CITATION: State Farm Mutual Automobile Insurance Company v. Federico, Financial Services Commission of Ontario, 2014 ONSC 109
DIVISIONAL COURT FILE NO.: 201/13
DATE: 20140106
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, WHALEN AND SACHS JJ.
BETWEEN:
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Applicant
– and –
NICOLA FEDERICO and FINANCIAL SERVICES COMMISSION OF ONTARIO
Respondents
Ian D. Kirby, for the Applicant
David S. Wilson, for the Respondent, Nicola Federico
Joe Nemet, for the Respondent, Financial Services Commission of Ontario
HEARD at Toronto: January 6, 2014
SACHS J. (ORALLY)
Introduction
[1] The applicant insurance company seeks judicial review of the Ontario Financial Services Commission (“the Tribunal”) ruling on the applicable rate of interest payable for outstanding Statutory Accident Benefits. The ruling arose from the respondent Federico’s December 20, 2006 motor vehicle accident, as a result of which he received statutory accident benefits, including income replacement, housekeeping and certain diagnostic and treatment expenses.
[2] Early in 2008, the applicant terminated the income and housekeeping benefits and refused to pay for some diagnostic and treatment expenses. After submitting to mandatory but unsuccessful mediation, Mr. Federico proceeded to arbitration and was completely successful by Decision of March 23, 2012. The applicant appealed this decision to the Tribunal, which upheld the arbitration ruling, except in respect of one expense that had eventually been paid by OHIP. For purposes of judicial review, the applicant only contests the Tribunal’s conclusion that interest is payable on income replacement benefits at the rate of 2% that are overdue after September 1, 2010.
[3] The central issue on this application is the effect and interpretation of O. Reg. 34/10, (“the New Regulation”) or O. Reg. 403/96 (“the Old Regulation”) particularly when it comes to the payment of interest on overdue amounts after September 1, 2010.
Standard of Review
[4] The applicant submits that the appropriate standard of review is correctness. In doing so, it argues that the issue on this application involves a pure question of law of central importance to the legal system that is outside the Tribunal’s specialized area of expertise. We disagree. The issue involves the interpretation of legislation and regulations that are specific to the Tribunal’s (“home”) statutory regime and that falls directly within its area of expertise.
[5] In both Gordyukova v. Certas Direct Insurance Co., 2012 ONCA 566, [2012] O.J. No. 4061 and Aviva Canada Inc. v. Pastore, 2012 ONCA 642, [2012] O.J. No. 4508, the Ontario Court of Appeal held that the standard of review is reasonableness where the Director’s Delegate has engaged in the interpretation and application of his/her home statute, The Insurance Act and the SAB Regulations under the Act.
[6] The applicant also submits that based on the Supreme Court of Canada’s decision in Rogers Communication Inc. v. Society of Composers, Authors and Music Publishers of Canada, (SOCAM), 2012 SCC 35, [2012] 2 S.C.R. 283, where a Tribunal shared concurrent jurisdiction at first instance with the courts on a question of law, the standard of review is correctness.
[7] In McLean v. British Columbia (Securities Commission) [2013] S.C.C. 67 at para. 24 (which was decided after Rogers) Moldaver J. who wrote the reasons of the majority, made it clear that when a Tribunal is solely tasked with considering the matter in the first instance, the logic of Rogers is inapplicable. According to s. 20(2) of The Insurance Act, once the insured chooses a FSCO arbitration over bringing a proceeding in a court of competent jurisdiction, the arbitrator has exclusive jurisdiction, and thereby becomes “solely tasked” with considering the matter in the first instance. Further, unlike with the Copyright Board, the decisions of arbitrators and the Director’s Delegate are subject to a privative clause. Privative clauses are a significant factor that “weighs strongly in favour of the reasonableness standard” (see Pastore at para. 21).
[8] Finally, we note that when the Court of Appeal was asked to reconsider Pastore on the basis of Rogers, it refused to do so.
Analysis
[9] The applicant submits that the Tribunal’s decision was unreasonable because it failed to give sufficient weight to the Superintendent’s Bulletin and because it ignored sections 3(1)(1.2) and (1.3) of the Old Regulation. The applicant also argues that an amount could not be overdue before it was due, which was significant in respect of amounts that were not due and could not therefore be overdue until after September 1, 2010.
[10] With respect to the submission about the Superintendent’s Bulletin, the position of the parties before the Tribunal was both that the Bulletin was not binding on the Tribunal and that it was incorrect. However, the applicant submits that the Tribunal went too far at para. 42 of its decision when it found that the Bulletin “did not assist”. We disagree with the applicant’s interpretation of para. 42. All that the Tribunal found was that the Bulletin did not assist in explaining how the Superintendent arrived at the conclusion he did, which is true.
[11] With respect to the applicant’s other arguments, we find that the Tribunal reasonably interpreted sections 3(1)(1.4) of the Old Regulation and s. 2(2)2 of the New Regulation as providing that an amount that would have been paid under the Old Regulation after August 31, 2010, shall be paid under the New Regulation, but in an amount determined under the Old Regulation.
[12] With respect to interest on overdue amounts, the amount payable under the Old Regulation was 2%. By virtue of the transitional provisions referred to above, this amount continues to be payable under the New Regulation on amounts that become overdue after September 1, 2010.
Conclusion
[13] For these reasons, the application is dismissed.
KITELEY J.
COSTS
[14] I have endorsed the back of the Application Record, “For oral reasons given, the application is dismissed. Costs of the respondent Federico to be paid by the applicant in the amount of $10,747.17 inclusive of disbursements and HST.”
SACHS J.
KITELEY J.
WHALEN J.
Date of Reasons for Judgment: January 6, 2014
Date of Release: January 10, 2014
CITATION: State Farm Mutual Automobile Insurance Company v. Federico, Financial Services Commission of Ontario, 2014 ONSC 109
DIVISIONAL COURT FILE NO.: 201/13
DATE: 20140106
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, WHALEN AND SACHS JJ.
BETWEEN:
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Applicant
– and –
NICOLA FEDERICO and FINANCIAL SERVICES COMMISSION OF ONTARIO
Respondents
ORAL REASONS FOR JUDGMENT
SACHS J.
Date of Reasons for Judgment: January 6, 2014
Date of Release: January 10, 2014```