Executive Summary: Key Legal and Evidentiary Issues

• Dispute over entitlement to income replacement benefits under Section B of a motor vehicle liability insurance policy following termination by the insurer.

• Conflicting medical evidence regarding the existence and extent of disability, including allegations of malingering by the insurer’s experts and contrary findings by treating physicians.

• The trial judge’s reliance on the absence of cross-examination of the insurer’s experts and failure to draw an adverse inference from the insurer’s decision not to call those experts.

• Application of the relaxed evidentiary and procedural rules under the Small Claims Act and its General Regulation.

• The appellate court’s determination of whether legal error occurred in attributing fault to the claimant for not cross-examining experts not called to testify.

• Determination and award of the statutory maximum damages, interest, costs, and allowable disbursements under the Small Claims Act.

Facts of the case

On August 5, 2016, Virginia Mattson was severely injured when her motor vehicle was struck at a T-intersection by a truck that failed to stop at a sign and entered the intersection at relatively high speed. The collision was violent, resulting in the destruction of Ms. Mattson’s vehicle. She suffered significant bruises to her upper body, soft tissue injuries to her neck and back, a major blow to the head with loss of consciousness for at least two minutes, and amnesia for the events surrounding the accident. Several of her treating medical professionals, including two neurologists, diagnosed an accident-related brain injury with associated disabling headaches, dizziness, and cognitive difficulties.

Due to her injuries, Ms. Mattson was unable to engage in employment for which she had just been hired. She applied for and was paid weekly income replacement benefits by TD General Insurance Company under Section B of her motor vehicle liability policy. These benefits were provided on a continuous basis for over five years, including more than three years beyond the initial “own occupation” period. On October 14, 2021, TD terminated the benefits, asserting that Ms. Mattson was no longer disabled from engaging in any occupation for which she was reasonably suited by education, training, or experience. TD’s position was based on reports from non-treating medical experts, including Dr. Edvin Koshi and Dr. David King, who questioned the existence of a brain injury and suggested possible malingering. In contrast, Ms. Mattson’s treating medical professionals consistently found she was not malingering and supported her claim of ongoing disability.

Policy terms and clauses at issue

The case focused on Section B of the motor vehicle liability policy, which provides for income replacement benefits. Up to the two-year anniversary of the accident, benefits were payable if Ms. Mattson was disabled from performing the tasks of her own occupation. After two years, to qualify for continued benefits, she had to be unable to perform the duties of any occupation for which she was reasonably suited by education, training, or experience. The dispute centered on whether Ms. Mattson continued to meet this standard after the two-year period and whether TD’s termination of benefits was justified.

Procedural history and evidentiary issues

After TD terminated her benefits, Ms. Mattson’s claim for income replacement benefits was denied by an adjudicator. She appealed by way of new hearing to the Court of King’s Bench. At the outset of the hearing, the judge expressed concern about deciding the case solely on the documentary record, given the conflicting medical opinions. Ms. Mattson, her ex-husband, and her treating neurologist, Dr. Renju Kuriakose, gave oral evidence. Dr. Kuriakose opined that Ms. Mattson was not malingering and that her disabling symptoms were causally linked to the brain injury sustained in the accident. TD requested and was granted an adjournment to consider calling its own experts, Dr. David King and Dr. Scott Theriault, but ultimately did not call them. The judge did not infer that the absence of these experts was detrimental to TD’s case, instead focusing on the lack of cross-examination by Ms. Mattson. The action was dismissed on the ground that entitlement to the benefits had not been established on a balance of probabilities.

Appellate review and outcome

On appeal, the New Brunswick Court of Appeal found that the judge erred in law by holding against Ms. Mattson the lack of cross-examination of TD’s experts and by not drawing the inference that TD did not call Dr. King because his oral evidence would likely have been detrimental to its theory of malingering. The appellate court held that, under the Small Claims Act’s relaxed evidentiary and procedural regime, the judge should have drawn the adverse inference against TD. The Court of Appeal concluded that Ms. Mattson had established her entitlement to the contested income replacement benefits.

Ruling and overall outcome

The Court of Appeal allowed the appeal, set aside the decision of the Court of King’s Bench, and granted judgment in favor of Virginia Mattson. She was awarded $20,000 for income replacement benefits (the maximum recoverable as damages under the Act), together with interest on that sum at the annual rate of 3% from October 14, 2021, to the date of judgment, $500 in costs (the maximum allowed under the Small Claims Act), and allowable disbursements. TD General Insurance Company was ordered to pay these amounts.