Prestidge v Definity Insurance Company, 2025 NBKB 200 (CanLII)
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By: Fiona Costello (Articled Clerk)
The Applicant, Ms. Prestidge, was injured in a motor vehicle accident and required physiotherapy and massage therapy. She held a Standard Automobile Policy issued by Definity Insurance, under which Section B provided that Definity would pay for “reasonable expenses” arising from bodily injury resulting from the accident.
Acting under Section B, Definity reimbursed transportation costs to and from her treatments at a rate of $0.30 per kilometre. Ms. Prestidge contended that this rate was not reasonable and sought reimbursement at $0.57 per kilometre. As neither the Standard Automobile Policy nor the Insurance Act defined “reasonable expenses,” specified transportation costs, or established a kilometric rate, the Court was tasked with determining whether the $0.30 per kilometre was reasonable and, if not, whether it could impose a higher rate.
At the outset, the Court reviewed the transcript of the undefended and unreported decision relied upon by the Applicant, Hilary Bradley v TD Insurance, FM/99/2023, in which a $0.22 per kilometre rate set by the insurer was successfully challenged and increased to $0.57 per kilometre. The Court noted, however, that the Hilary Bradley specifically stated that it was not intending to set a guideline on kilometric rates going forward, and that it did not outline the evidence or the consideration of the Standard Automobile Policy language, the Insurance Act or jurisprudence. Accordingly, the Court concluded that it was not bound by the decision.
The Court instead turned to Crotty v Aviva General Insurance Company, 2024 NLSC 54 where it was recognized that the setting of kilometric rates is the role of the legislator or insurance companies, not the Court. The Court also clarified that its role, upon request of the insured, to determine if an expense constitutes a “reasonable expense” and whether the discretion of the insurer is exercised in an arbitrary, capricious manner or in bad faith.
Regardless of the Court’s discretion to set a kilometric rate, Ms. Prestidge provided no evidence that the insurer’s allowance was unreasonable. Such evidence should have included information on vehicle-related expenses, including costs of fuel, registration, inspections, maintenance, and repairs. The sole evidence provided by the Applicant only concerned the short distances travelled to and from treatments (10 kilometres return for physiotherapy and 2 kilometres return for massage). In the end, there was nothing before the Court to support a conclusion that the insurer acted unreasonably, in bad faith, arbitrarily or capriciously. The Application was dismissed with costs awarded against the Applicant.
The decision serves as a reminder that achieving a favorable outcome requires preparation grounded in compelling evidence and robust legal authority.
