Volume. 3 Issue. 34 – September 25, 2019

This LAT inFORMER includes a Divisional Court decision released yesterday with potentially significant implications with respect to sufficiency of notice. More specifically, it dealt with ‘medical and any other reason’ within the notice requirement under s.38(8). In two other matters, the Tribunal dealt with implied consent and financial dependency to round up this edition.

“Boilerplate” Statements Provide No Reasons – Divisional Court Rules

No Reason at All – The Divisional Court just released a decision Hedley v Aviva, an appeal by Aviva of a reconsideration decision that had cancelled an earlier Tribunal decision 17-003774, which had found that Aviva’s denial of benefits “fell short of the mark” in terms of sufficiency of notice.

Original Decision (unreported, provided courtesy of Marianne Davies, Partner at Flaherty McCarthy LLP)

The Respondent had denied the benefits in question indicating that “upon review of the Treatment and Assessment Plan, we are unable to determine whether the recommendations are reasonably required for the injuries you received in this motor vehicle accident”. Further, “Medical Grounds” was indicated as “The type(s) of treatment does not appear consistent with the patient’s diagnosis.”

The Adjudicator found, “The given reasons indicate that the respondent has considered the treatment and assessment plans in light of the medical documentation on file. It has been unable to satisfy itself that the proposed plans are consistent with the applicant’s diagnosed injuries. I find that the reasons satisfy the requirement to give medical and other reasons.”

Reconsideration

The Executive Chair found that to accept the original Tribunal decision would “essentially allow an insurer to justify any denial of a plan by merely stating that it had reviewed the plan in light of the medical documentation on file, and without providing any meaningful detail, assert that the plan was not appropriate given the insured’s condition.”

The Court Has Spoken

The Court denied Aviva’s appeal, finding it reasonable for the Executive Chair to have found that the Adjudicator erred in his interpretation of the Schedule. The Court found that it is clear from Turner v State Farm that “where reasons are required, they must be meaningful in order to permit the insured to decide whether or not to challenge the insurer’s determination. Mere ‘boilerplate’ statements do not provide a principled rationale to which an insured can respond. In essence, such statements constitute no reasons at all.”

Implied Consent Confirmed for Drunk, Unlicensed Driver

Evidence over Intuition – In 18-000268 v Coseco, the Applicant was seriously injured as a passenger in a vehicle owned by his father, driven by an unlicensed operator that the Applicant had allowed to drive. He and the driver had been out for some time with the vehicle, and together consumed a bottle of whisky. The Applicant testified that at one point, the driver asked if she could drive, given the Applicant had become very intoxicated. He agreed, believing that the driver was licensed, and in the context of his father having given him broad discretion in allowing others to drive regularly in the past, particularly when he had been drinking.

The Respondent however contended that, given the circumstances, the vehicle was being operated absent the owner’s consent, the Applicant ought reasonably to have known this, and therefore his claim for IRB and visitor expenses was barred as per the exclusion in s.31(1)(c) of the Schedule. The Tribunal noted, “It may be intuitive to suggest that the owner would not have permitted a drunk, unlicensed driver to operate his vehicle. However, the hearing requires proof and evidence of consent not intuition.”

“The owner’s consent was implicit because the applicant was given broad permission to allow others to drive, without any restrictions imposed.” Further, even if there was no implied consent, “a person in the applicant’s shoes – being mindful of his level of intoxication, the fact that the applicant was allowed to let his friends drive, and had done so in the past, and given his (mistaken) belief that [the driver] had her driver’s license – would reasonably believe that [the driver] was operating the vehicle with consent.”

Concluding, it was found that the driver drove with the owner’s implied consent. “At any rate, even if [the driver] had been driving the vehicle without [the owner]’s consent, the applicant did not know and ought not reasonably to have known that the vehicle was being driven without consent. Therefore, the exclusion does not apply, and the applicant is entitled to the disputed benefits.”

Parental Generosity Does Not Equal Financial Dependency

A Life in Transition – In 18-005040 v Aviva, the Applicant was seeking a death benefit, claiming principle dependency upon her father who died following an accident in November 2017. Her parents paid her school and living expenses during the four years at university. She also received student loans and grants. With the help of her parents, she was able to pay off her student loans in full. The Respondent accepted that during her studies, the Applicant depended on her parents in order to meet her financial needs and focus on her education.

However, the Tribunal agreed with the Respondent that by May 1, 2017, “the applicant’s life changed, and she entered a transition phase. She was a graduate of a university program. She began work full-time in her field of study at the local hospital.” Accordingly, the time period for determining dependency was found to be May 1, 2017 until November 2017, with her earlier period of studies not to be included. While “the applicant benefitted from the generosity of her parents”, “this generosity does not mean she was financially dependent on her father”.