Ayr Farmers Mutual Insurance Co v. Wright, 2016 ONCA 789
This was an appeal of a preliminary issue application commenced by the insurer to determine if the applicant was entitled to accident benefits under the SABS. The question before the court was whether s.279 of the Insurance Act could be circumvented in this manner.
Released October 27, 2016 | Full Decision [CanLII]
Mr. Wright claimed that he had been injured when he tried to close his garage door after backing his vehicle out of his garage. Ayr Mutual denied the claim, stating that it was not an “accident” under the SABS.
In response, Mr. Wright commenced mediation. Rather than responding to the mediation application directly, Ayr Mutual commenced an application under R. 14 of the Rules of Civil Procedure to determine whether an accident within the meaning of the SABS had occurred. It claimed that, in order to engage the s. 279 scheme, a prospective claimant must have been involved in an “accident” as defined in the SABS.
In essence, Ayr Mutual proposed that the question before the court was not a SABS issue at all but a coverage issue, to be determined before the SABS framework was triggered.
This argument was rejected on the Application, where it was reiterated that s. 279 was a complete code governing all disputes between “insured persons” and their insurers, including the threshold questions of entitlement.
Simmons J.A. for the Court found that the question of whether Mr. Wright was involved in an accident under the SABS fell within the ambit of the s. 279 scheme, and therefore dismissed the appeal. She identified three reasons justifying this decision.
First, the s. 279 scheme establishes a comprehensive alternative dispute process which incentivizes arbitration over litigation. Following the insurer’s approach would be inconsistent with the intention of the legislature in founding the regime.
Second, while it might be more expeditious to proceed in this manner in certain cases, a court proceeding would be duplicative and counter-productive where a claimant does qualify as an insured person.
Third, read purposively, “insured person” under the s. 279 scheme can reasonably be read as encompassing all persons claiming entitlement to benefits under the SABS.
Significantly, her Honour refused to opine on the current statutory regime since the recent amendments to the s. 279 scheme abolished the right to sue in court.
Read the full decision on CanLII