C.A. Says Auto Insurer Can Question Insured Under Statutory Condition and Can Examine Him for Discovery

In Baig v. The Guarantee Company of North America, the Court of Appeal allowed an appeal from a decision of Justice Gordon, in which he had held that an auto insurer could not require its insured to submit to an examination under oath pursuant to a statutory condition once litigation had begun. The motions judge had been of the view that the right to an examination under oath ended with the litigation because of the availability of examinations for discovery. In this case, which involved a claim for damage to the plaintiff’s BMW, Justice Gordon had also held that the insurer was not entitled to question the plaintiff about the valuation of his vehicle. Finally, he had dismissed the insurer’s counterclaim against appraisers of the vehicle.

The Court of Appeal reversed all three findings. It held that an insured cannot avoid having to submit to an examination under oath under statutory condition 6(4) of the policy “by the simple expedient of commencing an action”. It noted that “Redundancy can be avoided because the court, in controlling its own procedures, is able to consider questions that have already been asked and answered on a statutory examination improper on a subsequent examination for discovery. The fact that an insurer has the right to a statutory examination and an examination for discovery does not mean the insured must answer the same questions twice.”

The Court also held that on its examination of its insured, the insurer was entitled to question him about the appraisal of the BMW. It noted that the insurer had taken the position that that appraisal had been fraudulently obtained and so, the questions were relevant:

If the question is relevant to the determination of GCNA’s liability at trial, I fail to understand how it would not be relevant to GCNA’s decision whether or not to pay the claim. The purpose of the statutory examination is to provide GCNA with the opportunity to examine the insured in regard to the matters that might properly affect its decision whether or not to pay the claim.

Finally, the Court overturned the motions judge’s dismissal of Guarantee’s counterclaim against the appraisers who had done the valuation on behalf of the insured. It concluded that the appraisers’ failure to tender evidence that there was no genuine issue for trial was “fatal to their motion”.

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