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| 2 minutes read

Advance Payments and the Requirement of “X-ray Disclosure”

In a recent case from the Alberta Court of Queen’s Bench, the Court considered an application for advance payments under section 5.6(3) of the Fair Practices Regulation and established important principles regarding the test for receiving such payments. In order to be successful in an application for advance payments under section 5.6(3) of the Fair Practices Regulation, a plaintiff must show that as a result of his or her injuries, they are unable to meet the necessities of life or that the payment is otherwise appropriate.

In Patel v Certas Direct Insurance Company, 2020 ABQB 426, the plaintiff was involved in a car accident on August 10, 2017. The defendant insurer, Certas Direct Insurance Company, admitted liability for the accident but disputed the scale of the plaintiff’s alleged damages and that there was insufficient evidence to establish financial need.

At the time of the accident, the plaintiff was living part-time with his partner at her house. At some point thereafter, he began living with her full-time. In the early stages of their relationship, the plaintiff was paying the majority of the household expenses, including the mortgage and utilities. After the accident he was unable to work for approximately ten months and his partner began paying for the household expenses. In January 2020, the plaintiff and his partner agreed to split the household expenses equally.

The Court held that where a plaintiff is in a spousal or common-law relationship, the necessities of life equation requires an X-ray of household income and assets. This means that in order for the Court to fairly gauge whether the plaintiff’s basic needs are at a real risk of going unmet, the Court needs disclosure of the partner’s financial picture. In this case, the plaintiff provided no evidence as to what his partner’s income or resources generally were or any evidence to predict his partner’s likely response to the plaintiff reaching the end of his EI benefits. Therefore, the Court was unable to infer from the evidence that the plaintiff’s basic needs would go unmet or that he would be unable to meet the necessities of life.

The Court also considered the impact of the plaintiff choosing to leave a settlement amount he received as a result of a subsequent car accident a mystery. The Court stated that although the settlement amount remained privileged for the purpose of the application, the plaintiff could have asked the other insurer for permission to disclose the settlement amount which presumably would have been granted given that the other insurer unilaterally disclosed the amount to the defendant insurer. The Court held that given that it was the plaintiff’s onus in proving an inability to meet basic needs, by choosing to leave the settlement amount out of the financial means equation stymied the necessary X-ray of those means.

In Alberta, we can expect reliance on Patel to find that where a plaintiff has made an application for an advance payment under section 5.6(3) of the Fair Practices Regulation, the plaintiff has the onus of proving an inability to meet basic needs. This means X-ray disclosure of a plaintiff’s household income and asset including a spouse or common-law partner as well as any settlement amounts which are potentially relevant to determining a plaintiff’s financial picture.


brownlee llp, litigation, civil litigation, insurance law, amanda baker