Court Denies Plaintiff “Peace of Mind” SABS Declaration

May 9, 2012

A Superior Court judge has denied an accident benefits plaintiff a “peace of mind” declaration she sought with respect to her claim for income replacement benefits. The decision is interesting as it appears that the plaintiff might have been categorized under the MIG, which was apparently the basis for her premptive act to secure indefinite entitlement to her income replacement benefits.

In Risebrough v. Co-operators, the plaintiff was involved in a motor vehicle accident on May 25, 2011. She was the named insured on a policy of automobile insurance with the defendant. She made an application for accident benefits to the insurer in June 2011 and has received payments including weekly income replacement benefits in the amount of $400 per week. The payments have been made based on the defendant being satisfied that the plaintiff met the disability test applicable in the first 104 weeks post-accident and that she was therefore entitled to benefits in accordance with the SABS. There has been no interruption in those payments to date. In other words, there has been no dispute between the parties.

The plaintiff issued a statement of claim against the defendant on November 23, 2011 (only five months after the accident), seeking a declaration that she meets the disability test for receipt of income replacement benefits under the SABS as a result of her injuries suffered in the motor vehicle accident. The insurer brought a Rule 21 motion to strike out the statement of claim on the grounds that it discloses no reasonable cause of action or in the alternative to dismiss the claim on the basis that the action is frivolous, vexatious or otherwise an abuse of the court’s process.

Essentially the plaintiff was seeking a “peace of mind” declaration for entitlement to ongoing income replacement benefits. One of the arguments she raised was that “it would be prejudicial to the plaintiff for the claim to be dismissed since the claims adjuster for the defendant has indirectly put the plaintiff on notice that he is categorizing the plaintiff’s injuries as minor and it is likely that a dispute over entitlement or amount of benefits will arise in the future.”

The insurer countered that there was no right to bring an action since there was no dispute between the parties. It also argued in the alternative that if there was a dispute, the plaintiff failed to follow the dispute resolution provisions under sections 279-281 of the Insurance Act.

The judge agreed with the insurer and struck the claim. He held:

A declaration is in essence a statement from the court as to the rights and duties between parties and does not in and of itself grant a remedy.  However, in the context of this case a successful claim for a declaration can have no other result than to create or continue an obligation on the defendant to pay statutory accident benefits. In my view, it is not possible to isolate the claim for a declaration in this context from a dispute between the parties over matters set out in section 279 of the Insurance Act.  

The judge also found that issue between the parties might be “moot”, as it was not clear that there ever will be a dispute between the parties on the issue of entitlement to or the amount of benefits to be paid. He concluded:

I am satisfied that, for the reasons noted above, it is inappropriate for there to be a claim for a declaration in advance of the mandatory mediation provisions contained in the Insurance Act.  Further, and quite apart from those requirements, it is premature to seek a declaration when there is no existing disagreement between the parties.

It would have been a bizarre result if a properly “MIG-ed” claimant was also holding a Superior Court declaration that she was entitled to indefinite income replacement benefits. If anything else, this decision is a great example of how crafty plaintiff lawyers are becoming in the post September 1, 2010 SABS regime.

See Risebrough v. Co-operator’s General Insurance Company, 2012 ONSC 2738 (CanLII)

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