Priority Dispute for Out-of-Province Claimant

In Intact v. Gore, 2019 ONSC 4508, the court overturned a decision of an arbitrator regarding a dispute between insurers over the responsibility to pay statutory accident benefits to a claimant who was injured in an out-of-province accident.

The claimant was a passenger in a single vehicle accident in Alberta. His friend owned and operated the vehicle. The vehicle was insured by Gore under an Ontario policy.

The claimant had previously resided in Ontario, but moved to Alberta 3.5 months prior to the accident. His mother, who resided in Ontario, had automobile insurance with Intact. The claimant submitted an Ontario application for accident benefits to Intact. Intact paid Alberta-level benefits and commenced a priority dispute against Gore in Ontario.

At the arbitration, the insurers agreed that the claimant was not a dependent of his mother and had not been an Ontario resident in the 60 days prior to or at the time of the accident.

The arbitrator found that the claimant was not an “insured person” under the Ontario Statutory Accident Benefits Schedule (“SABS”).

Due to this, the arbitrator said that the claimant was not entitled to benefits under Intact’s policy. The arbitrator applied the Ontario priority scheme and concluded that Gore was responsible to pay benefits.

On appeal, Justice Nakatsuru overturned the decision. Justice Nakatsuru stated that the arbitrator failed to consider the fact that the claimant was not an insured person under Gore’s policy since he was not a resident of Ontario within 60 days of the accident.

Justice Nakatsuru said that the determination of the priority of insurers to pay benefits includes the limitation on eligibility set out in the definition of an “insured person” in the SABS. Therefore, Justice Nakatsuru held that:

[i]f Mr. Fulton is not an “insured person” to whom Gore is obligated to provide Statutory Accident Benefits, Gore’s Ontario contract of insurance cannot fall within the priority scheme set out in s. 268 [of the Ontario Insurance Act]. As a result, Gore is in no greater priority to Intact than Intact is in greater priority to Gore to pay Statutory Accident Benefits to Mr. Fulton under s. 268.

Moreover, the arbitrator had considered the priority issue under both the Ontario scheme and the Alberta scheme. Based on the arbitration agreement, Justice Nakatsuru stated that the arbitrator exceeded his jurisdiction by considering the Alberta priority scheme.

As a result, Gore was successful in its appeal.