This priority dispute/coverage case has an unusual set of facts. The claimant was involved in a single vehicle accident in Nunavut while working in Nunavut. The vehicle she was driving at the time was owned and insured in Nunavut. However, the claimant was from Ontario and had a policy of insurance in Ontario. As allowed under her Ontario policy, she claimed Ontario benefits from her own insurer, CAA. CAA commenced payment of benefits and commenced a priority dispute in Ontario against Travelers, the insurer of the Nunavut vehicle.
The arbitrator released a decision concluding that Travelers was the priority insurer and was required to pay Ontario-level accident benefits to the claimant, because it was an “Ontario insurer”. He found that Travelers was an Ontario insurer because its head office was in Ontario and, as such, it was subject to the Ontario Insurance Act and related priority regime in s. 268. He also found that, as a signatory to the PAU (Power of Attorney and Undertaking), Travelers essentially became an Ontario insurer for the purpose of this dispute and, as such, was required to fund benefits up to the Ontario limits because the dispute was brought in Ontario. In coming to these conclusions, the arbitrator relied on the Supreme Court of Canada decision of Unifund v. ICBC. The appeal judge agreed with the arbitrator.
The Court of Appeal disagreed with the arbitrator/appeal judge and concluded that Travelers was not the priority insurer.
The Court stated that the arbitrator’s approach to the significance of the PAU would effectively “turn Unifund on its head” and, in the circumstances of this case, the PAU was found to have no application.
The Court also clarified what the term “Ontario insurer”, referenced by Justice Binnie in a brief comment in Unifund, meant. The Court confirmed that mere licensing, or the presence of an office, does not convert all insurers into Ontario insurers for all purposes, nor does it make the Ontario Insurance Act the governing legislation for all of the automobile insurance policies they underwrite as this would give Ontario insurance legislation extraterritorial effect, which was specifically rejected in Unifund. Rather, the analysis must be performed on a case by case basis and requires the parties to consider the location of the accident and the policies at issue, including the policies’ governing legislation. In this case, the Travelers Nunavut policy was governed by Nunavut legislation and applicable policy limits. Additionally, given that the Travelers-insured vehicle was being operated in Nunavut and not Ontario, the policy did not come within the authority of the Ontario Insurance Act. As such, Travelers was not an “Ontario insurer” in the circumstances.
This case, and the analysis to what constitutes an “Ontario insurer”, provides much needed guidance for Ontario priority disputes related to accidents that occur outside of Ontario but involve insurers who do business in Ontario.
See Travelers Insurance Company of Canada v. CAA Insurance Company, 2020 ONCA 382
