Supreme Court upholds right of insurer to examine under oath in adversarial situations

The Supreme Court of Canada has rejected leave to appeal a decision of the Ontario Appeal Court that found Insurers are entitled to conduct an examination under oath of an insured, regardless of whether or not the relationship between the insurer and insured is adversarial or a lawsuit has commenced.
The Supreme Court does not issue reasons for rejecting leave requests. The court awarded costs to the respondent insurer.
In Baig v. The Guarantee Company of North America (GCNA), Ontario’s Court of Appeal reversed the decision of a motions judge, who found the examination of oath insurers are entitled to conduct under Statutory Condition 6(4) of Ontario’s Insurance Act to be redundant in the situation of a threatened legal action. In an adversarial situation, the motions judge ruled, the insurer already had the right to examine the insured for discovery in a lawsuit.
“I do not agree with the motion judge’s conclusion that Statutory Condition 6(4) ceases to apply once the relationship between the insurer and the insured becomes adversarial or when litigation is commenced,” Ontario Court of Appeal Justice Russell Juriansz wrote for the Appeal Court. “There are no words in the provision that indicate an insurer’s right to examine an insured is limited to the situation in which their relationship is not adversarial.”
GNCA had insured Rehman Baig’s 1999 BMW M3 convertible for Cdn$71,300 after Baig submitted an appraisal signed by Leanne Giilick of Discount Appraisals. The car crashed in 2004.
Subsequently, GNCA learned Giilick was the common-law partner of Baig, and that together they operated Discount Appraisals.
When the insurer tried to examine Baig under oath about the car’s initial appraisal value, Baig’s lawyers refused to answer the questions.