In the recent decision Derenzis v. Ontario, 2025 ONCA 893, the Ontario Court of Appeal reviewed a number of key issues that might arise during disputes over an insured’s entitlement to statutory accident benefits. Most notably, this case illustrates the importance of abiding by one’s contractual and statutory obligations, and how failing to do so can prevent an optimal claim outcome.
Facts
In 2015, Ms. Derenzis (“Derenzis”) was injured when she was struck by a pick-up truck, and she sought no-fault accident benefits from the respondent automobile insurer Gore Mutual (“Gore”). Following disputes over her entitlement to certain benefits, she initiated litigation against Gore. She alleged that, during the adjustment phase, Gore had failed to manage her claim in good faith by failing to provide her complete medical records to the independent assessors that Gore had involved, by encouraging them to understate the extent of her injuries in their reports, and by scheduling unnecessary assessments. She also claimed damages for the insurer’s breach of good faith for failing to abide by the Statutory Accident Benefits Schedule (SABS).
Additional Claims
Derenzis also brought claims which involved several other parties. She alleged battery, breach of privacy, and abuse of process against Gore and Rapid Interactive Disability Management (“Rapid”), a company involved in scheduling her insurer’s medical assessments. The battery claim was based on allegations that an occupational therapist had forced her to lift weights during an assessment, causing a hernia injury which required surgery.
Derenzis further alleged that other defendants that had been involved in her claim by Gore, Whitehall Bureau of Canada Ltd. (“Whitehall”) and Ambleside Investigation Management Inc. (“Ambleside”), had engaged in harassment and intimidation against her. Whitehall and Ambleside were responsible for arranging and conducting surveillance of Derenzis on behalf of Gore.
Derenzis’ claims were not limited to seeking recovery for damages. She brought a constitutional challenge alleging that section 55 of the SABS infringes the Canadian Charter of Rights and Freedoms. According to her, section 55 condones medically invasive searches, and disproportionately impacts those with serious psychological impairments. She further alleged that section 19 of the SABS is discriminatory on the basis that it provides lesser payments to family members acting as caretakers versus independent service providers. According to Derenzis, this constituted discrimination based on family status, contrary to the Human Rights Code (HRC).
Lastly, the son-in-law of Derenzis, Mr. DaSilva (“DaSilva”), alleged that in 2017, he was hit by a vehicle driven by one of Whitehall’s private investigators when he approached the investigator’s vehicle and asked him to identify himself. The investigator allegedly fled and struck DaSilva with his car, resulting in injuries. As such, he claimed damages for battery and negligence against Gore, Rapid, Whitehall, and the individual investigator.
Before the Motion Judge
The motion was brought under Rule 21 of the Rules of Civil Procedure by Gore and its individually named employee defendants, Rapid, and Ontario, seeking to strike the claims against them without leave to amend. The motion judge struck a number of the appellants’ claims because they were “doomed to fail”, it being noted that Derenzis and DaSilva had already amended their pleading twice before the motion.
The claims of battery, breach of privacy, breach of good faith, and abuse of process were all dismissed on this basis. The constitutional challenge and claim under the HRC were dismissed, and DaSilva’s claims for battery and negligence were also dismissed as against Gore and Rapid. However, the claims of intentional infliction of emotional distress against Gore and its named employees were not struck on the basis that it was not “plain and obvious” that they could not be held liable if they had in fact acted in a way to intimidate or harass Derenzis.
At the Court of Appeal
The respondents did not appeal the motion judge’s rulings, including her dismissal of the motion to strike the claims for intentional infliction of emotional distress as against Gore and its named employees. On the other hand, Derenzis and DaSilva appealed several of the motion judge’s rulings to the Ontario Court of Appeal, which began its analysis by identifying the following key issues at play:
- Did the motion judge err in striking Derenzis’ claims for battery, breach of privacy, and abuse of process?
- Did the motion judge err in striking DaSilva’s claims?
- Did the motion judge err in striking the constitutional and human rights challenges to the SABS?
- Did the motion judge err in striking Derenzis’ claim for breach of good faith?
Battery, Breach of Privacy, & Abuse of Process
Starting off its analysis, the Court of Appeal affirmed the motion judge’s decision to strike Derenzis’ claim for battery against Gore and Rapid. As the motion judge had ruled, the insurer could not be held vicariously liable for the occupational therapist’s actions, since the assessor was a subcontractor of Rapid and not Gore. As against Rapid, the Court upheld the motion judge’s dismissal on the basis that it was not brought within the limitation period prescribed by the Limitations Act. This claim was therefore statute-barred.
The dismissal of the claim for breach of privacy was also upheld. The Court noted that this claim was properly framed as the tort of intrusion upon seclusion. Regardless, Derenzis had failed to plead any facts that could establish that Gore had unlawfully “invaded or intruded upon the plaintiffs’ private affairs or concerns,” nor did she provide any evidence that Gore or Rapid had accessed her personal records unlawfully. On the contrary, Derenzis had provided her consent for the various assessors involved in evaluating her health to review her medical records.
As for the claims for abuse of process, the Court of Appeal again upheld the motion judge’s dismissal as Derenzis had failed to establish that the insurer had initiated legal proceedings against her. In fact, it was Derenzis who had brought duplicative proceedings against Gore, both before the Court and at the LAT. To establish an abuse of process, Derenzis had to show that Gore had initiated improper legal proceedings against her, which did not occur in this instance.
DaSilva’s Claims for Negligence & Battery
The Court held that the motion judge did not err in dismissing DaSilva’s claims of negligence and battery against Gore and Rapid on the basis that there was an insufficient connection between these parties and the investigator. The investigator who allegedly struck DaSilva was not employed by Gore or Rapid, nor was he directed or assigned tasks by either of these parties. As such, DaSilva’s claims could not stand as against Gore and Rapid.
Constitutional Challenge & Alleged Breach of the HRC
Ironically, the Court of Appeal upheld the motion judge’s decision to strike the appellants’ constitutional and HRC claims on the basis that they constituted an abuse of process. As the Court explained, abuse of process can be established “where a party is raising the same issue that the party raised or could have raised in the previous proceeding.” Derenzis had previously brought these claims before the LAT, but had decided to discontinue the constitutional claim despite the LAT’s jurisdiction to hear the issue. The claim of discrimination was rejected by the LAT both at first instance and upon reconsideration. If the appellants wanted to bring a further appeal, they must do so before the Divisional Court and not the Court of Appeal.
Breach of Good Faith
Finally, the Court of Appeal turned to the appellants’ claim for breach of good faith against Gore. The motion judge held that breach of good faith is not a standalone cause of action. Instead, it must be accompanied by a claim of damages for breach of contract, which the motions judge found the appellants had failed to plead. The motion judge further held that the SABS does not form part of the insurance contract between the appellants and Gore, nor was any contractual relationship pleaded as between the appellants and Gore.
However, the Court of Appeal found that the motion judge was mistaken. While the appellants’ pleadings were somewhat lacking in detail, when read generously, they did in fact plead that Gore had failed to fulfil its contractual obligations to Derenzis under the motor vehicle policy. Therefore, the allegations of breach of good faith were tethered to a claim for breach of contract as required by law.
The Court also held that the motion judge had mistakenly concluded that the SABS does not form part of the contract of insurance. Per section 268(1) of the Insurance Act, every motor vehicle liability policy is deemed to include the benefits prescribed under the SABS. This meant the appellants’ claims for breach of good faith may also be grounded in the insurer’s breach of the SABS. This would require a determination of whether the specific SABS provisions alleged to have been breached fall within the scope of section 268(1), which the motions judge did not undertake in her analysis. As such, the appeal was allowed on this issue, with the Court granting leave to amend to properly plead the claims of breach of contract and breach of good faith as against Gore.
Conclusion
This case demonstrates how disputes over statutory accident benefits are not always neatly confined to issues under section 280 of the SABS, which restricts jurisdiction in such disputes to the LAT and applications for judicial review. It can involve allegations of tortious conduct, breach of contract, common law duties, and other issues not directly provided for under statute. As such, it is crucial that the parties to a motor vehicle liability policy abide by their obligations, including those arising from these various sources. Otherwise, a mountain of litigation may ensue as evidenced in this case.
Daniel Hinds is an articling student at ZTGH and the author of this blog. If you have any questions about this blog, please contact Daniel by email at [email protected].
