Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 170

Appeal P04-00038

OFFICE OF THE DIRECTOR OF ARBITRATIONS

LIBERTY INSURANCE COMPANY OF CANADA (Formerly: Liberty Mutual Insurance Company)

Appellant Respondent on Cross-Appeal

and

SHANNON STEWART

Respondent Appellant on Cross-Appeal

Before:

Nancy Makepeace

Representatives:

Suzanne Courtlander and Eric Sigurdson for Liberty

D. Kevin Carroll for Mr. Stewart

Hearing Date:

August 3 and 26, 2005

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The cross-appeal is dismissed. The appeal is allowed, and the arbitration order of November 16, 2004 is revoked. The matter is remitted for a new arbitration hearing.

2. If the parties are unable to agree on expenses of the appeal and cross-appeal, I may be contacted in accordance with Rule 77 of the Dispute Resolution Practice Code.

December 7, 2005

Nancy Makepeace Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This appeal raises issues about common-law spousal status. Anna Pyles was 24 when she was killed in an automobile accident on June 8, 1997. Her daughter, Ashley, was just under one month old. Ashley’s natural father, Shannon Stewart, claims he was the spouse of Anna Pyles and therefore entitled to spousal death benefits under s. 25(2)1.ii of the SABS–1996.¹ The arbitrator accepted his claim. The insurer appealed, arguing that the arbitrator erred in her interpretation and application of the definition of “spouse” in s. 224(1) of the Insurance Act. The insurer also appeals the arbitrator’s interest and special award orders, and Mr. Stewart cross-appeals on both points.

For the following reasons, I conclude that the arbitrator erred in law by relying on a presumption that “once a child is born, . . . cohabitation in a relationship of some permanence continues despite changes in living arrangements, until either natural parent takes concrete or legal steps to terminate the relationship.”² Because this error affected the arbitrator’s assessment of the evidence as a whole, I am unable to determine whether her conclusion is otherwise supportable, and therefore another arbitration hearing must be held. As the arbitrator’s interest and special award orders depend on her finding of spousal status, I need not decide those issues.

II. BACKGROUND

A. The issues

There is no dispute about the essential facts in this case. The dispute is about their legal consequences. The arbitrator summarized the main facts as follows:

It is not disputed that Mr. Stewart and Ms. Pyles cohabited in a common-law relationship starting as college students in Orillia from September 1993 until the summer of 1996, when they lived in Fredericton, New Brunswick, Mr. Stewart’s home town. That summer, the couple mutually agreed to separate, and Ms. Pyles decided to return to Ontario. She subsequently discovered she was pregnant with Mr. Stewart’s child, but went ahead with her plans regardless, returning to Owen Sound and moving in with her parents in October 1996. Mr. Stewart returned to Ontario about five months later in March 1997 and moved to Barrie, about 100 kilometres from Owen Sound, where he found work as a car salesman. Ashley Pyles was born on May 12, 1997, just under a month before her mother’s death.³

Ms. Pyles was a listed driver under her father’s automobile policy with Liberty Mutual Insurance Company. Optional death and funeral benefits had been purchased under s. 27(1)4 of the SABS-1996, and the transitional provisions of s. 70 of the SABS-1996 applied because the policy was in effect on November 1, 1996, when the SABS-1996 came into force. There was no dispute about the funeral benefits, which were paid by the insurer. Nor did the insurer dispute that s. 25(2)2 and s. 27(1)4ii of the SABS-1996 entitled Ashley to dependant’s death benefits of $20,000; this amount was paid into court for her in late 1997.

The sole dispute concerned spousal death benefits, provided in s. 25(2)1 of the SABS-1996 as follows:

(2) The death benefit shall provide for the following payments:

2. A payment to the insured person’s spouse of:

i. $25,000, or

ii. if the optional death and funeral benefit referred to in section 27 has been purchased and is applicable to the insured person, the amount fixed by the optional benefit.

Section 27(1)4i, preserved by s. 70(2)3 during the transitional period, fixes the spousal death benefit at $50,000 instead of $25,000. However, where there is no surviving spouse, s. 27(4) does not include an optional benefit in lieu of the spousal benefit. That explains the difference between the $50,000 spousal benefit the arbitrator awarded Mr. Stewart and the $25,000 the insurer paid into court for Ashley on the basis that Anna Pyles had no spouse.

Subsection 2(1) of the SABS-1996 (“spouse”) incorporates by reference the definition of “spouse” found in s. 224(1) of the Insurance Act:

“spouse” means either of a man and a woman who,

(a) are married to each other,

(b) have together entered into a marriage that is voidable or void, in good faith on the part of the person asserting a right under this Act, or

(c) are not married to each other and have cohabited continuously for a period of not less than three years, or have cohabited in a relationship of some permanence if they are the natural or adoptive parents of a child.⁴

It was Franklin Pyles, Anna’s father, who claimed death benefits on Ashley’s behalf after Anna’s death. He took the position that Mr. Stewart was not his daughter’s spouse. The insurer came to the same conclusion, and closed its file after paying the benefits of $45,000 for Ashley. Mr. Stewart contacted the insurer through counsel in 1999 and filed an application for spousal death benefits in early January 2003.

B. The Arbitration Decision

The arbitration hearing was held over two days, on December 16 and 17, 2003, and the parties gave their closing submissions by telephone on December 19, 2003. The arbitrator heard from six witnesses: Mr. Stewart, Ms. Stacey Parker (Mr. Stewart’s friend and former house-mate), Mr. Paul Van Niekerk (Mr. Stewart’s best friend), Mr. Franklin Pyles and Mrs. Gaynel Pyles (Anna’s parents), and Ms. Shanna Harvey (the insurer’s senior accident benefits claims specialist).

While there was little dispute about the facts, the parties relied on different aspects of the relationship.

The insurer focused on the couple’s living arrangements and Ms. Pyles’ economic independence from Mr. Stewart. The couple were not living together at the time of the accident and had no plans to do so. When Mr. Stewart returned to Ontario in late March 1997, he moved to Barrie, not Owen Sound, where Ms. Pyles was living with her parents. Just a week before the accident, Ms. Pyles had begun moving into her own apartment in Owen Sound, where she planned to live with Ashley. Ms. Pyles was employed, received financial support from her parents, and applied for social assistance to help her establish a home as a single mother in a new apartment on the basis that her common-law relationship had ended. She received no financial support from Mr. Stewart apart from some household things he had brought back from New Brunswick. In addition, the arbitrator found that Mr. Stewart “bought diapers, baby clothes and a washtub and gave Ms. Pyles $200 in cash” after Ashley’s birth.⁵

The insurer also argues that the social relationship between Ms. Pyles and Mr. Stewart supports its position they were not spouses. For example, the couple saw each other only once between October 1996, when Ms. Pyles moved to Owen Sound, and March 1997, when Mr. Stewart moved to Barrie. Mr. Stewart described Ms. Pyles as his “girlfriend” in the statement he gave the insurer in September 1997, and that term was also used by his friends (Ms. Parker and Mr. Van Niekerk). Ms. Pyles’ birth coach was her mother, not Mr. Stewart, who attended only one pre-natal class. After the birth, Ms. Pyles gave her daughter her own surname and unilaterally picked “Ashley” as her daughter’s first name. She described herself as single on the birth certificate. As the arbitrator stated, the insurer’s theory was that “Mr. Stewart’s behaviour towards Ms. Pyles and Ashley was more characteristic of a divorced or separated father than of a cohabiting spouse.”⁶ After Ms. Pyles’ death, it was her father, not Mr. Stewart, who made the funeral arrangements, prepared death notices and applied for accident benefits on Ashley’s behalf.

Mr. Stewart views things differently, focusing on his role as Ashley’s father, Ms. Pyles’ letters and cards sent to him during their separation, and the emotional and physical aspects of their continuing relationship. He submits that the term “girlfriend” is appropriate in common-law relationships. He submits that they lived apart for economic reasons, not because of the nature of their relationship. After Anna’s death, it was Mr. Pyles’ decision to assume control over her affairs. The Pyles’ disapproval of his relationship with their daughter influenced their views of that relationship.

The arbitrator accepted that Mr. Stewart and Ms. Pyles were spouses. Addressing the legal principles, she held that “cohabitation” must be given a broad and flexible interpretation consistent with modern relationships, and does not necessarily require that the partners be living together at the time of the accident. Instead, a number of factors must be considered, no one of which is determinative. Objective factors include living arrangements, economic interdependence and legal arrangements. Subjective factors include the couple’s view of their relationship and its social presentation to others.

With respect to living arrangements, an objective factor, the arbitrator accepted Mr. Stewart’s testimony that he stayed in New Brunswick over Christmas of 1996, rather than moving to Owen Sound, as Ms. Pyles had expected, because “he wanted to remain at his retail sales position over the busy Christmas season to earn increased income from commissions.”⁷ She accepted that he remained in Barrie because job prospects were better there than in Owen Sound, a much smaller community, and noted evidence that the couple shared overnight visits during this period. She placed no weight on Ms. Pyles’ application for social assistance as a single mother because “she made that statement in support of a request for financial assistance . . .”⁸ In general, she found that Mr. Stewart and Ms. Pyles made decisions about jobs and living arrangements based on economic considerations.

In any event, the arbitrator found that “objective facts alone do not always tell the whole story.”⁹ She accepted Mr. Stewart’s evidence about the problems in the relationship, and implicitly accepted his testimony that while he and Ms. Pyles “did not ‘discuss where the relationship was going” when Ms. Pyles returned to Ontario, they were “very much in love and very supportive of each other, and had no thought of terminating the relationship.”¹⁰ She put little weight on Mr. Stewart’s use of the word “girlfriend,” which was not, she concluded, intended as a correct legal definition. She accepted that “Mr. Stewart and Ms. Pyles socialised as, and were considered to be, a couple” by their peers.¹¹ She stated:

In any event, actions speak louder than words. Mr. Stewart visited with Ms. Pyles when he came to Ontario on a business trip in February 1997; she came to see him as soon as he returned to Ontario at the end of March and they spent almost every weekend together; he drove 100 kilometres to attend prenatal classes when his schedule permitted; he was present when Ashley was born and helped care for her afterward; he purchased things for the baby and provided some financial support; and, according to his uncontradicted testimony and that of his friends, resumed a close, affectionate and physical relationship with Ms. Pyles, plainly evident from the hospital photographs. As noted above, Mr. Stewart last saw Ms. Pyles the morning on the day she died, asleep with their daughter in his bed. Contrary to the insurer’s theory, these are not the actions of a separated couple. I find the couple exhibited more commitment to each other and interdependence than one would expect had either one of them demonstrated a clear intention to terminate the relationship, and in my view spent enough conjugal time together to meet the test of cohabitation in a relationship of some permanence.¹²

The arbitrator concluded:

Having considered the evidence as a whole, the comparatively low threshold for establishing a relationship of some permanence and the criteria set out in the jurisprudence, I find that Mr. Stewart and Ms. Pyles regularly spent time together in an affectionate, physical, and exclusive relationship, were both involved in the birth and care of their child, were mutually supportive of and emotionally dependent upon each other, and socialised as a couple. After Ashley was born, Mr. Stewart gave Ms. Pyles things for the baby and $200 in cash, with more likely to follow, presumably for Ms. Pyles to use as needed, either for herself or for the child. Although no one could predict with certainty where the relationship was headed at the time of the accident, there was no clear and convincing evidence that either party intended to permanently sever the relationship, and neither had taken concrete steps to do so.

I find that there was far more than a mere “touch of permanence” to the relationship, and it could definitely be said of Anna Pyles and Shannon Stewart that they cohabited in a relationship of some permanence at the time of the accident.¹³

Therefore, the arbitrator concluded that Mr. Stewart was a “spouse” under the SABS-1996.

Apart from the spousal status dispute, both parties raised procedural issues. The insurer argued that Mr. Stewart was not entitled to the benefit on the basis that he did not give notice of his intention to apply for it within 30 days of the accident or as soon as practicable thereafter, as required under s. 31(1) and 32(1) of the SABS-1996,¹⁴ and did not apply for mediation and arbitration of the dispute within two years after the insurer refused to pay his claim, as required by s. 281(5) of the Insurance Act and s. 51(1) of the SABS-1996.

The arbitrator rejected both positions. She found that Mr. Stewart did not apply within 30 days of the accident because the insurer did not inform him of his potential entitlement, despite its own investigation of that possibility, which included taking a statement from him in September 1997. Referring to Smith v. Co-operators General Insurance co., 2002 SCC 30, [2002] 2 S.C.R. 129, she concluded the insurer could not rely on the time limits because its own conduct had contributed to the delay. She concluded Mr. Stewart had a reasonable explanation for the delay and therefore, in accordance with s. 31(1) of the SABS-1996, he was not disentitled. Similarly, the arbitrator concluded the insurer could not rely on the two year limitation period because it had never provided clear and unequivocal refusal of the benefit.

The insurer’s failure to advise Mr. Stewart about his potential entitlement, the application process, or its decision in December 1997 that he was not a spouse, its failure to provide application forms, and its failure to refer him to his own insurance company, despite taking the position at the hearing that it was not the priority insurer, were also grounds for the arbitrator’s conclusion that the insurer unreasonably withheld benefits. The arbitrator ordered a special award of $25,000, inclusive of interest, under s. 282(10) of the Insurance Act.

Both parties’ delays were factored into the arbitrator’s interest award. She ordered the insurer to pay interest under s. 46 of the SABS-1996 from January 2, 1998 (180 days after the accident) until April 22, 1999 (when Mr. Carroll first contacted the insurer) and ongoing from January 18, 2002, when Mr. Stewart renewed his active pursuit of the claim. However, she found that

Mr. Stewart, not the insurer, was responsible for the lost time value of the benefit between April 22, 1999 and January 18, 2002, and therefore was not entitled to interest for that period.

C. The Appeal

On appeal, the insurer claims that the arbitrator made several errors of law in her interpretation and application of the definition of “spouse.” It submits that she failed to properly apply the “at the time of the accident” requirement, failed to consider relevant evidence, and erred by excluding from evidence a letter Ms. Pyles had written to a friend, while admitting her letters to Mr. Stewart. As well, the insurer submits there is no legal authority for the arbitrator’s ruling that common-law couples are subject to a less stringent definition of “cohabitation” in terms of the quality of their relationship as well as its duration, or for her ruling that common-law parents benefit from a presumption that cohabitation survives separation, absent evidence of a concrete intention to terminate the relationship. I agree the arbitrator erred on the latter point. Because of the importance of this ruling in her analysis, I conclude the matter must be reheard.

The insurer also argues that the arbitrator erred in ordering a special award or, alternatively, erred in ordering too high an award, and did not undertake the analysis mandated by Persofsky and Liberty Mutual Insurance Company, (FSCO P00-00041, January 31, 2003). Mr. Stewart submits the award was too low, considering the same criteria.

In his cross-appeal, Mr. Stewart submits that the arbitrator erred in withholding interest between April 22, 1999 and January 18, 2002. He argues that interest under s. 46 accrues from the time the benefit becomes overdue¹⁵ to the time it is paid. The insurer submits that the arbitrator erred in awarding interest prior to January 27, 2003, the date it received Mr. Stewart’s death benefits application, and in awarding interest until the benefit is paid, considering the delay in releasing the arbitration decision.

Given my finding that the matter must be reheard, I need not deal with the arbitrator’s interest or special award orders, which depend on Mr. Stewart’s entitlement to the spousal death benefit.

III. ANALYSIS

A. “Cohabitation” defined

The insurer submits that the arbitrator erred in law by finding that cohabitation “in a relationship of some permanence” (the standard that applies to common-law spouses) is a less rigorous standard than the one that applies to married spouses in terms of the quality of the relationship as well as its duration. In my view, while the phrase “a relationship of some permanence” has some qualitative connotations, the parallel structure of s. 224(1)(c)¹⁶ suggests that it is a flexible durational requirement that stands in the place of the fixed requirement of three years’ continuous cohabitation applicable to common-law spouses who are not parents.¹⁷ However, even if the arbitrator erred on this point, I am not persuaded it affected her ultimate conclusion.

There is little dispute as to the kind of relationship the spousal death benefits provisions are intended to protect. The arbitrator described it as follows, referring specifically to the definition of common-law spouse:

This language reflects the functional goal of statutory death benefits in the no-fault auto insurance scheme described by Justice L’Heureux-Dubé of the Supreme Court of Canada in Miron et. al. v. Trudel et. al.,¹⁸ – “to protect stable family units by insuring against the economic consequences that may follow from the injury of one of the members of the family.”¹⁹ The alternative, broader definition of cohabitation in subparagraph (c) is just one example of the acknowledgement and recognition in recent years by the courts and legislatures of non-traditional forms of relationships outside marriage, reflecting society’s beliefs that relationships of mutual interdependence and support, particularly where children are concerned, are deserving of protection.

Not all family units outside marriage are of sufficient stability and interdependence to warrant statutory protection, though. The key element that qualifying family units have in common is the obligation of mutual support such as imposed upon common-law spouses under the Family Law Act., R.S.O.1990, c. F.3. Commenting on this obligation, Justice L’Heureux-Dubé noted that in the no-fault accident insurance context, the basic purpose of the Ontario Standard Automobile Policy

[is] almost inextricably related to that mutual obligation [of support] and to the relationship of interdependency upon which that obligation is premised.²⁰

I agree with this statement of the law.²¹

The insurer’s real dispute is with the arbitrator’s finding that Mr. Stewart and Ms. Pyles cohabited in a relationship of some permanence at the time of the accident, despite the fact they had separate residences at the time.

The arbitrator accepted that “at the time of the accident” modifies “have cohabited in a relationship of some permanence.” I agree with this statement, which was not challenged by either party on appeal. However, there is good authority for the proposition that living together, while a very important indicator of common-law spousal status at any given time, is not conclusive. Other objective and subjective factors – sexual and personal relations, interaction in a family and social context, shared vacations, shared household and childcare responsibilities, shared use of assets, financial dependence or interdependence – are also considered.²² Furthermore, each relationship must be assessed on its own terms, recognizing “the diversity of reasons people [choose] to live together and the fact that those reasons, and the relationship, may change over time.”²³

For example, in Osbourne and Allstate Insurance Company of Canada; Osbourne and York Fire & Casualty Insurance Company, (OIC A-009110 & A-009111, March 6, 1995), the arbitrator accepted the couple’s evidence that their separate residences were intended to minimize the impact of their respective bankruptcies, and did not reflect an intention to end their spousal relationship, which continued as before.²⁴

And in Alfred and Allstate Insurance Company of Canada, (OIC A-009267, November 30, 1995), confirmed on appeal, (OIC P96-00015, April 23, 1997), the arbitrator accepted that the couple “cohabited in a relationship of some permanence” at the time of the accident, despite their separate residences, which they maintained because of cultural and religious traditions, the male partner’s work schedule, and the female partner’s receipt of family benefits as a single mother. On appeal, Director’s Delegate Draper accepted, “as a general statement,” Allstate’s submission that “the objective requirement of living together is critical because it allows people to control their legal status. Couples can avoid becoming spouses by not living together, even where their relationship is intimate and longstanding.”²⁵ However, he concluded it was open to the arbitrator to look beyond the fact of separate residences to find that “their separate residences were more form than substance.”²⁶ Moreover, he approved the arbitrator’s reliance on court decisions that “have taken a broad view of cohabitation. A minimal period of ‘living together’ may be sufficient where the other indicators of spousal status are strong . . . .”²⁷

Applying the same approach, adjudicators concluded that partners who did not live together were not common-law spouses in Stephens and Zurich Insurance Company, (OIC A96-000782, August 25, 1997), KD and Western Assurance Company, (FSCO A97-000015, June 1, 1998), confirmed, (FSCO P98-00025, February 8, 1999), and B.W. and Motor Vehicle Accident Claims Fund, (FSCO A99-000725, November 7, 2000). And in Shaw and Allstate Insurance Company of Canada and Belair Insurance Company Inc., (OIC A95-000557, June 30, 1997), confirmed, (FSCO P97-00042, October 30, 1998), the partners were found not to be spouses though they had lived together for many years.

As I read the decision under appeal, the arbitrator’s statement that the test for common-law spousal status is qualitatively less onerous than the test for married spousal status may simply reflect her recognition of the breadth of the definition of “spouse” in modern law. In any event,

I am not persuaded any error on this point affected her ultimate decision. Though living together is a very significant indicator of common-law spousal status at any given time, I agree with the arbitrator that partners may be common-law spouses, despite having separate residences at the time of the accident, depending on a number of objective and subjective factors, the relative importance of which varies depending on the relationship.

However, the arbitrator went further than this.

C. Rebuttable Presumption

At p. 7 of her reasons, the arbitrator made the following statement about the definition of “spouse”:

With respect to the subjective element, the parties’ intentions, the courts have looked for commitment and support, and the parties’ expectations.²⁸ As stated in Rodrigue, with respect to the requirement of “continuous” cohabitation,

the cases have made it clear that temporary interruptions in physical living arrangements do not terminate cohabitation, unless either party has demonstrated in a convincing manner a settled state of mind that the relationship is at an end:

the test should be realistic and flexible enough to recognize that a brief cooling-off period does not bring the relationship to an end.²⁹

I would go further. In my view, given the omission of the word “continuous” from the definition of cohabitation “in a relationship of some permanence,” and the special recognition and protection given by statute to relationships that produce children, in the form of this less stringent requirement for cohabitation, and given natural parents’ Family Law Act obligations to support their children and each other, it should be presumed, once a child is born, that cohabitation in a relationship of some permanence continues despite changes in living arrangements, until either natural parent takes concrete or legal steps to terminate the relationship.³⁰ [emphasis added]

The insurer submits there is no legal authority for this proposition, which, in the insurer’s view, improperly places the burden of proof on the insurer.

Although a number of court and FSCO decisions have found cohabitation where the parties were no longer living together at the time of the accident, I am not aware of any authority for a presumption that cohabitation survives separation, where the partners are parents of a child, until either parent takes formal or concrete steps to end the relationship.

The arbitrator relied on Rodrigue and Canadian General Insurance Company, (OIC A-005175, August 30, 1995), which concerned the definition of common-law “spouse” under the SABS-1990 – “a man and a woman who . . . are not married to each other and have cohabited continuously for a period of not less than three years. . . .” Ms. Rodrigue and the deceased, Mr. Hietikko, were living together at the time of the April 1993 accident, and had been doing so since October 1990, a period of two years and five months. The issue was whether the three year requirement was satisfied based on their relationship before they started living together.³¹ The arbitrator accepted that it was, based on evidence that the couple were effectively living together, moving back and forth between their separate residences, for several years before Mr. Hietikko finally gave up his apartment:

I do not consider it necessary to pinpoint the moment in time in which the relationship evolved to a relationship of cohabitation. I find that, by the beginning of 1990, Mr. Hietikko and Ms. Rodrigue were living together as a couple, in a family group with Melissa. The evidence suggests that this had been the case for some considerable time prior to this. It is not necessary for me to deal with the character of their brief separation [of about two months] around 1988; I am satisfied that the couple cohabited continuously for the three years before Mr. Hietikko’s death.³²

Rodrigue does not establish that a common-law couple are presumed to remain spouses though they have separated and not resumed cohabitation at the time of the accident.

The arbitrator in Rodrigue relied on Sanderson v. Russell (1979), 1979 CanLII 2048 (ON CA), 9 R.F.L. (2d) 81 (Ont. C.A.) for the proposition that “a brief cooling off period does not bring the relationship to an end”³³ Sanderson concerned a support application under the Family Law Reform Act, which recognized common-law relationships where the man and woman cohabited “continuously for a period of not less than five years . . . and have so cohabited within the preceding year.” The couple had lived together between July 1971 and May 1977 (almost six years) and ceased cohabiting within the year before the support application was brought. The issue was whether their four or five-day separation, following a disagreement in February 1976, prevented them from satisfying the temporal requirement. Morden J.A. wrote:

Without in any way attempting to be detailed or comprehensive, it could be said that such a relationship has come to an end when either party regards it as being at an end and, by his or her conduct, has demonstrated in a convincing manner that this particular state of mind is a settled one. While the physical separation of parties following a “fight” might, in some cases, appear to amount to an ending of cohabitation, the test should be realistic and flexible enough to recognize that a brief cooling-off period does not bring the relationship to an end. Such conduct does not convincingly demonstrate a settled state of mind that the relationship is at an end.³⁴

Again, as in Rodrigue, the issue was a short separation followed by the resumption of cohabitation before the final separation that gave rise to the support application. However, the main point about Sanderson is that it is a family law case; the couple’s separation is what gave rise to the application for support based on past cohabitation. In contrast, the SABS creates entitlement based on cohabitation at the time of the accident, which is the triggering event.

The leading case in the accident benefits context is Catherwood v. Young Estate, 1995 CanLII 7254 (ON CTGD), 32 C.C.L.I. (2d) 289, 130 D.L.R. (4th) 639, 27 O.R. (3d) 63, [1996] I.L.R. 1-3278 (O.C.J. (Gen. Div.)). The plaintiffs were the ex-wife (Jacqueline Catherwood) and minor children of the deceased. They had divorced about two years earlier before the accident, and the deceased had remarried. He paid spousal and child support to his ex-wife. It was agreed that Ms. Catherwood was not a “dependant” as defined. After reviewing the legislative language and history and the authorities on point, Justice Ferguson concluded that accident benefits legislation was not part of a coherent package of family legislation, and that for accident benefits purposes a common-law spouse “must be cohabiting with the deceased at the time of the accident.”³⁵

However, Ferguson J. seemed to leave open the possibility that a temporary separation may not end common-law status in all cases. After noting that his interpretation would exclude former common-law partners but not separated married partners, he added, in a footnote: “Whether the separation is evidence of a temporary separation or of a termination of the common-law relationship will be a matter of fact. See McIntyre v. West Wawanosh Mutual at para. 8 and McLean v. Wellington at p. 25.”³⁶

McIntyre v. West Wawanosh Mutual Insurance Co., (1994), 1994 CanLII 7500 (ON CTGD), 113 D.L.R. (4th) 759 (Ont. Gen. Div.) concerned common-law spouses who separated about a year before the accident that killed the male partner. The couple were the parents of twin daughters. The female partner had applied for custody and for support for herself and the children, but the application had not been heard at the time of the accident. Justice O’Connor found the couple were spouses, as defined, “during the 13 months in total that they lived together” [para. 6] but not at the time of the accident. However, he was prepared to recognize the greater fluidity of common-law relationships:

The defendant’s counsel argues that a common-law spousal arrangement ends when the parties separate. He points out that a marriage ends with divorce, which usually occurs some time after separation. As there is no similar formal step to be taken to terminate a common-law relationship, to accept Catherine’s argument that the common-law spousal relationship therefore continues indefinitely, permitting her to fall under the definition of “spouse” in the policy, would give common-law spouses greater rights than previously married spouses who have divorced. I agree that this cannot have been the intention of the legislators in drafting the Insurance Act nor of the drafters of the Standard Ontario Automobile Policy. Further, a common-law spousal arrangement is created by and founded on the parties’ intention to cohabit in a relationship of some permanence. It is ended by the parties changing their intention in this regard. Catherine admitted in evidence that she and Greg had no intention of resuming cohabitation. Thus, the spousal arrangement between Catherine and Greg ended when they no longer intended to cohabit, likely at separation. She was not a spouse at his death, the event which triggers benefits to his spouse under the policy. Thus her claim in the respect fails.³⁷

As I read it, this passage suggests that while divorce, not separation, terminates the spousal relationship of a married couple, separation “likely” terminates a common-law spousal relationship because it generally reflects an intention to end the relationship. Indeed, it may be the best evidence of the parties’ intentions because there is no formal event that marks the end of a common-law relationship. Justice O’Connor did not find it necessary to consider in what circumstances, if any, separation might not end a common-law relationship. This passage does not go so far as to suggest that common-law spousal status is determined by intention alone.

McIntyre was followed by the arbitrator in McGuire Estate and Zurich Insurance Co., (OIC A-002988, A-002989, June 20, 1994), and with the same result. The claimant had lived together with the deceased for six or seven years, during which time two children were born to them. They had separated over a year and a half before the accident in which the female partner was killed. The arbitrator found that “unmarried parties are ‘spouses’ so long as they continue to cohabit in a relationship, and no longer.”³⁸ He rejected the argument based on the provision for claims by more than one spouse, and Justice Ferguson approved of his reasoning in Catherwood:

The inclusion of a reference to two spouses is not an indication that a person will be considered a spouse after the spousal relationship has ended. I do not think it is a reasonable interpretation to take this provision as an indication that the legislature intended that all persons who had ever been in a common-law relationship with the deceased might somehow become entitled.³⁹

In McLean and Wellington and Economical,⁴⁰ the other “temporary break-up” case approved in Catherwood, there was no dispute that the claimant and Wellington’s insured had “cohabited in a relationship of some permanence” for some four years and were the natural parents of two children. They married after the accident. However, at the time of the accident, they had not lived together for at least a year, though the insured visited his children and made support payments. Economical argued that the couple continued to be common-law spouses at the time of the accident because they had not taken any formal steps to end the relationship.

The arbitrator found that the phrase “have cohabited” [in a relationship of some permanence] was ambiguous in that it could refer to an event that occurred at an indefinite past time or an event that continues into the present, and the legislative evolution of the provision was also inconclusive. However, she concluded that legislative context confirmed that spousal status must be determined as of the date of the accident, the event that triggers entitlement to benefits:

In my view, it is a matter of common sense to recognize that both marriages and common-law relationships end. The termination of the status of married “spouse” occurs on death or a final decree of divorce. The termination of the status of not married “spouse” is largely a question of fact to be determined in each case.

In my view the status of “spouse” . . . should be determined by the factual situation at the time of the accident, and not in relation to a previous time period. To conclude otherwise could lead to unpredictable and inappropriate results. For example, . . . the current dependants of a long ago, former “spouse”, could claim under the named insured’s policy even though they may be completely unconnected to the named insured and his or her current family situation.

Part VI of the Insurance Act (Automobile Insurance) creates a scheme of insurance to protect individuals from the consequences of motor vehicle accidents. The scheme is triggered by an accident and is intended to relate to the situation which exists at the time of the accident. When the definition of “spouse” is placed within the context of the definition of “insured person”, it is more likely that the Legislature simply intended to extend the same insurance coverage and benefits enjoyed by married spouses, to the immediate family of not married ‘spouses” who can establish that they share a relationship of some standing and permanent, at the time that the family unit is affected by an accident.⁴¹

Catherwood and the McIntyre, McGuire, McLean line of cases were approved in Economical Mutual Insurance Co. v. Lott (1998), 37 (O.R. (3rd) 417 (Ont. C.A.). The claimant had lived with the deceased, who was insured by Economical, for about nine years, during which time they had two children, but they had separated about five years before the accident. The motions judge had relied on Sanderson to find that the claimant remained a spouse of the deceased. On appeal, Justice Morden (Abella and Rosenberg JJ.A.) followed Catherwood in rejecting the view that “spouse” is defined in the SABS-1990 as it is in family law. Further, the Court of Appeal held that the SABS definition is narrower than definitions that include a temporal proximity requirement, like the Family Law Reform Act (“and have so cohabited within the preceding year”), the pre-June 21, 1990 accident benefits provided in Schedule – to the Insurance Act (“have so cohabited within the preceding year”), or the SABS-1994 (“at some point during the previous year”). Rejecting the argument that the absence of such language from the SABS-1990 means “once a common-law spouse always a common-law spouse even though cohabitation has ended”, Justice Morden concluded the intent was to require cohabitation at the time of the accident.⁴²

These decisions concern the SABS-1996, but both regulations incorporate by reference the same language in s. 224(1) of the Insurance Act – “have cohabited in a relationship of some permanence if they are the natural or adoptive parents of a child.”

I conclude there is no authority for the rebuttable presumption identified by the arbitrator. Though the history of a relationship is important in determining whether the partners were cohabiting in a relationship of some permanence at the time of the accident, there is no presumption based on parental status or previous cohabitation or any other factor.

The remaining question is whether the arbitrator’s error affected the outcome of the arbitration. Mr. Stewart submits that the arbitrator’s comments merely reflect a shift in the evidentiary burden of proof, not the legal burden.⁴³ I am not persuaded.

The arbitrator described the burden of proof correctly at the outset of her reasons:

Reading subsection 25(6) and 224(1)(c) together, Mr. Stewart, as Ashley’s natural father, would be entitled to a death benefit if he establishes on a balance of probabilities that he cohabited in a relationship of some permanence with Anna Pyles at the time of the accident.⁴⁴

However, her later discussion indicates that the presumption of continuing cohabitation played an important role in her assessment of the evidence. Rather than asking herself whether Mr. Stewart had proven that he cohabited with Ms. Pyles in a relationship of some permanence at the time of the accident, the arbitrator seems to have asked a different question – whether the insurer had proven the couple had decided to end their relationship. For example, though she implicitly rejected Mr. Stewart’s explanations about the problems in his relationship with Ms. Pyles, the arbitrator concluded this was unhelpful “in determining whether the couple at any time decided to permanently sever their relationship. In light of the evidence as a whole, I find the relationship difficulties in this case fall far short of the requirement of ‘convincing’ evidence of ‘a settled state of mind that the relationship is at an end’ as set out in Rodrigue.”⁴⁵ Again, after considering Mr. Stewart’s failure to reply to Ms. Pyles’ letters about their relationship, the arbitrator stated that his reticence was not “convincing evidence of a settled state of mind that the relationship was over.”⁴⁶ The arbitrator concluded that “there was no clear and convincing evidence that either party intended to permanently sever the relationship, and neither had taken concrete steps to do so.”⁴⁷

In light of these statements, I am unable to determine whether the arbitrator could have reached the same conclusion had she applied the law correctly. Therefore, the matter will be remitted for a new arbitration hearing. Having reached that conclusion, I need not consider the insurer’s submissions with respect to the arbitrator’s assessment of the evidence, and it would be inappropriate for me to do so, apart from the hearsay issue raised by the insurer.

D. The excluded letter

On the morning of December 17, 2003, the second day of the arbitration hearing, the insurer’s counsel, Ms. Courtlander, moved to introduce a letter she had just received that morning. The letter from Ms. Pyles to “J”⁴⁸ is dated March 15, 1997, about three months before the accident. Ms. Courtlander advised that J had faxed the letter to Mr. Pyles in July 1997 (July 8, 1997 is the date electronically printed on the document). Mr. Pyles had written to the insurer about the letter, quoting excerpts from it, but had not provided the letter itself until the morning of December 17, the day he was to testify. Ms. Courtlander further advised that despite previous attempts to obtain the letter, Mr. Pyles had been reluctant to produce it and did so only under subpoena. He allowed Ms. Courtlander to copy the letter on the morning of the hearing, and retained the original. Ms. Courtlander sought to make the letter an exhibit through Mr. Pyles. Mr. Carroll, on behalf of Mr. Stewart, objected on the basis of late production, the rule in Brown v. Dunn, and the hearsay rule.

After hearing from both counsel, the arbitrator ruled the letter admissible with respect to Ms. Pyles’ state of mind, but not for the truth of the statements in it or for purposes of impeaching Mr. Stewart’s credibility. She left open the possibility of recalling Mr. Stewart, who had completed his testimony on the first day of the hearing, but made no ruling whether this would be required.⁴⁹

The hearing proceeded, with Ms. Courtlander calling Mr. Pyles as her witness. He testified in chief that the letter was in his daughter’s handwriting and that J was a high school boyfriend. He explained that J had faxed him the letter and stated: AI didn’t think I had it anymore but it turned up when I went through the files at your request. But I think you had had it before. I think the company had had it so –.”⁵⁰ When Ms. Courtlander then began reviewing the contents of the letter with him, Mr. Carroll renewed his objection, asking for a voir dire on the basis that Mr. Pyles had provided new information about when the insurer received the letter and on the basis that Ms. Courtlander was leading the letter for its truth.

Reconsidering the matter, the arbitrator reversed herself and ruled that the letter was inadmissible. Essentially, she reasoned that there was no meaningful distinction between admitting the letter for the truth of its contents and admitting it as evidence of Ms. Pyles’ state of mind because her state of mind was a factor in determining whether she and Mr. Stewart were spouses at the time of her death. The arbitrator concluded that the prejudicial effect of the letter outweighed its probative value.

On appeal, the insurer submits that the arbitrator erred in her second order. Early in the appeal hearing, the insurer asked me to read the letter, which had been sealed pursuant to the arbitrator’s order. Mr. Carroll objected on the basis that it would be hard for me to disabuse myself of the contents of the letter in order to consider the legal validity of the arbitrator’s order. In his view, the matter could and should be decided in the abstract on the basis of the legal principles alone.

I concluded I should read the letter. I agreed with Mr. Sigurdson’s statement of the law, with which Mr. Carroll agreed: whether the letter, considered along with all the other evidence, would have affected the outcome at arbitration is an important factor in my decision on whether the arbitrator’s decision to exclude it was a reviewable error. This made conducting an efficient appeal hearing an important consideration. If I read the letter, then decided the arbitrator did not err in excluding it, the letter would have no further role in the appeal. On the other hand, if I decided, without reading the letter, that the arbitrator erred by excluding it, I would then have to reconvene the appeal hearing in order to read the letter and hear the parties’ submissions as to its importance in the outcome. I would also have to decide the appropriate remedy – ordering a new hearing or substituting my own order – and knowing the contents of the letter is critical to that decision.

After reading the letter to J, I conclude it might have affected the outcome of the arbitration because it describes Ms. Pyles’ relationship with Mr. Stewart in different terms than the other correspondence considered by the arbitrator. As there will be a new arbitration hearing, I will say nothing about the contents of the letter, and will limit my comments to the legal issues raised by it.

The insurer submits that the arbitrator erred in refusing Ms. Courtlander’s request for a voir dire so that Ms. Harvey could testify about when the insurer received the letter. A formal voir dire is unusual in FSCO’s quasi-judicial proceedings, where the arbitrator is trier of fact and law. Hearsay disputes are most often dealt with summarily after brief oral submissions, as happened in this case. Ms. Courtlander requested the voir dire in response to Mr. Carroll’s objection that the letter should be excluded based on late production. That was the weakest of his objections because the arbitrator had already admitted other documents that were not produced in accordance with the rules.⁵¹ Indeed, the transcript suggests that late production was not a significant factor in the arbitrator’s decision to exclude the letter. Instead, the hearsay nature of the evidence was her main concern, and she did not need to hear evidence from Ms. Harvey before deciding the hearsay issue. In any event, Ms. Harvey testified later about her receipt of the letter, amongst other matters. Counsel agree that Ms. Courtlander reiterated her motion to admit the letter after the close of evidence, with no court reporter present. The motion was dismissed, but counsel recall little of the arbitrator’s reasons. Very likely she believed she had heard sufficient evidence and wanted to avoid unnecessary delays in deciding the matter. I am not persuaded the arbitrator erred in her handling of the voir dire.

A more difficult question is whether she erred in excluding the letter. Because Ms. Pyles, the writer of the letter, could not be questioned under oath about it, the letter was hearsay to the extent it was admitted for the truth of its contents rather than Ms. Pyles’ intentions or state of mind.⁵² The problem was that Ms. Pyles’ intentions or state of mind was directly probative of the very issue in dispute in this proceeding – whether she and Mr. Stewart were spouses at the time of the accident. That was the concern, engaging the hearsay rule, that caused the arbitrator to reverse her initial ruling admitting the letter.⁵³

Subsection 15(1) of the Statutory Powers Procedure Act allows arbitrators to admit evidence, including hearsay evidence, that would not be admissible in a court. This does not mean everything is admissible. Arbitrators must consider the limitations of hearsay evidence with respect to fairness, reliability and necessity. As Director’s Delegate Draper stated in Macaulay and General Accident Assurance Company, (FSCO P98-00010, October 13, 1999):

Because hearsay evidence cannot be tested on cross-examination, it may be unfair to assume its accuracy – particularly if it is the only evidence on a crucial finding. However, in a system where hearings are to be quicker, more informal, and cheaper than the courts, hearsay evidence is inevitable. There is no fixed rule. Each case must be considered on its particular facts.⁵⁴

Deciding whether the requirements of necessity and reliability are satisfied requires the fact-finder to consider any number of factors, including (with respect to necessity) what other evidence is available, and (with respect to reliability) whether the circumstances in which the statement was made provide guarantors of reliability. Necessity and reliability are considered together on a continuum:

Accordingly, there may be instances where the necessity is so great – such as where the declarant is dead – that some elasticity on the issue of reliability may be given.⁵⁵

Because these decisions are highly contextual, the arbitrator’s judgement should be given considerable deference. However, I am concerned that the arbitrator’s exclusion of the letter to J left Ms. Pyles’ letters to Mr. Stewart as uncontroverted evidence of her positive and hopeful feelings about their relationship. Those letters were admitted into evidence, apparently without objection. The arbitrator relied on them, though it is not clear how significant they were in her ultimate decision.⁵⁶

I need not deal with this evidentiary point any further because I have concluded that the matter must be reheard. The admissibility of Ms. Pyles’ letters to and about Mr. Stewart should be addressed by the arbitrator at that time.

IV. EXPENSES

If the parties are unable to agree on appeal expenses, they may contact me in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 7, 2005

Nancy Makepeace Director’s Delegate

Date

(c) have lived together in a conjugal relationship outside marriage,

(i) continuously for a period of not less than three years, or

(ii) in a relationship of some permanence, if they are the natural or adoptive parents of a child;

In this case, the parties agree that the relevant definition is the one that applied at the date of Ms. Pyles’ death.

“spouse” means either of a man and a woman who,

(a). are married to each other,

(b). have together entered into a marriage that is voidable or void, in good faith on the part of the person asserting a right under this Act, or

(c). are not married to each other and have cohabited continuously for a period of not less than three years, or have cohabited in a relationship of some permanence if they are the natural or adoptive parents of a child. [emphasis added]

Footnotes

1. 1The Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Arbitration decision, p. 7.
3. 3Arbitration decision, p. 3.
4. 4The definition has since been amended. “Same-sex partner” provisions were added in 1999. Most recently, s. 35 of the Spousal Relationships Statute Law Amendment Act, 2005, S.O. 2005, c. 5 repealed the definition of “same-sex partner” in s. 224(1), and substituted “two persons” for “a man and a woman” in the preamble to s. 224(1). Clause (c) was repealed and the following substituted:
5. 5Arbitration decision, p. 10.
6. 6Arbitration decision, p. 11.
7. 7Arbitration decision, p. 8.
8. 8Arbitration decision, p. 19.
9. 9Arbitration decision, p. 11.
10. 10Arbitration decision, p. 11.
11. 11Arbitration decision, p. 14.
12. 12Arbitration decision, p. 18.
13. 13Arbitration decision, pp. 20-21.
14. 14As it read at the time of the accident. The same rule was set out in s. 32(1.1)(a) of the SABS-1996 as it read at the time of the arbitrator’s decision.
15. 15Though not raised as an issue in the appeal, I note that the arbitrator’s finding, at p. 31 of her decision, that interest began to accrue on January 2, 1998, seems to rely on s. 25(1)(a) of the SABS-1996. That section requires the insurer to pay a death benefit in respect of an insured person who dies within 180 days after the accident [p.23]. Alternatively, as provided under s. 25(1)(b), the death benefit is payable if the insured person is continuously disabled as a result of the accident and dies within 156 weeks of the accident. Section 41 of the SABS-1996 requires the insurer to pay a death or funeral benefit, or give notice of the reasons for refusing, within 30 days after receiving the application.
16. 16Repeated here for convenience:
17. 17See the arbitrator’s comments in Alfred and Allstate Insurance Company of Canada, (OIC A-009267, November 30, 1995), confirmed on appeal, (OIC P96-00015, April 23, 1997), at p. 6: “It must be established that the parties cohabited together, although – in contrast to the first part of subsection (c) – there is no requirement that cohabitation be of a specified duration. In this respect, the second part of subsection (c) imposes a less stringent test than the first part; it does not require cohabitation to be continuous or last for a certain amount of time, because there are children of the relationship involved.”
18. 181995 CanLII 97 (SCC), [1995] S.C.J. No. 44, issued on June 10, 1995 [footnote in original]
19. 19Paragraph 109 [footnote in original]
20. 20Miron v. Trudel, paragraph 114, referred to in Rodrigue [footnote in original]
21. 21As Director’s Delegate Naylor pointed out in Shaw and Allstate Insurance Company of Canada and Belair Insurance Inc., (FSCO P97-00042, October 30, 1998), at p. 8, the diversity of family forms has also been recognized in cases concerning same-sex relationships. She referred to Kane v. Ontario (Attorney General), [1997] O.J. No. 3979 (Ont. Gen. Div.) and M. v. H. (1996), 1996 CanLII 2218 (ON CA), 31 O.R. (3d) 417 (Ont.C.A.), which has since been upheld by the Supreme Court of Canada, 1999 CanLII 686 (SCC), [1999] 2 S.C.R. 3. See also Halpern v. Canada, 2003 CanLII 26403 (ON CA), [2003] O.J. No. 2268 (Ont. C.A.) and Reference re Same-Sex Marriage, 2004 SCC 79, [2004] 3 S.C.R. 698 (S.C.C.) amongst others.
22. 22The most often-cited authority for the elements of cohabitation is Molodowich v. Penttinen (1980), 1980 CanLII 1537 (ON HCJ), 17 R.F.L. (2d) 376 (Ont. District Court). In Shaw, above, the director’s delegate described the subjective criteria this way in confirming the arbitrator’s finding that the relationship was more consistent with a friendship than a conjugal relationship: “[The arbitrator] looked at a variety of relevant factors identified in the case-law as indicia of a conjugal relationship. These included how the parties saw themselves, how they presented themselves to others and how others saw them. He also considered their living and household arrangements, sexual and personal relations, family and social interaction and financial arrangements.” [emphasis added, pp. 4-5]
23. 23Shaw, note 10 above, at p. 10.
24. 24York Fire applied for variation/revocation of this order based on new evidence that Ms. Osbourne and Mr. Smart had misrepresented their relationship; in fact, both were married to other people at the time. On December 8, 1997, the arbitrator revoked her earlier order and ruled that Allstate was responsible for Nadine’s benefits. Allstate’s appeal was dismissed on June 23, 1998. Allstate argued that the other marriages, which Ms. Osbourne and Mr. Smart testified were marriages of convenience, did not preclude their being common-law spouses at the same time. The director’s delegate found that the arbitrator “did not reject the possibility that someone could have one spouse through cohabitation and another through marriage. She never reached that question. She found that the failure of Dorna Osbourne and Mr. Smart to disclose their other marriages undermined their credibility, including their evidence about the details of their relationship. As a result, she concluded that she did not have reliable evidence upon which to conclude that they were spouses at the time of Nadine’s accident.” [p. 9] He found no basis to interfere. Although not required to consider the arbitrator’s statement of the law on common-law spousal status, the director’s delegate noted that the spouses’ “lack of candour . . . . was critical because their status as spouses turned on their evidence. Not only were they living in different homes at the time of Nadine’s accident, there was little objective evidence, such as income tax returns or insurance policies, that they held each other out as spouses.” [p. 10]
25. 25At pp. 7-8.
26. 26At p. 8.
27. 27At p. 8.
28. 28Arbitrator Naylor in Alfred, quoting from cases cited in footnote #16 of that decision. [footnote in original]
29. 29Arbitrator Naylor in Rodrigue, quoting from Warwick v. Minister of Social Services (1978), 1978 CanLII 1300 (ON CA), 21 O.R. (2d) 528. [footnote in original]
30. 30Arbitration decision, p. 7.
31. 31Though Ms. Rodrigue’s daughter claimed dependant’s death benefits, she was not the natural or adoptive daughter of Mr. Hietikko, so the “have cohabited in a relationship of some permanence test” did not apply.
32. 32At p. 26.
33. 33Rodrigue, p. 7.
34. 34At para. 8. Similarly, in Feehan v. Attwells (1979), 1979 CanLII 1613 (ON HCJ), 24 O.R. (2d) 248 (Ont. Co. Ct.), the couple’s separation of one to three weeks in the summer of 1977 was found not to have interrupted their five years of continuous cohabitation (December 1972-February 1978) required for a support application under the Family Law Reform Act.
35. 35At para. 38.
36. 36At para. 56, footnote 25.
37. 37At para. 8.
38. 38At para. 16.
39. 39At para. 33.
40. 40McLean and Wellington Insurance Co., McLean and Economical Mutual Insurance Company, (OIC A-006649, A-006661, February 20, 1995), confirmed on appeal (OIC P-006649 & P-006661, June 24, 1996).
41. 41At paras. 43-46.
42. 42The same approach has been taken where a child’s death benefits claim turns on the former spousal relationship between the parents. Typically, the child was a dependant of the mother, but not the deceased father, and the parents had separated before the accident. In this situation, the former relationship of separated common-law spouses or divorced spouses does not make the child dependent on “the other person’s spouse.” Robinson and Zurich Insurance Company, (FSCO P-007196, June 6, 1996). Also Catherwood, above. In contrast, see McIntyre, above, where the non-custodial spouse’s ongoing support or support obligation entitled the child to a dependant’s death benefit.
43. 43See, for example, El-Saikali and Co-operators General Insurance Company, (FSCO P01-00059, March 13, 2003),
44. 44Arbitration decision, p. 3.
45. 45Arbitration decision, p. 13.
46. 46Arbitration decision, p. 18.
47. 47Arbitration decision, p. 21.
48. 48J’s full name was provided at the hearing.
49. 49Arbitration transcript, December 17, 2003, pp. 17-19.
50. 50Arbitration transcript, December 17, 2003, p. 54.
51. 51Arbitration transcript, December 16, 2004, p. 9. Mr. Stewart’s February 1996 RSP application, which named Ms. Pyles as his beneficiary and described their relationship as “common law,” was admitted though it was only given to Ms. Courtlander on the eve of the hearing, not 30 days in advance of the hearing, as required by Rule 39 of the Dispute Resolution Practice Code.
52. 52The letter was doubly suspect because Mr. Stewart was not questioned about its detailed contents either, though that problem could have been remedied by recalling him to the stand. On the first day of the arbitration hearing, he testified about the letters Ms. Pyles wrote him between October 1996 and February 1997 (arbitration transcript, December 16, 2003, pp. 61-68). He was cross-examined briefly about the March 15, 1997 letter (p. 138), of which he denied knowledge. He was not questioned about its contents because Ms. Courtlander did not have a copy until the morning of the second day. The parties disagree as to whether the rule in Browne v. Dunn required Mr. Stewart to be questioned about the contents of the letter. In my view, fairness would have required recalling Mr. Stewart had the letter been admitted even if, as the insurer submits, it was not led to impeach Mr. Stewart’s credibility. He was entitled to give his view of the significance of Ms. Pyles’ statements about their relationship, and his evidence would have been important to the arbitrator in deciding what weight to give the letter. This would not have caused a significant delay in the proceeding because the dispute arose early in Mr. Pyles’ testimony on the morning of the second day.
53. 53The insurer relies on R. v. P. (R.) (1990), 58 C.C.C. (3rd) 334 (Ont. H. C. J.), R. v. Smith (1992), 1992 CanLII 79 (SCC), 2 S.C.R. 915 (S.C.C.) and Home v. Corbeil, 1955 CanLII 395 (ON HCJ), [1955] 4 D.L.R. 750 (Ont. H.C.). See also the discussion about declarations indicating an existing mental or emotional condition, or state of mind or intention, at pp. 256-265 of The Law of Evidence in Canada, Second Edition, Sopinka, Lederman & Bryant (Butterworths: Toronto, 1999). Reliability and necessity considerations are at the heart of the debate about whether such evidence should be excluded as hearsay. The arbitrator recognized the problem in her oral reasons for excluding the letter at p. 59 of the arbitration transcript of December 17, 2003.
54. 54At p. 7. The leading case is Salvaggio and Simcoe & Erie General Insurance Company, (FSCO P97-00062, January 21, 1999). The issue on appeal is generally whether an arbitrator erred in admitting hearsay evidence, not whether he or she erred in excluding it.
55. 55Ibid., p. 195, para. 6.72.
56. 56At p. 17 of the decision, the arbitrator states: “There is no indication whatsoever from her letters that Ms. Pyles considered the relationship to be over after she returned to Ontario; quite the contrary, in fact.”