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Insurance - Waiver and Estoppel [IA 131]. Stewart v. Bay of Quinte Mutual Insurance Co.
In Stewart v. Bay of Quinte Mutual Insurance Co. (Ont CA, 2024) the Ontario Court of Appeal dismissed a property insurance appeal, here where the appellant alleges that the insurer paid "considerably less than the value of items that [were] lost in the fire".
Here the court considers insurance 'waiver' [under IA s.131]:[9] A determination that an insurer has waived its rights to insist on an insured’s perfect compliance with a contractual obligation is explicitly permitted under s. 131 of the Act. The trial judge’s finding of waiver was consistent with the criteria for waiver set out in Bradfield v. Royal Sun Alliance Insurance Co. of Canada, 2019 ONCA 800, at paras. 30-3 and open for him to make on the evidence. .... . BelairDirect Insurance Company v. Continental Casualty Company
In BelairDirect Insurance Company v. Continental Casualty Company (Ont CA, 2023) the Court of Appeal considers waiver in an insurance context:[22] We did not call on Belair to respond on the issue of waiver because, given the unchallenged circumstance that Belair was mistaken in its initial belief that Mr. Sarantakos was insured under his mother’s policy at the time of the accident, Continental cannot demonstrate that the requirements of waiver are satisfied. Waiver requires “full knowledge of rights” and “an unequivocal and conscious intention to abandon them”: Trial Lawyers Association of British Columbia v. Royal & Sun Alliance Insurance Company of Canada, 2021 SCC 47, 163 O.R. (3d) 398, at para. 75, citing Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490, at p. 500. Belair’s mistaken belief that Mr. Sarantakos was covered under its policy could not constitute full knowledge of its rights. . Akinyimide v. Economical Mutual Insurance Company
In Akinyimide v. Economical Mutual Insurance Company (Div Court, 2023) the Divisional Court considered a SABS appeal from the LAT, here where the insurer accused the insured of a "'material misrepresentation' in failing to disclose her correct address". The insurer charged different rates depending on where insurers lived, so when they learned of the correct address they charged the insurer a retroactive increase, which she paid. When she filed an insurance claim the insurer denied it:Application of s.131 [SS: 'Waiver and Estoppel'] of the Insurance Act
[13] In its Preliminary Decision the LAT rejected the appellant’s argument that Economical had “waived a right and is estopped from denying the IRB because the respondent increased her premium after the applicant notified it of her address change and charged her a higher premium retroactive to July 31, 2017.” (para. 46) Although it referred to s. 131 of the Act, the LAT cited other LAT decisions which held that the LAT “derives its powers by statute” and “lacks the jurisdiction to award equitable remedies” and therefore it could not apply the doctrines of waiver and estoppel (para. 53).
[14] In the Reconsideration Decision, the LAT went further on this point. Relying on s. 280(4) of the Act, which states that disputes over statutory accident benefits “shall be resolved in accordance with the Statutory Accident Benefits Schedule”, the LAT held that the SABS is a “complete code for resolving disputes between insurers and insureds” (para. 30). The LAT then repeated its earlier finding that it had no jurisdiction to award equitable remedies. It made no mention, however, of s. 131 of the Act.
[15] In my view, the LAT erred in law in finding that it could not apply s. 131 of the Act. Section 131 codifies in legislation what are otherwise equitable remedies. The issue, therefore, is not whether judge-made equitable relief can be awarded by the LAT, but whether the LAT can apply s. 131 of the Act, which is statutory relief. The analysis in the Preliminary Decision, which focused on whether the LAT had jurisdiction to award equitable relief, therefore, does not address the right question and the LAT erred in law in finding that, because it does not have jurisdiction to award equitable remedies, it could not apply s. 131.
[16] The Reconsideration Decision implicitly recognizes the weakness of the analysis in the Preliminary Decision and gives an alternative justification, asserting that the SABS is a “complete code” preventing the LAT from applying s. 131 of the Act. relying on s. 280(4) of the Act, which states that disputes over entitlement to IRBs “shall be resolved in accordance with the Statutory Accident Benefits Schedule.” But this too is an error of law by the LAT.
[17] Section 280 of the Act does not oust consideration by the LAT of other sections of the Act. Subsections 280(1) and (2) grant broad jurisdiction to the LAT to “resolve a dispute” “in respect of an insured person’s entitlement to statutory accident benefits.” There is nothing in section 280 that prevents the LAT from considering other sections of the Act, so long as the LAT’s decision is “in accordance with” the SABS.
[18] In ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board), 2006 SCC 4, [2006] 1 SCR 140, at para. 38, the Supreme Court observed that a statutory tribunal “obtain[s] its jurisdiction over matters from two sources: (1) express grants of jurisdiction under various statutes (explicit powers); and (2) the common law, by application of the doctrine of necessary implication (implicit powers).” This is reflected in the Licence Appeal Tribunal Act, 1999, SO 1999, c 12, Sch G, s. 3(2), which provides that, “[e]xcept as limited by this Act, the Tribunal has all the powers that are necessary or expedient for carrying out its duties.”
[19] In ATCO, the Supreme Court stated that determining implicit powers requires consideration of the “larger statutory scheme.” As the Court stated at para. 49:As in any statutory interpretation exercise, when determining the powers of an administrative body, courts need to examine the context that colours the words and the legislative scheme. The ultimate goal is to discover the clear intent of the legislature and the true purpose of the statute while preserving the harmony, coherence and consistency of the legislative scheme (Bell ExpressVu, at para. 27; see also Interpretation Act, R.S.A. 2000, c. I-8, s. 10 (in Appendix)). “[S]tatutory interpretation is the art of finding the legislative spirit embodied in enactments”: Bristol-Myers Squibb Co., at para. 102. [20] When engaging in this exercise one must consider the purpose of the legislation. As the Court continued at para. 51 of ATCO, “the powers conferred by an enabling statute are construed to include not only those expressly granted but also, by implication, all powers which are practically necessary for the accomplishment of the object intended to be secured by the statutory regime created by the legislature.”
[21] In this case the purpose of the Act, including the SABS, is consumer protection, and it must be read, interpreted and applied in that way: Smith v. Co-Operator’s General Insurance Co., 2002 SCC 30 (CanLII), [2002] 2 S.C.R. 129 at para. 11; Kellerman-Bernard v. Unica Insurance Company, 2023 ONSC 4423 (CanLII) at para. 24. Section 131 of the Act provides protection to consumers which, in the absence of clear direction to the contrary, can and should be invoked by the LAT in appropriate circumstances. This accords with the point made at para. 73 of ATCO that a further consideration in determining jurisdiction is when “the Legislature did not address its mind to the issue and decide against conferring the power upon the Board.” Here, there is no direction against the LAT applying s. 131 of the Act. Indeed, one LAT case recently appeared to accept that s. 131 might apply but did not apply in that case involving repayment provisions that are specifically addressed in the SABS: Thompson v. Aviva Insurance Company, 2023 CarswellOnt 11114 at paras. 20 and 25.
[22] Further, as was discussed during oral argument, if the LAT cannot apply s. 131, the purpose of the section is unclear. It is assumed that the legislature does not pass laws that have no purpose. As the Supreme Court held in R. v. Proulx, 2000 SCC 5, [2000] 1 S.C.R. 61, at para 28, “[i]t is a well accepted principle of statutory interpretation that no legislative provision should be interpreted so as to render it mere surplusage.” The courts do not require s. 131, as they have equitable jurisdiction, and if it is not able to be used by the LAT, then it appears that there is no need for it. Indeed, the finding of the LAT that it cannot award equitable relief appears to be precisely why s. 131 is in the Act – so that the same kind of relief can be applied by the LAT to protect insured persons in appropriate cases.[2]
[23] Accordingly, the LAT committed an error in law in finding that it does not have the ability to apply s.131 of the Act.
[24] The LAT also, in my view, “fundamentally misapprehended” the evidence in concluding that, if it had equitable jurisdiction, it would not have applied it: Vavilov at para. 126. The LAT stated, at para. 55 of its Preliminary Decision as follows:Even if the Tribunal had equitable jurisdiction, I fail to see how the applicant acted to her detriment or in some way changed her position as a result of the respondent taking additional premiums. The change of address occurred after the subject accident and this timing does not weigh in favour of the applicant. [25] The issue is not whether Economical took the premiums, but rather whether Akinyimide paid them expecting the contract of insurance to be honoured by Economical. Nor do I understand the second sentence of the passage quoted, as Akinyimide changed her address months in advance of the accident; it was when that change of address was disclosed to Economical that she was charged, and paid, the additional premium, including the retroactive premium.
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