Neutral Citation: 2014 ONFSCDRS 102 FSCO A13-004308

BETWEEN:

AMINA JAMA Applicant

and

AVIVA CANADA INC. Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Isoken Osunde Heard: April 16, 2014, at the offices of the Financial Services Commission of Ontario in Toronto. Written submissions were completed on: April 7, 2014.

Appearances: Lawrence A. Berg for Ms. Jama Charlia von Buchwald for Aviva Canada Inc.

Issues:

The Applicant is the surviving widow of Mr. Abdishakur Jowhar. On May 13, 2012 in Borama, Somaliland, Africa, Mr. Abdishakur Jowhar was involved in a motor vehicle accident and died as a result of injuries sustained from the accident. The Applicant applied for death and funeral benefits from the Insurer as a result of the motor vehicle accident. The parties were unable to resolve their disputes through mediation, and the Applicant applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issues are:

Do the territorial limitations set out in section 2(3) of the Statutory Accident Benefits Schedule¹ preclude the Applicant from claiming statutory accident benefits arising out of the accident that occurred in Somaliland, Africa?
Is either party entitled to their arbitration expenses?

Result:

The Applicant is precluded from claiming statutory accident benefits arising out of the accident that occurred in Somaliland, Africa, by the territorial limitations set out in section 2(3) of the SABS.
There is no order on the issue of expenses. I remain seized should the parties be unable to resolve this issue on their own.

BACKGROUND:

This preliminary issue hearing proceeded on the following statements of facts as agreed by the parties:

The deceased, Mr. Abdishakur Jowhar, was married to the Applicant, Ms. Jama, at the time of the motor vehicle accident.
Mr. Abdishakur Jowhar was insured by Traders General Insurance Company² at the time of the accident.
Mr. Abdishakur Jowhar was killed in a motor accident on May 13, 2012 in Somaliland, Africa, while driving an uninsured vehicle owned by his sister.

The crux of the Applicant’s case rests on the legal question of whether there is an ambiguity in the territorial limitations set out in the legislation, which if answered in the affirmative, should be interpreted in the Applicant’s favour.

PARTIES’ POSITIONS:

The Applicant submits that the territorial limitations as set out in the Schedule³ are silent on accidents occurring outside of Canada and the United States. She further submits that since the Schedule is silent with regards to accidents occurring outside of Canada and the United States, it is therefore ambiguous and the doctrine of contra proferentum should be applied to resolve the ambiguity in her favour. ⁴

In response, Aviva, submits that the territorial limitations set out in the Schedule and the Insurance Act⁵ are clear. Therefore, the Applicant is barred from claiming statutory accident benefits. Aviva futher submits that jurisprudence has accepted that territorial limitations restricting the provision of accident benefits have been imposed by the applicable legislation.⁶

Aviva also submits that since there is no ambiguity in the legislation, the doctrine of contra proferentum need not be applied.

ANALYSIS:

Is there an ambiguity in the territorial limitations set out in the legislation?

I find that neither the SABS nor the Insurance Act is ambiguous on the territorial limitations set out with respect to claiming statutory accident benefits for accidents that occurred outside of Canada or the United States.

Section 2(3) of the SABS states the following:

The benefits set out in this Regulation shall be provided in respect of accidents that occur in Canada or the United States of America, or on a vessel plying between ports of Canada or the United States of America.

In addition to section 2(3) above, the territorial limitations with regards to statutory accidents benefits are mentioned in section 59(1) of the SABS and section 243(2) of the Insurance Act.

Section 243(2) provides that:

Statutory accident benefits provided under section 268 apply to the use or operation of any automobile in Canada, the United States of America and any other jurisdiction designated in the Statutory Accident Benefits Schedule, and on a vessel plying between ports of Canada, the United States of America or a designated jurisdiction.

Section 59(1) allows an insured to elect to receive benefits in Ontario for an accident that occurs in another province or territory of Canada or a jurisdiction of the United States of America where there are no benefits received under the law of the jurisdiction in which the accident occurs.

In Prassad v. Gan Canada Insurance Company⁷, the court of appeal in considering the definition of an insured as described in the 1994 Schedule⁸, interpreted the phrase “in or outside of Ontario” to mean “throughout the world.” Therefore, the insured in Prassad was allowed to claim accident benefits for injuries arising out of an accident in Mexico.

Following Prassad’s case, the 1996 Schedule⁹ introduced section 3(2). It states the following:

The benefits set out in this Regulation shall be provided in respect of accidents that occur in Canada or the United States of America, or on a vessel plying between ports of Canada or the United States of America.

Section 243(2) stated above was also introduced to the Insurance Act.

The current position of the law is as stated in Nazarali and Allianz Insurance Company of Canada¹⁰ wherein Arbitrator Renahan held that based on section 3(2) of the 1996 Schedule and section 243(2) of the Insurance Act, the applicants in that case were barred from claiming accident benefits for an accident that occurred in Malawi.

In the case before me, the Applicant relies solely on the decision of the Superior Court in TD General Insurance Co. and Baughan, wherein the court held that the doctrine of contra proferentum should be applied to resolve any ambiguity in the legislation in favour of an insured.

For the reasons set out below, I find that the Baughan case is distinguishable from the case before me. Therefore, the doctrine of contra proferentum is not applicable in this case.

The accident in the Baughan case, occurred in the United States Virgin Islands, whereas the accident in this case occurred in another part of the world – Somaliland, Africa. [my emphasis]

While according to Baughan there is an ambiguity with regards to the territorial limitations set out in the legislation, I find that the ambiguity is only as it relates to the United States of America, and not other parts of the world.

The following are some of the reasons which led the Court to conclude that the territorial provisions were ambiguous in Baughan:

The uncertainty as to whether the United States of America may include any of the three unincorporated organized territories, one of which is the United States Virgin Islands¹¹, and
The fact that none of the relevant territorial provisions¹² provided any clarification or definition for the term “United States of America”.¹³

In the case before me, considering the legislative amendments to the territorial provisions, I conclude that the legislature intended to restrict claiming accident benefits from accidents in or outside of Ontario to accidents that occur in Canada or the United States of America or on a vessel plying between ports of Canada or the United States of America.

I reject the Applicant’s submission that the benefits are not specifically restricted to Canada and/or the United States, and if the benefits were indeed so restricted, the legislation would have specifically stated the same. I find that though the Act is silent on accidents in other parts of the world such as Africa, it makes sense, given the legislative amendments to the territorial limitations, to interpret the silence as an intentional exclusion of other parts of the world and not as an ambiguity.

I agree with Aviva that the doctrine of contra proferentum only becomes relevant after an ambiguity has been identified in the legislation. In this case, I find that since there is no ambiguity in the territorial provisions in the legislation as it relates to Africa, the doctrine of contra proferentum is not relevant.

The Applicant is therefore precluded from claiming statutory accident benefits arising out of the accident that occurred in Somaliland, Africa, by the territorial limitations set out in section 2(3) of the SABS.

EXPENSES:

The parties did not make any submissions on the issue of expenses. They are encouraged to resolve it themselves; if they are unable to resolve it, I may be spoken to on this issue.

June 17, 2014

Isoken Osunde Arbitrator

Financial Services Commission of Ontario