Aviva v. Pafco, Allstate, MVACF, and Belair, Private Arbitration, Arbitrator Jones
This was a preliminary issue hearing regarding whether the arbitration was limitation barred.
O. Reg 283/95 requires that a priority arbitration be commenced within one year of the firstnotice provided under Section 3. In this matter, Aviva had provided its first notice to Pafco. It later provided a more detailed notice to Pafco and the remaining insurers. Aviva failed to commence the arbitration within one year of its first notice to Pafco. However, the arbitration was commenced before the 1-year anniversary of notices given to the other insurers.
The respondents argued that the entire arbitration was barred because it was not commenced within one year of the firstnotice provided. In support, the respondents relied upon Section 10(3), which states that all priority disputes in relation to a particular SABS claim are to be dealt with in “one arbitration”.
Aviva argued that its first notice to Pafco was not sufficiently detailed to be considered notice under Section 3. Alternatively, Aviva submitted that it should not be precluded from arbitrating against the other insurers, who it commenced arbitration against within one year of putting them on notice under Section 3.
Arbitrator Jones confirmed that notice from one insurer to another under Section 3 does not need to be overly detailed. Most significantly, he ruled that the entire arbitration was barred since it was not commenced within one year of the first notice provided to Pafco. Aviva was not permitted to have separate limitation periods for the other responding insurers, who could potentially bring Pafco back into the dispute.
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