Trial required to confirm insured’s cash payment to broker, court finds

A dispute between an auto insurance claimant and a carrier over whether or not the claimant paid her broker in cash to update an auto policy is a genuine matter for trial, an Ontario court has ruled.

Marie-Therese Dakane brought a motion for summary judgment seeking a finding that she had a valid motor vehicle insurance policy in effect at the time of an auto accident on June 16, 2012.

She claimed to have paid the insurance broker the amount owing in cash before the policy was cancelled by her insurer, Jevco Insurance Company. Dakane and her husband said they had sworn affidavits stating that they paid the broker in cash to bring the policy into good standing when the broker visited their home on May 23, 2012.

Jevco brought a cross-motion for an order or declaration that the insurance policy issued to Dakane was properly cancelled for non-payment. The insurer said the policy was not in effect on the date of the accident on June 16, 2012.

Additionally, Jevco argued that Dakane’s claim for accident benefits was out of time. It noted the accident benefits application was made in 2017, approximately five years after the date of the accident.

Dakane told the court that she failed to file an application because her insurance broker advised her that she had to wait for a response from Jevco. Consequently, she did not become aware or discover that commencing an action was an appropriate means to obtain a remedy until sometime in 2015.

Ultimately, the court found it was not appropriate to decide the matter on a summary motion. A trial was necessary to assess the credibility of Dakane and her husband’s claim that she paid the broker in cash, as well as the insurer’s contention that the claim was out of time, the court ruled.

The Court of Appeal has a threshold test for when a motion judge can grant summary judgment, which effectively grants or rejects a motion without the need for a lengthy trial.

The motion judge, the appellate court found, should assess whether the benefits of the trial process – including the opportunity to hear and observe witnesses, to have the evidence presented by way of a trial narrative, and to experience the fact-finding process first-hand – are necessary to fully appreciate the evidence in the case.