Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.
Statt v SGI Canada Insurance Services Ltd, 2019 ABQB 828
Claim on Policy | Umpire Decision | Fair Practices Regulation | Notice of Limitation Period
Raun v Shumborski, 2019 ABQB 823
Medical Malpractice | Limitation Period
Cullen v Kao, 2019 ABQB 799
Inevitable Accident | Lost Consciousness after Vasectomy
This was an originating application for a claim on a policy brought by the Insureds against their insurer following a fire at their home. The Application was successful in part.
The Parties previously attended before an Umpire pursuant to Section 519 of the Insurance Act. The issues for the Umpire were whether the fire damaged cabinets, and whether the insurer could impose a deadline on completion of repairs to terminate loss of rent coverage. The Umpire assessed $6,512.78 for cabinets and $35,700 for lost rent and utilities. However, the insurer argued that the Umpire addressed quantum only, and not coverage, which the insurer denied.
The Court focused on Statutory Condition 11, which states:
IN CASE OF DISAGREEMENT
11(1) In the event of disagreement as to the value of the insured property, the value of the property saved, the nature and extent of the repairs or replacements required or, if made, their adequacy, or the amount of the loss or damage, those questions must be determined using the applicable dispute resolution process set out in the Insurance Act whether or not the insured’s right to recover under the contract is disputed, and independently of all other questions.
(2) There is no right to a dispute resolution process under this condition until
(a) a specific demand is made for it in writing, and
(b) the proof of loss has been delivered to the insurer.
The Court directed that Statutory Condition 11 was broad enough to determine more than just quantum, and that the issue in this case was not coverage in a true sense, but causation:
 Arguably, Statutory Condition 11 is broad enough to encompass more than a determination as to mere quantum. It includes “…the nature and extent of the repairs or replacements required…” which in many cases would require consideration of the policy and that arguably extends to a determination of what an insurer is or is not obliged to do under the policy on the facts of a particular case. The issues in this case were not basic coverage issues in any event. “Coverage” issues typically involve matters such as whether or not there is a policy, and the nature of an insured peril or type of loss. On the cabinets, the issue was causation and whether the fire damaged them, and on the rent claim, the issue was whether SGI could impose its own deadline for the completion of repairs in order to terminate further loss of rent coverage.
 The parties proceeded to arbitration before the umpires and they received a ruling. The insurer made no application for judicial review in relation to the awards calling for it to pay money. Even if the issues were not decided, there is little, if any, evidence from the insurer to support its assertions that there ought to be no coverage for the items. On its assertion that the cabinets were not damaged as a direct result of the fire, there is no real evidence on the point other than general assertions by the insurer. On its assertion that rental coverage should be cut off as of a date certain, the insurer was clearly in default of payout of the approved scope of the reclamation work. There is no dispute that the Statts did not have sufficient financial resources to complete the work themselves, nor should they be expected to do so. The umpire arbitration awards are owing as awarded, subject only to the possible limitations defence that I will consider later.
Further, the Court directed that the Insureds were entitled to damages that crystalized after the Umpire’s decision:
 The Statts also make a claim for rent and utilities subsequent to the umpire proceedings. In my view, that is also appropriate. Fundamentally, the insurer did not pay what became the undisputed scope of work amount that was determined by the change order process. It was SGI’s obligation to pay what it owed under the policy. Not doing so put the Statts in a position where they were left with incomplete renovations and the property was unrentable.
 Part of the evidence that was presented was a letter from the previous tenants confirming their willingness to rent the property but for the fire. That letter was not submitted in an admissible non-hearsay way for a final application such as this one, but regardless of that, the Statts had shown an ability to rent the property earlier and there is no reason to expect that they would not have been able to rent a newly repaired property. They are entitled to lost rent and utilities (subject to any policy maximums) on the same basis and rates as the previous tenancy arrangement from the conclusion of the umpire proceedings to the date this matter was heard being October 9, 2019, subject to my consideration of limitations issues.
The Insureds also sought damages for “wrongful denial of renewal of their insurance coverage”. The Court dismissed this aspect of the claim:
 Notwithstanding that the renewal denial was communicated only very shortly before the expiry and the insurer’s assertion that it did not renew the coverage on the basis of the Statts “claims history” despite the fact that there was little or no claims history on other matters, I deny the claim for the “failure to renew” aspect for two reasons. One reason is that I agree in a general sense with the insurer’s submission that it is free to contract with parties as it wishes. It would be exceptional for the Court to foist a renewal on a party if it did not wish to extend. The second concern arising is that I have no real analysis or evidence before me to compare the features of the replacement policy obtained by the Statts and the features of the old policy and no industry evidence as to practices on renewals and claims histories. As presented, it is difficult to allow the claim on this record, particularly in the context of an Originating Application. I dismiss that aspect of the claim.
The Insureds also sought punitive damages. However, the Court directed that a disagreement over the adjustment process is insufficient to establish punitive damages:
 The Statts chose a summary process in electing to proceed by way of Originating Application. It would not be appropriate to bifurcate the issues by dealing with the matter summarily on some issues, and directing a trial on other issues after the matter has been pursued as an Originating Application for some time. The inevitable tension that arises in bifurcation is a debate over exactly what was decided and what was not decided as a result of the bifurcation process. In the circumstances here, and based upon the principles in Whiten, I find that a punitive damages award likely would not have been appropriate in any event. The parties had a disagreement over the loss adjustment process. Each had positions that they took and the Court now provides an appropriate dispute resolution forum for them. The existence of a disagreement between the parties is not in itself a sufficient basis for punitive or exemplary damages. This was not a case such as Whiten where allegations of criminal conduct of arson were improperly made by the insurer. Nor is this a case where a party directly profited from high handed conduct. While it is troubling that the insurer arguably withheld payments of some amounts that were largely not in dispute in order to leverage its position on amounts that were in dispute, from an overall perspective the entitlement to a punitive or exemplary damages award is not obvious on these facts.
Finally, the Court considered whether the claim was statute barred under the Limitations Act. It considered the Insurer’s obligations to advise of the Limitation Period under the Fair Practices Regulation, and concluded that proper notice had not been given:
 Lawyers and insurance professionals know what the words “limitation period” mean in the context of an insurance claim. Insureds may not be as familiar with the language of the industry. The initial letter speaks of a “limitation period”, but it does so while forwarding a proof of claim. It is not clear in its language as to exactly what must be done within the two years, such as submitting a proof of claim or commencing an action, and it is not clear what limitation period in the Insurance Act is being referenced. The letter makes no mention of the Limitations Act, which is also relied upon by the insurer now. The letter was also written in a context where the claim was self-described as being in its “preliminary stages” and liability under the policy was specifically not acknowledged.
 Giving a purposive interpretation to section 5.3 of the regulation, the notice mandated by section 5.3 of the Fair Practices Regulation should at least inform as to what needs to be done, and by when, and under which legislation. Ideally, the notice should refer to the specific provision of the legislation, but I do not specifically decide that issue. It should also be given in a way such that the timing relates to one of the triggering events in section 5.3(2) of the Regulation. A form notice issued almost immediately upon the making of the claim does not meet the requirements of section 5.3. All of the triggering events in section 5.3(2) are qualified by and measured using the word “within” which suggests that the time period begins at the happening of the event and not before.
 By way of overall conclusion on the limitations issue, I find that there was no defining moment of compliance with the Fair Practices Regulation. No fact based argument was made that a retention of counsel at some point rendered s. 5.3 inoperable by virtue of section 5.3(4) of the Fair Practices Regulation. Accordingly, section 5.3(7) of the Fair Practices Regulation applies. I repeat it for convenience here:
(7) If an insurer fails to give notice under subsection (2) when required to do so, the Court may, on application by the claimant,
(a) order that the applicable limitation period be extended, and
(b) grant any other remedy that the Court considers appropriate.
 As a result, the Court has a discretion to extend the limitation period on these facts. That does not mean that the limitation period must be extended, it only means that there is a discretion to do so.
Ultimately the Court concluded that the Limitation Period should be extended, and awarded damages:
 Section 5.3 of the Fair Practices Regulation has a purpose. It is to make certain that clear notice is given to an insured regarding limitation periods. There was insufficient compliance here. In this case, and based upon all of its facts, this is an appropriate case for an extension of the limitation period for seeking a remedial order. I extend the limitation period, if necessary, to at least December 23, 2017 which is the day after the Originating Application was filed.
This was an unsuccessful appeal of an unsuccessful summary dismissal application brought by the defendant physician. The issue was whether the claim was brought outside of the limitation period. The Plaintiff’s husband attended the physician in September of 2006 and reported weight loss, fatigue and night sweats. Lab results showed blood in the urine. The Plaintiff was told by her husband that he had an abnormal lab result and may need iron supplements, but she was unaware of what the abnormal result was. The husband was relieved he did not have any serious health concerns, and appeared to improve over the winter months. He experienced decline in April of 2007, and reattended the physician. A lump in his abdomen was discovered and further testing revealed a diagnosis of renal cell carcinoma. He died in July of 2007. In 2009, the Plaintiff was provided with a report from the Alberta College of Physicians noting deficiencies in her husband’s care. She commenced the action in 2011.
The Court summarized the law on limitations as follows:
 To summarize:
- A plaintiff’s limitation period begins to run when the plaintiff knew or should have known that the injury occurred, was attributable to the defendant’s conduct and, assuming liability, warrants bringing an action;
- The degree of knowledge required is “reasonable awareness” and falls somewhere between mere suspicion and perfect knowledge;
- In medical malpractice cases, a medical opinion may or may not be required to attain the requisite degree of knowledge, depending on the factual context; and
- The plaintiff must act with reasonable diligence in acquiring the knowledge.
The Court concluded that simply wondering if a family doctor could have done more is insufficient to trigger the limitation period:
 To wonder about something is to speculate or be curious about it. It does not mean to know the thing. I find that on this record it is more than arguable that Ms. Raun may have wondered or been curious about attribution of the death to Dr. Shumborski’s delay or misdiagnosis, but did not know that or draw that conclusion until she learned of the College’s findings. Put another way, I find that this case may well be within that category of cases where a medical opinion is required to perfect on the plaintiff’s part a sufficient degree of knowledge of attribution.
 Nor do I think that in the absence of the investigation report, Ms. Raun should have concluded that Dr. Shumborski’s delay in diagnosis contributed to Mr. Raun’s death. She had no information to that effect beyond the mere fact of the death and the fact that Mr. Raun had been Dr. Shumborski’s patient. If those, as material facts, are sufficient to commence a claim for medical negligence, then the family members of every patient who dies while under a doctor’s care should commence an action right after the death. Clearly, that is not a tenable position for plaintiffs, defendants or the Court system.
This was a summary trial on liability, and specifically, whether the defence of inevitable accident applied. The Defendant was driving home after having a vasectomy. He had no symptoms until he stopped at a red light. Once he stopped, he felt dizzy, had vision issues, and lost feeling in his fingers and toes. Notwithstanding these symptoms, when the light turned green he moved forward with the intention of turning to the right lane. He then lost vision and consciousness:
 Before the light changed to green, Mr. Kao felt discomfort which he described as difficulty in breathing, hyperventilation, dizziness, loss of visual focus and blurring of his vision, and loss of feelings from his toes to his fingers. When the light changed to green, he began moving with the traffic. His symptoms continued, “coming in and out like a wave, so it will get better in a second and it will get back to worse again the next second.” He continued to experience difficulty in breathing, shortness of breath, and dizziness.
 As he was moving with traffic, his plan was to move to the right lane “and move over to the runoff area from the ramping from Heritage Park.” He accelerated in an attempt to get into the right lane. As he was doing so, he claims to have lost his vision and memory and consciousness. As of his last memory, he still was on the southside of the intersection.
 The plaintiffs’ vehicle was traveling southbound on 14th Street SW. While traveling at a high rate of speed, the Kao vehicle violently struck the rear of the Cullen vehicle at or near the intersection of 14th Street SW and 90th Avenue SW. The collision caused the Cullen vehicle to spin around and interact with the Kao vehicle again. The Kao vehicle then violently collided with the rear of the Johnston vehicle. Prior to striking the Cullen and Johnston vehicles, the Kao vehicle had swiped another vehicle also traveling on 14th Street SW. The Kao vehicle collided with at least four other vehicles at or near the scene of the accident.
 Prior to March 19, 2013, Mr. Kao never experienced any symptoms comparable to what he experienced at the intersection of 14th Street SW and Heritage Drive.
The Court accepted that he lost consciousness, based on his evidence alone:
 The only evidence regarding loss of consciousness is Mr. Kao’s testimony at his examination for discovery. On this point, the agreed statement of facts merely states that “Kao’s evidence as to what happened after he was stopped at the red light . . . is contained in the excerpts from the transcript . . ..” In some cases, this might not be sufficient evidence of loss of consciousness. In this case, on the record before me I conclude there was a loss of consciousness, a finding that is reinforced by the fact that neither counsel suggested any other conclusion should be made on the facts.
 There is no reason to doubt Mr. Kao’s testimony that the symptoms he experienced in his vehicle at 14th Street SW had never occurred to him before. However, when the symptoms developed, they came on rapidly and severely. He had difficulty breathing, hyperventilation, dizziness, loss of visual focus, blurring of vision, and loss of feelings from his toes to his fingers. He experienced this while his vehicle was stopped at a red light in the middle lane of three lanes of traffic.
 In light of the fact that Mr. Kao had recently had minor surgery, it would be easy to infer some connection between surgery and the symptoms he developed in his vehicle. There was no evidence that Mr. Kao was warned not to drive his vehicle. But these points are not determinative.
The Court directed that once the Plaintiff started experiencing symptoms, it was negligent for him to keep driving:
 Mr. Kao was safely stopped, with stopped vehicles ahead, behind and on both sides of him, when he began to feel seriously ill. The symptoms he experienced made it dangerous for him to drive. It could not tenably be suggested that it would be safe to continue driving for any significant period in his condition.
 The only question is whether he responded to his symptoms reasonably. The standard of care is what would have been done by the reasonable person in like circumstances. I conclude that he failed to meet the required standard by acting as he did – that is, attempting to drive away from the intersection, cross other lanes of traffic and exit from 14th Street SW. The reasonable person in like circumstances, in my view, would have remained stopped, activated his hazard flashers, and either called or waited for assistance.
 The case is much different, for example, from Nguyen v Smith (February 1, 2011, ABQB, unreported), drawn to my attention by counsel, where the defendant experienced the symptoms while her vehicle was in motion on Memorial Drive, and she looked for the first opportunity to safely bring the vehicle to a stop.
 The defendant Mr. Kao is therefore liable in negligence for the damages sustained by the plaintiffs in these actions. I understand the amount of damages have been agreed.