truth, in the context of a dispute with Sun Life. 133 Of course, I do not have to reject all of Dr. Wright’s evidence. A trial judge can accept some, all or none of a witness’s evidence. However, because of my concerns about Dr. Wright’s credibility and reliability, I have concluded I cannot give much weight to Dr. Wright’s uncorroborated evidence about: injuries he sustained in the Accident; his dental practice prior to the Accident; his reasons for selling that practice, returning to university and retraining, to the extent he identifies injuries sustained in the Accident as the cause; the work he was doing in Califor- nia at dental practices beginning in late 1999 and continuing to 2003 (when he closed the Newport Centre) or the work he was doing at Amer- ican Dentistry in London. I am prepared to give considerable weight to Wright v. Sun Life Assurance Co. of Canada Adair J. 101

Dr. Wright’s evidence where he has made statements against his interest, or where there is some admissible and reliable contemporaneous docu- mentary evidence to support Dr. Wright’s evidence.

(ii) The Dentistry and Medical Experts 134 With respect to what the practice of dentistry involves, I had the benefit of opinion evidence from two experts. Dr. David Thorburn is a dentist who has practiced as a general practitioner (rather than a specialist) in a solo practice in Vancouver since 1989. Dr. Thorburn testified as Dr. Wright’s expert. Dr. Anthony McCullagh is a clinical associate professor in the School of Oral Health of the Faculty of Dentistry at the University of British Columbia. He testified as Sun Life’s expert. Dr. McCullagh qualified as a dentist at the University of Liverpool and worked for several years as a general dentist. He then took four years of additional training in the speciality of prosthodontics, and received a specialist’s certifi- cation in prosthodontics. He came to Canada from the U.K. in late 2004. He has practiced in B.C. as a prosthodontist, but (in accordance with the limitations of an academic licence from the B.C. College of Dental Sur- geons) never full-time. 135 Dr. Thorburn was qualified to give opinion evidence in a more narrow scope than Dr. Wright requested. Ms. Foord (for Sun Life) objected to the admissibility of a number of parts of Dr. Thorburn’s report on the grounds that they went beyond the limits of my ruling regarding Dr. Thorburn’s qualification as an expert. I do not consider it useful to address each and every one of Ms. Foord’s objections and requests for re- dactions. Although the presentation of Dr. Thorburn’s opinions as set out in his report can be criticized (and I do not fault Dr. Thorburn in that regard), his opinions within the limits of my ruling are easy to recognize. Dr. Thorburn testified in a fair and balanced way, did not hesitate to acknowledge points on which he felt he was unable to express any opinion (for example, he testified that he had no idea whether Dr. Wright was capable of returning to practice as a general practitioner) and helpfully pointed out areas where he and Dr. McCullagh agreed. 136 Dr. McCullagh also testified in a fair and balanced way, and (as one might expect given his position as a teacher) was able to explain relevant aspects of dentistry and prosthodontics clearly and simply. Dr. Wright was critical of Dr. McCullagh’s lack of experience in B.C. as a full-time practicing prosthodontist. However, in my opinion, that was less important than Dr. McCullagh’s overall experience. In his report, Dr. McCul- 102 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

lagh summarized the differences between general dental practice and prosthodontic speciality practice, and Dr. Thorburn (in his report) acknowledged that Dr. McCullagh provided a very good summary. I agree. 137 Dr. Wright did not tender any medical opinion evidence in support of his claim. Sun Life, in closing submissions, argued that this was a serious (and perhaps fatal) gap in Dr. Wright’s case. In support of its position, Sun Life cited (among other cases) Mathers v. Sun Life Assurance Co. of Canada, 1999 BCCA 292 (B.C. C.A.), Plouffe v. Mutual Life Assurance Co. of Canada, 2003 BCCA 96 (B.C. C.A.) and Plouffe v. Mutual Life Assurance Co. of Canada, 2005 BCSC 1531 (B.C. S.C.) (the retrial). 138 Sun Life tendered expert reports from two medical doctors: Dr. Ian Connell, who was qualified as an expert in occupational medicine; and Dr. Keith Christian, an orthopaedic surgeon. Both carried out independent medical examinations of Dr. Wright. Both Dr. Connell and Dr. Christian also testified at trial. 139 Dr. Wright criticized both Dr. Connell’s and Dr. Christian’s ability to give any opinions about his ability to carry on practicing dentistry, since neither Dr. Connell nor Dr. Christian had made any study of what that practice involved. However, I consider Dr. Wright’s criticisms to be somewhat misplaced. There was no evidence that, for example, Dr. Wright went to see Dr. Larsen or Dr. Vanhagen because either had special expertise in treating patients who were dentists. Rather, Dr. Wright consulted these physicians because they were orthopaedic surgeons, the same as Dr. Christian. Dr. Christian clearly had many years’ experience in carrying on a surgical practice, and could speak to the mental and physical demands of doing so. Dr. Connell at the very least had Dr. Wright’s Pre and Post-disability Statement available, along with additional information provided to him by Dr. Wright, with respect to what (at least according to Dr. Wright) practicing general dentistry involves. 140 Dr. Wright was also critical of the time Dr. Christian took to do his physical examination of Dr. Wright. The implication of Dr. Wright’s criticism is that the examination was much too short to be meaningful. On the other hand, Dr. Christian testified that the time he spent was not an unreasonable amount of time. There is no evidence to the contrary. Dr. Wright’s views as a lay person concerning how long an orthopaedic physical examination should take are not relevant. 141 Both Dr. Connell and Dr. Christian were asked to give an opinion on the question of whether Dr. Wright has been “unable to perform the essential duties of his Regular Occupation as a general practitioner practic- Wright v. Sun Life Assurance Co. of Canada Adair J. 103

ing dentistry as a result of Sickness or Injury,” and asked whether Dr. Wright’s symptoms “would restrict performing the essential duties of a general practitioner practicing dentistry, if at all?” Both doctors answered both questions, no. However, based on the contents of the reports, I do not know what either doctor assumed made up “the essential duties.” Clearly, both Dr. Connell and Dr. Christian must have made some assumptions in that respect. But whatever assumptions they made are not set out either in the doctor’s report or in the instructing letter. As a result, since I do not know the full basis for the opinions, it is difficult for me to give a great deal of weight to their opinions on these questions. 142 Moreover, although Dr. Connell has a specific section in his report headed “Facts and Assumptions,” it is obvious from reading the report that this section does not set out all of the facts and assumptions on which he bases his opinions. Indeed, in the “Opinion” section, Dr. Con- nell says that his opinion “is based on my interview and examination of Dr. Wright and review of the supplied documentation,” and he does not mention his “Facts and Assumptions” at all. Again, I am left to guess at what facts and assumptions actually ground the opinions. As result, the report is considerably less useful to me than it could have been, and I cannot give it the weight I would give to an opinion where the facts and assumptions on which the expert’s opinions are based are set out clearly. This is what Rule 11-6(1) of the Supreme Court Civil Rules requires. 143 There are similar problems with Dr. Christian’s report. 144 I also note that Dr. Connell and Dr. Christian were both asked to express an opinion on the question whether Dr. Wright has been “under the regular care of a physician since the onset of his condition.” Whether Dr. Wright has been under the regular care of a physician is, first, a factual issue for me to determine, and then I must decide whether he has been under the “regular care of a physician” in the context of the Policy. It is not a matter on which expert opinion evidence is either necessary or admissible. I have given no weight to the doctors’ responses to this question.

(b) Framework for considering Dr. Wright’s claim for benefits 145 The issues in this case are not about whether, for example, Dr. Wright has experienced or experiences disabling back and neck pain, or disabling pain generally. Rather, with respect to Dr. Wright’s claim for income replacement Total Disability benefits, the question is whether Dr. Wright is “Totally Disabled” as that term is defined by the Policy. Simi- 104 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

larly, with respect to Dr. Wright’s claim for income replacement Residual Disability benefits, the question is whether Dr. Wright is “Residually Disabled” as that term is defined by the Policy. This point is made in (for example) Ditomaso v. Manufacturers Life Insurance Co./Cie d’Assurance-vie Manufacturers, 2002 BCSC 502 (B.C. S.C.), where Ross J. wrote: [50] The issue before me is not whether Mr. Ditomaso has pain; nor whether he suffers from fibromyalgia.... The question is whether he is disabled as that term is defined by the Plan. 146 The point is also made in Norwood on Life Insurance Law in Canada, 3rd ed. (Toronto: Carswell, 2002), at p. 471 [italics in original; footnote omitted]: While the determination of disability depends upon underlying medical facts, it should be noted that total disability is not a pre-emptive medical judgment by a doctor about a medical condition, but a legal judgment in light of the contractual measurement of liability. An insured may be sick, but the legal question is whether the illness is disabling in accordance with the terms of the policy definition. 147 With respect to Dr. Wright’s entitlement to income replacement benefits under the Policy, the essential issues are, therefore: (a) was Dr. Wright “Totally Disabled”, as defined by the Policy, after October 2001 and until trial; and (b) was Dr. Wright “Residually Disabled,” as defined by the Policy, either in the period December 18, 1993 to March 23, 1995 or (if he was not Totally Disabled after October 2001) after October 2001 and until trial, or both.

(c) Was Dr. Wright Totally Disabled after October 2001? 148 For convenience, I will again set out the definitions of “Total Disabil- ity” and Totally Disabled” in the Own Occupation Option of the Policy: “Total Disability and Totally Disabled” shall mean that, as a result of Sickness or Injury, the Participant is unable to perform the essential duties of his Regular Occupation and is under the regular care of a physician. 149 In closing submissions, Dr. Wright cited the following passage from Sucharov v. Paul Revere Life Insurance Co., [1983] 2 S.C.R. 541 (S.C.C.), at p. 546, in support of his position that he satisfies the test for being totally disabled: In Couch on Insurance (1983), 2d (Rev. ed.) §53:118 there is the following relevant paragraph: Wright v. Sun Life Assurance Co. of Canada Adair J. 105

The test of total disability is satisfied when the circumstances are such that a reasonable man would recognize that he should not engage in certain activity even though he literally is not physically unable to do so. In other words, total disability does not mean absolute physical inability to transact any kind of business pertaining to one’s occupation, but rather that there is a total disability if the insured’s injuries are such that common care and prudence require him to de- sist from his business or occupation in order to effectuate a cure; hence, if the condition of the insured is such that in order to effect a cure or prolongation of life, common care and prudence will require that he cease all work, he is totally disabled within the meaning of health or accident insurance policies. 150 Many cases have cited this passage from Sucharov. However, ultimately, the specific policy language will determine whether an insured is entitled to coverage on the grounds that he or she is “totally disabled.” 151 In the Amended Statement of Claim, Dr. Wright alleged total disability as a result of “Injury.” The injuries he alleged he suffered in the Acci- dent were: (a) a concussion; (b) a fracture of the left humerus; (c) traumatic injury to the left radius; (d) subluxation of the left shoulder joint; (e) a hyperextension injury to the cervical spine; and (f) exacerbation of pre-existing chronic lower back pain. 152 Dr. Wright testified concerning his injuries, and used some medical terminology (for example, “subluxation, “compression fracture,” “pares- thesia”) to describe what he believed happened to him as a result of the Accident. Some of the conditions (for example, varicose veins) that Dr. Wright identified in the Preliminary Statement of Claim as conditions that prevented him from working as a general dentist had no connection with the Accident. More importantly, Dr. Wright is not a medical doctor and, despite his education and training, he cannot provide a medical diagnosis for himself. 153 On the other hand, Dr. Henderson is a medical doctor. Dr. Henderson diagnosed a fracture of Dr. Wright’s left humerus (specifically, a fracture through the tuberosity). At Dr. Wright’s request, based on Dr. Wright’s report of pain in his left elbow and evidence of significant bruising tracking down Dr. Wright’s left arm, Dr. Henderson investigated whether Dr. Wright had fractured the left radial head and ordered an x-ray. The x-ray 106 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

was normal. Dr. Henderson recommended that Dr. Wright use a sling for a period and attend physiotherapy. On December 30, 1993, his recom- mendation was that Dr. Wright return in two weeks “as advised.” That was the last time Dr. Henderson saw or treated Dr. Wright as a patient. 154 Dr. Henderson testified that he expected the injury to Dr. Wright’s shoulder would improve over a few months. This is consistent with the opinion evidence from Dr. Christian. Dr. Christian stated that the injury likely would have expected to have taken four to six weeks to heal and ongoing problems would not have been expected. Dr. Christian went on to say that in 30 years of orthopaedic practice dealing with musculoskel- etal trauma, he had not encountered physical impairment causing ongoing disability as a result of this type of fracture. There is nothing in the evidence to indicate that the injury to Dr. Wright’s shoulder failed to heal in the normal course. 155 Dr. Henderson did not make a diagnosis of a hyperextension injury to the cervical spine, or a concussion, or a subluxation of the shoulder joint, or a fracture to Dr. Wright’s left wrist. On the other hand, in both the Attending Physician’s Statement of Disability completed in February 1996 and in the letter he later prepared dated September 15, 1997, Dr. Henderson noted that Dr. Wright had a history of chronic back problems. 156 I find that, in the Accident, Dr. Wright suffered a fracture of his left humerus, and had associated pain and discomfort in his left shoulder, arm, neck and back. I find, based on Dr. Christian’s opinion evidence, that the fracture probably healed within a maximum of eight weeks and was not the cause of any ongoing disability or impairment. Based on Dr. Henderson’s statements, I find that Dr. Wright probably also sustained aggravation of chronic back problems. However, there has been no medical diagnosis made that, in the Accident, Dr. Wright sustained an injury to his neck that resulted in chronic neck problems lasting years after the Accident. 157 The Policy’s definition of “Total Disability” and “Totally Disabled” states further that “as a result of ... Injury, the Participant ... is under the regular care of a physician.” 158 In support of his position concerning the proper interpretation of a term that the insured be “under the regular care of a physician,” Dr. Wright cites Kirkness (Committee of) v. Imperial Life Assurance Co. of Wright v. Sun Life Assurance Co. of Canada Adair J. 107

Canada (1993), 12 O.R. (3d) 285, 99 D.L.R. (4th) 391 (Ont. C.A.). There, Blair J.A. (for the court) wrote (at O.R. p. 295): Compliance with a “regular care and attendance” clause is not a condition precedent for recovery under a disability insurance contract. Rather, the purpose of such clauses is evidentiary. They provide insurers with reliable assessments of the condition of insureds and protect insurers against fraudulent claims. Where permanent and irreme- diable disability exists, regular medical care and attendance is futile and ineffective. To insist on it defeats the main purpose of the policy, which is to provide indemnity in case of permanent disability, and is “unfair, unreasonable and unjust” as Goodman J. stated in the Taaffe case. 159 In effect, Dr. Wright argues that his condition was permanent and un- treatable, so being under regular care of a physician was pointless. 160 However, Kirkness is not the law in B.C. Rather, the leading authorities in B.C. in relation to this type of policy wording are Rose v. Paul Revere Life Insurance Co. (1991), 62 B.C.L.R. (2d) 48 (B.C. C.A.) and Andreychuk v. RBC Life Insurance Co., 2008 BCCA 492 (B.C. C.A.). 161 In Rose (a case that, co-incidentally, involved a dentist), Mr. Justice Taylor (for the court) discussed a number of issues relevant to this case, including the burden of proof where (as here) the insurer has accepted a claim and paid benefits for a time on the basis of “Total Disability,” and then terminated payments. 162 On the facts in Rose, the plaintiff was diagnosed as suffering acute depression and hypertension associated with his work as a dentist. He left his practice, and for a period of 15 months, the insurer paid benefits under a policy that provided: “Total Disability” means that because of sickness or injury: 1. You are unable to perform the important duties of your regular occupation; and 2. You are under the regular and personal care of a Physician. 163 The insurer then terminated benefits on the basis that the plaintiff was no longer totally disabled, even though medical opinion evidence indicated that the plaintiff could not return to dentistry. As of trial, the plaintiff was working as the manager of a sporting goods store. His medical opinion evidence did not indicate he was suffering from any underlying major psychiatric or phobic disorder. Rather, his symptoms were only likely to recur if he returned to the practice of dentistry. Dr. Rose’s ac- 108 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

tion, seeking a declaration of entitlement to benefits under the policy, was dismissed at trial. 164 In framing the issues on the appeal, Mr. Justice Taylor wrote: [8] The case is one which turns, in my view, very much on the wording of the policy. It is not, in my view, a disability policy in the broadest sense of the term, but one which protects the insured from income loss during the treatment phase of a sickness causing total disability and in the event the insured suffers one of four forms of permanent disability. 165 After referring to specific provisions in the policy in issue, Mr. Jus- tice Taylor then wrote: [11] So the policy protects the insured against income loss due to disability caused by sickness for so long only as the insured is “under the regular and personal attendance of a Physician” ... and provided that the sickness “requires the regular and personal attendance of a licensed physician” ... (my emphasis), unless the sickness results in the loss of speech, hearing, sight or the use of two limbs, in which case benefits are payable without continuing attendance of a physician. It is of obvious importance in this case that the policy does not cover loss of income due to inability to work resulting from sickness not under regular treatment by a physician except when it results in loss of speech, hearing, sight or the use of two limbs. Except in those defined cases, benefits cease when the treatment phase of a sickness ends. 166 In my opinion, Mr. Justice Taylor’s comments apply here. The Policy is one that protects the insured from income loss during the treatment phase of an Injury causing “Total Disability” (as defined), and in the event the insured suffers from one of five forms of permanent disability (described in the Policy as “Presumed Total Disability”). In the latter case, the insured is not required to be under the regular care of a physician. However, other than in cases of “Presumed Total Disability,” the Policy does not cover loss of income due to inability “to perform the essential duties of [the insured’s] Regular Occupation” resulting from In- jury that is not under “the regular care of a physician.” 167 One of the issues on the appeal in Rose raised the question: on whom does the onus of proof lie in an action on such a policy where the insurer has acknowledged the existence of a valid claim, and paid benefits under the policy, but later asserts that conditions have so changed that benefits are no longer payable? See Rose, at para. 15. Dr. Rose argued that the onus of proving that the disability had ended was on the insurer, and it Wright v. Sun Life Assurance Co. of Canada Adair J. 109

had not been met. Implicitly, Dr. Wright makes the same argument in this case. 168 After reviewing the authorities, and noting that, in accordance with the principle normally applied in civil cases that the onus of proof, or the “ultimate risk of non persuasion,” rested on the plaintiff Mr. Justice Tay- lor wrote: [21] ... In the end, in my view, the fact that the insurer has at one time accepted a claim is something which may or may not weigh in the scales against the insurer, depending on the nature of the coverage and the precise wording of the policy. [22] In the present case it seems to me that the insured had the burden of showing that he was still being regularly treated by a physician for a totally disabling sickness, as defined by the policy, after the date when the insurer ceased paying benefits, and that the fact that the insurer had admitted that the insured was earlier suffering from such a sickness and under such treatment, by paying benefits under the policy, involves no admission which can assist the plaintiff in this case. 169 In my opinion, that same analysis applies based on the wording of the Policy (which includes a specific provision that proof satisfactory to Sun Life of continued disability may be requested by Sun Life at all reasonable times). Dr. Wright has the burden of showing that, during the period after October 2001 and to trial, he was still being regularly treated by a physician as a result of Injury. 170 “Physician” in the context of the Policy provisions means a medical doctor. Being under the care, for example, of a chiropractor or other medical or health professional is insufficient. See: Rose, at para. 25. 171 In Roston v. Paul Revere Life Insurance Co., [1996] B.C.J. No. 9 (B.C. S.C.), 1996 CanLII 2812, Low J. (as he then was) applied the analysis in Rose to policy terms that defined “Total Disability” to mean that: because of Injury of Sickness: 1. You are unable to perform the important duties of Your regular occupation; and 2. You are under the regular and personal care of a Physician. 172 Low J. found (at para. 38) that the plaintiff had been totally disabled, as that term was defined in the policy. However, after a certain date, she could no longer be considered to be receiving treatment as part of the treatment phase of her injury. Although the plaintiff continued to be under medical care, Mr. Justice Low concluded that the plaintiff had not 110 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

proved total disability, as that term was defined in the policy, beyond that date. 173 In my opinion, Roston emphasizes the point made by Mr. Justice Tay- lor in Rose, that policies with wording such as the Policy are not disability policies in the broadest sense, but protect an insured against income loss during the treatment phase of an Injury or Sickness. 174 The policy in issue in Andreychuk provided total disability benefits if, because of injury or sickness, the insured was: (a) unable to perform important duties of his or her occupation; and (b) not engaged in any other gainful occupation; and (c) under the regular and personal care of a physician. The plaintiff’s claim for benefits had been dismissed at trial. On appeal, she argued that Rose was wrongly decided and that the provisions of the policy should be given a liberal interpretation, as in Kirkness. 175 Chiasson J.A. rejected the plaintiff’s argument and expressed the view (at para. 38) that Kirkness proceeded on an incorrect analytical basis. He had earlier observed (at para. 21) that “the fact that a medical condition is not treatable does not make Rose inapplicable.” Chiasson J.A. continued: [42] In my view, the issue is not whether a liberal or strict construction of the provision should be applied. Kirkness and the American authorities acknowledge that the policy provision clearly requires the care of a physician, but conclude the insured should not be obliged to comply with it. The proviso that the insured be under the care of a physician is considered as an obligation imposed on the insured by the policy, from which there should be relief...... [44] In the present case, the provision concerning the care of a physician is contained in the definition of “Total Disability”. This defines the reach of coverage. It is not concerned with obligations imposed on the insured. The insurer provides coverage when an insured is “unable to perform the important duties” of his or her occupation and the insured is “under the regular and personal care of a Physician”. Obviously, the insurer does not provide benefits when the insured is not disabled and, equally obviously, it does not provide benefits when the insured is not under the care of a physician. Neither of these risks was undertaken by the insurer. 176 In summarizing his conclusions, Chiasson J.A. wrote (at para. 51): 1. A provision in a disability insurance policy stating that “total disability” includes being under the care of a physician Wright v. Sun Life Assurance Co. of Canada Adair J. 111

is a provision that defines coverage, the risk accepted by the insurer; 2. This Court’s decision in Rose reflects this analysis[.] 177 In my opinion, the analysis and conclusions in Andreychuk must apply here, given the similarity in the policy wording. 178 As in Andreychuk, the definition of “Total Disability” and “Totally Disabled” in the “Own Occupation Option” section of the Policy contains a provision concerning “regular care of a physician.” As in An- dreychuk, the provision therefore defines the reach or scope of coverage and the risk accepted by the insurer. It is not concerned with obligations imposed on the insured. The language of the Policy is not ambiguous. Rather, the words are plain and unambiguous in their ordinary meaning. Unless the insured can show that “as a result of ... Injury,” he or she is “under the regular care of a physician,” the insured will not satisfy the burden on him to prove “Total Disability” and “Totally Disabled” under the Policy and will have failed to prove he is entitled to coverage under the Policy. 179 After Sun Life terminated benefits in October 2001, was Dr. Wright “as a result of” any Injury suffered in the Accident “under the regular care of a physician”? Dr. Wright has the onus of proof to show this, on a balance of probabilities. In my opinion, the evidence does not support the conclusion that Dr. Wright was “under the regular care of a physician,” as required for coverage under the Policy. 180 While still in California (until 2003), Dr. Wright attended the Student medical clinic occasionally. But, accepting Dr. Wright’s evidence at face value, the visits were not “as a result of” any Injury suffered in the Accident. 181 After moving to the U.K. in 2003, his visits to medical doctors and clinics were, generally speaking, of the same type, to deal with occa- sional conditions or for routine matters (for example, immunizations). He was not there seeking treatment for any Injury suffered in the Accident. Between 2003 and 2011 (when he moved back to California), Dr. Wright saw an orthopaedic surgeon, Dr. John Vanhegan, twice, once in 2006 and again in 2009. (Whether Dr. Wright saw Dr. Vanhegan a third time, and if so for what, is quite unclear on the evidence.) Dr. Wright made one of the visits because he thought he might be developing carpal tunnel syndrome. In my opinion, the evidence is inconclusive concerning whether Dr. Vanhegan provided any treatment to Dr. Wright on any visit, and also inconclusive (at best) concerning whether the purpose of a visit was 112 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

“as a result of” any Injury suffered in the Accident. In any event, two (or even three) visits over this period cannot qualify as “regular care,” and I find that Dr. Wright was not under the regular care of Dr. Vanhegan. 182 Dr. Wright testified that he “consulted with” Dr. Vanhegan in 2013 about having him prepare a report in connection with an earlier trial date in this action. However, such a consultation cannot qualify as “regular care of a physician” as set out in the Policy. 183 After he returned to the U.S. in 2011, Dr. Wright’s sporadic visits to medical practitioners cannot qualify as “regular care of a physician,” as required by the Policy. Once Dr. Wright moved to Saskatchewan, according to his evidence, he again had a regular doctor (which he appears not to have had since leaving B.C. in 1995). However, in view of my concerns (described above) about Dr. Wright’s credibility and reliability, I am not prepared to draw conclusions favourable to Dr. Wright based on his evidence alone. I have no independent evidence about whether, during Dr. Wright’s time in Saskatchewan, he has been receiving medical care from a physician in relation to any Injury that he suffered as a result of the Accident. Dr. Wright’s firm belief that his current problems have their origins in the Accident is insufficient without some independent corroboration, which is altogether lacking. The reason is because Dr. Wright is not a credible or reliable witness. 184 I find, therefore, that Dr. Wright has not met his burden to show that, since October 2001, he has been “under the regular care of a physician” as a result of an Injury suffered in the Accident. Rather, the evidence supports the conclusion that Dr. Wright has not been under the regular care of a physician. As a result, Dr. Wright has failed to meet the burden on him to prove that he is “Totally Disabled” as that term is defined in the Policy, and therefore he has failed to prove that he is entitled to coverage under the Policy for income replacement benefits for the period beginning November 2001 to date. 185 My conclusion that Dr. Wright has not met his burden to show that he has been “under the regular care of a physician” is sufficient to dispose of Dr. Wright’s claim for benefits for the period beginning November 2001, on the basis that he has failed to show that he was “Totally Dis- abled” within the terms of the Policy. 186 However, the Policy definition also includes a requirement that “as a result of ... Injury, the Participant is unable to perform the essential duties of his Regular Occupation.” Since the parties presented evidence and argument on this aspect of the definition of “Total Disability” and “Totally Wright v. Sun Life Assurance Co. of Canada Adair J. 113

Disabled,” I will address it, although only relatively briefly. Dr. Wright has the burden of proof on this issue. 187 The relevant date of disability is December 18, 1993. On that date, Dr. Wright was engaged in the practice of dentistry as a general practitioner (rather than a specialist). 188 One of the main points I draw from Dr. Thorburn’s and Dr. McCul- lagh’s evidence is that the practice of dentistry is highly individual. Al- though every individual practicing dentistry is involved with teeth and oral care, individual dentists develop (as one would expect) their own individual areas of interest and expertise. For example, Dr. Thorburn over his career developed a particular interest in gold foil technique. In- dividual dentists may identify procedures (for example, extractions or orthodontics or endodontic work) that they prefer to refer to specialists (if available), rather than perform themselves. A general practitioner working in a town or area where there are few specialists may have to be proficient in many things, whereas someone working in a large city is more likely to be able to refer a patient to a specialist (where warranted). A general practitioner and an individual practicing as a prosthodontist both perform oral surgery and may perform many of the same procedures on patients (for example, crowns). On the other hand, a prosthodontist is unlikely to do orthodontics, whereas a general practitioner may. Whether an individual is practicing as a general practitioner or a prosthodontist, working with a patient requires concentration, focus, and care and attention to many small details. Whether an individual is practicing as a general practitioner or a prosthodontist, the work can be stressful, and be mentally and physically tiring. For example, Dr. McCullagh mentioned that working with dental implants (a significant portion of any modern prosthodontic office) was something that involves the manipulation of small screws and implant components close to the patient’s airway, thus requiring careful concentration and a steady hand. The lab work associated with a prosthodontist’s practice can (depending on the situation) provide some respite to the rigours of a clinical practice. 189 Of course, any dental practice is a business. It has overhead and expenses. Unless patient care generates sufficient revenues, the business will not be profitable. Whether (as I discuss below) Dr. Wright’s dental practice was in fact profitable before the Accident (and if so, to what extent) cannot be determined because Dr. Wright did not produce the relevant financial documents. There is also no reliable evidence of the extent to which Dr. Wright involved himself in the actual running of the 114 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

business (for example, submitting claims for dental services rendered, paying bills, hiring and firing staff, keeping equipment up-to-date), prior to the Accident. 190 Business records, or some reliable financial analysis, from Dr. Wright’s pre-Accident practice could also have shed light on how Dr. Wright was in fact spending his time (and therefore assisted in determining Dr. Wright’s “essential duties”), in addition to showing how the practice was doing financially. However, no such records or analysis were in evidence. The documents that Sun Life requested when Dr. Wright originally submitted his Preliminary Statement of Claim in 1996 might also have assisted. However, Dr. Wright never provided what was requested, and there was no reliable evidence tendered at trial. 191 Dr. Wright argues that it is essential to distinguish between dentistry procedures (which may well overlap as between someone practicing as a general practitioner and someone practicing as a prosthodontist) and the “style of practice.” His position was that someone practicing as a specialist in prosthodontics carries on a completely different style of practice than someone practicing as a general dentist, even though the individuals might perform many of the same procedures. The implication of his argument is that, since the styles of practice are different, the “essential duties” must also be different. Dr. Wright’s position was that even if he were able to carry on practice as a prosthodontist (and he expressed grave doubts about his ability to do that), it did not follow that he was able to carry on practice as a general practitioner, as he had done before the Accident. The styles of practice were not the same. Dr. Wright says that, since November 2001, he is unable to carry on the style of practice he had in Abbotsford before the Accident, and therefore is unable to carry out the essential duties of his Regular Occupation. He identifies injuries he suffered in the Accident as the reason. 192 On the other hand, Sun Life says that Dr. Wright’s description of his pre-Accident practice in the Preliminary Statement of Claim is likely the most accurate. There, Dr. Wright described his daily duties as: “Restora- tive & Prosthetic Dentistry, Endodontics, Minor Oral Surgery, Sedation & Selective Orthodontics plus Administrative Duties.” Sun Life says that this description should be preferred over the contents of the Pre- and Post-disability Statement (a self-serving document that was created in the context of litigation and is therefore suspect), which Dr. Wright essentially repeated at trial. Sun Life says that, with the possible exception of “selective orthodontics,” Dr. Wright continued to do all of the things de- Wright v. Sun Life Assurance Co. of Canada Adair J. 115

scribed in the Preliminary Statement of Claim after the Accident. Sun Life says that the fact that Dr. Wright may have done more prosthodontic and restorative treatment once he completed his specialist’s training does not mean that he was “unable to perform the essential duties of his Regu- lar Occupation.” Sun Life says further that the list of services Dr. Wright advertised were available to patients at American Dentistry in London were the types of procedures he was performing at his dental office in Abbotsford. Sun Life argues that I should conclude that Dr. Wright was able to perform these procedures — in other words, the “essential duties of his Regular Occupation” as a general dentist — because he was in fact offering to perform them on patients. 193 In my opinion, Dr. Wright has failed to satisfy the onus on him to show that, for the period in issue, he was “as a result of ... Injury ... unable to perform the essential duties of his Regular Occupation,” and therefore Totally Disabled. The ordinary meaning of “essential” includes “absolutely necessary,” “extremely important” and “fundamental.” So, tasks or duties that were incidental to Dr. Wright’s pre-Accident practice do not fall into the category of “essential.” I find that the description of Dr. Wright’s pre-Accident practice in his Preliminary Statement of Claim is probably a reasonably accurate description of what he was doing, as compared to the more elaborate summary (which Dr. Wright essentially repeated at trial) found in the Pre and Post-disability Statement. This is one of the areas where I do not consider Dr. Wright’s evidence at trial to be reliable. Without better and more reliable evidence from Dr. Wright (for example, some contemporaneous business records or independent financial analysis), I am not prepared to conclude that orthodontics (a procedure Dr. Wright probably did not perform after November 2001) qualified as “an essential duty,” and, in the absence of some evidence corroborating Dr. Wright’s evidence concerning his capabilities, I am not persuaded that, from November 2001 continuing through to trial, he was unable to perform the “essential duties” of his “Regular Occupation”, and was therefore “Totally Disabled,” as a result of an Injury (or Inju- ries) sustained in the Accident.

(d) Is Dr. Wright entitled to benefits on the basis that he was Residually Disabled? 194 There are two periods in issue with respect to Residual Disability. The first is the period from December 18, 1993 to March 23, 1995. The second is the period beginning November 2001 to trial, since Dr. Wright 116 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

claims that, if he is not Totally Disabled for that period, he is at least Residually Disabled. 195 Again, for convenience, I will set out the relevant definitions of “Residual Disability” and “Residually Disabled”: “Residual Disability and Residually Disabled” shall mean that the Participant is not Totally Disabled but that as a result of Sickness or Injury, he is under the regular care of a physician and has a loss of Earned Income for each month of at least 15% of his Average Monthly Earned Income, resulting from the inability: a. to perform one or more of the essential duties of his Regular Occupation; or b. to perform the essential duties of his Regular Occupation for as much time as those duties usually require. 196 Sun Life accepted that, for the period from December 18, 1993 to March 23, 1995, Dr. Wright satisfied the medical requirements for being “Residually Disabled.” As part of his case, Dr. Wright read in Discovery evidence from Mr. Kling to this effect, and, during his evidence at trial, Mr. Kling acknowledged this was Sun Life’s position. Sun Life’s defence to this part of the claim is that Dr. Wright failed to provide sufficient financial information and documents to quantify any amount of Residual Disability benefits that might be payable. 197 I find that Dr. Wright in fact failed to provide sufficient financial information and documents to quantify any amount of Residual Disability benefits that might be payable for the period from December 18, 1993 to March 23, 1995. In my opinion, Dr. Wright’s failure to make the necessary financial disclosure is fatal to his claim for Residual Disability benefits for this period. His failure made it impossible for all practical purposes to establish his pre-disability Average Monthly Earned Income. 198 Dr. Wright’s position was that he could not provide financial and income information until the date of disability was determined. Dr. Wright fought hard to have the date of disability fixed at December 18, 1993, rather than in June 1996. His fears that he would be prejudiced (and the benefit payment minimized) by the later date of disability were misplaced, because, for purposes of arriving at the Average Monthly Earned Income, one of his options was to elect the highest average of any two consecutive years in the 5-year period immediately prior to the month disability commenced. Even with the June 1996 disability date, he was not forced to select years in which he was a graduate student and earning little or no income. In my opinion, there was no good reason for Dr. Wright v. Sun Life Assurance Co. of Canada Adair J. 117

Wright to refuse to provide the financial information that Sun Life was asking for, pending ultimate resolution (to his liking) of the date of disability. 199 Sun Life repeatedly requested Dr. Wright to provide financial documents and information, including in particular tax returns and notices of assessment. Sun Life requested this information going back to 1991. In the context of the Policy provisions, and Dr. Wright’s claim for Residual Disability benefits, this request was reasonable and justified. However, there is no evidence that Dr. Wright provided Sun Life with a copy of a notice of assessment at any time for any year. There are no notices of assessment for Dr. Wright in evidence at all. There are no individual tax returns for Dr. Wright in evidence for any year prior to 1999. Dr. Wright never provided Sun Life with a personal income tax return in relation to income he earned from his dental practice in Abbotsford, and no such returns are in evidence. Dr. Wright has produced no financial records of any kind for any period prior to June 1993. 200 I find that Dr. Wright’s failure to provide the financial information requested by Sun Life caused the delay in Sun Life adjudicating this part of Dr. Wright’s claim, and ultimately made it impossible to adjudicate. Dr. Wright must have been well aware that his claim for Residual Disa- bility benefits required both medical information and support (which Sun Life had accepted Dr. Wright had provided) and financial information and support. Despite that, Dr. Wright failed to provide the relevant financial information. What Dr. Wright did provide was incomplete and could not be given much weight without some independent confirmation (for example, by a notice of assessment), which he never provided. 201 Dr. Wright submitted some financial information with his Preliminary Statement of Claim. However, what he submitted was obviously incomplete. What source documents were used is unknown. Whether the source documents that were used were reliable is also unknown. 202 Under cover of Mr. McFee’s July 10, 1998 letter, Dr. Wright provided Sun Life with some information concerning his pre and post-disability revenues and expenses. Some additional information was provided under cover of Mr. McFee’s letter dated April 6, 1999. The sum total of the information provided to Sun Life by Dr. Wright in relation to his dental practice in Abbotsford (in addition to what was in the Preliminary Statement of Claim) was: (a) the statement of income prepared by Hedden Chong for the six months ended November 30, 1993; 118 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

(b) a corporate tax return (unsigned) prepared by Lake & Asso- ciates for Dr. Wright’s professional corporation (Dr. Robert S. Wright Inc.) for the year ended August 31, 1994 (its first year of business) along with financial statements prepared by Lake & Associates for the same period; and (c) a statement of income prepared by Hedden Chong and dated September 14, 1998, showing the 9 months ended August 31, 1994, and the 7 months ended March 31, 1995. 203 The first Hedden Chong statement was provided in order to establish Dr. Wright’s pre-disability income. These were the six months chosen by Dr. Wright as his highest months of income, as provided by the definition of “Average Earned Income.” It is not a simple matter to try and reconcile what is shown in the first Hedden Chong statement with the Preliminary Statement of Claim, especially without the benefit of any source documents or explanation. 204 I agree with the submissions by counsel for Sun Life that the financial records submitted by Dr. Wright show inconsistencies with one another (for which Dr. Wright was not able to offer any credible explanation) and cannot be accepted as reliable for the purposes of establishing either Dr. Wright’s Average Earned Income or his Earned Income, as those terms are defined in the Policy. 205 For example, based on the Lake & Associates financial statements, once Dr. Wright began operating the dental practice through his personal corporation, the expenses for the dental practice increased. The professional corporation paid dental practice rent, an expense for the building lease and property taxes. None of these expenses was being incurred prior to September 1, 1993. None of these expenses is shown on the Hed- den Chong statement for the period ended November 30, 1993 (even though, beginning September 1, 1993, Dr. Wright was operating through his professional corporation). As a result, expenses are lower and net income is higher. 206 “Earned Income” is defined as income (before tax) “after the deduction of the usual and customary business expenses.” This would probably require some evidence and explanation from an accountant. But, at the very least, the figures presented would require some explanation from someone about what the “usual and customary business expenses” were. Dr. Wright was unable to assist on this point. 207 Other expenses of the dental practice appear to increase after Decem- ber 1993 (despite Dr. Wright’s evidence that he was trying to keep ex- Wright v. Sun Life Assurance Co. of Canada Adair J. 119

penses down). For example, laboratory fees in the Lake & Associates financial statements (for a 12-month period) are almost four times the laboratory fees for the 6-month period ended November 30, 1993. In- deed, based on the three sets of financial documents, the laboratory fees for the six months ended November 30, 1993 — at the time when Dr. Wright asserts he was carrying on his normal busy practice — seem un- usually low. Dr. Wright offered no reasonable explanation. 208 I find that Sun Life was not required to accept the statements from Hedden Chong and Lake & Associates as appropriate support for the financial side of Dr. Wright’s claim for Residual Disability benefits, in place of the documents Sun Life had clearly and repeatedly asked Dr. Wright to provide. 209 In closing submissions, Dr. Wright argued that a reasonable way to reconcile the inconsistencies in these financial documents, to arrive at a proper determination of his income before and after the Accident, was to remove what he termed the “confounding variables” (for example, the dental practice rent), and then redo the comparison. In Dr. Wright’s submission, when this was done, there was still a loss of more than 15% in his “Earned Income,” and he therefore met the financial requirements for Residual Disability income replacement benefits. 210 However, in my opinion, rather than answering the point argued by Sun Life’s counsel, Dr. Wright’s submission reinforces the point, namely, that the financial information he provided to Sun Life (and that he tendered in evidence at trial) was unreliable and incomplete. Looked at as a whole, the information raised questions, but it was provided to Sun Life without any explanation of inconsistencies. In my opinion, given that the information provided by Dr. Wright was unreliable and incomplete, it could not be used in the context of handling and adjusting Dr. Wright’s claim, and cannot be used now, to establish his Average Monthly Earned Income or his Earned Income. 211 Dr. Wright may believe it should be obvious that, after the Accident, he suffered a loss of income from his Abbotsford practice after the Acci- dent of at least 15%, as compared with the period prior to the Accident. However, the Policy required that he provide reasonable proof of that. I find that he has failed to do so. 212 The result is that, for the period December 18, 1993 to March 23, 1995, Dr. Wright has failed to establish an entitlement to Residual Disa- bility income replacement benefits in accordance with the Policy. The reason is because he has failed to show what the coverage terms require: 120 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

that he had a loss of Earned Income of at least 15% of his Average Monthly Earned Income resulting from the inability either to perform one or more of the essential duties of his Regular Occupation or to perform the essential duties of his Regular Occupation for as much time as those duties require. 213 With respect to the period beginning November 2001, Sun Life argued that Dr. Wright was not entitled to coverage for Residual Disability because he was not “under the regular care of a physician,” relying on Rose and Andreychuk. I agree. The same analysis and conclusions will apply with respect to this claim as are set out above in respect of the claim that Dr. Wright was and is Totally Disabled. On the facts, Dr. Wright has failed to meet the burden on him to prove that, in the period beginning November 2001, he was under the regular care of a physician as a result of an Injury suffered in the Accident, and he has therefore failed to prove that he is entitled to coverage under the Policy for income replacement Residual Disability benefits for the period from November 2001 to date. 214 Moreover, as discussed above, the financial information and documentation provided by Dr. Wright is insufficient. This is a second reason why Dr. Wright cannot succeed in his claim for Residual Disability benefits for this period. 215 Accordingly, I find that Dr. Wright has failed to prove that he is entitled to Residual Disability benefits, either for the period from December 18, 1993 to March 23, 1995, or for the period beginning November 2001 to date.

(e) The FIG Option and the Cost of Living adjustment 216 Even though I have dismissed Dr. Wright’s claims for benefits, Dr. Wright says that he is nevertheless entitled to judgment for amounts he did not receive under the FIG Option and the cost of living adjustment with respect to the benefits Sun Life in fact paid. 217 Dr. Wright asserts that, by his November 27, 1996 letter to CDSPI, he made an election under the FIG Option to increase the amount of coverage in force, which he asserts increased the income replacement benefit amount payable to him by $1,300 per month. Dr. Wright asserts that Sun Life breached the Policy by refusing or neglecting to give effect to his election, and has deprived him of benefits from and after December 21, 1996. Wright v. Sun Life Assurance Co. of Canada Adair J. 121

218 However, with respect to coverage under the FIG Option, the Policy required that a written application in a form satisfactory to Sun Life be received by Sun Life within 60 days of an Option Date. A blank form was attached to CDSPI’s letter dated October 23, 1996. The letter informed Dr. Wright that the application form must be completed and returned within 60 days of his birthday. His November 27, 1996 letter, given its contents, cannot be considered the “written application in a form satisfactory to” Sun Life. There is no evidence that, at any time, Dr. Wright ever completed or submitted the written application to Sun Life. This is fatal to his claim for benefits under the FIG Option. 219 In addition, as of his 45th birthday, Dr. Wright was not “Actively at Work” as defined by the Policy, and he did not return to “full-time active employment at his normal place of employment” within 60 days of his 45th birthday. These facts also disqualified him from coverage under the FIG Option. 220 Accordingly, Dr. Wright is not entitled to any increased benefits under the FIG Option for any period. 221 Dr. Wright also asserts that, with respect to the income replacement benefits paid to him, Sun Life did not apply the provisions of the Policy concerning the Cost of Living Adjustment. Dr. Wright says that he is entitled to annual increases to the income replacement benefits, beginning on the first anniversary of the date determined to be his Disability Anniversary Date (as defined by the Policy), and is entitled to payment of those amounts. 222 Dr. Wright tendered an expert report from Mr. Robert Carson, an economist, in respect of this part of his claim. Mr. Carson provided calculations based on a number of assumptions, including that: (a) long- term benefits were payable to Dr. Wright beginning in March 1994; (b) the first cost of living increase would have been 0.2% and would have applied to a monthly benefit in March 1995; (c) certain payments had in fact been made to Dr. Wright by Sun Life; and (d) assuming the benefits were payable to Dr. Wright in every month from March 1994 to the present, CPI increases that would have applied to the benefits were shown in column 7 of Appendix 4 of Mr. Carson’s report. The monthly benefits shown in column 8 of Appendix 4 reflect the effect of compounding. 223 The matters that Mr. Carson assumed, including the payments that had been made to Dr. Wright (and whether there was any shortfall as compared with the amount payable including a cost of living adjustment), were matters that could not be proved through Mr. Carson. 122 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Rather, those matters had to be established through another witness or other admissible evidence. 224 Dr. Wright failed to prove the amount of the payments he received from Sun Life. I have only his assertion that the payments failed to include a cost of living adjustment. However, there is no foundation in the evidence on which I can conclude that they did not. In addition, other assumptions made by Mr. Carson have not been proved. I accept that Mr. Carson’s calculations are accurate. However, since they are based on factual assumptions that have not been established in the evidence, I am unable to give Mr. Carson’s calculations any weight. 225 As a result, Dr. Wright has failed to make out this part of his case.

(f) Dr. Wright’s claim for a declaration of entitlement to future benefits 226 One of the items of relief Dr. Wright sought in his Amended State- ment of Claim was a declaration that he “continues to be entitled” to income replacement benefits under the Policy. In other words, Dr. Wright seeks a declaration in respect of benefits payable in the future. In his report, Mr. Carson provided a calculation up to age 65. 227 However, the Policy provides that “proof satisfactory to [Sun Life] of continued disability may be requested by [Sun Life] at all reasonable times.” Thus (absent a case of “Presumed Total Disability”), the Policy does not provide for payment of future benefits without proof of continuing disability. Accordingly, even if Dr. Wright had proved an entitlement to benefits up to the date of trial, the declaration he is seeking concerning future benefits is not available.

(g) Dr. Wright’s claim for aggravated damages 228 In Dr. Wright’s Amended Statement of Claim, he claimed “aggravated damages.” However, there were no facts pleaded (or proved) to support a true claim for aggravated damages: see the discussion in Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30 (S.C.C.), at paras. 51-53. What Dr. Wright appears to have had in mind is damages reflecting that the Policy was (as he described it) in the nature of a “peace of mind” contract. 229 In the circumstances, since I have concluded that Dr. Wright has failed to establish an entitlement to benefits and thus has failed to prove a breach of contract, it follows that his claim for aggravated damages must also be dismissed. See Andreychuk, at paras. 53-54. 230 I will however make some very brief observations. Wright v. Sun Life Assurance Co. of Canada Adair J. 123

231 As I have pointed out above in the discussion of Dr. Wright’s claim for Residual Disability benefits, Dr. Wright’s failure to provide financial information and documentation to Sun Life delayed and ultimately frus- trated the proper adjudication of his claim. Even as of trial, reliable, reasonably complete financial information and documents had not been produced. Dr. Wright must accept responsibility for the consequences of his decisions and actions. 232 Sun Life was entitled to rely on the terms of the Policy, subject to its obligation to act honestly, fairly and in good faith: see Nayyar v. Manufacturers Life Insurance Co./Cie d’Assurance-vie Manufacturers, 2012 BCCA 501 (B.C. C.A.), at para. 39. Sun Life, on the basis of what could be described as incomplete information and virtually no proof that Dr. Wright was under the regular care of a physician, accepted his claim in 1996 that he was Totally Disabled. That part of Dr. Wright’s claim likely could have been adjudicated more quickly had Dr. Wright provided Sun Life with a copy of Dr. Larsen’s August 1996 report sooner than he did. Dr. Wright’s combative and suspicious approach to his insurer ultimately worked against him. Even if I had found that Dr. Wright was entitled to benefits, it would not follow necessarily that Sun Life was not justified in the approach it took to Dr. Wright’s claim. 233 As I noted above, Dr. Wright found the activities investigations carried out by Sun Life highly offensive. However, if Dr. Wright had been more forthcoming about what he was doing and why, there likely would have been little reason for Sun Life to investigate. The fact is that he was working at Crown and being paid for it, despite stating (without qualifications) in the Supplementary Statement of Disability that he had been “unable to do any work” (underlining added) since April 1995. However, rather than explain (or have Mr. McFee explain) that his work at Crown was part of his practical training as a prosthodontist (assuming it was), Dr. Wright covered up who he was working for and left Sun Life with no practical alternative but to investigate on its own what he was doing. The conclusions that Mr. Kling drew were, in the circumstances, not unreasonable. Dr. Wright’s strong disagreement with them does not make them so.

(h) Sun Life’s Counterclaim 234 By way of counterclaim, Sun Life seeks to recover the income replacement benefits it paid to Dr. Wright from March 1, 2000 to October 31, 2001, which it says total $99,981. On the pleadings, there is no issue 124 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

that monthly benefits (at least $5,000 per month) were in fact paid to Dr. Wright for this period. However, there was no evidence about how Sun Life arrived at $99,981 as the amount paid. 235 Sun Life says that, from March 1, 2000 to October 31, 2001, Dr. Wright was not “Totally Disabled,” but was in fact practicing general dentistry. Sun Life says that Dr. Wright concealed his activities and knowingly misrepresented facts to Sun Life, with the intention of induc- ing Sun Life to continue to make payments under the Policy. Among the facts Sun Life says Dr. Wright concealed was that he was working full- time in his own practice, the Newport Centre. Sun Life also says that while Dr. Wright informed it that he was unable to perform any of the duties of a general dentist, he was in fact carrying on these duties beginning in March 2000. 236 Sun Life does not rely on other grounds (for example, that Dr. Wright was not under the regular care of a physician) to say that, during this period, Dr. Wright was not entitled to any benefits because he was not Totally Disabled. Rather, its position is that Dr. Wright was not, as a result of Injury, unable to perform the essential duties of his Regular Oc- cupation. Or, to put it another way, Sun Life’s position is that, from March 2000 to October 2001, Dr. Wright was able to perform the essential duties of his Regular Occupation, was in fact doing so, and was deliberately concealing his activities so that he could continue to receive benefits. In this context, Sun Life has the onus of proof. 237 In addition to repayment of the benefits paid for this period, Sun Life also seeks punitive damages against Dr. Wright, on the basis that Dr. Wright’s conduct — his concealment, deceit and misrepresentations — is worthy of rebuke. 238 Dr. Wright filed an amended statement of defence to counterclaim in February 2014, and filed a further amended statement of defence to counterclaim on March 5, 2015. Regrettably, neither document complied with the provisions of the Rules of Court (either the current Rules or the former Rules) relating to pleadings, so they are of little assistance in de- fining the issues on the counterclaim. However, at the very least, Dr. Wright denies any liability to Sun Life for repayment of the benefits paid. 239 Dr. Wright was the only witness who had personal knowledge about his work activities at Crown and the Newport Centre. The gist of Dr. Wright’s evidence is that he was not carrying on practice as a general dentist at either place, and he was not capable of doing so on account of Wright v. Sun Life Assurance Co. of Canada Adair J. 125

injuries he suffered in the Accident. In that sense, nothing had changed between 1999 (and earlier), when Sun Life accepted that Dr. Wright was Totally Disabled, and 2000. 240 In January 2001, Sun Life received Dr. Larsen’s more complete report in which he expressed the opinion that Dr. Wright would not be able to practice dentistry in a private setting. However, Dr. Larsen’s opinion is based in part on what Dr. Wright told him. Dr. Wright is not a reliable source of information (either for Dr. Larsen or for the court), particularly where his self-interest is involved. 241 Mr. Kling had no personal knowledge about what Dr. Wright was doing. All of his information came from others, none of whom testified. 242 Because of the problems (which I described above) with Dr. Con- nell’s and Dr. Christian’s reports, I am not prepared to give much weight to their opinions that, during this period, Dr. Wright was not limited in the hours and type of work he could perform. 243 I have not been persuaded that Sun Life has made out its case on the counterclaim. The evidence concerning what Dr. Wright was doing, and what he was capable of doing, during this period is too thin and unreliable. I agree with Sun Life that Dr. Wright was concealing what he was in fact doing. However, Sun Life was not left in the dark, and I do not see Dr. Wright’s concealment as a sufficient basis to grant judgment in favour of Sun Life on the counterclaim. 244 In that light, it is unnecessary for me to deal with Sun Life’s claim for punitive damages. However, again, I will make a few brief observations. 245 I begin by noting the comments of McLachlin C.J.C. and Abella J. in Fidler (at para. 62) that “It is important that punitive damages be resorted to only in exceptional cases, and with restraint.” 246 In my opinion, there is much to criticize in Dr. Wright’s conduct. It reflected a misguided sense of entitlement and a very strong resistance to the idea that he might be in error in any respect. Dr. Wright’s conduct also reflected an inability to accept both points of view different than his own and obligations different from what he considered he should be required to do. That conduct contributed in significant way to the failure of his claims, particularly the failure of his claim for Residual Disability benefits. However, and considering the comments in Fidler, I would not have been inclined to order of punitive damages against Dr. Wright, even if Sun Life had been successful on the counterclaim. 126 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Summary and Disposition 247 In summary, Dr. Wright’s claims are dismissed, and Sun Life’s counterclaim is also dismissed. 248 If the parties are unable to agree on costs and wish to make submissions concerning costs, they may do so by taking steps, within 30 days of this judgment, to arrange a hearing date convenient to Dr. Wright and counsel, and to the court. Action and counterclaim dismissed. Optimum Insur. and Dominion of Canada Gen. Insur. 127

[Indexed as: Optimum Insurance Co. and Dominion of Canada General Insurance Co. (De Paz), Re] In the Matter of the Insurance Act, R.S.O. 1990, c. I. 8, as amended, Section 268 and Regulation 283/95 In the Matter of the Arbitration Act, S.O. 1991, c.17 In the Matter of an Arbitration between Optimum Insurance Company, Applicant and The Dominion of Canada General Insurance Company, Respondent Ontario Arbitration (Insurance Act) Docket: None given. Kenneth J. Bialkowski Member Judgment: April 24, 2015 Insurance –––– Automobile insurance — General principles –––– Claimant was front-seat passenger in vehicle driven by M when M’s vehicle was struck by third party vehicle who failed to stop at red light — At time of accident, M’s vehicle was insured under motor vehicle liability policy of insurance with O Co. — O Co. policy contained coverage for statutory accident benefits pursuant to Statutory Accident Benefits Schedule — At time of accident, claimant’s husband was insured under policy of motor vehicle insurance with D Co. — Claim- ant’s husband had reduced his insurance coverage on his motor vehicle insured under D Co. policy to comprehensive coverage — Suspension of Coverage Form OPCF-16 was not used in reducing coverage under this policy to comprehensive coverage — Claimant submitted application for accident benefits to O Co. — O Co. sent claimant and D Co. notice to applicant of dispute between insurers — Arbitration held — D Co. stood in priority with respect to payment of statutory accident benefits to claimant — D Co. ought to have used OPCF-16 form to reduce coverages as required by s. 227 of Insurance Act — Policy and any subsequent renewal was deemed to include residual accident benefits coverage that would have been required by OPCF-16. Cases considered by Kenneth J. Bialkowski Member: Certas v. CGU/Aviva (2005), 2005 CarswellOnt 11591 (Ont. Arb.) — followed Patterson v. Gallant (1994), 7 M.V.R. (3d) 157, 125 Nfld. & P.E.I.R. 1, [1994] 3 S.C.R. 1080, 120 D.L.R. (4th) 1, 174 N.R. 380, (sub nom. Co-operators General Insurance Co. v. Judgment Recovery (P.E.I.) Ltd.) [1995] I.L.R. 1- 3133, 1994 CarswellPEI 6, 1994 CarswellPEI 97, 389 A.P.R. 1, 26 C.C.L.I. (2d) 165, EYB 1994-67720, [1994] S.C.J. No. 111 (S.C.C.) — considered 128 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

Statutes considered: Insurance Act, R.S.O. 1990, c. I.8 Generally — referred to s. 227 — considered s. 227(1) — considered s. 268(1) — considered s. 268(2) — considered s. 268(2) ¶ 1 — considered Regulations considered: Insurance Act, R.S.O. 1990, c. I.8 Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, O. Reg. 403/96 Generally — referred to

HEARING concerning priority dispute between insurers.

Amanda M. Lennox, for Applicant, Optimum Insurance Company D’Arcy McGoey, for Respondent, The Dominion of Canada General Insurance Company

Kenneth J. Bialkowski Member: Issue 1 The following issues have been placed before me for determination: a. Does the Dominion policy of insurance no. APP 1416140 contain coverage for statutory accident benefits pursuant to the Statutory Accident Benefits Schedule (hereinafter the “SABS”)? b. If the Dominion policy contains accident benefits coverage available to the claimant, does Dominion rest in priority to Optimum pursuant to Section 268(2)(1) of the Insurance Act? 2 The matter involves circumstances where a standard automobile policy was attempted to be reduced to comprehensive only without use of an OPCF-16 Suspension of Coverage Form.

Agreed Facts 3 On or about July 22, 2012, the claimant, Dalia De Paz (hereinafter “Ms. De Paz”) was a front- seat passenger in a vehicle driven by Rosa Montalban (hereinafter “Ms. Montalban”) on the Highway 401 exit at Islington Avenue in Toronto, Ontario. Optimum Insur. and Dominion of Canada Gen. Insur. Bialkowski Member 129

4 Ms. Montalban’s vehicle was struck by a third party vehicle who failed to stop at a red light (hereinafter “the accident”). Police and ambulance attended at the scene of the accident. Ms. De Paz was taken to Humber River Hospital via ambulance. 5 At the time of the accident, Ms. Montalban’s vehicle was insured under a motor vehicle liability policy of insurance with Optimum Insur- ance Company (hereinafter “Optimum”), bearing policy no. M793ABP828. 6 The Optimum policy contained coverage for statutory accident benefits pursuant to the Statutory Accident Benefits Schedule (hereinafter the “SABS”). 7 At the time of the accident Ms. De Paz’s husband, Edgar De Paz (hereinafter “Mr. De Paz”) was an insured under a policy of motor vehicle insurance with The Dominion of Canada General Insurance Company (hereinafter “Dominion”), bearing policy no. APP 1416140. 8 A Certificate of Automobile Insurance was issued to Mr. De Paz for a 2004 Chevrolet Cavalier for the period of April 25, 2010 to April 25, 2011. The premiums of this policy were $3,716.00. This policy was a renewal of the previous policy no. APP 1416140. This policy contained coverage for, among other things, statutory accident benefits pursuant to the SABS. 9 On August 17, 2010, Mr. De Paz reduced his insurance coverage on his 2004 Chevrolet Cavalier insured under Dominion policy no. APP 1416140 to comprehensive coverage with a $500.00 deductible. A “Pol- icy Change” form was used by Dominion to facilitate this change. No premium is listed on this Form. 10 A Suspension of Coverage Form “OPCF-16” was not used in reducing the coverage under this policy to comprehensive coverage. 11 A letter dated March 3, 2011 was sent by Dominion to Mr. De Paz containing the renewal for Dominion policy no. APP 1416140. This letter contained a Certificate of Automobile Insurance issued to Mr. De Paz for a 2004 Chevrolet Cavalier for the period of April 25, 2011 to April 25, 2012. The premiums of this policy were $108.00. On page 12 of the letter next to “Comprehensive (excluding Collision or Upset)” $500.00 is listed under “Deductible” and $108.00 is listed under “Principal driver premium”. On page 12 of the letter next to “Accident Benefits (Standard Benefits)” an amount is not listed. 130 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

12 A letter dated March 2, 2012 was sent from Dominion to Mr. De Paz containing the renewal for Dominion policy no. APP 1416140. This letter contained a Certificate of Automobile Insurance issued to Mr. De Paz for a 2004 Chevrolet Cavalier for the period of April 25, 2012 to April 25, 2013. The premiums of this policy were $108.00. On page 8 of the letter next to “Comprehensive (excluding Collision or Upset)”, $500.00 is listed under “Deductible” and $108.00 is listed under “Principal driver premium”. On page 8 of the letter next to “Accident Benefits (Standard Benefits)” an amount is not listed. 13 Ms. De Paz submitted an Application for Accident Benefits (OCF-1) to Optimum, dated August 10, 2012. Optimum received the OCF-1 on August 13, 2012. The OCF-1 noted that Ms. De Paz was married and was not covered under any automobile insurance policy. 14 On August 20, 2012, Optimum sent Ms. De Paz and Dominion the Notice to Applicant of Dispute of Between Insurers dated August 20, 2012. 15 On August 28, 2012, Dominion confirmed receipt of the Notice to Applicant of Dispute of Between Insurers dated August 20, 2012. 16 This Arbitration was commenced on June 20, 2013 by way of a No- tice of Submission to Arbitration.

Applicable Legislation 17 A priority dispute arises when there are multiple motor vehicle liability policies which might respond to a statutory accident benefit claim made by an individual involved in a motor vehicle accident. Section 268(2) of the Insurance Act sets out the priority rules to be applied to determine which insurer is liable to pay statutory accident benefits. 18 Since the claimant was an occupant of a vehicle at the time of the accident, the following rules with respect to priority of payment apply: (i) The occupant has recourse against the insurer of an automobile in respect of which the occupant is an insured; (ii) If recovery is unavailable under (1), the occupant has recourse against the insurer of the automobile in which he or she was an occupant; (iii) If recovery is unavailable under (1) or (2), the occupant has recourse against the insurer of any other automobile involved in the incident from which the entitlement to statutory accident benefits arose; Optimum Insur. and Dominion of Canada Gen. Insur. Bialkowski Member 131

(iv) If recovery is unavailable under (1), (2) or (3), the occupant has recourse against the Motor Vehicle Accident Claims Fund. 19 If I were to find that the Dominion policy continued to provide accident benefit coverage, despite coverage being reduced to comprehensive only, then Dominion would stand in priority to Optimum by reason of the application of the aforesaid priority hierarchy set out in s.268(2) of the Insurance Act.

Analysis and Findings 20 It is the position of the Applicant Optimum, as outlined in the following paragraphs, that all motor vehicle liability policies must contain coverage for statutory accident benefits pursuant to the SABS and the Insur- ance Act. Dominion policy of insurance no. APP 1416140 is a motor vehicle liability policy. As such, Dominion policy of insurance no. APP 1416140 had coverage for statutory accident benefits available to Ms. De Paz on the date of loss. 21 On August 17, 2010, Edgar De Paz (Dominion’s Insured) attempted to reduce the coverage under Dominion policy of insurance no. APP 1416140 to comprehensive coverage. The only way to effect a change of the terms of a motor vehicle liability policy is with an endorsement approved by the Superintendent of Financial Services. 22 The Ontario Policy Change Form 16 (OPCF-16) is the prescribed form that must be used to reduce a motor vehicle liability policy to comprehensive coverage. Dominion failed to use an OPCF-16 to alter Mr. De Paz’s policy. 23 Any changes Dominion attempted to effect to Dominion policy of insurance no. APP 1416140 are null and void due to Dominion’s failure to use an OPCF-16 to reduce the policy to comprehensive coverage. As such, this policy continues to contain coverage for statutory accident benefits pursuant to the SABS, which was available to Ms. De Paz on the date of loss. 24 In the alternative, the terms of the OPCF-16 must be read into the policy even if the OPCF- 16 was not used. As such, this policy continues to contain coverage for statutory accident benefits pursuant to the SABS, which was available to Ms. De Paz on the date of loss so long as the prescribed automobile, a newly acquired automobile or a temporary substitute automobile was not involved in the accident. 132 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

25 Coverage for statutory accident benefits pursuant to the SABS in Do- minion policy of insurance no. APP 1416140 carried forward on each renewal of said policy and was available to Ms. De Paz on the date of loss. 26 The Dominion policy of insurance no. APP 1416140 contains coverage for statutory accident benefits pursuant to the SABS and rests in higher priority to Optimum policy no. M793ABP828 pursuant to Section 268(2)(1) of the SABS. 27 It is the position of the Respondent Dominion that, while the policy period ending April 25, 2011 may have provided for statutory accident benefits coverage, each successive policy renewed thereafter did not provide for accident benefits coverage either by operation of law, or by statute, or in accordance with its terms. 28 The Dominion insured, Mr. De Paz, was free to enter into a contract of insurance with the Dominion that did not provide for liability coverage, and he did so on two successive occasions leading to the accident. There is no authority for the proposition that coverage not requested and not desired by a policyholder, must be forced upon the insured. The insured made a conscious decision to have comprehensive coverage only and declined available residual accident benefits coverage and was entitled to make such choice. 29 Counsel for both parties have referred me to 4 previous priority dispute arbitration decisions involving the availability of accident benefits to a claimant where coverage was reduced to comprehensive only without the use of an OPCF-16 endorsement. In the first 3 decisions it was held that availability of accident benefits would continue after the policy change, whereas in the final decision it was held that no accident benefits coverage would exist. It is the decision of arbitrator Scott in State Farm v. TD that forms the basis for the Respondent Dominion’s position in the matter before me. 30 The 4 decisions are as follows: 1. Certas v. CGU/Aviva [2005 CarswellOnt 11591 (Ont. Arb.)] 2. Enterprise Rent A Car v. ING Insurance Company Of Canada (Arbitrator Guy Jones, November, 2006); 3. Jevco v. State Farm (Arbitrator Kenneth J. Bialkowski, July 23, 2013); Optimum Insur. and Dominion of Canada Gen. Insur. Bialkowski Member 133

4. State Farm v. TD General Insurance Company (Arbitrator Jarvis Scott, August, 2011) 31 In Certas (supra), arbitrator Samis dealt with a situation where an insured requested that his auto policy with Certas be reduced to “comprehensive only”. Rather than using an OPCF-16, Certas issued a “Certifi- cate of Automobile Insurance” reflecting “comprehensive” coverage only. The subject accident occurred about a month after the changes and before any renewal. 32 Like the arbitrators in all 4 cases, arbitrator Samis considered the impact of s.227(1) of the Insurance Act. 33 Section 227(1) of the Insurance Act states: (1) An insurer shall not use a form of any of the following documents in respect of automobile insurance unless the form has been approved by the Superintendent: 1. An application for insurance. 2. A policy, endorsement or renewal. 3. A claims form. 4. A continuation certificate. Also considered in all 4 cases was the wording of the OPCF-16 Endorse- ment as approved by the Superintendent of Insurance. The OPCF-16 reduces the coverage available on a motor vehicle liability policy pursuant to the following conditions listed on the form: 2.1 You agree that the following coverage will be cancelled for the use or operation of the described automobile, a newly acquired automobile, and a temporary substitute automobile: • Section 3, “Liability Coverage,” • Section 4, “Accident Benefits Coverage,” • Section 5, “Uninsured Automobile Coverage,” and • Section 6, “Direct Compensation - Property Damage Coverage.” 2.2 You also agree that the following coverage will be cancelled for the described automobile, newly acquired automobile and temporary substitute automobile: • Section 7, “Loss or Damage Coverages (Optional)” • All Perils, but only for loss or damage caused by Col- lision or Upset, and • Collision or Upset. 134 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

34 The OPCF-16 effectively reduces almost all coverage from a desired automobile with the exception of comprehensive coverage and some residual accident benefits coverage not involving the described automobile, newly acquired automobile or temporary substitute automobile. 35 Arbitrator Samis in Certas (supra) concluded that, where an insured wished to reduce his policy to comprehensive coverage, the OPCF-16 is the proper form and mustbe used. Arbitrator Samis stated the following: In my view, the transaction entered into by Certas and Michnevich on August 22, 2002, is substantially, the same transaction which is intended to be governed by the OPCF-16. It is, for the most part, a suspension of liability coverage, and other coverage other than comprehensive. As such, in my view, Section 227 of the Act requires that the insurer use the available approved form for this purpose, the OPCF-16. 36 In reaching his decision Arbitrator Samis found that by creating the OPCF-16, Regulators have seen it important for people that have coverage under suspension to continue to have residual protection for accident benefits coverage as set out in the OPCF-16 Endorsement. He found that Regulators believed that insured persons were in need of such protection. He found that s.227 of the Insurance Act required the insurer to use the approved form and that accident benefits coverage remained available to the insured as if the OPCF-16 had been used. He essentially found that there was a deemed continuation of residual accident benefits coverage as if the OPCF-16 had been used. Arbitrator Samis wrote: In the Supreme Court of Canada’s decision in Smith vs.Co-operators, the court discussed the effect of insurer non-compliance with prescribed procedures. In the Smith case, the insurer had declined a claim but had provided documentation to the insured person, which was found to be deficient in meeting the prescribed obligations to disclose Dispute Resolution Procedures. The obligation to describe the Dispute Resolution Procedures was separate and distinct from a limitation period found in the insurance arrangement. Nonetheless, the court concluded that the inadequacy of the disclosure prevented the insurer from saying that the limitation period had started to run. In this way, the court has shown that the consumer interest represented by having insurers comply with prescribed procedures, means that insurers will not be able to rely upon their own inadequate procedures, to their advantage or to the detriment of policy holder. Here, if Certas had followed the prescribed procedure and issued the OPCF16, Certas would be the insurer responsible to pay the accident benefits and would have no claim against Aviva. Optimum Insur. and Dominion of Canada Gen. Insur. Bialkowski Member 135

37 In Enterprise (supra), arbitrator Jones dealt with a similar situation where the insured requested that policy coverage be reduced to “comprehensive only”. ING, rather than using an OPCF-16 form, merely issued a new Certificate of Automobile Insurance showing coverage for “Com- prehensive” only. There were no subsequent renewals prior to the subject accident. 38 Relying on the decision of arbitrator Samis in Certas (supra,) arbitrator Jones found: In short, the legislature, by way of s.227 of the Insurance Act, required that changes be made in accordance with the approved form. Because of the complexities of insurance coverage in Ontario, there are good reasons for the use of such forms. If ING had used the correct form, the statutory accident benefits coverage would have continued to be in place for limited purposes including the factual situation presented in this case. ING cannot benefit by its failure to use the required form. Accordingly the benefits that would have been in place had the form been used should be deemed to have remained in place and accordingly ING is responsible for payment of accident benefits to or on behalf of the clamant. 39 In Jevco (supra), a previous decision of mine, the insured requested that insurance be reduced to comprehensive only. State Farm used an internal document called a “Withdrawal from Use Form” which purported to eliminate several coverages, including accident benefits coverage, while continuing with comprehensive coverage only, rather than using an OPCF-16. The subject collision occurred before any renewal of the policy. 40 I found that accident benefits coverage remained available to the insured. Firstly, by reason of the ambiguity in the wording of the “With- drawal of Use Form” used by State Farm and secondly, because the approved form OPCF-16 ought to have been used. I wrote: I accept the general proposition that approved forms must be used to modify an existing policy. I am satisfied that Section 227 of the In- surance Act requires all policy endorsements be completed in a form approved by the Superintendent. It is not that Mr. Azizi did not have options available to him. In April of 2010, Mr. Azizi had the option of terminating his policy (which cancels all coverage) as contemplated by s.11(2) if OAP 1 - Ontario Automobile Policy, or, in the alternative, execute an OPCF 16 - Suspension of Coverage which would maintain comprehensive coverage and certain residual coverages. 136 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

41 It is the State Farm (supra) decision of arbitrator Scott that forms the basis for the submissions advanced by Dominion herein. In State Farm (supra) the insured on August 9, 2006 called TD and requested comprehensive coverage only. He was offered the OPCF-16 and declined as he did not want residual accident benefits coverage. An underwriting note indicates the change effective August 10, 2006. On November 4, 2006 the insured called TD requesting liability coverage be restored to his policy. On May 18, 2007 TD issued a renewal of the policy. On December 13, 2007 the insured once again called TD to once again delete liability coverage. There is no reference to an OPCF-16 being offered at this time. The underwriting note indicates that coverage was reduced to “comprehensive only” effective December 14, 2007. The policy was renewed on May 18, 2008 with TD issuing a Certificate of Insurance for the policy period May 18, 2008 to May 18, 2009 showing comprehensive coverage only. The claimant was involved in a motor vehicle accident on May 3, 2009. 42 The factual differences between the State Farm (supra) decision of arbitrator Scott and the 3 other decisions that were referred to me by counsel is that in State Farm an offer of an OPCF-16 was declined by the insured and that the policy was renewed between the changes and subsequent motor vehicle accident. In the other 3 decisions there is no reference to an OPCF-16 having been offered and there had never been a renewal of the policy between the purported changes and subsequent motor vehicle accident. 43 Arbitrator Scott in State Farm (supra) concluded that the insured had at the time of the loss the coverage she had asked for, namely comprehensive coverage only without residual accident benefits coverage. When applying for accident benefits she appeared to be cognizant that she had no coverage from any other policy including her TD policy. Arbitrator Scott outlined situations where the insured would have no interest in maintaining accident benefits coverage, such as circumstances where the insured owned another vehicle with accident benefits coverage. He found that the insured ought be able to purchase the insurance he or she wants. He found that an insured seeking to reduce coverage to comprehensive is likely entitled, from a broker or insurer, to be informed about the availability of and the available benefits coverage of the OPCF-16, but ulti- Optimum Insur. and Dominion of Canada Gen. Insur. Bialkowski Member 137

mately the decision would be that of the insured whether the additional benefits were warranted. He writes: Despite the decisions to the effect that use of an OPCF-16 is mandatory, for policy reasons, to reduce full coverage to comprehensive coverage only, there would appear to be, at least in my mind, an inconsistency in finding that it is also perfectly fine to issue a policy with only comprehensive coverage at first instance. Why should an initial request for limited coverage and presumably a lower premium than that which would exist without an OPCF-16 be any different than a mid policy term request for the same or limited coverage? The insured should be able to purchase the coverage she wants from an insurer. 44 In my view there is a flaw in basing his decision on the insured’s entitlement to have a choice. Automobile insurance in Ontario is a highly regulated product and often provides the consumer with no choice. The wording of the Standard Automobile policy is mandated and cannot be modified at the choice of the consumer. Motor vehicle liability policies must contain accident benefits coverage. Motor vehicle liability policies must contain accident benefits coverage. Section 268(1) of the Insurance Act states that “every contract evidenced by a motor vehicle liability policy ... shall be deemed to provide Statutory Accident Benefits”. A consumer cannot say that he or she wants third party liability coverage but does not want to pay for accident benefits coverage. A consumer cannot say that he or she only wants $100,000 in third party liability coverage as the Insurance Act requires minimum limits of $200,000. Clearly, regulators have provided consumers with no choice with respect to certain aspects of automobile coverage. 45 Arbitrator Scott also considered the argument advanced by TD that when the policy was renewed on May 18, 2008 it was for comprehensive coverage only and ought be looked at as “a new contract with its own offer and acceptance”. He considered the following comments of the Su- preme Court of Canada in Patterson v. Gallant, [1994] 3 S.C.R. 1080 (S.C.C.): Two separate meanings can be described to a ‘renewal’ of an insurance policy. The first meaning results from a continuous policy. Such policies provide for further extensions to the term of an existing contract, subject to the rights of either of the parties to terminate the contract. In a single continuous policy, questions of formation are answered by reference to the original offer and acceptance that initiated the coverage. By contrast, the other meaning of a ‘renewal’ of 138 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

an insurance policy involves the situation where a separate and distinct contract comes into existence at each renewal. Automobile insurance renewals fall Into the latter category, in that each renewal represents a new contract with its own offer and acceptance. 46 Despite these considerations he came to the conclusion that he was unable to determine if the subject policy fell into the “continuous policy” category or “new contract” category but arbitrator Scott writes: In any event, even if there was a ‘new contract’, if it was found that the OPCF-16 was to be read into the policy, subsequent certificates would include the reading in of the OPCF-16 endorsement. 47 Ultimately the basis for his decision was based on his view that an insured be entitled to purchase the insurance he or she wants and not be forced to pay for additional accident benefits coverage he or she may not require. 48 With the greatest of respect, I find that arbitrator Scott in State Farm (supra) has failed to place sufficient emphasis on the policy considerations of the regulators when introducing the OPCF-16 endorsement. Ar- bitrator Samis in Certas (supra) writes at page 3 of his decision: Automobile insurance in the Province of Ontario is a highly regulated product. The price of the product is controlled by regulatory authorities, the characteristics of coverage are defined, limited and mandated by the provisions in Part VI of the Insurance Act, and the documentation issued by insurers to their policy holders is highly regulated in accordance with the statute. There is a strong public policy, evidenced by the extensive legislative activity, that the insurance product should be delivered in a way that makes it understandable to the consumer. There are many instances of limitations on the ability of an insurer, or a consumer, to enter into agreements that vary from the mandatory characteristics 49 Arbitrator Samis stated at page 7 of his decision: Regulators have seen that it is important for people that have coverage under suspension to continue to have residual protection for liability coverage and accident benefits coverage. hence regulators have issued the OPCF-16 to provide the residual protection. 50 Consumer protection reasons may not be the only policy consideration of the Regulators for the introduction of the OPCF-16. The requirement of the OPCF-16 to maintain residual accident benefits coverage also reduces exposure of claims presented to the Ontario Motor Vehicle Accident Claims Fund. An individual with “comprehensive only” coverage would be putting forth an accident benefit to the Motor Vehicle Ac- Optimum Insur. and Dominion of Canada Gen. Insur. Bialkowski Member 139

cident Claims Fund if injured in an accident involving an unidentified or uninsured motor vehicle. With the mandatory residual coverage required by the OPCF-16 those claims as against the Fund would be avoided with the burden falling on private insurers. Regulators seem to have a subtle movement to avoid or reduce claims against the Fund as evidenced by recent changes effective September 1, 2010 to Ont. Reg. 283/95 - Dis- putes Between Insurers - now requiring insurers to complete a reasonable investigation and provide particulars of such investigation to the Fund before the Fund can be put on notice of a priority dispute. 51 I much prefer the rationale of the decisions in Certas, Enterprise and Jevco (supra) to the reasoning in of arbitrator Scott in State Farm (supra). I therefore find that Dominion ought to have used the OPCF-16 form to reduce coverages as required by s.227 of the Insurance Act and that the policy and any subsequent renewal is deemed to include the residual accident benefits coverage that would have been required by the OPCF-16. 52 I find that Dominion stands in priority with respect to the payment of statutory accident benefits to the claimant Dalia De Paz.

Order 53 I hereby order that Dominion is the priority insurer. I order that Do- minion reimburse Optimum with respect to those benefits properly the subject of indemnification. I order the Dominion pay Optimum the legal costs of this priority dispute on a partial indemnity basis. I order that Dominion pay the Arbitrator’s costs. Order accordingly. 140 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[Indexed as: Primerica Life Insurance Co. of Canada v. Ontario (Financial Services Commission)] Primerica Life Insurance Company of Canada, Applicant and Financial Services Commission of Ontario, Respondent Ontario Superior Court of Justice Docket: CV-14-00507806 2015 ONSC 2651 G. Dow J. Heard: April 16, 2015 Judgment: April 24, 2015 Civil practice and procedure –––– Practice on interlocutory motions and ap- plications — Miscellaneous –––– Insurance company sold life insurance policies and provided course for those seeking to become qualified and licensed life insurance agents — Financial Services Commission of Ontario (FSCO) provided regulatory services to protect public interest — Insurance company alleged breach by FSCO of its commitment to consult and communicate with course providers prior to making any changes to curriculum design document or to examination format or content as stated in Letter of Intent between parties and others — Insurance company commenced application under R. 21.01(1)(b) of Rules of Civil Procedure — FSCO brought motion for dismissal of insurance company’s application — Motion dismissed — Insurance company sought declaratory relief or judicial review — Analysis needed to do on further — Insur- ance company was entitled to proceed given nature of relief sought. Cases considered by G. Dow J.: Gratton-Masuy Environmental Technologies Inc. v. Ontario (2010), 7 Admin. L.R. (5th) 260, 76 C.C.L.T. (3d) 1, 2010 ONCA 501, 2010 CarswellOnt 4871, 91 C.L.R. (3d) 19, 321 D.L.R. (4th) 25, 101 O.R. (3d) 321, (sub nom. Gratton-Masuy Environmental Technologies Inc. v. Building Materials Evaluation Commission (Ont.)) 269 O.A.C. 279, [2010] O.J. No. 2935 (Ont. C.A.) — followed Portuguese Canadian Credit Union Ltd. v. 1141931 Ontario Ltd. (2012), 2012 CarswellOnt 5120, 2012 ONCA 274 (Ont. C.A.) — considered Westlake v. R. (1971), [1971] 3 O.R. 533, 21 D.L.R. (3d) 129, 1971 CarswellOnt 763 (Ont. H.C.) — considered Statutes considered: Financial Services Commission of Ontario Act, 1997, S.O. 1997, c. 28 Generally — referred to Primerica Life Insurance Co. of Canada v. Ontario G. Dow J. 141

s. 5 — considered s. 10 — referred to Public Service of Ontario Act, 2006, S.O. 2006, c. 35, Sched. A Generally — referred to Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 21.01(1)(b) — considered

MOTION by Financial Services Commission of Ontario for dismissal of insurance company’s application under R. 21.01(1)(b) of Rules of Civil Procedure.

Julie K. Parla, F. Paul Morrison, Kate Findlay, for Applicant Ronald Carr, Sandra Nishikawa, for Respondent, Moving Party

G. Dow J.:

1 The respondent, Financial Services Commission of Ontario (“FSCO”), seeks dismissal of this application by Primerica Life Insur- ance Company of Canada under Rule 21.01(b), or on the basis it dis- closes no reasonable cause of action. 2 The application seeks declaratory relief for an alleged breach by FSCO of its commitment to “Consult and communicate with course providers, prior to making any changes to the curriculum design document or to the examination format or content” as stated in a Letter of Intent dated May 24, 2002 between these parties (and others). Primerica also seeks a declaration that FSCO acted without authority with regard to entering into a Memorandum of Understanding June, 2012 signed by the Superintendent of Financial Services for Ontario, a Participation Agree- ment April 5, 2013 again, signed by Superintendent of Financial Ser- vices, Financial Services Commission of Ontario and a Service Agree- ment also April 5, 2013 signed by Superintendent of Financial Services, Financial Services Commission of Ontario on behalf of Her Majesty the Queen in Right of Ontario, as represented by the Minister of Finance.

Analysis 3 Primerica is a life insurance company not only selling policies to Canadians but also, prior to the issue which has arisen in this application, a course provider for those seeking to become qualified and licensed life insurance agents. 142 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

4 The Financial Services Commission of Ontario, as stated, is a Com- mission created by statute (S.O. 1997, c.28) to provide regulatory services to protect the public interest reporting to the Minister of Finance. Counsel for FSCO in his argument identified the Superintendent, created in section 5 as having specific powers and duties which include, in section 8 the right to “engage persons” which appears to include hiring people or bind the Commission to contracts of employment both within and outside the Public Service of Ontario Act, 2006 c.35. 5 The legislation also contains the standard immunity clause (section 10) protecting the Superintendent and any employee from any “action or other proceeding for damages” for any act done in good faith in the exe- cution of that person’s powers or duties. 6 In addition to this application against FSCO, there are two other ap- plications, identical in substance against Her Majesty the Queen between the parties which counsel for the Crown is not moving to strike out. 7 The parties agree that a motion under Rule 21.01(b) involves taking the allegations contained in the application and assuming same have been proven. That is, as set out in paragraphs 10 through 12, inclusive of the Notice of Application, FSCO entered into a letter agreement with Primerica, among others, executed on May 24, 2002. 8 Counsel for FSCO refers to the Portuguese Canadian Credit Union Ltd. v. 1141931 Ontario Ltd., 2012 ONCA 274 (Ont. C.A.) decision where the Court adopts the reasoning of the motions judge that in the circumstances presented to it, a counterclaim for contribution indemnity from a fraud committed and the apparent recovery of $30,000,000, that “FSCO is a non-corporate entity without the express or implied capacity to be sued.” This is on the basis it fell within the sixth category of statutory entities described by Justice Houlden in Westlake v. R., [1971] 3 O.R. 533 (Ont. H.C.) which is: Non-corporate bodies which are not by the terms of the statute incor- porating them or by necessary implication liable to be sued in an action for damages, but who are legal entities in that their actions may be reviewed in proceedings brought against them by way of the extraordinary remedies of certiorari, mandamus and prohibition. 9 This classification of statutory entities, and their exposure to legal proceedings is reviewed by our Court of Appeal in Gratton-Masuy Environmental Technologies Inc. v. Ontario, 2010 ONCA 501 (Ont. C.A.) and, at paragraph 53, appears to agree with my sense that Primerica Life Insurance Co. of Canada v. Ontario G. Dow J. 143

Portuguese Canadian Credit Union Ltd. v. 1141931 Ontario Ltd. should be interpreted only with regard to “an action for damages”. 10 What Primerica is seeking, without in any way evaluating the merits, is declaratory relief or (as the Court raised with the parties) judicial review. 11 In my view, the analysis need go no further. The Superintendent of Financial Services is clearly empowered to enter into contracts on behalf of Her Majesty the Queen in Right of Ontario as represented by the Min- ister of Finance. The relief being sought is declaratory. The applicant is entitled to proceed given the nature of the relief sought and this motion is dismissed.

Costs Counsel for Primerica had three counsel in attendance and the matter was argued by intermediate level counsel. Counsel for the Crown Law Office advised, in the absence of a cost outline, if successful, he was seeking the sum of $5,000, inclusive of fees, HST and disbursements. Counsel for Primerica indicated their partial indemnity cost outline to be in the amount of $21,000. I would fix costs in the amount of $5,000, inclusive of fees, HST and disbursements payable by the FSCO to Primerica in any event of the cause. Motion dismissed. 144 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[Indexed as: Nguyen v. Economical Mutual Insurance Co.] Thi Binh Nguyen, Plaintiff and Economical Mutual Insurance Company and Jeff Smith and Colin Davy and Ann Shewchuk, Defendants Ontario Superior Court of Justice Docket: CV-14-00517417-0000 2015 ONSC 2646 G. Dow J. Heard: April 2, 2015 Judgment: April 24, 2015 Torts –––– Negligence — Vicarious liability — Miscellaneous –––– Plaintiff was injured in motor vehicle collision and claimed accident benefits from defendant insurer — Plaintiff’s caregiver benefits were terminated — Plaintiff contested termination of benefits and commenced arbitration — Arbitrator dismissed plaintiff’s claim on basis that plaintiff did not prove she was continuously prevented from engaging in substantially all her pre-accident activities — Plaintiff brought action against insurer and its employees (individual defendants), alleging employees and plaintiff had reached binding settlement of claim — Defendants brought motion to dismiss statement of claim — Motion granted in part — Action dismissed as against employees because statement of claim failed to set out cause of action against them — Employees acted within course of their employment — Vicarious liability was properly raised — Action against insurer for enforcement of purported settlement or breach of contract could continue — Action presented clearly defined and alternative relief to claim for additional benefits, which was unsuccessful at arbitration, and was also distinct from libel action with inferred vicarious liability claim in action against insurer and doctor. Insurance –––– Claims — Settlement and release — Miscellaneous –––– Plaintiff was injured in motor vehicle collision — Plaintiff claimed accident benefits from defendant insurer — Plaintiff’s caregiver benefits were terminated — Plaintiff contested termination of benefits and commenced arbitration — Arbitrator dismissed plaintiff’s claim on basis that plaintiff did not prove she was continuously prevented from engaging in substantially all of her pre- accident activities — Plaintiff brought action against insurer and its employees (individual defendants), alleging employees and plaintiff had reached binding settlement of claim — Defendants brought motion to dismiss statement of claim — Motion granted in part — Action dismissed as against employees — Statement of claim failed to set out cause of action against employees due to Nguyen v. Economical Mutual Insurance Co. 145 vicarious liability — Action against insurer for enforcement of purported settlement or breach of contract could continue — Action presented clearly defined and alternative relief to claim for additional benefits, which was unsuccessful at arbitration, and was distinct from libel action against insurer and doctor. Cases considered by G. Dow J.: Bush v. Continental Insurance Co. (2001), 2001 CarswellOnt 2903, 41 C.C.L.I. (3d) 220, [2002] I.L.R. I-4033, [2002] O.J. No. 3315, [2001] O.J. No. 3315 (Ont. S.C.J.) — considered Gao v. Ontario (Workplace Safety and Insurance Board) (2014), 37 C.L.R. (4th) 7, 2014 ONSC 6497, 2014 CarswellOnt 15695, 61 C.P.C. (7th) 153, [2014] O.J. No. 5307 (Ont. S.C.J.) — considered Islington Village Inc. v. Canadian Imperial Bank of Commerce (1992), 12 C.P.C. (3d) 331, 1992 CarswellOnt 368, [1992] O.J. No. 1940 (Ont. Gen. Div.) — considered Nguyen v. Economical Mutual Insurance Co. (2013), 2013 CarswellOnt 12675 (F.S.C.O. Arb.) — referred to Nguyen v. Economical Mutual Insurance Co. (2014), 2014 CarswellOnt 14273 (F.S.C.O. App.) — referred to Standard Life Assurance Co. v. Elliott (2007), 50 C.C.L.I. (4th) 288, 86 O.R. (3d) 221, 2007 CarswellOnt 3236, [2007] O.J. No. 2031 (Ont. S.C.J.) — considered Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 2.1 — considered R. 21.01 — pursuant to R. 21.01(1)(b) — considered R. 21.01(3)(d) — referred to Regulations considered: Insurance Act, R.S.O. 1990, c. I.8 Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, O. Reg. 403/96 s. 2(4) — referred to

MOTION by defendants to dismiss statement of claim.

Thi Binh Nguyen, Plaintiff, Respondent, for herself Catherine Korte, for Defendant, Moving Party 146 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

G. Dow J.:

1 The defendants seek to have the plaintiff’s Statement of Claim dismissed on motion made under r. 21.01 or r. 2.1. Alternatively, the defendants seek dismissal of the claims as against the defendants, Smith, Davy and Shewchuk. The plaintiff opposes same. 2 The plaintiff was self-represented and accompanied by her daughter Rose Le who made submissions on her mother’s behalf given her mother’s first language is Vietnamese and she has a limited comprehen- sion and ability to speak English. Ms. Le translated my initial comments to the plaintiff regarding her right to have counsel and the importance of getting legal advice. The Court confirmed the plaintiff’s decision to proceed without counsel and that this decision was voluntary. The Court noted that the materials provided by the plaintiff clearly exhibited considerable legal training. Ms. Le advised while neither she, her mother or any other member of the family has formal legal training, they have consulted with lawyers and made use of the internet. The Court explained to the plaintiff (with her daughter translating), the Court’s concern that the plaintiff was seeking dismissal of all or part of the plaintiff’s action and that this was a potential result. The plaintiff, through her daughter, confirmed her understanding of this risk.

Facts 3 From the Motion Records filed by each party, it is clear the plaintiff was injured in a motor vehicle accident which occurred on January 27, 2003. The plaintiff made an accident benefit claim against the corporate defendant which continued until the caregiving benefits being paid were terminated effective August 23, 2008. The claim sought additional caregiving benefits and then non-earner benefits which required her to meet the “complete inability” test defined in s. 2(4) of the applicable Statutory Accident Benefit Schedule (accidents on or after November 1, 1996) which requires her to sustain “an impairment that continuously prevents the person from engaging in substantially all of the activities in which the person ordinarily engaged before the accident”. The plaintiff contested the termination of benefits and commenced an arbitration proceeding before the Financial Services Commission of Ontario which resulted in a hearing that proceeded on October 9, 10, November 9, 2012 and February 1, 2013. The decision was reserved and released August 28, 2013 [Nguyen v. Economical Mutual Insurance Co., 2013 Carswell- Ont 12675 (F.S.C.O. Arb.)] with Arbitrator Richards concluding the Nguyen v. Economical Mutual Insurance Co. G. Dow J. 147

plaintiff had not presented evidence demonstrating she was continuously prevented from engaging in substantially all of her pre-accident activities. Thus her application was dismissed. 4 In this regard, it should be noted Arbitrator Richards found the plaintiff’s impairments primarily psychological in nature. In this regard, the defendant insurer relied on an examination at their request and the evidence of Dr. Monte Bail, psychiatrist. However, Arbitrator Richards concluded Dr. Bail did not fairly assess the plaintiff and did not assign great weight to his opinion. 5 The plaintiff appealed the decision of Arbitrator Richards which was heard on September 9, 2014 by Directors Delegate David Evans. His reasons were released October 3, 2014 [Nguyen v. Economical Mutual Insurance Co., 2014 CarswellOnt 14273 (F.S.C.O. App.)] which confirmed the Arbitrator’s order and dismissed the appeal. 6 The plaintiff commenced an action in this Court on April 30, 2014 against the defendant insurer and Dr. Bail (court file CV 14 503198) which is being defended and is the subject of a November 21, 2014 endorsement by Justice Stinson regarding an appropriate discovery plan. 7 This action against the defendant insurer and three of its employees, Smith, Davy and Shewchuk is commenced on December 3, 2014, Dis- covery plans have been exchanged, not apparently agreed upon, and is the subject of a motion by the plaintiff to proceed on June 17, 2015. The key aspects of this action are the plaintiff’s allegation that the defendants, Smith, Davy and Shewchuk were the defendant’s Claim Adjuster, On- tario Region Claims Team Leader and Accident Benefits Technical Ad- visor respectively, and that they and the plaintiff reached a settlement agreement on August 22, 2013 in the amount of $157,500 in exchange for a full and final release (see paragraphs 3, 4, 5 and 9 of the Statement of Claim). 8 Paragraph 11 of the defendant’s Statement of Defence admits the defendants Smith, Davy and Shewchuk were at all material times employed by the defendant insurer and that they were acting in the course of their employment.

Issue — Cause of Action 9 My understanding of a motion under r. 21.01(1)(b) is that no evidence is admissible and that, as stated by Justice E. Macdonald in Islington Village Inc. v. Canadian Imperial Bank of Commerce, [1992] O.J. No. 1940 (Ont. Gen. Div.)that striking pleadings should be exercised with 148 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

great care and reluctance and that the pleadings “on a motion such as this must be taken as correct”. Thus, for the purpose of this motion, the Court presumes the plaintiff has proven, as set out in paragraphs 3, 4 and 5, that the defendants Smith, Davy and Shewchuk are employed by the defendant insurer. Further, one or more of them reached a settlement with the plaintiff on August 22, 2013 in the amount of $157,500 in exchange for full and final release. It is noted this date is six days before Arbitrator Richards releases his reasons and thus the outcome of the arbitration is, as of August 22, 2013, unknown. 10 As a result, the Statement of Claim fails to set out a cause of action against the defendants, Smith, Davy and Shewchuk. Given their status as employees and acting within the course of their employment (in the absence of any allegations any of them contracted to pay the $157,500 to the plaintiff personally), the action as against them is dismissed. I am reinforced in this conclusion given the admission by the defendants they were acting in the course of their employment. The defendants correctly raise the vicarious liability of the employees and as noted in the decision of Bush v. Continental Insurance Co. (2001), [2002] O.J. No. 3315 (Ont. S.C.J.), at paragraph 25 and Standard Life Assurance Co. v. Elliott, [2007] O.J. No. 2031 (Ont. S.C.J.), at paragraph 3. 11 However, the action as against the defendant, Economical, for enforcement of a (purported) settlement or breach of contract may continue.

Issue — Frivolous, Vexatious or Abuse of Process 12 The defendant alleges this claim by the plaintiff meets the criteria under r. 21.01(3)(d) or, alternatively Rule 2.1. 13 The defendants describes this action as a veiled attempt by the plaintiff to re-litigate her claims for additional accident benefits which were dismissed by Arbitrator Richards. The defendants argue the decision to appeal that decision to Directors Delegate Evans, without success, rather than proceed directly with this action to enforce the purported settlement, supports this argument. 14 My concern is that there are two different causes of action raised and it is possible that the defendant insurer negotiated a settlement in advance of the decision by Arbitrator Richards fearing it would not be favourable. Alternatively, the defendant insurer made a settlement offer which remained outstanding and available for acceptance as of August 22, 2013 when the plaintiff communicated her acceptance of the offer. It Nguyen v. Economical Mutual Insurance Co. G. Dow J. 149

is the Court’s view this would be something that would be straightforward in proving or disproving either by written documents or testimony with confirming records that the offer was made and accepted such that a full trial is likely not required. To that end, the defendants’ motion is premature. 15 The defendant insurer did not emphasize its right to request the action be dismissed as frivolous, vexatious or an abuse of the process of the Court under Rule 2.1. This rule permits the Court, on its own initiative, to address this issue. My review of the reasons of Justice Myers in Gao v. Ontario (Workplace Safety and Insurance Board), [2014] O.J. No. 5307 (Ont. S.C.J.) identifies the problem of frivolous proceedings being a strain on Court resources and a burden on the party against whom the proceedings are commenced. I agree with Justice Myers Rule 2.1 is “aimed at clearer cases of abuse” (paragraph 12 of his reasons). Overall, my sense is that the plaintiff is approaching this legal threshold with her repeated litigation against the defendant, Economical. However, the action before the Court in this matter presents a clearly defined and alternative relief to the claim for additional benefits which was unsuccessful at the Financial Services Commission of Ontario, and is also distinct from the libel action with an inferred vicarious liability claim in the action against Economical Insurance and Dr. Bail. As a result, the Court is not prepared to strike out or dismiss this action at this juncture. 16 Had this request come before the Court following delivery of the parties’ affidavit of documents or in the form of a summary judgment motion following discovery of the plaintiff the absence of any evidence supports the allegation in paragraph 9 of the Statement of Claim, the result may have been quite different.

Costs 17 The defendants, having had some success, is entitled to its costs. Given all defendants were represented by the same counsel, the Court orders the costs, fixed at $2,000 inclusive of fees, HST and disbursements, be payable by the plaintiff to the defendants following when this matter is finally determined, or to use the legal phrase, in any event of the cause. Motion granted in part. 150 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[Indexed as: Bonaccorso v. Optimum Insurance Co.] Julie Bonaccorso, Plaintiff and Optimum Insurance Company Inc., Defendant Ontario Superior Court of Justice Docket: 13-44061 2015 ONSC 2633 Arrell J. Heard: April 21, 2015 Judgment: April 24, 2015 Insurance –––– Automobile insurance — No-fault benefits — Practice and procedure on claim for benefits — Limitation period –––– Plaintiff received income replacement benefits (IRBs) from insurer after 2008 motor vehicle collision — Benefits ceased when plaintiff returned to work in 2009 — Insurer sent letter to plaintiff in February 2010 which included Explanation of Benefits and set out two year time limit to dispute insurer’s refusal to pay — Plaintiff stopped working again in February 2011, allegedly due to accident injuries — Plaintiff requested reinstatement of IRBs in July 2012 — Insurer denied coverage on basis limitation period had expired — Plaintiff brought action against insurer in November 2013 — Insurer brought motion for summary judgment to dismiss plaintiff’s claim as statute-barred — Motion granted — Action dismissed — There was no genuine issue for trial — Insurer’s February 2010 letter was valid refusal of benefits — Two year limitation period was triggered and plaintiff should have been aware of that based on Explanation of Benefits enclosed with letter — Plaintiff should have been aware she had to apply for benefits and mediation by February 2012 to be within two year limitation period. Cases considered by Arrell J.: Haldenby v. Dominion of Canada General Insurance Co. (2001), 2001 Cars- wellOnt 2865, 204 D.L.R. (4th) 721, 32 C.C.L.I. (3d) 1, 55 O.R. (3d) 470, 149 O.A.C. 172, [2001] O.J. No. 3317 (Ont. C.A.) — followed Hryniak v. Mauldin (2014), 2014 CarswellOnt 640, 2014 CarswellOnt 641, 2014 SCC 7, 95 E.T.R. (3d) 1, (sub nom. Hryniak v. Mauldin) [2014] 1 S.C.R. 87, 27 C.L.R. (4th) 1, 37 R.P.R. (5th) 1, 46 C.P.C. (7th) 217, 2014 CSC 7, (sub nom. Hryniak v. Mauldin) 314 O.A.C. 1, (sub nom. Hryniak v. Mauldin) 453 N.R. 51, 12 C.C.E.L. (4th) 1, (sub nom. Hryniak v. Mauldin) 366 D.L.R. (4th) 641, 21 B.L.R. (5th) 248, [2014] S.C.J. No. 7, [2014] A.C.S. No. 7 (S.C.C.) — followed Smith v. Co-operators General Insurance Co. (2002), 286 N.R. 178, 210 D.L.R. (4th) 443, 36 C.C.L.I. (3d) 1, 158 O.A.C. 1, [2002] I.L.R. I-4071, 2002 Cars- Bonaccorso v. Optimum Insurance Co. Arrell J. 151

wellOnt 914, 2002 CarswellOnt 915, 2002 SCC 30, [2002] 2 S.C.R. 129, 2002 CSC 30, [2002] S.C.J. No. 34, REJB 2002-29765 (S.C.C.) — followed Wadhwani v. State Farm Mutual Automobile Insurance Co. (2013), 2013 ONCA 662, 52 M.V.R. (6th) 1, 26 C.C.L.I. (5th) 173, 2013 CarswellOnt 15078 (Ont. C.A.) — followed Statutes considered: Insurance Act, R.S.O. 1990, c. I.8 s. 281.1(1) [en. 2002, c. 24, Sched. B, s. 39(6)] — considered Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 20.04(2) — considered R. 20.04(2.1) [en. O. Reg. 438/08] — considered Regulations considered: Insurance Act, R.S.O. 1990, c. I.8 Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, O. Reg. 403/96 Generally — referred to s. 11 — considered s. 51(1) — considered

MOTION by insurer for summary judgment dismissing plaintiff’s action as statute-barred.

D. Roncari, for Plaintiff A. Lennox, for Defendant

Arrell J.: Introduction: 1 The defendant moves for summary judgment to dismiss the plaintiff’s case as being statute barred under the applicable limitation period. 2 The plaintiff resists the motion on the basis that the appropriate date triggering the limitation period is not that alleged by the defence and as such there is a genuine issue for trial as to the correct date for the commencement of the limitation period.

Facts: 3 The plaintiff was injured in a M.V.A on February 4, 2008. She was unable to work and received Income Replacement Benefits (I.R.Bs) from the defendant. 152 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

4 The plaintiff returned to work June 28, 2009 and the defendant ceased paying I.R.Bs. 5 The defendant sent a letter dated February 8, 2010 to the plaintiff stating that since she had “resumed her pre-accident employment duties...” I.R.Bs were being discontinued effective June 28, 2009. She had received an earlier letter dated June 22, 2009 in anticipation of her returning to work June 28 on modified duties and was advised that no further benefits would be payable once she commenced full time work. The letter went on to say: In accordance with Section 11 of the SABS, a person receiving an Income Replacement Benefit may return or start employment at any time during the 104 weeks following the onset of the disability in respect of which the benefit is paid without affecting his or her entitlement to resume receiving Income Replacement Benefits under this part, if as a result of the accident, he or she is unable to continue in the employment. 6 The 104 week period under S.11 of the SABS expired on February 4, 2010. 7 On February 15, 2011 the plaintiff ceased work, allegedly as a result of her M.V.A. injuries. This was well past the 104 weeks. On July 11, 2012 a doctor’s Disability Certificate was filed by the plaintiff indicating she was unable to perform the essential tasks of her employment due to her M.V.A. injuries. A request was made of the defendant to re-instate I.R.Bs by letter dated July 13, 2012 effective February 15, 2011. This request was approximately 1.5 years after she stopped work. 8 The defendant denied coverage by way of letter dated July 20, 2012 on the basis that the plaintiff was past the limitation period to dispute the benefits. 9 The plaintiff applied for mediation with FSCO on October 9, 2012. Mediation failed in September 2013 and the Statement of Claim was issued November 8, 2013.

Position of the Parties: 10 The defendant argues the limitation period to seek mediation or initi- ate court proceedings under the Statutory Accident Benefits Schedule (SABS) s.51(1)”...shall be commenced within two years of the insurer’s refusal to pay” means the limitation period expired on February 8, 2012, being 2 years after it advised the plaintiff no further IRBs would be paid as she had gone back to her pre-accident employment. Bonaccorso v. Optimum Insurance Co. Arrell J. 153

11 The plaintiff argues that although she did indeed go back to work effective June, 2009 within the “104 week period of disability” and as such under S.11 of the SABS this should be considered a “temporary return” to work. In other words, the plaintiff argues, she attempted to return to her old job but by February, 2011, it became apparent she could no longer do it as a result of her M.V.A. injuries and has been off work ever since. Therefore the appropriate limitation date is July 20, 2014 being 2 years after the defendant denied the claim by letter dated July 20, 2012.

Analysis: 12 The parties concede there are no facts in dispute. I agree. 13 The defendant argues this is an appropriate case for summary judgment while the plaintiff argues there is a genuine issue for trial, although there are no facts in dispute. 14 Rule 20 of the Rules of Civil Procedure states as follows: 20.04 ... (2) The court shall grant summary judgment if, (a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment (2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial: 1. Weighing the evidence. 2. Evaluating the credibility of a deponent 3. Drawing any reasonable inference from the evidence 15 The Supreme Court of Canada in In Hryniak v. Mauldin, 2014 SCC 7 (S.C.C.) stated, at para. 49: [49] There will be no genuine issue requiring trial when the judge is able to reach a fair and just determination on the merits on a motion 154 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. 16 The court went on to indicate, at para. 50, that the overarching issue to be answered is “whether summary judgment will provide a fair and just adjudication.” The Court went on to say that “the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.” 17 I conclude that this is an appropriate case for summary judgment as all three criteria of the test in Hryniak have been met. I am confident that the undisputed facts, and the relevant legal principles, allow me to provide a fair and just adjudication to this dispute in a timely and least expensive way. 18 I have reviewed the case law provided by both counsel and it appears that I am bound by Smith v. Co-operators General Insurance Co., 2002 SCC 30 (S.C.C.). The issue in that case was what constituted a valid refusal to provide further benefits under the SABS which would then trigger the running of the limitation period. At para. 14 the majority stated: In my opinion, the insurer is required under s. 71 to inform the person of the dispute resolution process contained in ss. 279 to 283 of the Insurance Act in straightforward and clear language, directed towards an unsophisticated person. At a minimum, this should include a description of the most important points of the process, such as the right to seek mediation, the right to arbitrate or litigate if mediation fails, that mediation must be attempted before resorting to arbitration or litigation and the relevant time limits that govern the entire process. Without this basic information, it cannot be said that a valid refusal has been given. 19 I have concluded that the letter of February 8, 2010 was a valid refusal of benefits as it was accompanied by the Explanation of Benefits. The language, in my view, was clear and unequivocal. It contained a step by step process to dispute the refusal and was very clear by stating in bold print WARNING: TWO YEAR TIME LIMIT “You have TWO YEARS from the date of your insurer’s refusal to pay...to arbitrate or commence a lawsuit in court.” The letter itself was very clear that since the plaintiff had resumed her pre-accident employment duties the insurer was discontinuing payment of any further I.R.B.s. Bonaccorso v. Optimum Insurance Co. Arrell J. 155

20 The limitation period under the Insurance Act s. 281.1(1) states as follows: A mediation proceeding or evaluation under section 280 or 281.1 or a court proceeding or arbitration under section 281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed. 21 The SABS schedule section 51(1) provides an identical two year limitation period triggered by the insurer’s refusal to pay the amount claimed. 22 The argument of the plaintiff that the appropriate date for the valid refusal was the letter sent by the insurer on July 20, 2012 in response to the plaintiff’s request for reinstatement of benefits as she had stopped work, must fail. 23 This court is bound by the authority of Haldenby v. Dominion of Canada General Insurance Co. (2001), 149 O.A.C. 172 (Ont. C.A.) and Wadhwani v. State Farm Mutual Automobile Insurance Co., 2013 ONCA 662 (Ont. C.A.). Both cases appear to be a complete answer to the plaintiff’s argument. 24 In Haldenby the legislation at the time dealt with a 156 week period while the legislation for the case at bar is 104 weeks. The plaintiff returned to work within two years of the accident. The insurer advised her at the 156 week mark that benefits were terminated as she did not meet the disability test. One year later she lost her job. One year after that she requested further benefits which the insurer ignored. The plaintiff medi- ated her claim six months later and issued a statement of Claim over three years after the insurer’s letter of refusal of benefits. 25 Ms. Haldenby’s argument that her return to work had in effect created two limitation periods failed. At paragraph 23 the court stated as follows: As properly noted by the application judge, the relevant statutory language is not free of ambiguity. However, in our view, s. 26(1) contemplates one limitation period. It is the insurer’s refusal which trig- gers the limitation period that can arise out of two types of situations. Indeed, the two parts of s. 26(1) apply respectively to the situations where (1) the insurer refuses to pay the amount claimed by the insured; or in the alternative where (2) the insurer refuses to pay further benefits if the claimant went to school or returned to work as permitted by s. 16. 156 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

26 The court further opined at paragraphs 35 and 36: The appellant’s interpretation of s. 26(1) was properly rejected by David Evans, the arbitrator in Shirani v. Wellington Insurance Co. (F.S.C.O. File No. A96-000114, January 7, 1997) since it suggests that, in effect, there would be no limitation period. The appellant’s interpretation of s. 26(1) would allow a person receiving benefits who has successfully returned to work, to apply for further benefits at any time in an undetermined future. The limitation period in s. 26(1) would only be engaged when such an application was refused. [36] As noted by the application judge (para. 8), the appellant’s approach would extend a claimant’s entitlement to benefits for an inde- terminate period of time and is “inconsistent with the Supreme Court of Canada’s rationale which underlined the common sense of, and the need for limitation periods”. Indeed, as discussed above, such an interpretation of ss. 26(1) and 16 would unreasonably controvert the systemic need for finality, certainty and the principle of diligence. 27 The court of appeal in Wadhwani specifically followed Haldenby and made it clear that it continues to be the law in this province. The court framed the issue and response as follows: [14] The argument for the appellant is that an insured can return to work during the initial 104-week period (as the appellant did here) and, if at some time thereafter she or he is entirely unable to work because of accident-related injuries, she or he can reassert a claim for income replacement benefits at any time, with the limitation period beginning to run only when the insurer refuses to pay the further benefits claimed. [15] This argument was rejected by this court in Haldenby v. Domin- ion of Canada General Insurance Co. (2001), 55 O.R. (3d) 470. A similar conclusion was reached by the Appeal Division of the Finan- cial Services Commission of Ontario in Ladhar v. Economical Mu- tual Insurance Co., 2012 CarswellOnt 5805. [16] We would not give effect to this ground of appeal.

Conclusion: 28 I conclude that the defendant gave the plaintiff a valid refusal of further benefits pursuant to the guidelines set out in Smith by way of its letter dated February 8, 2010 with enclosures. As a result the two year limitation period was triggered and the plaintiff should have been well aware of that based on the Explanation of Benefits enclosed with the letter of refusal. She should have been aware that she had to apply for benefits and mediation on or before February 8, 2012 to be within the two Bonaccorso v. Optimum Insurance Co. Arrell J. 157

year limitation period. She stopped work on February 15, 2011, well past the 104 week period. She therefore had almost one year to commence proceedings under the Act but failed to do so and the limitation period expired. There is no genuine issue for trial and summary judgment is granted dismissing the action. 29 The parties indicated costs should follow the result of this motion. The plaintiff had a bill of costs for only the motion in an amount of $3,200.00 on a partial indemnity basis. The defendant did not have a draft bill but estimated her costs to date for the entire action at approximately $15,000.00 on a full indemnity basis. The defendant has been totally successful and is entitled to costs. There is nothing to indicate that the usual rule of partial indemnity costs for the defence should not pre- vail. The defence is entitled to its costs for the entire action as it was successful in having the case fully dismissed. I fix those costs at $5,500.00 inclusive of taxes and disbursements, payable within 30 days, as fair and reasonable under all the circumstances. Motion granted. 158 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[Indexed as: Insurance Corp. of British Columbia v. Dew] Insurance Corporation of British Columbia, Appellant and Ronald Dew, Respondent British Columbia Supreme Court Docket: Vancouver S135455 2015 BCSC 631 Ross J. Heard: March 24, 2015 Judgment: April 22, 2015 Insurance –––– Automobile insurance — Extent of risk — Fraud or negligence of insured — Theft –––– Insured claimed she wished to sell automobile and placed it considerable distance from home to gain exposure for sale — Car was involved in accident and was damaged — Both sets of keys were found in vehicle and locksmith found there were no signs of forced entry — On day after accident, insured made midterm change to his insurance by purchasing collision and comprehensive coverage, and soon after made report that automobile was missing — ICBC denied claim on basis that insured filed false statement — Claim by insured against ICBC was allowed — ICBC appealed — Appeal allowed — Claim of insured was dismissed — Trial judge found that trial judge did not make finding that insured had coverage in place for loss at time of alleged theft, and there was no evidence which could sustain such a finding — Current policy had been purchased after accident and any previous policy had not been provided — Insured was required to establish that automobile was stolen — Trial judge made no express finding that insured had established that theft had occurred, but rather moved directly to address allegations of misrepresentation without dealing with this issue and concluded that ICBC had failed to establish insured made false claim to find that insured was entitled to indemnity. Cases considered by Ross J.: Golden (1995) International Trading Ltd. v. Insurance Corp. of British Colum- bia (1998), 1998 CarswellBC 1520, [1998] B.C.J. No. 1643 (B.C. S.C.) — considered Singh v. Insurance Corp. of British Columbia (2014), 2014 BCSC 797, 2014 CarswellBC 1261, 33 C.C.L.I. (5th) 102, (sub nom. Singh v. ICBC) [2014] I.L.R. I-5601 (B.C. S.C.) — followed Statutes considered: Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 s. 75(c) — considered Insurance Corp. of British Columbia v. Dew Ross J. 159

Small Claims Act, R.S.B.C. 1996, c. 430 s. 13(1)(a) — considered

APPEAL by ICBC from judgment allowing insured’s claim for coverage.

Michael Hewitt, for Appellant Stephen Glanzberg, for Respondent

Ross J.: Introduction 1 This is an appeal by the Insurance Corporation of British Columbia (“ICBC”) from the decision at trial dated June 11, 2013, which granted judgment against ICBC in favour of the respondent Ronald Dew. Mr. Dew’s claim was for insurance coverage in respect of an alleged theft of his motor vehicle, and vehicle damage alleged to have resulted from that theft. 2 ICBC submits that the learned trial judge erred in finding that there was insurance coverage for the loss alleged. In particular: (a) The trial judge failed to determine whether there was any theft coverage in place at the time of the alleged theft. (b) The trial judge failed to determine whether the respondent had proven on a balance of probabilities that his vehicle was stolen.

Facts 3 Mr. Dew was the registered owner of a 2002 Dodge Caravan which was equipped with a factory alarm and an immobilizer. Mr. Dew testified that he had two sets of keys for the vehicle, one that he kept in the con- sole and one on his person. 4 Mr. Dew testified that some time before November 21, 2008, he placed “For Sale” signs in his vehicle and parked it on Alma Street, between 7th and 8th Avenues, some considerable distance from his resi- dence, in order to expose it for sale. 5 Mr. Dew’s vehicle was involved in a collision that occurred around 2:00 a.m. on November 22, 2008, near the intersection of West 7th Ave- nue and Highbury Street in Vancouver. A nearby resident observed the scene after the accident. She found the car abandoned, pushed up against a fence and another car. Two sets of keys were found in the vehicle, one in the ignition, and on the right front passenger seat. 160 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

6 The uncontradicted report of the locksmith in evidence at trial found that there were no signs of forced entry to the vehicle, its immobilizer system had not been compromised and that a properly programmed and working key was required to drive the vehicle. 7 On November 23, 2008, Mr. Dew made a midterm change to his insurance by purchasing collision and comprehensive coverage. The effective date for that coverage was November 23, 2008. The uncontradicted evidence of the ICBC claims adjuster was that theft coverage is included in comprehensive coverage. 8 On November 25, 2008, Mr. Dew initiated a claim with ICBC, reporting his vehicle missing. The claim was investigated by ICBC and the accident by the Vancouver police. 9 By letter dated August 20, 2009, ICBC advised Mr. Dew that the claim for indemnity was not accepted. ICBC asserted that Mr. Dew had provided a false statement to ICBC regarding the details of this loss and as a result breached s. 75(c) of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231, which results in a forfeiture of all claims.

Did the trial judge err by failing to determine whether there was any theft coverage in place at the time of the alleged theft? 10 The first matter to be determined at trial was whether there was insurance coverage in place for the loss alleged at the time the loss occurred. A claimant has the legal burden of proving that the loss alleged falls within the terms of the insurance. 11 On a review of the learned trial judge’s Reasons for Judgment (“the Reasons”), I note that there is a reference to this issue in the first paragraph of the Reasons: [1] The Claimant claims that he had parked and left his vehicle one week previously on Alma Street, Vancouver, British Columbia, between 7th and 8th Avenues, with FOR SALE signs in the front and back of the vehicle to attract prospective buyers, and that on or about Friday, November 25, 2008, he discovered that his vehicle had been stolen by way of a telephone call from the RCMP advising that it had been involved in a motor vehicle accident. The vehicle was insured for both theft and collision coverage under a policy of insurance with the Insurance Corporation of British Columbia (ICBC), and as a result of the motor vehicle accident was written off. The Claimant claimed that he had just recently listed the vehicle for sale on Craig’s List for $9,000, but alleged that the actual market value of the vehicle Insurance Corp. of British Columbia v. Dew Ross J. 161

was $11,000. The Claimant claimed from the insurance policy with the Defendant, the sum of $11,000. 12 However, reading the Reasons as a whole, I conclude that the statement in paragraph 1 was not a finding of fact but part of an introduction to the case. In addition, there is no reference to the timing of the purchase of coverage for theft. 13 The evidence with respect to this issue before the learned trial judge was as follows: • Mr. Dew testified that he had an insurance policy for the vehicle which he kept in the glove compartment of the vehicle. He stated that the policy he had was “just the regular insurance that you normally get with ICBC.” • The policy was not in evidence. • Mr. Dew stated that he did not recall making a change in his coverage on November 23, 2008. • He did not agree that he did not have theft coverage on the vehicle when he parked it on 8th and Alma. • The Claim File Report dated November 25, 2008 was in evidence. This report refers to a midterm change of coverage with an effective date of November 23, 2008. • Sheree-Ann Gerry, a claims adjuster with ICBC, stated that Mr. Dew changed his insurance on November 23, 2008, to include comprehensive and collision coverage. It was her evidence that coverage for theft is included in comprehensive coverage. 14 The learned trial judge summarized much of this evidence in his Rea- sons. In addition, he made reference to counsel’s submissions on the issue. However, the Reasons contain no analysis of the evidence and no finding with respect to this issue. I find that the learned trial judge did not make a finding that Mr. Dew had coverage in place for the loss at the time of the alleged theft. 15 Moreover, on a review of the evidence, it appears that there was no evidence which could sustain such a finding. The accident was reported on November 22, 2008; therefore, if the vehicle had been stolen, it had occurred by this time at the latest. The only evidence of what coverage was in place on November 22, 2008, was that it was the “regular” insurance. The policy was not in evidence and there was no evidence about what coverage that policy provided. 162 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

16 There was comprehensive insurance coverage that did provide for theft coverage in effect as of November 23, 2008, but this was after the date when the car was discovered abandoned. If the car had been stolen, it clearly had happened before the purchase of additional coverage on November 23, 2008. 17 Mr. Dew argued that the appellant was asking the court to make a new finding of fact that his insurance policy did not cover theft at the time of the loss. Counsel submits that ICBC did not provide evidence of what coverage Mr. Dew had at the time of the loss and that such evidence cannot be introduced on appeal. Finally, counsel submits that Mr. Dew had coverage for theft in place at the time he reported the loss and this should be the operative time. 18 I agree that the appeal is to be determined on the basis of the record at trial. However, ICBC is not attempting to introduce new evidence on appeal. Moreover, ICBC is not seeking to have this court make a new finding of fact. Rather, it is asserting first, that the learned trial judge erred in failing to make a finding of fact with respect to this issue and second, that the evidence at trial does not provide evidence upon which a court could conclude that Mr. Dew had coverage for theft at the time of the alleged theft. 19 In any event, the plaintiff bears the burden to establish that insurance covering the risk was in place at the time of the loss. In the present case, I agree with counsel for ICBC that the learned trial judge erred in failing to make a finding with respect to this issue and further that there is no evidence upon which a finding could be made that there was coverage for theft in place at the time of the loss. The only evidence concerning coverage for theft was that it was effective commencing November 23, 2008, which was after the loss at issue. 20 Finally, with respect to the submission regarding the timing of coverage, in my view it is well established that, in the absence of some evidence of a different contractual intention, of which there is none in the present case, the coverage provided by theft insurance commences to operate at the time of purchase: see Nicholas Legh-Jones, John Birds & David Owen, eds., MacGillivray on Insurance Law, 11th ed. (London, UK: Thomson Reuters, 2008) at 159-166 and E.R. Hardy Ivamy, Gen- eral Principles of Insurance Law, 6th ed. (London, UK: Butterworths, 1993) at 249-254. Insurance Corp. of British Columbia v. Dew Ross J. 163

Did the learned trial judge err by failing to determine whether the respondent had proven on a balance of probabilities that his vehicle was stolen? 21 The proper approach to be taken to the onus and burden of proof in a case such as this was recently described by Madam Justice Hyslop in Singh v. Insurance Corp. of British Columbia, 2014 BCSC 797 (B.C. S.C.) [Singh] at paras. 110 and 111 as follows: [110] Mr. Singh has conflated his burden of proof that is to prove, on a balance of probabilities, that the Mercedes was stolen, with that of the defendant’s separate and distinct burden of proof which is to prove its defences to vitiate coverage on a balance of probabilities. [111] These two separate burdens of proof are well articulated in the case of Hughes v. Insurance Corp. of British Columbia, 2010 BCPC 222, where T.S. Woods PCJ stated: [13] ... as refracted through the lens recently held up by the Supreme Court of Canada in its decision in McDou- gall — compels two legal conclusions concerning the case at bar. They are that: (a) Mr. Hughes must tender evidence sufficient to prove, on a balance of probabilities and nothing less, that his alleged losses and damage fall within the scope of his policy coverage. If he succeeds in discharging that onus, then; (b) ICBC must tender evidence sufficient to prove, on a balance of probabilities and nothing more, that Mr. Hughes made wilfully false statements and misrepresentations in connection with his indemnity Claims in order to have its affirmative defences succeed. 22 The learned trial judge commences his Reasons with an observation that he found certain aspects of the investigation troubling and that a conclusion seemed to have been reached at the outset by ICBC and Consta- ble Gilbert that Mr. Dew was complicit in making a false claim. He continues, stating at para. 33: [33] That being said, I find that I must consider how reasonable were the basis [sic] for these suspicions of Mr. Dew’s complicity. 23 He then reviews the evidence and concludes at paras. 37-39: [37] Likewise I find that in the case at bar that Mr. Dew may have made statements to ICBC and to Constable Gilbert, for that matter, which “were vague and perhaps inaccurate”, however on reviewing 164 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

the evidence I cannot conclude that Mr. Dew made any willfully false statements to ICBC in the course of this claim, or that ICBC has proved this on the balance of probabilities. I also find that most of the alleged inconsistencies were satisfactorily explained away by the Claimant and his witnesses, and were open to interpretations quite different from those placed upon them by ICBC. I therefore concur in this regard with the submissions of Counsel for the Claimant cited above. [38] With regards the alleged inconsistencies on which ICBC claims played a significant part in their deciding to reject Mr. Dew’s claim, I reiterate with concurrence what was stated in the Gill case (supra): 41 The circumstantial evidence presented by ICBC and ICBC’s reasonable suspicions arising therefrom gave me reason to pause. However, after considering and weighing all the evidence, I must conclude that strong suspicions are not enough to meet the standard of proof which apply to such cases. The circumstantial evidence led by ICBC in this case is not sufficiently clear and cogent to allow me to conclude that Gill was directly involved or otherwise complicit in the theft and torching of the Mustang... [39] Likewise I find that in the case at bar that the “strong suspicions” presented by ICBC are not enough for me to conclude that on the balance [of] probabilities, Mr. Dew made a false claim to ICBC regarding the loss of his vehicle, and I find that he is entitled to indemnity under his insurance policy for his loss. 24 ICBC submits that the learned trial judge made the error described in Singh of conflating the question of proof of the loss, in this case proof of theft for which the burden of proof is on the claimant, with the question of affirmative defences, in this case misrepresentation, for which the burden of proof is on the insurer. ICBC submits that the learned trial judge did not make a finding of fact that the vehicle was stolen but instead looked only at the issue of whether ICBC had established that the respondent made misrepresentations which breached the policy. 25 The respondent concedes that there is no explicit finding of fact by the learned trial judge that the vehicle was stolen. Counsel submits that it is clear from reading the Reasons as a whole that the learned trial judge implicitly reached this conclusion and then proceeded to deal with the affirmative defences. 26 As Mr. Justice Brenner (as he then was) noted in Golden (1995) International Trading Ltd. v. Insurance Corp. of British Columbia, [1998] B.C.J. No. 1643 (B.C. S.C.), in some cases the defence evidence Insurance Corp. of British Columbia v. Dew Ross J. 165

called to rebut the plaintiff’s contention of a theft may also be the evidence relied upon by the defence to prove that the insured breached the policy by making a fraudulent claim. However, it is clear that before considering the affirmative defences, the court is required first to determine, on a review of all of the evidence, if the plaintiff has established on a balance of probabilities that a theft occurred. 27 Having reviewed the Reasons, I find that the learned trial judge made no express finding that Mr. Dew had established on a balance of probabilities that a theft had occurred. Instead, the learned trial judge moved directly to address the allegations of misrepresentation without dealing with this issue and concluded that ICBC had failed to establish on a balance of probabilities that Mr. Dew made a false claim regarding the loss of his vehicle. He then concluded that Mr. Dew was entitled to indemnity under his policy. 28 I have concluded that in so doing the learned trial judge did fall into the error described in Singh of conflating two separate issues with two separate burdens of proof. Mr. Dew had the burden to establish on a balance of probabilities that the vehicle was stolen. The trial judge made no such finding and accordingly erred.

Disposition 29 Section 13(1)(a) of the Small Claims Act, R.S.B.C. 1996, c. 430, provides: 13 (1) On an appeal, the Supreme Court may do one or more of the following: (a) make any order that could be made by the Provincial Court; 30 In the present case, given my finding with respect to the first issue that there is no evidence in the record which could support a finding that Mr. Dew had coverage for theft in place at the time of the alleged theft, I allow the appeal and dismiss Mr. Dew’s action against ICBC. ICBC is entitled to its costs. Appeal allowed. 166 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

[Indexed as: IPEX Inc. v. AT Plastics Inc.] Ipex Inc., (Responding Party/Plaintiff) and AT Plastics Inc., (Moving Party/Defendant) Ontario Superior Court of Justice (Divisional Court) Docket: Toronto DC 71/15 2015 ONSC 2618 Molloy J. Judgment: April 22, 2015 Civil practice and procedure –––– Practice on appeal — Leave to appeal — Application — Grounds –––– Plaintiff had paid $125 million to settle claims against it in class actions in relation to alleged defects in piping systems it had marketed — Plaintiff sued defendant, who had supplied some of components in those piping systems, to recover all of amounts it paid to investigate, defend and settle class action — Plaintiff’s insurers contributed to settlements and participated in mediation process leading to settlements, and after settlements insurers transferred their subrogated rights and interests to plaintiff — Plaintiff refused at discovery to identify insurers who contributed to settlement and individuals involved on behalf of insurers — Plaintiff also refused to make inquiries of its insurers and produce all relevant documents relevant to proceedings and recommendations of insurer as to settlement — Master ordered plaintiff to provide information as to identity of insurers and insurers’ representatives who participated but limited this to extent information was within plaintiff’s knowledge — Master ruled that plaintiff was not required to answer other questions because contribution by insurer was not relevant based on private insurance exception, claim was not subrogated one, and any indemnity received from insurer was irrelevant — Appeal was dismissed — Judge held that Master was correct when he considered and directly applied insurance exception and stated that he agreed with plaintiff that defendant was attempting to get affidavit of documents from non-party without bringing motion — Defendant sought leave to appeal to Divi- sional Court — Motion granted — Test for leave to appeal under R. 62.02(4)(b) of Rules of Civil Procedure was met and leave to appeal to Divisional Court was granted — There were reasons to doubt correctness of decision — Given nature of proceeding and of insurance companies, it was logical conclusion that those insurers and their representatives had documents that were relevant — Fact that this was not subrogated claim was not seen as relevant — Reasons Master gave were sparse but it would appear that incorrect and irrelevant legal principle was applied in situation to which it had no bearing, and there was at least argument to be made that this was palpable and overriding error — There was issue of IPEX Inc. v. AT Plastics Inc. Molloy J. 167

general application and importance that went beyond interests of parties to litigation and had implications for administration of justice. Cases considered by Molloy J.: Ash v. Corp. of Lloyd’s (1992), (sub nom. Ash v. Lloyd’s Corp.) 8 O.R. (3d) 282, 1992 CarswellOnt 1099, [1992] O.J. No. 894 (Ont. Gen. Div.) — considered Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 7 O.R. (3d) 542, 6 C.P.C. (3d) 271, 55 O.A.C. 316, 1992 CarswellOnt 429, [1992] O.J. No. 652 (Ont. Div. Ct.) — referred to Greslik v. Ontario (Legal Aid Plan) (1988), 65 O.R. (2d) 110, 30 O.A.C. 53, 1988 CarswellOnt 436, 28 C.P.C. (2d) 294, [1988] O.J. No. 525 (Ont. Div. Ct.) — referred to Nazari v. OTIP/RAEO Insurance Co. (2003), 2003 CarswellOnt 3315, [2003] O.T.C. 794, 3 C.C.L.I. (4th) 149, [2003] O.J. No. 3442 (Ont. S.C.J.) — considered Rankin v. McLeod, Young, Weir Ltd. (1986), 57 O.R. (2d) 569, 1986 Carswell- Ont 463, 13 C.P.C. (2d) 192, [1986] O.J. No. 2380 (Ont. H.C.) — referred to Rules considered: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 R. 62.02(4) — considered R. 62.02(4)(a) — considered R. 62.02(4)(b) — considered

MOTION for leave to appeal from judgment dismissing appeal from Master’s decision.

Lawrence Theall, Jeffrey Brown, for Moving Party Jessica A. Kimmel, Suzy Kauffman, for Responding Party

Molloy J.: Introduction 1 The defendant AT Plastics (“ATP”), seeks leave to appeal to the Di- visional Court from the Order of Whitaker J. dated January 28, 2015, dismissing an appeal from the Order of Master Graham dated March 7, 2014. 2 The issue on the appeal was Master Graham’s ruling on one question that IPEX refused to answer at examinations for discovery. IPEX had paid $125 million to settle claims against it in class actions in relation to alleged defects in piping systems it had marketed. Some of the components in those piping systems had been supplied by ATP. IPEX sued ATP to recover all amounts it paid to investigate, defend and settle the 168 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

class action. IPEX claims in this lawsuit that the only reason it settled the class actions is because it believed that defects in the materials supplied by ATP would cause failure at catastrophic rates, thereby exposing it to much greater liability. The insurers of IPEX contributed to the settlements and participated in the mediation process leading to the settlements. After the settlements, the insurers transferred their subrogated rights and interests to IPEX. Therefore, this action for indemnity is being pursued by IPEX, in its own right, and not by the insurer as a subrogated claim. 3 IPEX refused at discovery to identify the insurers who contributed to the settlement and the individuals involved on behalf of the insurers. IPEX also refused to make inquiries of its insurers and produce all relevant documents relevant to the proceedings and the recommendations of the insurer as to settlement (identified as Refusal 9). 4 In a very brief hand-written endorsement, Master Graham ordered IPEX to provide the information as to the identity of the insurers and insurers’ representatives who participated, on the grounds that were persons with knowledge of relevant transactions or occurrences, but limited this to the extent the information was within IPEX’s knowledge. He ruled that IPEX was not required to answer the other questions because: contribution by the insurer was not relevant based on the private insurance exception; the claim is not a subrogated one; and any indemnity received from the insurer is irrelevant. 5 Justice Whitaker dismissed the appeal in a brief one-page endorsement. He held that the Master was entitled to deference on this question of mixed fact and law. He also held that the Master was correct when he “considered and directly applied the insurance exception” and stated that he agreed with IPEX’s counsel that ATP was attempting to get an affidavit of documents from a non-party without bringing a motion.

The Test for Granting Leave to Appeal 6 The test for granting leave to appeal under Rule 62.02(4) is well-settled. It is recognized that leave should not be easily granted and that the test to be met is a very strict one. There are two possible branches upon which leave may be granted. Both branches involve a two-part test and in each case, both aspects of the two-part test must be met before leave may be granted. 7 Under Rule 62.02(4)(a), the moving party must establish that there is a conflicting decision of another judge or court in Ontario or elsewhere IPEX Inc. v. AT Plastics Inc. Molloy J. 169

(but not a lower level court) and that it is in the opinion of the judge hearing the motion “desirable that leave to appeal be granted”. A “conflicting decision” must be with respect to a matter of principle, not merely a situation in which a different result was reached in respect of particular facts: Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 7 O.R. (3d) 542 (Ont. Div. Ct.). 8 Under Rule 62.02(4)(b), the moving party must establish that there is reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that leave to appeal should be granted. It is not necessary that the judge granting leave be satisfied that the decision in question was actually wrong; that aspect of the test is satisfied if the judge granting leave is satisfied that the correctness of the order is open to “very serious debate”: Nazari v. OTIP/RAEO Insurance Co., [2003] O.J. No. 3442 (Ont. S.C.J.) (per Then J.); Ash v. Corp. of Lloyd’s (1992), 8 O.R. (3d) 282 (Ont. Gen. Div.) (per Farley J.). In addition, the moving party must demonstrate matters of importance that go beyond the interest of the immediate parties and involve questions of general or public importance relevant to the development of the law and the administration of justice: Rankin v. McLeod, Young, Weir Ltd. (1986), 57 O.R. (2d) 569 (Ont. H.C.) (per Catzman J.); Greslik v. Ontario (Legal Aid Plan) (1988), 65 O.R. (2d) 110 (Ont. Div. Ct.).

Reasons to Doubt Correctness 9 I agree with Whitaker J.’s assessment as to the appropriate standard of review being “palpable and overriding error.” Although he found the Master’s decision to be also correct, it was not necessary to do so. In considering this leave to appeal, I have applied the more onerous and deferential standard. 10 Notwithstanding that standard of review, I am persuaded that there are reasons to doubt the correctness of the decision. Strathy J. decided in an earlier motion that IPEX was required to produce all of its material relevant to the mediation because IPEX had put the mediation at issue and ATP would have no effective way to mount a defence without understanding the evidence and arguments that caused IPEX to agree to pay the settlement amounts. What ATP is now requesting is the same type of information and documentation in the hands of the insurers, who were participants in the mediation right along with IPEX. The Master’s order that IPEX disclose the names of the insurers and their representatives involved was based on the fact that they are persons who “had knowl- 170 CANADIAN CASES ON THE LAW OF INSURANCE 49 C.C.L.I. (5th)

edge of transactions or occurrences” relevant to the proceeding. Given the nature of the proceeding and of insurance companies, it is a logical conclusion that those insurers and their representatives also have documents that are relevant. 11 I see no relevance to the fact that this is not a subrogated claim. The insurers were acting on behalf of IPEX at the time and have relevant documents and information. I fail to see a basis for saying there is no requirement on IPEX to at least request these documents and information. The private insurance exception relates to whether ATP can claim a credit for sums recovered by IPEX from its insurers. That is not sought in this case. The information as to settlement amounts paid and why goes to the heart of the lawsuit itself, and is not related to any argument that IPEX’s claim for damages is reduced by any amounts it received from its insurers. The reasons of the Master are sparse, but it would appear that an incorrect and irrelevant legal principle was applied in a situation to which it has no bearing. There is at least an argument to be made that this is a palpable and overriding error. There may be a distinction as between the mere production of relevant documents and providing information as to the reasoning of the insurers apart from what may be disclosed in documents. However, no such distinction was addressed in the material here or below, so I leave that to the Court hearing the appeal.

Issue of General Importance 12 The decision under appeal appears to stand for the proposition that where the private insurance exception applies to damages that may be recoverable, there can be no basis for obtaining information from the insurer for any purpose. It appears to have been applied as a complete bar. This has implications for routine inquiries of third parties normally required of parties to the litigation. In the absence of any obligation on the defendant or plaintiff to make such a simple request of a person with relevant information and who has some relationship with the party, the only alternative would be to bring a motion to get disclosure and discovery from a third party. This is a far more onerous, time-consuming and costly process. 13 In my view, this is an issue of general application and importance that goes beyond the interests of the parties to the litigation and has implications for the administration of justice. IPEX Inc. v. AT Plastics Inc. Molloy J. 171

Ruling 14 I therefore find that the test for leave to appeal under Rule 62.02(4)(b) is met and leave to appeal to the Divisional Court is hereby granted. The issue on appeal is restricted to those aspects of “Refusal 9” that the Master determined did not need to be answered. 15 Upon the consent of both parties, costs of this motion are fixed at $4000, payable to the successful party defendant forthwith. Motion granted.