Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on what constitutes “reasonable expenses” under Section B – Accident Benefits of a Standard Automobile Insurance Policy.

• Applicant sought to increase the reimbursed transportation rate from $0.30/km to $0.57/km based on federal and provincial employee travel rates.

• Respondent accepted the obligation to pay transportation costs but maintained discretion over the reimbursement rate.

• The policy and Insurance Act do not define “reasonable expenses” or mandate a kilometric rate.

• Court emphasized that insurer discretion must not be arbitrary, capricious, or exercised in bad faith.

• Application was dismissed as the court found the $0.30/km rate reasonable and no misconduct by the insurer.

Facts and outcome of the case

Background and factual context
The applicant, Jacklyn Prestidge, was injured in a motor vehicle accident and received medical treatments including physiotherapy and massage therapy. The insurer, Definity Insurance Company, paid transportation costs at $0.30/km for travel to these appointments, which were within 10 km and 2 km from her home. The applicant argued this rate was insufficient and sought an increase to $0.57/km for the entire benefit period, along with arrears and legal costs. She cited government kilometric reimbursement rates as a benchmark.

Legal framework and parties’ arguments
The core legal issue revolved around the interpretation of “reasonable expenses” under Section B – Accident Benefits of the Standard Automobile Policy governed by the Insurance Act (RSNB 1973, c. I-12). While the insurer accepted that transportation costs fall within the scope of benefits, it argued that the kilometric rate was within its discretionary authority. The applicant relied on prior, unreported case law suggesting higher rates had been ordered and invoked judicial comity and fairness arguments. The respondent countered that no legal authority required a fixed rate and that its discretion had been properly exercised.

Court’s analysis and decision
The court confirmed that “reasonable expenses” are not defined in either the Insurance Act or the policy, and that discretion rests with insurers to assess reasonableness, subject to judicial review for arbitrariness, capriciousness, or bad faith. Citing similar case law from other jurisdictions, the court found that insurers are allowed to set their own kilometric rates unless exercised improperly. The court rejected the applicant’s reliance on an unreported decision that lacked full analysis and held that such precedent was not binding. It found the applicant’s distances traveled to be minor and the evidence insufficient to demonstrate that $0.30/km was unreasonable or that the insurer acted improperly.

Outcome and costs
The application was dismissed. The court concluded that the $0.30/km rate was reasonable under the specific circumstances and that there was no bad faith or arbitrary conduct by the insurer. The applicant was ordered to pay $1,000 in legal costs to the respondent.