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Insurance (Auto) - Insurer Examinations. Derenzis v. Gore Mutual Insurance Co.
In Derenzis v. Gore Mutual Insurance Co. (Div Ct, 2025) the Divisional Court dismissed a LAT SABS joint appeal-JR (Yatar), here where an issue was the admission in evidence of allegedly privileged affidavit "information and internal Tribunal documents that the affiant obtained as a Tribunal adjudicator".
Here the court considers the adequacy of insurer notices for required medical examinations (for eligibility) [under SABS s.44 'Examination required by insurer']:[11] Section 44 of the SABS provides in part:Examination required by insurer
44. (1) For the purposes of assisting an insurer to determine if an insured person is or continues to be entitled to a benefit under this Regulation for which an application is made, but not more often than is reasonably necessary, an insurer may require an insured person to be examined under this section by one or more persons chosen by the insurer who are regulated health professionals or who have expertise in vocational rehabilitation.
...
(5) If the insurer requires an examination under this section, the insurer shall arrange for the examination at its expense and shall give the insured person a notice setting out,
(a) the medical and any other reasons for the examination;
(b) whether the attendance of the insured person is required at the examination;
(c) the name of the person or persons who will conduct the examination, any regulated health profession to which they belong and their titles and designations indicating their specialization, if any, in their professions; and
(d) if the attendance of the insured person is required at the examination, the day, time and location of the examination and, if the examination will require more than one day, the same information for the subsequent days. ....
A. Adequacy of IE notices
[54] Ms. Derenzis submits that the Tribunal made errors of law in determining whether Gore Mutual’s IE notices complied with its obligations under s. 44 of the SABS.
[55] Given the “consumer protection purpose” of insurance legislation (and the SABS in particular), Ms. Derenzis argues that notices to the insured under insurance legislation are required to be in “straightforward and clear language, directed towards an unsophisticated person”: see Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, at paras. 11, 14. In Smith, at para. 13, the Supreme Court also questioned whether a “verbatim reproduction” of the applicable legislative provisions would constitute sufficient notice to the insured. Consistent with that concern, Ms. Derenzis argues that the contents of Gore Mutual’s IE notices (which in some cases included pages of verbatim SABS provisions before setting out reasons for the IE) ran afoul of the consumer protection purpose of the SABS.
[56] In M.B. v. Aviva Insurance Canada, 2017 CanLII 87160 (Ont. LAT), at para. 26 (referred to in the IRB Decision, at para. 62), the Executive Chair Lamoureux of the Tribunal applied the consumer protection principle in interpreting s. 44(5)(a) of the SABS, which requires that the insurer’s IE notice explain the “medical and other reasons for the examination”:In my view, an insurer satisfies its obligation to provide its “[medical] and any other reasons,” whether under s. 44(5)(a) or elsewhere, by explaining its decision with reference to the insured’s medical condition and any other applicable rationale. That explanation will turn on the unique facts at hand … [but] should, at the very least, include specific details about the insured’s condition forming the basis for the insurer’s decision or, alternatively, identify information about the insured’s condition that the insurer does not have but requires. Additionally, an insurer should also refer to the specific benefit or determination at issue, along with any section of the Schedule upon which it relies. Ultimately, an insurer’s “medical and any other reasons” should be clear and sufficient enough to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. Only then will the explanation serve the Schedule’s consumer protection goal. [Emphasis added.] [57] Ms. Derenzis notes that the M.B. decision has been cited in subsequent Tribunal decisions, including B.M. v Unica Insurance Inc., 2020 CanLII 72512 (ON LAT), in which the Tribunal also stated, at para. 27:An insured person should not be expected to piece together “medical or other reasons” for an examination from disparate notices and correspondence, or ... to advise an insurer of deficiencies in those notices so they may be corrected. The duty to give reasoned notice rests with the insurer. [58] Applying those principles, Ms. Derenzis submits that the Tribunal erred in considering the cumulative effect of various IE notices when determining whether they were sufficient to meet the requirements of s. 44 of the SABS.
[59] Ms. Derenzis says that the Tribunal’s repeated determinations in the IRB Decision that s. 44 notices were valid when considered along with prior notices constituted an extricable error of law, subject to appeal on a correctness standard. She also argues that when considering the validity of IE notices provided in September 2018 shortly before Gore Mutual suspended IRB payments, the Tribunal was wrong in law to consider the reasons provided in an IE notice provided a year and seven months earlier on March 13, 2017 in deciding that the later notices met the requirements of s. 44. Ms. Derenzis says that doing so was an afront to the consumer protection purpose of the SABS and a direct breach of the language and object of s. 44(5)(b). She also submits that the Tribunal’s error in the IRB Decision cannot be saved by its attempts on reconsideration to recharacterize the Tribunal’s findings by stating that the adjudicator considered the adequacy of each notice individually and found each to be compliant: see IRB Reconsideration Decision, at paras 36, 39.
[60] We do not agree that Ms. Derenzis has established an error of law relating to the application of s. 44 of the SABS in this case.
[61] Consistent with Gore Mutual’s submissions, the question of whether the IE notices it provided meet the requirements of s. 44 of the SABS is a question of mixed fact and law, involving the application of s. 44 to the facts. We see no extricable legal error in the Tribunal’s analysis.
[62] When the Tribunal is determining whether an IE notice complied with s. 44, we agree with Gore Mutual that the Tribunal would be precluded from taking into account the information that the insured and their counsel had previously received from the insurer in connection with previous IE notices. As the Tribunal stated in M.B., at para. 26, the insurer’s explanation of the medical and other reasons for the examination turns on the “unique facts at hand” in each case. In 17-004358 v Economical Mutual Insurance Company, 2018 CanLII 112110 (ON LAT), at paras. 13-14, the Tribunal referred to the M.B. decision, including its reference to the “consumer protection goal” of the SABS. In Economical, at paras. 16-17, the Tribunal considered three of the insurers’ examination notices that the insured party challenged as insufficient. The Tribunal found that “sufficient notice was provided for all of the benefits in question”: Economical, at para. 15. In doing so, the Tribunal took into account related reports and forms that had been exchanged between the parties. From these documents, taken together, the Tribunal concluded that the insured had sufficient information to make an informed decision about attending the examinations.
[63] Similarly, in the IRB Decision, in determining that Gore Mutual’s IE notices met the requirements of s. 44, the Tribunal did not err in considering the course of conduct between the parties, including previous IE notices and other documents and information that Ms. Derenzis and her counsel received from Gore Mutual. We are not satisfied that Ms. Derenzis has established any basis for interfering with the Tribunal’s finding that the IE notices complied with s. 44. In any case, the Tribunal found on reconsideration that the adjudicator at first instance considered that adequacy of each IE notice and found each compliant. It was open to the Tribunal to reach that conclusion on the record before it. We see no basis to interfere.
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