Intact Insurance Company v. Federated Insurance Company of Canada

[Indexed as: Intact Insurance Co. v. Federated Insurance Co. of Canada]

Ontario Reports

Court of Appeal for Ontario

Doherty, MacPherson and Lauwers JJ.A.

January 27, 2017

134 O.R. (3d) 241 | 2017 ONCA 73

Case Summary

Insurance — Automobile insurance — Arbitration — Insurer A claiming that it was not responsible for paying statutory accident benefits as it had cancelled automobile insurance policy before accident — Driver convicted of driving without insurance — Priority dispute between Insurer A and Insurer B proceeding to arbitration — Abuse of process doctrine not preventing Insurer B from leading evidence that driver was in fact insured at time of accident as Insurer A had not followed required procedure when purporting to cancel policy.

The son of C was injured when C collided with a truck. C's vehicle had been insured by Intact, and C's son claimed statutory accident benefits from Intact. Intact denied that it was responsible for paying statutory accident benefits, claiming that it had cancelled the policy five days before the accident. C was convicted of driving without insurance. A priority dispute between Intact and Federated, the insurer of the truck, proceeded to arbitration. Federated wanted to lead evidence that, because Intact had not followed the required procedures when purporting to cancel the policy, C was in fact insured at the time of the accident. The parties asked the arbitrator to decide whether the abuse of process doctrine prevented Federated from doing so. The arbitrator, emphasizing that Federated had not been a party to the proceeding that had resulted in C's conviction, found that it would be unfair to Federated to deny it an opportunity to lead evidence contrary to the conviction in the context of a priority dispute between insurers. On appeal, the application judge reversed that finding. The application judge concluded that Federated had failed to lead any "evidence to the contrary" as required by s. 22.1 of the Ontario Evidence Act, R.S.O. 1990, c. E.23, which provides that proof of a prior conviction is proof that the crime was committed by the convicted person in the absence of "evidence to the contrary". Federated appealed.

Held, the appeal should be allowed.

The application judge confused the operation of s. 22.1 of the Evidence Act and the abuse of process doctrine. The abuse of process doctrine operates to foreclose a party from leading "evidence to the contrary" when to do so would constitute an abuse of the court's process. The application judge erroneously held that the preliminary motion turned on whether Federated had led sufficient "evidence to the contrary" to rebut the evidence offered by proof of C's conviction for driving without insurance. The outcome of the motion depended not on whether Federated had led "evidence to the contrary" under s. 22.1, but on whether Federated had satisfied the arbitrator that in the circumstances it should be permitted to challenge the prior conviction with "evidence to the contrary". The application judge erred in law in concluding that the reach of s. 22.1 rendered Federated's non-involvement in C's prosecution irrelevant for the purposes of the abuse of process doctrine.

The arbitrator correctly held that the abuse of process doctrine did not prevent Federated from leading evidence that C was insured at the time of the accident. As Intact was not a party to C's prosecution, it could not complain that relitigation of C's insurance status in the arbitration forced it to reprove a fact that it had already expended time and resources proving in another proceeding. Federated was a true stranger to C's prosecution, and had had no opportunity to present its argument that C was in fact insured at the time of the accident. Fairness to Federated strongly dictated that it should have an opportunity to demonstrate that C was insured at the time of the accident. Moreover, relitigation of C's insurance status in the context of the private arbitration between the insurers would have no negative impact on the integrity of the overall adjudicative process and might in fact enhance that integrity by generating a more reliable result.

APPEAL from the order of Diamond J. (2016), 129 O.R. (3d) 549, [2016] O.J. No. 550, 2016 ONSC 719 (S.C.J.) allowing an appeal from a decision of the arbitrator.

Greg Bailey and Bevin Shores, for appellant.

Joseph Lin and Dana Yoon, for respondent.

The judgment of the court was delivered by

DOHERTY J.A.:

I. Overview

[1] This appeal arises out of a priority dispute between two insurers. The court must decide whether the abuse of process doctrine as described in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 ("CUPE") precluded the appellant ("Federated") from leading evidence at an arbitration that the vehicle in which the injured person was a passenger was covered by an automobile insurance policy issued by the respondent ("Intact"). The driver of the vehicle had previously been convicted of driving without insurance at the time of the accident.

[2] The arbitrator held that the abuse of process doctrine should not prevent Federated from leading evidence that the driver was in fact insured at the time of the accident. On appeal, the application judge reversed the arbitrator, holding that the issue could not be relitigated in the context of the arbitration.

[3] This court granted leave to appeal from the application judge's order. I would allow the appeal and restore the arbitrator's order.

II. Facts

[4] On April 25, 2010, a vehicle driven by Patrick Cadieux collided with a truck. Mr. Cadieux's four-year-old son, a passenger in his vehicle, suffered significant injuries in the crash. The son claimed statutory accident benefits under the Insurance Act, R.S.O. 1990, c. I.8.

[5] The Cadieux vehicle had been insured by Intact. Intact claimed, however, that it had cancelled the policy five days before the accident for non-payment of premiums. Federated insured the truck involved in the accident.

[6] Under the provisions of s. 268(2)1(ii) of the Insurance Act, Intact was responsible to pay the statutory accident benefits if it was the insurer of the Cadieux vehicle at the time of the accident. If, however, that policy had been cancelled before the accident, then responsibility for payment of the statutory accident benefits would fall on Federated as the insurer of the other vehicle involved in the accident: Insurance Act, ss. 268(2)1(ii) and (iii).

[7] Intact and Federated were obligated to arbitrate their dispute pursuant to regulations under the Insurance Act. They entered into an arbitration agreement which, among other things, empowered the arbitrator to determine procedural and interlocutory matters on the arbitration. Intact paid Mr. Cadieux's son's statutory accident benefits on an ongoing basis while the arbitration proceeded.

[8] At the arbitration, the parties asked the arbitrator to determine a preliminary issue. Although the parties put that issue before the arbitrator in an informal manner, I am satisfied that they agreed that Mr. Cadieux had been convicted of driving without insurance at the time of the accident, contrary to s. 2(1) of the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25. Intact and Federated asked the arbitrator to decide whether the abuse of process doctrine prevented Federated from leading evidence that Mr. Cadieux had insurance at the time of the accident. Federated wanted to lead evidence that because Intact had not followed the required procedures when purporting to cancel the policy, Mr. Cadieux was insured at the time of the accident by Intact. Intact maintained that Mr. Cadieux's status as an insured or uninsured driver had been decided in the proceedings in which he was convicted of driving without insurance and that it would be an abuse of process to permit Federated to relitigate that issue.

[9] On the preliminary motion, Federated filed transcripts of examinations of two Intact employees. It is unnecessary to refer to their evidence in detail. It is sufficient to say that the evidence raised legitimate questions about Intact's notification to Mr. Cadieux of the policy cancellation. Proper notice is a precondition to cancellation for non-payment.

III. The Decisions Below

[10] In permitting Federated to lead evidence that Mr. Cadieux was insured at the time of the accident, the arbitrator emphasized that Federated had not been a party to the proceeding that had resulted in Mr. Cadieux's conviction. Consequently, Federated had no prior opportunity to raise the argument that Intact had not complied with the provisions governing policy cancellation. The arbitrator concluded:

All of the jurisprudence brought to my attention by counsel herein involve situations where the individual who was convicted or a party with identical interests, sought to introduce evidence contrary to that supporting the initial conviction. That is not the case here. Here it is the opposing party Federated that seeks to introduce evidence contrary to the conviction at first instance. Federated played no role whatsoever in the original proceeding and was not in a position to influence the outcome of the initial proceeding. I am of the opinion that it would be unfair to deny a party of opposite interest an opportunity to lead evidence contrary to the initial conviction in the context of a priority dispute pursuant to the Insurance Act.

[11] In reversing the arbitrator, the application judge held that the arbitrator's decision that Federated could challenge the facts underlying Mr. Cadieux's conviction raised a question of law reviewable on a correctness standard (paras. 22-24). He also concluded that Federated had failed to lead any "evidence to the contrary" as required by s. 22.1 of the Ontario Evidence Act, R.S.O. 1990, c. E.23 ("Evidence Act"). That section provides that proof of a prior conviction is proof that the crime was committed by the convicted person "in the absence of evidence to the contrary". The application judge said, at para. 39:

The onus to lead "evidence to the contrary" was clearly upon Federated. In the record before the arbitrator, not only was there no "credible evidence" relating to the father's conviction, there was no evidence to the contrary at all. This is highlighted by the arbitrator's own conclusions that it was Federated's intention to "hopefully" tender and introduce some unspecified, new evidence during the arbitration that could potentially amount to "evidence to the contrary".

[12] The application judge held (at para. 42) that as Federated had not led any "evidence to the contrary" under s. 22.1, the arbitrator "erred in law by refusing to apply the doctrine of abuse of process" to prevent Federated from leading evidence that Mr. Cadieux had insurance at the time of the accident (paras. 41-42).

[13] The application judge briefly considered the abuse of process doctrine in more general terms. After referring to CUPE and noting that the consequences of a conviction for driving without insurance were sufficiently significant to warrant a serious defence to the charge (para. 45), the application judge returned to s. 22.1 of the Evidence Act. He reasoned that because litigants who were not parties to the proceeding in which the conviction was entered could resort to s. 22.1 to prove the conviction in the subsequent proceeding, the arbitrator had erred in holding that Federated's non-involvement in the proceeding resulting in the conviction was a significant consideration in his decision to allow Federated to relitigate Mr. Cadieux's insurance status. The application judge opined, at para. 46:

It is important to note that section 22.1 of the Evidence Act applies whether or not the father is a party to the arbitration. In my view, the arbitrator focused upon whether Federated was a party to the criminal proceeding in deciding whether or not fairness dictated that Federated be provided with an opportunity to re-litigate the facts surrounding the conviction. This was an error in law . . .

IV. Analysis

(i) Standard of Review

[14] For once, the applicable standard of review is not in issue. Everyone agrees that correctness is the appropriate standard of review, both before the application judge and in this court: see CUPE, at paras. 13-16.

(ii) The Errors in Law

[15] In my view, the application judge confused the operation of s. 22.1 of the Evidence Act and the abuse of process doctrine. That confusion led him into error.

[16] Section 22.1 of the Evidence Act reads in part:

22.1(1) Proof that a person has been convicted . . . of a crime is proof, in the absence of evidence to the contrary, that the crime was committed by the person[.]

[17] Section 22.1 is a rule of evidence intended to expedite the proof, in a subsequent proceeding, of facts decided in a prior criminal proceeding. The section declares that evidence of one fact -- a prior conviction -- is proof of another fact -- the convicted person committed the crime -- absent "evidence to the contrary".

[18] Under s. 22.1, proof of the prior conviction constitutes "proof" of all of the facts essential to that conviction absent "evidence to the contrary": Caci v. Dorkin, 2008 ONCA 750, at para. 15, leave to appeal to S.C.C. refused [2009] S.C.C.A. No. 2. The section applies to convictions for provincial regulatory offences as well as convictions for criminal offences: see Andreadis v. Pinto, at paras. 11-16.

[19] "Evidence to the contrary" under s. 22.1 refers to evidence that contradicts the facts essential to the prior conviction. For example, evidence that a driver who had been convicted of driving without insurance was in fact insured at the relevant time would constitute "evidence to the contrary" under s. 22.1 led to rebut the proof offered by evidence of the conviction.

[20] Unlike s. 22.1, the abuse of process doctrine is not an evidentiary rule. It is a common law doctrine developed by the courts to protect the integrity of the adjudicative process. Abuse of process takes many forms. This case is concerned with abuse of process by relitigation of decided facts. The doctrine precludes relitigation when it would undermine the integrity of the adjudicative process.

[21] The operation of s. 22.1 and the abuse of process doctrine intersect at the phrase "evidence to the contrary" in s. 22.1. A party may lead "evidence to the contrary" to avoid the evidentiary rule established in s. 22.1. The abuse of process doctrine operates to foreclose a party from leading that "evidence to the contrary" when to do so would constitute an abuse of the court's process: see Bank of Montreal v. Woldegabriel, [2007] O.J. No. 1305, at paras. 47-48.

[22] The interaction between abuse of process and s. 22.1 is explained in CUPE, at paras. 18-19:

. . . s. 22.1 contemplates that the validity of a conviction may be challenged in a subsequent proceeding, but the section says nothing about the circumstances in which such challenge is or is not permissible. That issue is determined by the application of such common law doctrines as res judicata, issue estoppel, collateral attack and abuse of process. Section 22.1 speaks of the admissibility of the fact of the conviction as proof of the truth of its content, and speaks of its conclusive effect if unchallenged[.]

Section 22.1 renders the proof of the conviction admissible. The question is whether it can be rebutted by "evidence to the contrary". There are circumstances in which evidence will be admissible to rebut the presumption that the person convicted committed the crime, in particular where the conviction in issue is that of a non-party. There are also circumstances in which no such evidence may be tendered. If either issue estoppel or abuse of process bars the re-litigation of the facts essential to the conviction, then no "evidence to the contrary" may be tendered to displace the effect of the conviction. In such a case, the conviction is conclusive that the person convicted committed the crime.

[23] Applying the CUPE analysis to this case, the interplay between s. 22.1 of the Evidence Act and the abuse of process doctrine can be described in the following terms. Intact, relying on s. 22.1, argued that proof that Mr. Cadieux had been convicted of driving without insurance at the time of the accident proved, for the purposes of the arbitration, that he was driving without insurance at that time, negating Intact's responsibility to pay statutory accident benefits under the priority scheme in the Insurance Act. Federated responded to Intact's position with "evidence to the contrary" consisting of evidence that Intact had not properly cancelled the policy, meaning that Mr. Cadieux was insured and that Intact was responsible for the statutory accident benefits. Intact, in turn, argued that the abuse of process doctrine should be applied to prevent Federated from leading its "evidence to the contrary".

[24] On the preliminary motion, the arbitrator had to decide if the abuse of process doctrine should block Federated from leading its "evidence to the contrary". The arbitrator was not asked to decide whether Federated's evidence would in fact negate the evidentiary value of the proof of Mr. Cadieux's conviction for driving without insurance.

[25] The application judge erroneously held, at paras. 41-42, that the preliminary motion turned on whether Federated had led sufficient "evidence to the contrary" to rebut the evidence offered by proof of Mr. Cadieux's conviction for driving without insurance. The outcome of the motion depended not on whether Federated had led "evidence to the contrary" under s. 22.1, but on whether Federated had satisfied the arbitrator that in the circumstances it should be permitted to challenge the prior conviction with "evidence to the contrary". Federated's evidence that the Intact policy had not been properly cancelled was offered to demonstrate that if Federated was allowed to relitigate Mr. Cadieux's insurance status, it had evidence supporting its claim that Mr. Cadieux was insured.

[26] The confusion between the evidentiary rule in s. 22.1 of the Evidence Act and the abuse of process doctrine reappeared when the application judge considered Federated's submission that it should be allowed to relitigate the insurance coverage issue because it had not been a party to the proceedings in which Mr. Cadieux had been convicted of driving without insurance. The application judge correctly pointed out that a litigant could use s. 22.1 to prove a prior conviction, even if that litigant was not a party to the proceedings in which the conviction was entered. However, the application judge erred in law in concluding that the reach of s. 22.1 rendered Federated's non-involvement in Mr. Cadieux's prosecution irrelevant for the purposes of the abuse of process doctrine. That doctrine turns ultimately on whether fairness requires relitigation. The role played in the earlier proceeding by the party seeking to relitigate a fact is an important consideration in deciding whether relitigation constitutes an abuse of process. Fairness is more likely to favour relitigation if the party seeking to relitigate did not have an opportunity to litigate the issue at the prior proceeding: Canam Enterprises Inc. v. Coles, 2002 SCC 63, at paras. 57-58, per Goudge J.A., dissenting, approved. The evidentiary reach of s. 22.1 of the Evidence Act has no relevance to that fairness inquiry.

(iii) Would Relitigation Amount to an Abuse of Process?

[27] The application judge's legal errors are not necessarily determinative of the outcome of the appeal. I must consider whether a proper application of the abuse of process doctrine precluded relitigation of whether Mr. Cadieux was insured at the time of the accident.

[28] The abuse of process doctrine as it is applied to prevent relitigation is explained in CUPE. I take the following points from the reasons of Arbour J.:

• the abuse of process doctrine is a manifestation of a court's inherent power to prevent misuse of its process by relitigation of previously decided facts: CUPE, at para. 37;

• the doctrine is primarily focused on preserving the integrity of the administration of justice rather than protecting the interests of individual litigants: CUPE, at para. 43;

• relitigation inevitably has a detrimental effect on the due administration of justice. It can lead to inconsistent and even irreconcilable results, devalue finality and cause the expenditure of resources, both public and private, on further proceedings with no guarantee that the second result will be more accurate than the first: CUPE, at paras. 38, 51-52;

• relitigation should thus be avoided unless "the circumstances dictate that relitigation is in fact necessary to enhance the credibility and the effectiveness of the adjudicative process as a whole": CUPE, at para. 52;

• there is no closed list of the circumstances in which relitigation is necessary. Courts will permit relitigation if in the specific circumstances "fairness dictates that the original result should not be binding in the new context": CUPE, at paras. 52-53.

[29] The factors informing the fairness of permitting relitigation in a given case will vary with the circumstances. CUPE identified some of those factors, at paras. 52-53. Other cases have identified other factors: see, e.g., Hanna v. Abbott, at para. 32; Canam Enterprises Inc., at paras. 57-60; and Becamon v. Wawanesa Mutual Insurance Co., 2009 ONCA 113, at paras. 17-21.

[30] Most of the factors informing the inquiry involve a comparison of different features of the initial proceeding in which the finding of fact was made and the subsequent proceeding in which a party seeks to relitigate that fact. The court, in considering the various factors, must balance the damage done by relitigation to systemic interests, including finality and consistency of result, against fairness to the litigant seeking to relitigate a previously determined finding: CUPE, at paras. 15, 55.

[31] I see no point in attempting to catalogue the factors relevant to the abuse of process inquiry. Instead, I will address the factors that are relevant here. There are four:

• the parties to the two proceedings;

• the nature of the initial proceeding (the prosecution);

• the potential consequences or "stakes" of the initial proceeding; and

• the nature of the second proceeding (the arbitration).

[32] I start with a comparison of the parties to the two proceedings. The Crown in Right of the Province of Ontario and Mr. Cadieux were the parties to the prosecution. Neither Federated nor Intact were parties, or shared any interest in common with either the prosecutor or Mr. Cadieux.

[33] As Intact was not a party to the prosecution, it cannot complain that relitigation of Mr. Cadieux's insurance status in the arbitration forces it to reprove a fact that it has already expended time and resources proving in another proceeding. Intact is not being "vexed" to reprove a fact it has already proved: CUPE, at para. 38.

[34] Federated is a true stranger to the prosecution of Mr. Cadieux. There is no suggestion that Federated was even aware of the prosecution. CUPE accepts that the abuse of process doctrine, unlike issue estoppel, can apply to preclude relitigation by a party who was not a party to the prosecution. However, the non-involvement of the party seeking to relitigate in the initial litigation is a significant factor in determining whether relitigation constitutes an abuse of process. Clearly, a party who had a full opportunity to litigate a fact at a prior proceeding stands on much weaker ground when seeking to relitigate that fact in a different context in a subsequent proceeding than does a party who has never had the opportunity to litigate the fact in issue: see CUPE, at para. 19; Canam Enterprises Inc., at paras. 57-58; Caci, at para. 15; Engels v. Merit Insurance Brokers Inc.; and Morel v. Canada, 2008 FCA 53.

[35] The non-involvement of Federated and Intact in the proceedings in which Mr. Cadieux was convicted of driving without insurance militates in favour of permitting relitigation of that issue as between Federated and Intact. In particular, Federated's non-involvement in the prosecution was properly treated by the arbitrator as an important factor, strongly supporting Federated's contention that it should be allowed, in the context of the arbitration, to challenge Mr. Cadieux's insurance status at the time of the accident.

[36] I turn to the second factor. The nature of the proceeding, in this case the prosecution of Mr. Cadieux for driving without insurance, in which the fact that a party seeks to relitigate was first decided, can affect whether the abuse of process doctrine forecloses relitigation. The procedures followed in the first proceeding may have an impact, positive or negative, on the fairness of that proceeding or the reliability of its result: Guergis v. Novak, 2013 ONCA 449, at para. 18. Parties arguing for or against relitigation in a subsequent proceeding may rely on those features of the prior proceeding to support their position. For example, if the initial proceeding provided little, if any, procedural fairness to the parties, the nature of that proceeding would support arguments in favour of relitigating facts decided in that proceeding: see Becamon, at paras. 21-22.

[37] Arguments directed at the nature of the initial proceeding can be made at a general and a specific level. The former looks to the statutes and rules governing the conduct of the initial proceeding while the latter looks to the actual conduct of the specific proceeding in issue. Arguments that the procedures provided for in the relevant rules are so informal as to render the outcome of the initial proceeding unfair, or unreliable, can be made without evidence. However, if a party seeks to rely on the conduct of the specific prior proceeding, either to support or counter an abuse of process argument, it is incumbent on that party to lead evidence to support its position. For example, if one party claims that the conviction entered in the prior proceeding should not foreclose relitigation because the accused did not understand the charge, or did not defend the charge, it falls on that party to lead evidence to support its claim. Equally, if a party seeking to invoke the abuse of process doctrine at the subsequent proceeding asserts that exactly the same factual issues were fully litigated at the prior proceeding, it falls on that party to lead evidence to support that position.

[38] On the preliminary motion before the arbitrator, neither party led any evidence about the proceeding resulting in Mr. Cadieux's conviction. To the extent that the nature of that proceeding was relevant to the abuse of process argument, the arbitrator could only assume that Mr. Cadieux was properly convicted according to the applicable statutory provisions.

[39] Mr. Cadieux was prosecuted under the provisions of the Provincial Offences Act, R.S.O. 1990, c. P.33. It is safe to assume that the prosecution proceeded under Part III of that Act. The procedures described in Part III of the Provincial Offences Act are similar to those used in the prosecution of summary conviction matters under the Criminal Code, R.S.C. 1985, c. C-46. Like a criminal prosecution, Mr. Cadieux's prosecution was carried out by a public prosecutor, acting in the public interest: CUPE, at para. 31. Furthermore, as in a criminal proceeding, the prosecution was required to prove guilt beyond a reasonable doubt.

[40] In the absence of any evidence referable to the specific proceedings against Mr. Cadieux, I see no reason to doubt the fairness of the proceeding or to discount the reliability of any factual findings essential to his conviction. In my view, the nature of the prior proceeding speaks against permitting Federated to relitigate Mr. Cadieux's insurance status on the arbitration.

[41] The third factor set out above focuses on the potential consequences of the proceedings to the parties. As Arbour J. indicated in CUPE, at para. 53, if the stakes of the first proceeding are "too minor to generate a full and robust response", fairness supports relitigation of facts decided in the first proceeding, especially when the stakes in the second proceeding are considerably more significant: see, also, Becamon, at para. 20.

[42] As with arguments about the nature of the initial proceedings, arguments about the stakes of the first proceeding, both for and against the application of the abuse of process doctrine, can be made on a general or specific level. If the statute calls for a minimal penalty, the argument can be made that a party would not spend the time or money needed to make a "full and robust response" to the charge. However, if the potential penalties are significant, one can argue that those penalties would naturally generate a full and vigorous defence.

[43] Apart from arguments based on the penalties provided by the applicable legislation, it can be argued that the outcome of the initial proceeding was particularly important, or unimportant, to the parties: see, e.g., Duncan v. Morton, 2012 ONSC 3105, at paras. 27-28, leave to appeal to Divisional Court refused [2012] O.J. No. 4475, 2012 ONSC 5200. If that kind of argument is to be advanced, the party making the argument must lead evidence to support it. No such evidence was led in this case.

[44] A conviction for driving without insurance carries a minimum fine of $5,000 and a potential licence suspension. I agree with the application judge that those consequences are sufficiently serious to assume that a person facing that charge would make a "full and robust" defence, if he had one. The potential outcome of the initial proceeding does not favour allowing Federated to relitigate the finding that Mr. Cadieux drove without insurance.

[45] The fourth factor germane to the application of the abuse of process doctrine in this case looks to the nature of the proceeding in which the party seeks to relitigate the previously decided fact. It is fair to say that relitigation of decided facts in any context has some negative impact on the integrity of the administration of justice. However, relitigation of some facts in certain contexts can have a profoundly negative impact on the integrity of the overall administration of justice. Relitigation of other facts in other contexts will have only a minimal impact.

[46] The facts in CUPE present an example of a situation in which relitigation, in the context of a labour arbitration, of facts decided in a previous criminal case would have had a very damaging effect on the overall integrity of the adjudicative process. A justice system that could in one proceeding brand an individual guilty of sexual assault and worthy of a lengthy jail sentence, and in another proceeding declare the same person to have not committed the offence and to be entitled to employment as a teacher, could not hope to maintain the support of an informed public for either result: see CUPE, at paras. 57-58.

[47] The facts of this case are far removed from those of CUPE. Federated seeks to relitigate Mr. Cadieux's status as an insured driver in the context of a private dispute between Federated and Intact over the obligation to pay statutory accident benefits under a priority scheme designed to allocate the responsibility for those payments as among insurers. While there is certainly a public interest in protecting the passenger's right to statutory accident benefits under the Insurance Act, there is little, if any, public interest in the determination of which of the two insurers involved in the proceeding should pay those benefits.

[48] The arbitration proceeding is particularly well-suited to a determination of whether Mr. Cadieux was an insured driver at the relevant time. Both Intact and Federated have the means and expertise to fully litigate the issue. Both also have ready access to the information necessary to accurately determine whether the policy was properly cancelled. In my view, determining Mr. Cadieux's insurance status in the context of the arbitration between Intact and Federated is likely "to enhance the credibility and the effectiveness of the adjudicative process as a whole": CUPE, at para. 52.

[49] Realistically, I see no danger to the overall integrity of the adjudicative process flowing from a relitigation of Mr. Cadieux's insurance status in a private arbitration between Federated and Intact. Even if that relitigation were to produce a finding that is inconsistent with the finding underlying Mr. Cadieux's conviction, that inconsistency would do little, if any, damage to the integrity of the process. A balancing of systemic concerns that inevitably arise if relitigation is permitted against fairness to the litigants, and in particular Federated, favours relitigation in these circumstances.

V. Conclusion

[50] The preliminary motion before the arbitrator proceeded on the basis that Mr. Cadieux had been convicted of driving without insurance at the time of the accident. Federated, as the party seeking to relitigate Mr. Cadieux's insurance status, had the onus of demonstrating that relitigation would not, in the circumstances, amount to an abuse of process: Bank of Montreal, at para. 48; and CUPE, at para. 52.

[51] In my view, fairness to Federated strongly dictates that it should have an opportunity to demonstrate that Mr. Cadieux was insured at the time of the accident. Intact suffers no unfairness in allowing Federated that opportunity. In addition, relitigation of Mr. Cadieux's insurance status in the context of the private arbitration between the insurers has no negative impact on the integrity of the overall adjudicative process and may in fact enhance that integrity by generating a more reliable result. These factors combine to satisfy the onus on Federated to show that relitigation would not constitute an abuse of process.

[52] I would allow the appeal and restore the arbitrator's order. Federated should have its costs here and before the application judge. In keeping with counsel's comments at the end of oral argument, I would fix those costs at $15,000 for the appeal and an additional $7,000 for the hearing before the application judge, as agreed to by the parties, inclusive of disbursements and relevant taxes. If I have misunderstood counsel's comments, they should advise the court.

Appeal allowed.

Notes

1 The parties did not file a certificate of conviction as contemplated by s. 22.1(3) of the Ontario Evidence Act, R.S.O. 1990, c. E.23, but instead filed a document referred to as "an extended driver profile". That document indicated that Mr. Cadieux was convicted of "Operate Motor Vehicle No Insurance C.A.I.A." Strictly speaking, the document does not appear to be evidence of anything.

2 Technically, it would appear that the prosecution could have proceeded under Part I of the Provincial Offences Act. That part provides for a much less formal procedure, including convictions based entirely on an accused's failure to defend the charge. However, given the very significant minimum fine imposed for driving without insurance ($5,000), and the much lower maximum penalties available under Part I ($1,000), it is very unlikely that the prosecution would ever proceed with a charge of driving without insurance under Part I: see Provincial Offences Act, s. 12.

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