Dorman v. Economical Mutual Insurance Company et al. Mieyette v. Allstate Insurance Company of Canada et al. Black v. Belair Insurance Company Inc. carrying on business as Belair Direct et al. Brooks v. Intact Financial Corporation c.o.b. Intact Insurance et al. Elliott v. Aviva Insurance Company of Canada et al. Nicholson v. Unifund Assurance Company et al. Sampaio v. Certas Home and Automobile Insurance Company et al. MacLeod v. The Commonwealth Mutual Insurance Group et al. Bonhomme v. Co-operators General Insurance Company et al. Robertson v. Echelon General Insurance Company et al. Cicciarelli v. Wawanesa Mutual Insurance Company et al. Baron v. St. Paul Fire and Marine Insurance Company et al. Gibbons v. TD Insurance et al. Nagle v. Gore Mutual Insurance Company et al. Sura v. CUMIS General Insurance Company et al.
[Indexed as: Dorman v. Economical Mutual Insurance Co.]
Ontario Reports Court of Appeal for Ontario Huscroft, Nordheimer and Harvison Young JJ.A. May 13, 2021 155 O.R. (3d) 338 | 2021 ONCA 314
Case Summary
Administrative law — Jurisdiction — Plaintiffs filing proposed class actions against insurers and regulator for improperly deducting HST from accident benefits — Two of 15 insurers settling and plaintiffs seeking approval of settlements — Court had no jurisdiction to approve settlements or to hear actions against insurers, as questions of accident benefits were within exclusive jurisdiction of Licence Appeal Tribunal — Actions against regulator involving improper investigation rather than issues of entitlement to benefits, so those actions could proceed — Insurance Act, R.S.O. 1990, c. I.8, s. 280 . [page339]
Civil procedure — Class proceedings — Approval of settlement — Plaintiffs filing proposed class actions against insurers and regulator for improperly deducting HST from accident benefits — Two of 15 insurers settling and plaintiffs seeking approval of settlements — Court had no jurisdiction to approve settlements or to hear actions against insurers, as questions of accident benefits were within exclusive jurisdiction of Licence Appeal Tribunal — Actions against regulator involving improper investigation rather than issues of entitlement to benefits, so those actions could proceed — Insurance Act, R.S.O. 1990, c. I.8, s. 280 .
Civil procedure — Costs — Discretion to award costs — Plaintiffs filing proposed class actions against insurers and regulator for improperly deducting HST from accident benefits — Two of 15 insurers settling and plaintiffs seeking approval of settlements — Motion judge finding that questions of accident benefits were within exclusive jurisdiction of Licence Appeal Tribunal, while actions against regulator involving improper investigation could proceed — Insurers awarded costs of motion in an amount substantially less than what they sought — Motion judge entitled to conclude that costs incurred were excessive for a straightforward motion on a jurisdictional question.
Courts — Jurisdiction — Plaintiffs filing proposed class actions against insurers and regulator for improperly deducting HST from accident benefits — Two of 15 insurers settling and plaintiffs seeking approval of settlements — Court had no jurisdiction to approve settlements or to hear actions against insurers, as questions of accident benefits were within exclusive jurisdiction of Licence Appeal Tribunal — Actions against regulator involving improper investigation rather than issues of entitlement to benefits, so those actions could proceed — Insurance Act, R.S.O. 1990, c. I.8, s. 280 .
Insurance — Actions against insurer — Plaintiffs filing proposed class actions against insurers and regulator for improperly deducting HST from accident benefits — Two of 15 insurers settling and plaintiffs seeking approval of settlements — Court had no jurisdiction to approve settlements or to hear actions against insurers, as questions of accident benefits were within exclusive jurisdiction of Licence Appeal Tribunal — Actions against regulator involving improper investigation rather than issues of entitlement to benefits, so those actions could proceed — Insurance Act, R.S.O. 1990, c. I.8, s. 280 .
Insurance — Automobile insurance — Statutory accident benefits — Deductions — Settlement — Plaintiffs filing proposed class actions against insurers and regulator for improperly deducting HST from accident benefits — Two of 15 insurers settling and plaintiffs seeking approval of settlements — Court had no jurisdiction to approve settlements or to hear actions against insurers, as questions of accident benefits were within exclusive jurisdiction of Licence Appeal Tribunal — Actions against regulator involving improper investigation rather than issues of entitlement to benefits, so those actions could proceed — Insurance Act, R.S.O. 1990, c. I.8, s. 280 .
Multiple plaintiffs filed proposed class actions against 15 auto insurers and the Financial Services Commission of Ontario (FSCO) for improperly deducting Harmonized Sales Tax (HST) from their statutory accident benefits. Shortly after the [page340] actions were commenced, two of the defendant insurers entered into settlement agreements. The settlements were conditional on the proceedings being certified as class proceedings and on court approval of the settlements. Most of the remaining defendants, including the FSCO, brought parallel motions for a determination that the Licence Appeal Tribunal (LAT) had exclusive jurisdiction over the dispute. The settling plaintiffs sought a determination that the court had jurisdiction to certify the proceedings as class proceedings and to approve the settlements. The motion judge concluded that the Superior Court of Justice's jurisdiction was ousted by s. 280 of the Insurance Act , which stated that in respect of entitlement to statutory accident benefits, an insured person may apply to the LAT and no person may bring a proceeding to a court other than an appeal or application for judicial review. Accordingly, he granted the motions to dismiss the proposed class actions and declined to approve the settlements. He dismissed the Crown's motion to dismiss the claims against the FSCO as being barred by s. 280. The plaintiffs appealed from the dismissal of their claims and the refusal to approve the settlements; the Crown appealed from the decision not to dismiss the claims against the FSCO.
Held, the appeals should be dismissed.
Section 280 of the Insurance Act provided a complete answer to the plaintiffs' claim. They argued that as a matter of policy the exclusive jurisdiction of the LAT undermined the purpose of the Act and hindered access to justice, but the statute was clear and had to be given effect. Nor did it avail the plaintiffs that s. 280 did not specifically prohibit representative actions. The Class Proceedings Act, 1992 was procedural and did not confer jurisdiction that did not otherwise exist. Nor could it be said that a dispute about HST was not a dispute about entitlement to benefits. There was no scope for a judicial settlement approval jurisdiction.
There was no error in the motion judge's analysis in respect of the Crown's motion. The plaintiffs' dispute with the FSCO concerned failures related to its duties. Although a finding of wrongful conduct was a predicate determination that had to be made before the plaintiffs' allegations could be established, that went to the causes of action rather than the jurisdiction of the court over the claim. Nothing in s. 280 deprived the court of jurisdiction, over the tort claims alleged, in preference to the LAT. The LAT was concerned only with claims between insured persons and insurers.
Most of the respondent insurers sought leave to appeal the motion judge's costs order that they be awarded $1,000 each, plus $15,000 to be shared amongst them as they saw fit. The respondents had sought over $600,000 in costs, but the motion judge was well familiar with the case and it was open to him to conclude that it was a straightforward motion on a jurisdictional question and that the costs incurred were excessive in the circumstances. His conclusion revealed no error in principle and was entitled to deference.
Stegenga v. Economical Mutual Insurance Co . (2019), 147 O.R. (3d) 65 , [2019] O.J. No. 3845 , 2019 ONCA 615 , 436 D.L.R. (4th) 361 , 44 M.V.R. (7th) 173 , 95 C.C.L.I. (5th) 194 , apld
Statutes referred to
Class Proceedings Act, 1992 , S.O. 1992, c. 6 [as am.] Insurance Act , R.S.O. 1990, c. I.8, s. 280, (3) [page341]
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 21.01(1) (a), (3) (a)
Counsel
APPEAL and CROSS-APPEAL from order of Belobaba J., reported at (2020), 151 O.R. (3d) 791 , [2020] O.J. No. 3033 , 2020 ONSC 4004 (S.C.J.) , and from the costs order, with reasons reported at [2020] O.J. No. 3694 , 2020 ONSC 4952 , 8 C.C.L.I. (6th) 184 (S.C.J.) .
Glenn Frelick , Dona Salmon and Adam Mortimer , for appellants/respondents by way of cross-appeal (C68563) and respondents/respondents by way of cross-appeal (C68566) Her Majesty the Queen in Right of Ontario, Philip Howell and Brian Mills.
Ron Bohm , Paul Harte , Jay Ralston and Kevin Kemp , for respondent/respondent by way of cross-appeal (C68563) and appellant/respondent by way of cross-appeal (C68566) Bradley Dorman, and for respondents (C68563) and appellants/respondents by way of cross-appeal (C68566) Jeanette Mieyette, William Elliott, Jill Nicholson, David MacLeod, Madeleine Bonhomme, John Ross Robertson, Mark Cicciarelli, Gary Gibbons, Brian Nagle and David Sura, and for respondents (C68563) and appellants (C68566) Shelli-Lynn Black, Catherine Brooks and Kristopher Baron, and for respondent/ respondent by way of cross-appeal (C68563) and appellant (C68566) Fernanda Sampaio.
Mark Gelowitz , Laura Fric and Carla Breadon , for respondent/appellant by way of cross-appeal (C68563 & C68566) Economical Mutual Insurance Company.
Byron Shaw and Selina Mamo , for respondents (C68563 & C68566) Intact Financial Insurance and Belair Insurance Company Inc.
Paul Martin , Sarah Armstrong and Daanish Samadmoten , for respondents (C68563) and respondents/ appellants by way of cross-appeal (C68566) Aviva Insurance Company of Canada, Co-operators General Insurance Company, CUMIS General Insurance Company and Gore Mutual Insurance Company.
Arthur Hamilton , for respondent (C68563) and respondent/appellant by way of cross-appeal (C68566) Wawanesa Mutual Insurance Company.
Christine Lonsdale and Alison Bond , for respondent/appellant by way of cross-appeal (C68563) and respondent (C68566) Certas Home and Automobile Insurance Company.
Belinda Bain , Scott Kugler and Heyla Vettyvel , for respondent (C68563) and respondent/appellant by way of cross-appeal (C68566) TD Insurance. [page342]
Cheryl Woodin and Joseph Blinick , for respondents (C68563 & C68566) St. Paul Fire and Marine Insurance Company of Canada and Travelers Insurance Company of Canada.
Glenn Zacher , Alexandra Urbanski and Patrick O'Kelly , for respondents (C68563) and respondents/ appellants by way of cross-appeal (C68566) Unifund Insurance Company and Allstate Insurance Company of Canada.
Paul Tushinski and Gillian Eckler , for respondent (C68563) and respondent/appellant by way of cross-appeal (C68566) Commonwealth Mutual Insurance Company.
Lisa Armstrong , for respondent (C68563) and respondent/appellant by way of cross-appeal (C68566) Echelon General Insurance Company.
BY THE COURT:
[1] The plaintiff appellants filed proposed class actions against 15 auto insurers and the Financial Services Commission of Ontario ("FSCO"), the government entity that regulates the insurers, along with its current and former Superintendents. They alleged that the insurers had improperly reduced their statutory accident benefits ("SABs") by deducting Harmonized Sales Tax ("HST"), and that the FSCO wrongfully failed to investigate the practices of the insurers after receiving complaints, and also failed to enforce its own guidelines on HST and SABs.
[2] Two of the insurers, Belair and Intact, entered into tentative settlements with the plaintiff appellants who claimed against them. The settlements were conditional on the proceedings being certified as class proceedings and on court approval of the settlements.
[3] The FSCO, and most of the respondent insurers, brought parallel motions under rules 21.01(1)(a) and (3)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, seeking to stay or dismiss the proposed class actions on the basis that the Superior Court of Justice lacks jurisdiction. The plaintiff appellants, who had entered into tentative settlements with Belair and Intact, sought a determination that the court has jurisdiction to certify the proceedings as class proceedings and to approve the settlements.
[4] The motion judge concluded that the Superior Court of Justice's jurisdiction was ousted by s. 280 of the Insurance Act, R.S.O. 1990, c. I.8 and that the Licence Appeal Tribunal ("LAT") has exclusive jurisdiction over the plaintiff appellants' dispute against the insurers. Accordingly, he granted the motions to dismiss the proposed class actions and declined to approve the [page343] settlements with Belair and Intact. He dismissed the Crown's motions, finding that it was not plain and obvious that the proposed class actions against the FSCO were barred by s. 280 because the allegations were not concerned with SAB entitlements or amounts, but instead were concerned with the FSCO's misconduct.
[5] The plaintiff appellants appeal from the dismissal of their claims and the refusal to approve the Belair and Intact settlements. The Crown appeals from the decision not to dismiss the claims against the FSCO. The respondent insurers seek leave to appeal the costs order made in their favour by the motion judge.
[6] For the reasons that follow, the plaintiffs' appeals (C68566) and the Crown's appeal (C68563) are dismissed. Leave to appeal the costs order is refused.
The Plaintiffs' Appeals
[7] We see no error in the motion judge's analysis. Section 280 of the Insurance Act provides a clear answer to the plaintiff appellants' claim. That section provides as follows:
280(1) This section applies with respect to the resolution of disputes in respect of an insured person's entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.
(2) The insured person or the insurer may apply to the Licence Appeal Tribunal to resolve a dispute described in subsection (1).
(3) No person may bring a proceeding in any court with respect to a dispute described in subsection (1), other than an appeal from a decision of the Licence Appeal Tribunal or an application for judicial review.
[8] As the motion judge noted, no court actions are permitted with respect to either disputes about entitlement to SABs or the amount of the SAB. The LAT has exclusive jurisdiction over such disputes. This was confirmed by this court's decision in Stegenga v. Economical Mutual Insurance Co., 2019 ONCA 615, at paras. 21-22 and 53. The plaintiff appellants cannot avoid this result with policy arguments that the exclusive jurisdiction of the LAT undermines the purpose of the Act or hinders access to justice. The Act is clear and must be given effect.
[9] Nor does it avail the appellants that s. 280 does not specifically prohibit representative actions. The Act cannot be read as prohibiting only individual actions. Moreover, the Class Proceedings Act, 1992, S.O. 1992, c. 6 is procedural in nature and does not confer jurisdiction on the court that does not otherwise exist. Nor [page344] can it be said that a dispute about HST is not a dispute about the amount of the benefits to which a person is entitled. Finally, there is no scope for a judicial settlement approval jurisdiction. As the motion judge explained, settlements cannot be approved unless a proposed class action is certified, and certification is impossible because the action is barred by s. 280(3).
The Crown's Appeal
[10] Again, we see no error in the motion judge's analysis. As he explained, the plaintiff appellants' dispute with the FSCO concerns failures related to its duties. Although a finding of wrongful conduct is a predicate determination that must be made before the plaintiff appellants' allegations can be established, this goes to the causes of action rather than the jurisdiction of the court over the claim. Nothing in s. 280 deprives the court of jurisdiction, over the tort claims alleged, in preference to the LAT. The LAT is concerned only with claims between insured persons and insurers.
Costs
[11] Most of the respondent insurers seek leave to appeal the costs order. They sought over $600,000 in costs on the motion, but the motion judge awarded them $15,000 to be shared amongst them, as they deem appropriate, and awarded a further $1,000 to each insurer as costs of the action, for a total of $28,000.
[12] The respondent insurers allege that the motion judge erred by ignoring and misapplying relevant factors, undervaluing the result of the motion and the importance of the issues at stake, pointing to the potential value of the plaintiff appellants' claims. The motion judge is also said to have erred by considering irrelevant and improper factors.
[13] We see no such errors. It is well-established that costs are within the discretion of the motion judge and should not be interfered with unless there is an error in principle, or they are plainly wrong. In this case, the motion judge was well familiar with the case, having case managed it throughout. It was open to him to conclude that this was a straightforward motion on a jurisdictional question and that the costs incurred were excessive in the circumstances. Although he may have put the matter bluntly, his conclusion reveals no error in principle and is entitled to deference.
[14] In addition, motion judges have considerable experience with the appropriate quantum of costs for many different types of motions. They are therefore often able to establish a fair and [page345] reasonable amount to fix for costs without the need for lengthy submissions or a detailed review of the time spent, or the rates charged. The quantum of costs sought does not, by itself, require any different approach.
Disposition
[15] The plaintiffs' appeals and the Crown's appeal are dismissed. Leave to appeal the costs order is refused.
Costs on the Appeal
[16] Economical, the lead respondent on the plaintiffs' appeals, is entitled to its costs on the appeal, which are fixed at $10,000, all-inclusive.
[17] The respondents Belair and Intact do not seek costs. No costs order is made in favour of the other respondent insurance companies.
[18] The respondents on the Crown's appeal are entitled to costs in the net agreed amount of $4,500, all-inclusive.
Appeal and cross-appeal dismissed.
End of Document
