March 27, 2017, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
STAGED OR UNINTENTIONAL - term 'accident' well defined in SABs, does not discriminate between staged or unintentional; insurer choses wrong avenue to fight claim; section 53 should have been used to deny payment
Madinei and Alzzdeh-Ebadi
Date of Decision: February 10, 2017
Heard Before: Adjudicator David Evans
The appeal is allowed. Paragraphs 1 and 2 of the Arbitrator’s August 14, 2015 decision are rescinded and replaced by the following:
- Ali Madinei was involved in an accident as defined The Statutory Accident Benefits Schedule as it read immediately prior to April 1, 2016.
- Maryam Alizadeh-Ebadi was involved in an accident as defined by The Statutory Accident Benefits Schedule as it read immediately prior to April 1, 2016.
REASONS FOR DECISION
Ali Madinei and Maryam Alizadeh-Ebadi appealed Arbitrator Kelly’s order that they were not involved in a “legitimate accident” and so could not claim statutory accident benefits under the 2010 SABS.
For the reasons below, Arbitrator Evans found that Arbitrator Kelly erred in finding that an accident under the SABS has to be “accidental.” In doing so, he relied on outdated case law.
The issue before Arbitrator Kelly was whether Mr. Ali Madinei and Mrs. Maryam Alizadeh-Ebadi were involved in a motor vehicle accident on July 23, 2010, as defined in the SABS.
Arbitrator Evans remarked that ‘accident’ is well defined in the SABS. The issue in this case was the use of the car, and whether it met the Amos test. Arbitrator Kelly indicated that to fit the definition of “accident,” “the collision must be accidental and not staged,” and cited four cases in support, discussed below. He found that the Appellants paid a third party to be involved in the collision, so he found the collision was staged. The Arbitrator had the evidence to support his conclusion that the accident was staged. He stated that on this basis, “the Applicants have failed to satisfy their burden of proof, on a balance of probabilities, that they were involved in a legitimate accident.” In other words, although there was a collision, there was no accident.
Mr. Madinei and Mrs. Alizadeh-Ebadi appealed. Their appeal relates almost entirely to the fact-finding process, so has little merit regarding that aspect of the appeal.
After the submissions were received from the parties by Arbitrator Evans, he issued a decision in Elmi and State Farm Mutual rejecting the proposition that there can be a collision but no accident. Accordingly, Arbitrator Evans requested more information. Only the Insurer responded.
Arbitrator Evans reviewed the insurer’s expanded submissions and the four previous cases cited by both the Arbitrator and the insurer. Arbitrator Evans determined that two of the cases cited were irrelevant as either they dealt with shifting the burden of proof, and the other as it did not relate to the use of the car.
The insurer relies on the remaining two cases cited for its submission that a planned event is not accidental and does not reflect the ordinary use or operation of a motor vehicle. In other words, this use or operation fails the Amos test. Arbitrator Evans stated that this directly contradicts what he stated in Elmi, namely that driving a car fulfils its purpose, and that even an act such as purposefully driving a car off a bridge still satisfies the Amos test.
Accordingly, the previous common law history is not relevant in light of the statutory definition, which in turn does not distinguish between intentional and unintentional incidents now, and so contrary to what was stated in J.E. and the cases that followed it, an incident does not have to be “accidental” to meet the definition of “accident” under the SABS.
As for policy grounds to find otherwise, s. 53 of the 2010 SABS provides that an insurer may terminate the payment of benefits to or on behalf of an insured person, if the insured person has wilfully misrepresented material facts with respect to the application for the benefit and if the insurer provides the insured person with a notice setting out the reasons for the termination. As discussed in Szabo and CAA Insurance Company this iis a powerful anti-fraud tool: it is intended to impose a penalty beyond repayment in cases of wilful material misrepresentation, the penalty being the denial of benefits, even if no benefits were ever paid.
Arbitrator Evans noted that the insurer should have applied s. 53 here, instead of trying to distort the meaning of “accident” based on old case law that has been overruled by the Court of Appeal. As there was a collision, there was an incident meeting the statutory definition of “accident,” even though the incident was not “accidental” in common parlance. It is only on this basis that Arbitrator Evans is allowing the appeal, as there is no error in the Arbitrator Kelly’s fact-finding process.