Catala v Intact Insurance Company, 2021 ABQB 655

Court of Queen’s Bench of Alberta Citation: Catala v Intact Insurance Company, 2021 ABQB 655 Date: 20210817 Docket: 2101 05197 Registry: Calgary Between: Brittany Catala Applicant - and - Intact Insurance Company Respondent _______________________________________________________ Memorandum of Decision of J.R. Farrington , Master in Chambers _______________________________________________________ [ 1 ] This is an application for an advance payment in a personal injury action pursuant to

section 5.6(3) of the Fair Practices Regulation , Alta Reg 128/2001 which was promulgated under the Insurance Act , RSA 2000, c I-3 . It is a contested desk application which is a process adopted at the outset of the pandemic for the purpose of facilitating the hearing of contested applications more readily. For the reasons set out in this decision, the application is allowed. [ 2 ] There is no significant dispute between the parties in relation to the applicable law.

Section 5.6 of the Fair Practices Regulation provides:

5.6(1) In this section, “claimant” means a plaintiff who is or alleges to be entitled to recover losses or damages from an insured who is covered by a motor vehicle liability policy.

(2) A claimant may apply to the Court for a payment from the insured’s insurer under section 581(1) of the Act.

(3) The Court may make an order under

section 581 of the Act, on any conditions it considers appropriate, requiring the insurer to make a payment to a claimant who applies to the Court under subsection (2) of this

section where the Court is satisfied that (

a) as a result of the injuries of the claimant, the claimant is unable to pay for the necessities of life, or (

b) the payment is otherwise appropriate.

(4) The Court may make the order in advance of giving judgment in an action involving the claimant and the insured. (5) Section 581(3) and (4) of the Act apply in respect of any payment made pursuant to an order referred to in this section. [ 3 ]

Section 581 of the Insurance Act provides that payments may be made without prejudice to the rights of the insurer and a payment operates as a release to the extent of the payment. [ 4 ] The law is set out in Shannon v 1610635 Alberta Inc , 2014 ABCA 393 . At paragraph 37, Côté, JA held: [37] Without repeating explanations and qualifications found above, here is a brief recap of the tests. 1. An order for an advance payment requires two things: (

a) the defendant is probably liable to the plaintiff for the amount requested (or more); and (

b) without that payment, the plaintiff is likely to go without necessities (or things broadly analogous), or unlikely to be able to prosecute his or her claim for damages. 2. If #1 is satisfied, the court should weigh approximately the plaintiff’s likely loss without an advance payment against the defendant’s likelihood of overpaying (looking at probabilities and money amounts in both cases). 3.

The court should flexibly consider imposing terms and conditions on one of the parties, to mitigate the risk to one or both parties. [ 5 ] The dispute here between the parties relates to the application of the facts to the law. [ 6 ] The respondent insurer argues for a more restricted approach on the availability of interim payments.

In my view, the approach argued by the insurer is much more restrictive than the law requires, or than was intended by the regulation. [ 7 ] In Patel v Certas Direct Insurance Company , 2020 ABQB 426 , Lema, J. held at paragraph 9: [9] In Sweetland v MacInnis , I summarized some of the interpretive principles developed and applied by the Alberta courts on such applications: • [advance] payments are appropriate where the defendant is at least “probably liable” to the claimant and where, due to the his or her injuries, the claimant is unable to pay for the necessities or life or the payment is otherwise appropriate; • necessities of life” and otherwise appropriate” should be given a liberal

interpretation so that the intention of the mechanism (to ensure injured persons are able to support themselves and otherwise bridge the period between an accident and trial or other resolution) is not defeated; • the court may impose terms on the payment (e.g. obligation to repay if payment proves to be an overpayment, security to anchor that obligation, payment rhythm (lump-sum, periodic, some combination), and a time limit on periodic payments); • via such terms, the court can try to manage the risk that the defendant will ultimately be found not liable for the claimant’s injuries or, if liable, for an amount less than the advance payment; • nothing in s. 581 IA or s. 5.6 FPR limits the number of applications a claimant can make in a given case (where, for example, circumstances change) or imposes a cap on how much (collectively) an insurer can be directed to advance; and • while practicality may dictate otherwise, nothing obliges a claimant to first request advance payment from an insurer i.e. before applying under these provisions. [ [ 8 ] Here, despite the denial of liability by the insurer, liability does not appear to be seriously in dispute.

The plaintiff's supporting affidavit recites a set of facts where she was stopped for a pedestrian and her vehicle was struck from the rear by the respondent’s insured's vehicle. The respondent insurer presents no alternative view of the facts. On the evidence before the court, the dispute is about causation rather than fault per se. [ 9 ] The report of Dr.Stanleigh sets out required dental work for the applicant.

The applicant fairly concedes that the specific work for which the advance payment is sought is not caused directly by the 2018 accident, but it is a precursor to obtaining the recommended treatment for what was caused by the 2018 accident. Again, the respondent insurer puts forth no facts to contradict that characterization. It appears reasonable on its face. [ 10 ] The insurer's main argument is that the circumstances are not dire enough or significant enough or sufficiently caused by the

accident to require interim compensation and are not necessaries of life in the traditional sense. [ 11 ] Dental work can be a significant component in overall health. While the insurer points out that it may be possible to get the necessary work done with small monthly payments, the applicant says that even paying for the work with monthly payments cannot be reasonably afforded. Further, on the evidence, the precursor work is necessary to deal with mitigation of and treatment of the injuries that were caused by the accident.

Recall that in Shannon , Cote, JA held that “broadly analogous” purposes were sufficient. [ 12 ] The work that is required is less than $10,000. That remains a significant expense to any household budget and it is not something that is easily absorbed into day to day financial affairs of I dare say most people and that has been shown to be the case here. [ 13 ] In my view, the necessary dental work clearly has a nexus to the treatment that is required as a result of the 2018 accident, and the applicant has shown hardship in that the treatment cannot be reasonably afforded based upon the evidence.

Similarly, proper treatment of the injuries that were caused by the accident is a “necessary of life”, or “broadly analogous” thereto, and the treatment sought here is a necessary precursor to that treatment. [ 14 ] I find that this is a type of fact situation envisioned by the regulation. Further, the payment is not exaggerated in any way on its face, and it is directly connected to the health and well-being of the applicant. Based upon the authorities, and the facts here, I allow the application and direct that an interim payment of $10,000 be made.

I do not direct the additional condition sought by the insurer regarding direct billing to the insurer or any controlling of the use of the money or a form of release. The regulation and statute deal with the effect of payments and the release is not necessary. The applicant (or her dentist) should not be constrained in her financial dealings with her dental professionals by having to involve the third party insurer.

Further, if by some chance the applicant does not get the work done, and there is nothing to suggest that will be the case, she will certainly be challenged on that at any eventual trial of the matter, particularly with respect to mitigation. While the health of the applicant is no doubt sufficient motivation in itself to get the work done, the repercussions at trial of not getting the work done are additional motivation to ensure that the work gets done. The only condition that I would impose is that if the plaintiff’s recovery in the action is not at least $10,000, any surplus must be repaid to the respondent.

I have considered the weighing of factors suggested in the cases and I am satisfied that a recovery of more than $10,000 in the action is sufficiently likely to order the payment sought. [ 15 ] The applicant is presumptively entitled to costs. If the parties cannot agree on quantum, or if there are any matters that might affect a costs disposition, they can be addressed in a 9 AM session booked through the Masters Coordinator. [ 16 ] Thank you to the parties for their very helpful materials. They were very well presented and of great assistance to the court.

Heard by written desk application uploaded for consideration August 5, 2021. Dated at the City of Calgary, Alberta this 17 th day of August, 2021. J.R. Farrington M.C.Q.B.A. NOTE: This decision was released to counsel as a Chambers Endorsement on August 17, 2021. Counsel for one of the parties requested that I consider releasing it in a format for publication in the ordinary way and I have done so pursuant to that request. The only change that I have made is that in paragraph 1 I have referred to these reasons as a “decision” rather than an “endorsement”.

Appearances: McLeod Law LLP Austin Paladeau for the Applicant Scott Venturo Rudakoff LLP Noah Hodgson for the Respondent