CITATION: SHAUGHNESSY v. AVIVA CANADA INC. ET AL, 2011 ONSC 1566
COURT FILE NO.: DC000010700
DATE: 20110308
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
JENNINGS, GRAY, RAMSAY, JJ.
B E T W E E N:
DOROTHY SHAUGHNESSY
J. McCARTHY for the Applicant/Appellant
Applicant
- and -
AVIVA CANADA INC. and FINANCIAL SERVICES COMMISSION OF ONTARIO
J. BROWN for the Respondent - Aviva J. NEMET for the Respondent – Financial Services
Respondents
Heard at Newmarket: March 8, 2011
ENDORSEMENT
JENNINGS, J.
[1] At root, the real issue in this application for judicial review of the appeal order of the Director’s Delegate is whether the decision of the Court of Appeal in Liberty Mutual v. Fernandes (2006), 82 O.R. 3d 524 is controlling. If it is, this application must be dismissed.
[2] In Ferandes, the court held that the dispute resolution scheme in ss. 279-283 of The Insurance Act constituted a complete code. The court further held that while insurers may not challenge CAT DAC decisions in the courts. They can have recourse to the dispute resolution process in the Act.
[3] The applicant’s position is that those portions of the decision in Fernandes dealing with how the insurer can access the dispute resolution process to change CAT DAC decisions were not necessary to its decision on the issues before it, and accordingly constituted obiter. The applicant submits that the Director’s Delegate erred in applying obiter comments as the reason for reversing the arbitrator’s ruling.
[4] We disagree. The issue before the court in Fernandes is set out in paragraph 2 of its decision was the operation of the dispute resolution scheme. In upholding the decision of the motion’s judge that the insurer could not bring an action to overturn a CAT DAC decision, the Court of Appeal of necessity determined that the ability to review such a decision was provided for in the “complete code” contained in the Act. That was an integral part of its decision, and not obiter.
[5] If we are wrong, the appellate court’s comments on the insurer’s ability to use the dispute resolution system are sufficiently close to the issue in question to, in our opinion, constitute binding authority, McIntyre v. Grigg, [2006] O.J. 4420 (C.A.).
[6] As put by Binnie, J for the Supreme Court of Canada in R. v. Henry 2005 SCC 76, [2005] 3 S.C.R. 609, at para. 53,
“…much of the court’s work (particularly under the Charter) required the development of a general analytical framework which necessarily went beyond what was essential for the disposition of the particular case. In those circumstances, the court nevertheless intended that effect be given to the broader analysis.”
[7] In our opinion, framing the issue as it did, the Court of Appeal in Fernandes intended to provide guidance and to address the argument raised by the insurer that the effect of the decision of the motion’s judge was to deny an insurer any remedy to challenge an unfavourable CAT DAC.
[8] The standard of review is agreed by counsel to be one of reasonableness. The decision of the Director’s Delegate that the arbitrator was bound by Fernandes was, in our opinion, reasonable.
[9] The application must be dismissed.
[10] Costs payable forthwith to Aviva Canada Inc. by the applicant is fixed at $7200.
JENNINGS, J.
GRAY, J.
RAMSAY, J.
Released: March 8, 2011
CITATION: SHAUGHNESSY v. AVIVA CANADA INC. ET AL, 2011 ONSC 1566
COURT FILE NO.: DC000010700
DATE: 20110308
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
JENNINGS, GRAY, RAMSAY, JJ.
DOROTHY SHAUGHNESSY
Applicant
- and -
AVIVA CANADA INC. and FINANCIAL SERVICES COMMISSION OF ONTARIO
Respondents
REASONS FOR JUDGMENT
Released: March 8, 2011