COURT FILE NO.: CV-19-612900

DATE: 20201026

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Allstate Insurance Company of Canada

Appellant

– and –

The Wawanesa Mutual Insurance Company

Respondent

David Murray and Saro Setrakian, for the Appellant

Tim Gillibrand, for the Respondent

HEARD: July 2, 2020

REASONS FOR DECISION

Overview

[1] This is an appeal from a preliminary decision of an insurance arbitrator concerning a priority dispute between two insurers.

[2] When more than one insurance policy may be implicated in the payment of statutory accident benefit claims following a motor vehicle accident, section 268(2) of the Insurance Act, R.S.O. 1990, c. I.8 provides a cascading priority scheme to determine which insurer is liable to pay the accident benefits:

Liability to pay

The following rules apply for determining who is liable to pay statutory accident benefits:

1. In respect of an occupant of an automobile,

(i) the occupant has recourse against the insurer of an automobile in respect of which the occupant is an insured,

(ii) if recovery is unavailable under subparagraph i, the occupant has recourse against the insurer of the automobile in which he or she was an occupant,

(iii) if recovery is unavailable under subparagraph i or ii, the occupant has recourse against the insurer of any other automobile involved in the incident from which the entitlement to statutory accident benefits arose,

(iv) if recovery is unavailable under subparagraph i, ii or iii, the occupant has recourse against the Motor Vehicle Accident Claims Fund.

[3] Section 3(1) of Ontario Regulation 283/95, entitled Disputes Between Insurers ("the Regulation"), provides that if an insurer intends to dispute that it is highest in priority, it must provide notice to all other insurers within 90 days of receipt of a completed application for benefits.

[4] Under section 3(2) of the Regulation, an insurer may also give notice after the 90-day period if it can satisfy a statutory test.

[5] Allstate appeals from the decision of Arbitrator Vance H. Cooper dated December 19, 2018, which held that, in a priority dispute with Wawanesa, Allstate had to pay statutory accident benefits to the claimant. The arbitrator determined that Allstate failed to provide notice to Wawanesa within 90 days of receipt of a completed application, and that Allstate did not satisfy the statutory test for providing notice after 90 days. Accordingly, Allstate was responsible for paying the accident benefits.

[6] Under the Regulation, "application" means an application for accident benefits (OCF-1) approved by the Superintendent for the purposes of the Schedule, and "completed application" means a completed and signed application.

[7] Here, the OCF-1 was signed, but not by the claimant. Instead, it was signed by the claimant's aunt. Allstate argues that since it did not receive an application signed by the claimant, it did not receive a completed application, hence the 90-day period did not begin to run. Allstate argues, in the alternative, that if it did receive a completed application but gave notice after the 90-day period, it satisfied the regulatory criteria.

[8] For the reasons set out below, I find that the appeal should be dismissed, with costs awarded to the respondent. In summary, I find:

(a) the appellate standard of review is engaged because this is a statutory appeal from an insurance arbitrator under the Arbitrations Act, 1991.

(b) two standards of review are applicable:

(i) the correctness standard applies to the narrow question of law as to whether, under the Regulation, a signed application means an application signed by the claimant.

(ii) the reasonableness standard applies to the remaining questions of mixed fact and law, and questions of fact. These include whether and when the application was completed, and whether Allstate was entitled to provide notice to Wawanesa after the 90-day period.

(c) The Arbitrator correctly interpreted the meaning of “signed application” in the Regulation and determined that a signed application can be an application that is signed by a non-claimant.

(d) The Arbitrator was reasonable in determining that Allstate did not provide notice to Wawanesa within 90 days of receiving a completed application.

(e) The Arbitrator was reasonable in determining that Allstate failed to satisfy the test for notifying Wawanesa after 90 days.

Facts

[9] The facts as found by the Arbitrator are as follows.

[10] The claimant was involved in a motor vehicle accident on March 5, 2014. He was a passenger in a vehicle that was insured by the respondent Wawanesa. The claimant's lawyer submitted an application (OCF-1) to Allstate that was received on March 12, 2014. The claimant applied to Allstate since Allstate had issued a policy to his mother, and he was claiming under her policy as a dependent. The application was not signed by the claimant, but rather by his aunt, who the claimant described as his guardian.

[11] The application contained some inconsistent information about the claimant's birth date, and did not contain the investigating police officer's name and badge number. The arbitrator found, nevertheless, based on the adjusting notes, that it was immediately apparent to Allstate as of March 12, 2014 that the claimant was a passenger, and that the vehicle he was riding in was not insured by Allstate.

[12] On March 27, 2014, Allstate sent a letter to the claimant's lawyer requesting certain documents, but did not request a copy of the police report which would have revealed the insurer of the subject vehicle. The letter also did not request an authorization to obtain the police report, or the name and badge number of the investigating police officer. Allstate's log notes indicated, as early as March 27, 2014, an awareness of a potential policy dispute.

[13] On April 1, 2014, Allstate acknowledged receipt of the application and requested additional information from the claimant pursuant to the Statutory Accident Benefits Schedule (SABS), including medical and employment records, and the claimant's driver's license. Allstate did not raise any objections to the OCF-1 or take issue with its completeness. On the same date, Allstate also asked an independent adjuster to "make note of the time restrictions for PRIORITY", and Allstate prepared an "agenda/diary" with a reminder to follow up on priority. A bring-forward date of April 25, 2014 was diarized and marked as urgent.

[14] There was no indication that Allstate ever created a 90-day diary date in relation to the anticipated priority dispute.

[15] The independent adjuster obtained the claimant's statement on May 8, 2014 at an in-person meeting. The claimant advised that he was in a vehicle driven by another person and that the claimant's lawyer had all the information about the accident and subject vehicle.

[16] On May 12, 2014, the independent adjuster sent an email to a paralegal at the claimant lawyer’s office which requested a copy of the police report in the lawyer's file. However, there was no deadline for receipt or follow-up by the adjuster or Allstate.

[17] On June 6, 2014, Allstate received an identical OCF-1 from the claimant dated May 21, 2014, but this time the OCF-1 was signed by the claimant. The claimant's lawyer explained that, as the claimant did not require a litigation guardian, the second OCF-1 has been signed by the claimant himself. By the time of receipt of the second application, Allstate had apparently received, approved and paid for some 10 treatment plans, which involved 5 to 6 payments to the claimant.

[18] Allstate's first request for the police report was in a letter dated June 25, 2014, which resulted in the claimant's lawyer producing the police report on July 2, 2014. Due to fax difficulties, Allstate only received the report on July 11, 2014. The police report identified the driver of the vehicle and the owner, and identified Wawanesa as the insurer. Allstate put Wawanesa on notice the same day, advising that Allstate disputed priority over the claim. Allstate's position was that, as the claimant did not reside with Allstate's insured, was not a listed driver on the Allstate policy, and was not dependent on Allstate's insured, the higher priority insurer would be Wawanesa, as the insurer of the vehicle involved in the accident.

[19] On December 11, 2014, Allstate served a Notice to Applicant of Dispute Between Insurers Form on the claimant.

[20] On September 1, 2015, Arbitrator Cooper was appointed as Arbitrator to adjudicate the priority dispute. The parties agreed to proceed with a series of preliminary issues which were refined and described as follows:

(1) Did Allstate put Wawanesa on notice of this priority dispute in accordance with Section 3(1) of the Regulation?

(2) If the answer to question (a) is "No", is Allstate entitled to maintain this Arbitration on the basis of the saving provisions in Section 3(2) of the Regulation?

(3) Did Allstate initiate this Arbitration against Wawanesa in accordance with Section 7 of the Regulation?

The Arbitrator's Decision

[21] On the first issue, the Arbitrator found that Allstate failed to put Wawanesa on notice within 90 days of receipt of a completed application. The Arbitrator reasoned that:

(a) The definition of a completed application, which was introduced when the Regulation was amended in 2010, states that the OCF-1 is to be completed and signed; it does not state that the application is to be completed and signed by the claimant.

(b) While there may be similarities between the definition of a "completed application" in the Regulation and Section 32 of the SABS, they are not identical and the Regulation does not refer to the SABS. It would have been a simple matter for the regulators to define "completed application" in a manner akin to SABS to require that the application be signed by the claimant or their legal representative, but the Regulation does not require this.

(c) Allstate must have considered the application signed by the claimant's aunt to be complete since it approved at least six treatment plans before receiving a second application signed by the claimant.

(d) Pursuant to the leading decision Ontario (Minister of Finance) v. Pilot Insurance Co., 2012 ONCA 33, the claimant's application met all the criteria for a completed application.

[22] On the second issue, the Arbitrator held that Section 3(2) of the Regulation must be approached by asking whether the insurer was able to gather the necessary facts within the 90-day timeframe. Did the insurer exercise due diligence but the circumstances still required more than 90 days to make a determination? Here, the Arbitrator found that it was obvious to Allstate almost immediately upon receipt of the first OCF-1 (March 12, 2014) that the claimant was an occupant of a vehicle other than the vehicle insured by Allstate, and that Allstate was aware of a potential priority dispute no later than April 1, 2014.

[23] The Arbitrator found that Allstate did not request the police report from the complainant until June 25, 2014, which was unjustifiably late. Allstate did not put Wawanesa on notice until July 11, 2014, by which time the 90-day period ending on June 10, 2014 had expired. Allstate failed to discharge its onus to prove that 90 days was not a sufficient period of time to determine that another insurer was higher in priority, or that it made the reasonable investigations necessary to determine if another insurer was liable within the 90-day period.

[24] On the third issue, the Arbitrator held that Allstate provided sufficient notice to Wawanesa of its intention to initiate an arbitration within the one-year period required under section 7 of the Regulation. Wawanesa has not cross-appealed on this issue.

[25] As Allstate failed to notify Wawanesa that it intended to dispute the claim within 90 days of receipt of a completed application, and since there was no justification for Allstate to go past the 90 days, Allstate, not Wawanesa, was liable to the claimant for payment of benefits.

Analysis

(a) The Standard of Review

[26] This appeal from an arbitrator is a statutory appeal since it arises from the Regulation under the Insurance Act and is based on section 45 of the Arbitration Act, 1991, S.O. 1991, c. 17.

[27] In December 2019, the Supreme Court in Vavilov revised the legal framework for determining the standard of review of administrative decisions: Minister of Citizenship and Immigration v. Vavilov, 2019 SCC 65. Where there is a statutory right of appeal, the presumption that reasonableness is the applicable standard in all cases is rebutted, and the appellate standard of review is applicable: Vavilov, at paras. 36-38.

[37] It should therefore be recognized that, where the legislature has provided for an appeal from an administrative decision to a court, a court hearing such an appeal is to apply appellate standards of review to the decision. This means that the applicable standard is to be determined with reference to the nature of the question and to this Court's jurisprudence on appellate standards of review. Where, for example, a court is hearing an appeal from an administrative decision, it would, in considering questions of law, including questions of statutory interpretation and those concerning the scope of a decision maker's authority, apply the standard of correctness in accordance with Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8. Where the scope of the statutory appeal includes questions of fact, the appellate standard of review for those questions is palpable and overriding error (as it is for questions of mixed fact and law where the legal principle is not readily extricable): see Housen, at paras. 10, 19 and 26-37. Of course, should a legislature intend that a different standard of review apply in a statutory appeal, it is always free to make that intention known by prescribing the applicable standard through statute.

[28] While both Allstate and Wawanesa agree that the appellate standard of review is engaged, they disagree over which of the two standards is applicable and to which parts of the Arbitrator's decision. Allstate submits that the question of who may sign the OCF-1 is a general question of law that attracts a correctness standard. Conversely, Wawanesa submits that all the issues involve questions of mixed fact and law, or questions of fact, therefore the reasonableness standard applies.

[29] Questions of law are questions about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests: Canada (Director of Investigation and Research) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748, at para. 35. Despite this apparently straightforward delineation, discerning the difference between a question of law and a question of mixed fact and law can sometimes prove difficult.

[30] The Southam case provides further assistance:

36 For example, the majority of the British Columbia Court of Appeal in Pezim, supra, concluded that it was an error of law to regard newly acquired information on the value of assets as a "material change" in the affairs of a company. It was common ground in that case that the proper test was whether the information constituted a material change; the argument was about whether the acquisition of information of a certain kind qualified as such a change. To some extent, then, the question resembled one of mixed law and fact. But the question was one of law, in part because the words in question were present in a statutory provision and questions of statutory interpretation are generally questions of law, but also because the point in controversy was one that might potentially arise in many cases in the future: the argument was about kinds of information and not merely about the particular information that was at issue in that case. The rule on which the British Columbia Securities Commission seemed to rely -- that newly acquired information about the value of assets can constitute a material change -- was a matter of law, because it had the potential to apply widely to many cases.

37 By contrast, the matrices of facts at issue in some cases are so particular, indeed so unique, that decisions about whether they satisfy legal tests do not have any great precedential value. If a court were to decide that driving at a certain speed on a certain road under certain conditions was negligent, its decision would not have any great value as a precedent. In short, as the level of generality of the challenged proposition approaches utter particularity, the matter approaches pure application, and hence draws nigh to being an unqualified question of mixed law and fact. See R. P. Kerans, Standards of Review Employed by Appellate Courts (1994), at pp. 103-108. Of course, it is not easy to say precisely where the line should be drawn; though in most cases it should be sufficiently clear whether the dispute is over a general proposition that might qualify as a principle of law or over a very particular set of circumstances that is not apt to be of much interest to judges and lawyers in the future.

[31] I disagree with either side's identification of the standard of review. One cannot decide on who is entitled to sign the application without first deciding whether the Regulation only permits the claimant to sign the application. This appears to be a classic statutory interpretation exercise requiring no facts, which points in the direction of it being a question of law. The interpretation of "signed application" will determine if insurers are entitled to consider an application as unsigned because it has not been signed by a claimant. This is a decision of great precedential value for the entire automobile insurance sector and, per Southam, I find it to be an extricable question of law. This case is distinguishable from another post-Vavilov insurance dispute decision, The Economical Insurance Group v. Desjardins Insurance, 2020 ONSC 1363. This case turned on the definition of “dependent”, and both sides agreed that the finding of the arbitrator was one of mixed fact and law which led to a standard of reasonableness.

[32] But if the Regulation also permits non-claimants to sign an application, determining the range of valid signatories seems a far more complex and policy-laden task that should be decided by insurance arbitrators rather than generalist judges. There may be no one correct answer to that question. It appears then that different standards of review are called for depending on what part of the Arbitrator's decision is being examined.

[33] Here, the Arbitrator's interpretation of the words "signed application" in the Regulation is a question of law which attracts a standard of correctness. The Arbitrator's decision concerning a "signed application" is an extricable question of law separate from the two questions on appeal, namely (i) whether Allstate put Wawanesa on notice of this priority dispute within 90 days, as per section 3(1) of the Regulation; and (ii) if not, whether Allstate was entitled to give notice past the 90 days in accordance with section 3(2). The latter two questions are questions of mixed fact and law since they are about whether the facts satisfy a particular legal test. They attract a reasonableness standard and the Arbitrator's decision concerning those two questions is owed deference, assuming the Arbitrator interpreted the meaning of "signed application" correctly.

[34] Having identified the appropriate standards of review, I will apply them to the Arbitrator's decision.

(b) The correct interpretation of “signed application”

[35] Correctness review requires the court to ask what conclusion it would have reached if it were in the administrative decision maker's place: Vavilov, at para. 15. No deference is owed to the administrative decision maker's reasoning.

[36] Under the Regulation,

"application" means an application for benefits (OCF-1) approved by the Superintendent for the purpose of the Schedule; and

"completed application" means a completed and signed application.

[37] I begin by noting the obvious. The definition of "completed application" uses the passive form of the verb "signed" before the word application. The Regulation is silent on who must sign the application and relatedly, whether an application is only complete when signed by the claimant.

[38] Wawanesa states that, prior to the definition of “completed application” being added to the Regulation in 2010, the Financial Services Commission of Ontario (FSCO) completed a review of automobile insurance in Ontario and published a Report on Five Year Review of Automobile Insurance on March 31, 2009. The Five Year Report stated at pages 25-26:

“[the Regulation] should be amended to make it more difficult for insurers to deflect claims and to ensure that claimants receive accident benefits while the issue of liability for a claim is resolved.”

[39] Wawanesa submits that the absence of discussion in the Five Year Report about the need for the claimant to sign the OCF-1 is significant, and consistent with the intention of the Regulation to make it more difficult for insurers to deflect claims.

[40] Allstate disagrees and submits that "signed application" must mean "signed application by the claimant" because:

(a) A proper reading of the Regulation in the context of its overall regulatory and statutory scheme demands this interpretation;

(b) The features of the OCF-1 form support that it must be signed by the applicant or a valid substitute decision maker; and

(c) Privacy considerations support that the application must be signed by the claimant or a person with legal authority to permit the disclosure of the applicant's private information.

(i) Same Words, Different Regulations: Same or Different Meaning?

[41] With respect to the first point, Allstate suggests that the meaning of "signed application" in the Regulation should be read harmoniously with the same words that appear in Ontario Regulation 34/10, more popularly known as SABS. In particular, Allstate submits that section 32 of SABS, found in Part VIII (Procedures for Claiming Benefits) of that regulation, requires that a completed application must be signed by the claimant.

32. (1) A person who intends to apply for one or more benefits described in this Regulation shall notify the insurer of his or her intention no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day. O. Reg. 34/10, s. 32 (1).

(2) The insurer shall promptly provide the person with,

(a) the appropriate application forms;

(b) a written explanation of the benefits available;

(c) information to assist the person in applying for benefits; and

(d) information on the election relating to income replacement, non-earner and caregiver benefits, if applicable. O. Reg. 34/10, s. 32 (2).

[subsections 32(3) and 32(4) have been omitted for brevity]

(5) The applicant shall submit a completed and signed application for benefits to the insurer within 30 days after receiving the application forms. O. Reg. 34/10, s. 32 (5).

(6) If an insurer receives an incomplete or unsigned application, the insurer shall notify the applicant within 10 business days after receiving the application and shall advise the applicant of the missing information that is required or that the applicant's signature is missing, as appropriate. O. Reg. 34/10, s. 32 (6).

(7) The insurer shall not give a notice under subsection (6) unless,

(a) the insurer, after a reasonable review of the incomplete application, is unable to determine, without the missing information, whether a benefit is payable; or

(b) the application has not been signed by the applicant. O. Reg. 34/10, s. 32 (7).

(8) If subsection (6) applies in respect of an incomplete application, no benefit is payable before the applicant provides the missing information or signs the application, as the case may be. O. Reg. 34/10, s. 32 (8).

[42] I disagree that, because the same or similar wording appears in two different regulations under the Insurance Act, they must bear the same meaning. The Arbitrator stated, "while there may be similarities between the definition of a 'completed application' in the Regulation and the content of Section 32 of the SABS, they are not identical and the Regulation does not refer to the SABS." Notwithstanding the general principle that words in a statute should be given a consistent meaning throughout, the rule is not an inflexible one: ING Insurance Company of Canada v. State Farm Insurance Companies (2009), 97 O.Rs. (3d) 291 (S.C.), at para. 42 citing Bapoo v. Co-Operators General Insurance Co. (1997), 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616(C.A.). Consideration of the provision’s context and purpose can justify departing from that rule: Bapoo, at paras. 27-28. In this case, the purpose of section 3 of the Regulation is to put another insurer on notice that the first insurer intends to dispute a claim. The insurer does not need the claimant’s signature, as distinct from someone else’s signature on the OCF-1, to do that. A “completed application” for the purpose of section 3 could include an OCF-1 signed by a non-claimant, even if this results in a meaning that is different from the meaning of “completed application” in the SABS.

[43] I note that Allstate concedes, based on the Pilot decision, that even within the same Regulation, the words "completed application" have a different meaning in section 2 than in section 3.

[44] Section 2 of the Regulation directs the first insurer that receives a completed application for statutory accident benefits to pay those benefits to the injured applicant:

2(1) The first insurer that receives a completed application for benefits is responsible for paying benefits to an insured person pending the resolution of any dispute as to which insurer is required to pay benefits under section 268 of the Act.

[45] Section 3 gives an insurer 90 days from receipt of a completed application to dispute its obligation to pay statutory accident benefits:

3(1) No insurer may dispute its obligation to pay benefits under section 268 of the Act unless it gives written notice within 90 days of receipt of a completed application for benefits to every insurer who it claims is required to pay under that section.

[46] In Pilot, the Ontario Court of Appeal held that a "functionally adequate" application is a completed application for the purposes of both sections 2 and 3; however, the test for "functionally adequate" is different depending on the section:

[54] As set out in ING, to be functionally adequate for the purpose of s. 2 -- and thus trigger the first insurer's obligation to pay benefits to the injured person -- an application must contain sufficient information to allow the insurer to assess and process the injured person's claim for benefits.

[55] To be functionally adequate for the purposes of s. 3 -- and thus trigger the 90-day period an insurer has to notify another insurer that it is disputing its obligation to pay benefits -- an application must contain sufficient information to allow the first insurer to give notice of dispute to another insurer. This interpretation applies in this case.

[47] Accordingly, if the same words in the same regulation can have different meanings depending on the context, the same words in different regulations can, a fortiori, have different meanings.

(ii) The OCF-1 Form

[48] Allstate submits that the application (OCF-1) form itself supports the proposition that the applicant must be the only one to sign it. Allstate points to Part 11 (the Signature section) of the OCF-1 and its declarations and authorizations, which appear to be in the voice of the applicant.

[49] The definition of "application" in the Regulation references the OCF-1 form approved under the "Schedule", which is simply a reference to SABS. Section 65 of SABS deals with Substitute Decision Makers:

65. Any consent, notice or other thing to be given by or to an insured person under this Regulation may be given by or to a person exercising a power of decision on behalf of the insured person under the authority of the Substitute Decisions Act, 1992 or as authorized under the Health Care Consent Act, 1996.

[50] This means that, in addition to the claimant, an authorized Substitute Decision Maker can sign the application, a fact acknowledged by Allstate in its argument. This is reflected in Part 11, the Signature section of the OCF-1, which contains two signature boxes: "Name of Applicant or Substitute Decision Maker (please print)" and "Signature of Applicant or Substitute Decision Maker". However, the parties part company over the significance of this. For Allstate, the ability of a Substitute Decision Maker to sign the OCF-1 highlights the fact that, where no authorized Substitute Decision Maker is present, only the Applicant can sign the OCF-1. For Wawanesa, the permissibility of a class of individuals other than the claimant to sign the application moves the focus away from whether only the claimant can sign, to who is entitled to sign the application for it to be considered complete.

[51] I have difficulty accepting Allstate's submission that because the declarations and authorizations on the OCF-1 are in the voice of the applicant, this means that the applicant is the only one who is entitled to sign the OCF-1, and consequently that the applicant’s failure to sign the OCF-1 amounts to an unsigned and therefore incomplete application. Allstate's position seems to prioritize form over function.

[52] On balance, I find that the permission granted in the OCF-1 to non-claimant Substitute Decision Makers to sign the application, combined with the passive use of the word "signed" in the definition of "completed application" in the Regulation, supports a more liberal interpretation of the meaning of "signed application" than is being proposed by Allstate. The mention of Substitute Decision Makers serves as an indication of the regulation’s purpose which assists in my interpretation of the words “signed application”. I find guidance on this point in ING Insurance Company of Canada v. TD Insurance Meloche Monnex, 2010 ONCA 559, a pre-2010 decision which emphasizes a purposive reading of the Regulation.

[53] Meloche Monnex dealt with the adequacy of a "completed application" for the purposes of section 2 of the Regulation. Recall that section 2 directs the first insurer that receives a completed application to pay benefits to an injured applicant. "Pay now, dispute later" is how the court in Meloche Monnex characterized the Regulation. At the time, the Regulation did not define the term "completed application for benefits".

[54] Parenthetically, I note that Allstate submits that jurisprudence prior to the September 1, 2010 regulatory amendment that introduced the term "completed application" is of limited value. I disagree. As Wawanesa points out, section 56 of the Legislation Act, 2006, S.O. 2006, c. 21, Sched. F, S. 56, states that an amendment of a regulation does not imply a change in the law. The 2010 regulatory amendment clarified that an application must be on the OCF-1 form, and that it must be competed and signed. This was a clarification of the common law, not a repudiation of it.

[55] In Meloche Monnex, a chiropractor forwarded pre-approved treatment forms signed by the claimants to ING requesting payment. ING appealed the insurance arbitrator's decision that the forms sent by the third party constituted a "completed application" triggering payment. The court stated:

[35] The arbitrator rejected ING's submission that the Forms were not a proper application because they had been submitted by an initiating health practitioner and not a "person" as set out [page276] in s. 32 of the Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996, O. Reg. 403/96 (the "Schedule"). [footnote omitted] The arbitrator held that there was no requirement that the actual claimant provide the notice, noting that in many cases an injured claimant is incapable of providing notice and that in Liberty Mutual, notice was provided by the injured party's lawyer.

[56] Meloche Monnex makes two important points. One is that the meaning that advances the regulatory purpose - the Forms were sent to the insurer, albeit not by the actual claimants - should be chosen over a meaning that frustrates that purpose. This is just another way of saying that the words in a statute should be read in a purposive manner, a concept to which I will return. Second, there was an additional reason for supporting the purposive interpretation, namely that injured claimants may be incapable of providing notice.

[57] Extrapolating these two points into the present case, the fact that certain provisions of the OCF-1 are in the "voice of the claimant" should not result in an application signed by a non-claimant being rejected as unsigned, and therefore incomplete. The non-claimant is likely signing the application on behalf of the claimant akin to the health practitioner in Meloche Monnex forwarding the treatment forms to the insurer. There may also be genuine medical reasons for why the claimant cannot sign the OCF-1 and is using another signatory. The permission granted to Substitute Decision Makers in the OCF-1 Form provides one means by which this can be achieved, and suggests that the provision should be interpreted in a way that does not frustrate its purpose.

[58] I am alive to the concern that jurisprudence in respect of section 2 of the Regulation should be used with caution in respect of section 3, since the two provisions have different purposes. I nevertheless find the two points in Meloche Monnex apposite to the case at bar.

(iii) Privacy, Consent and Abuse Considerations

[59] Allstate submits that privacy considerations, including authorization for the release of private information, also support its position that the claimant must be the one to sign a completed application.

[60] Wawanesa objects to this line of argument being raised on appeal since it was not argued at first instance: Shtaif v. Toronto Life Publishing Co. Ltd., 2013 ONCA 405, at para. 46; Van Galder v. Economical Mutual Insurance Company, 2016 ONCA 804, at para. 79. Wawanesa argues that evidence was not called on this issue and it was not considered by the Arbitrator or identified in Allstate's Notice of Appeal. In the alternative, Wawanesa submits that if Allstate is permitted to advance consent and privacy-related arguments in this appeal, such arguments would not have affected the decision of the Arbitrator because, inter alia, the claimant's aunt could have fallen within the list of persons who qualify as a "substitute decision-maker". Wawanesa argues that privacy and consent issues do not come into play since the claimant considered his aunt to be signing the OCF-1 on his behalf.

[61] For the purposes of determining the correct meaning of "signed application", I understand Allstate to be saying that its more restrictive interpretation of "signed application" is more consistent with the consent and privacy requirements indicated on the OCF-1. While I agree that mandating only the claimant's signature on the application will likely address one kind of potential abuse, I am concerned that it may invite another, namely delay and disputes from insurers over the authenticity of claimant signatures resulting in the 90-day period in section 3 of the Regulation never getting started.

[62] I note that, in section 3, there is no equivalent to section 2.1(5) of the Regulation:

2.1(5) An insurer that provides an application under subsection (2) to an applicant shall not take any action intended to prevent or stop the applicant from submitting a completed application to the insurer and shall not refuse to accept the completed application or redirect the applicant to another insurer. O. Reg. 38/10, s. 3.

[63] Accordingly, interpreting "signed application" as a "signed application by the claimant" raises a concern about the purposes of section 3 (i.e. putting other insurers on notice within 90 days or receipt of a completed application) being frustrated by insurers disputing the authenticity of claimant signatures and taking the position that the 90 days has not begun to run. Conversely, while consent and privacy issues are important, they do not seem to factor into the purposes of section 3.

(iv) The purposive approach to statutory interpretation

[64] While it is conventional in correctness review to start with the purposive approach to statutory interpretation, the foregoing discussion of the meaning of "signed application" permits a greater understanding of how the words in question should be interpreted.

[65] In Wawanesa Mutual Insurance Company v. Axa Insurance (Canada), 2012 ONCA 592, at para. 34, the Court of Appeal succinctly described the purposive approach:

[34] The purposive approach to statutory interpretation requires the court to take the following three steps: (1) it must examine the words of the provision in their ordinary and grammatical sense; (2) it must consider the entire context that the provision is located within (Bell Expressview, at para. 27); and (3) it must consider whether the proposed interpretation [page365] produces a just and reasonable result (Bapoo v. Co-Operators General Insurance Co. (1997), 1997 CanLII 6320 (ON CA), 36 O.R. (3d) 616, [1997] O.J. No. 5055 (C.A.), at para. 8).

(v) Conclusion re: Correct Interpretation of Signed Application

[66] Taking this approach to the words in question, I find as follows: (1) The words "signed application" in their ordinary and grammatical sense do not mean "signed application by the claimant"; (2) the words are located in a provision which is directed at putting other insures on notice that the first insurer may be deflecting responsibility for the claim, and the more restrictive meaning ascribed by Allstate does not advance that purpose; (3) Allstate's proposed interpretation does not produce a just and reasonable result since it could result in technical arguments over authenticity of signatures, and delay or prevent the commencement of the 90-day notice period.

[67] With reference to "completed application" found in section 3 of the Regulation, I find that the correct meaning of the words "signed application" is an application that is signed, not an application that is signed by the claimant. This means that an application that is completed and signed by a non-claimant can still be considered a completed application. Given that the Arbitrator reached the same conclusion, he was correct in his interpretation and this part of his ruling is affirmed.

(c) The arbitrator was reasonable in determining that Allstate did not provide notice to Wawanesa within 90 days of receiving a completed application.

[68] The Arbitrator's ruling on Allstate not providing notice to Wawanesa within 90 days of receiving a completed application is owed deference. In Brockville (City) v. Information and Privacy Commissioner, Ontario, 2020 ONSC 4413, the Divisional Court described the proper approach to reasonableness review following Vavilov:

[28] In Vavilov, at paras. 82 and 83, the Supreme Court directs that the focus of judicial review is on the decision itself. The court is reviewing the reasons and the outcome. At para. 84 of Vavilov, the Supreme Court directed that a reviewing court begins by examining the tribunal's reasons with "respectful attention". The court's goal is to understand the reasoning process followed by the decision maker to arrive at her conclusion. At para. 85, the Court instructed:

…a reasonable decision is one that is based on an internally coherent and rational chain of analysis and that is justified in relation to the facts and law that constrain the decision maker. The reasonableness standard requires that a reviewing court defer to such a decision.

[paragraphs 29 and 30 have been omitted for brevity]

[31] In conducting a judicial review application, the court does not determine the correct statutory interpretation and then look to see if the tribunal "got it right". Rather, the goal is to consider what the tribunal did in light of the reasons it provided to determine if the outcome satisfies the well-understood hallmarks of a reasonableness review: transparency, intelligibility, and justification.

[69] The Arbitrator's reasons with respect to the completeness of the claimant's application focused on the Pilot decision, which confirmed that a "completed application" is an OCF-1 that is genuinely complete; functionally adequate for its legislated purpose; or treated as complete based on the conduct of the first insurer.

[70] The Arbitrator described a genuinely complete application as one that is filled out on the OCF-1 and that contains any required attachments. The OCF-1 received by Allstate on March 12, 2014 was on the required form and signed.

[71] The Arbitrator also found the application to be "functionally adequate" in that it "provided sufficient particulars to reasonably assist Allstate with processing the application, identifying the benefits to which the applicant may be entitled and assessing the claim." Relying on Waterloo Insurance v. Wawanesa Mutual, 2014 ONSC 533, the Arbitrator held that a functionally adequate application need only provide sufficient information to allow reasonable priority investigations to begin. The application did not need to have "the complete and exact priority information to specifically identify a priority insurer."

[72] Finally, the Arbitrator held that Allstate treated the application as complete based on its adjusting the claim for accident benefits and Allstate not raising any objections to the completeness of the OCF-1. The Arbitrator made a finding that Allstate received sufficient information to trigger the 90-day time limit as reflected in its internal notes, and based on the involvement of the independent adjustor.

[73] Allstate faults the Arbitrator's reasoning with respect to all three Pilot factors concerning a completed application.

[74] Allstate argues that the claimant's application was not genuinely complete, since it was literally incomplete and missing a description of the accident, the identity of the investigating officer, and information about the vehicle involved in the accident or its owner. I disagree. The OCF-1 was not so bereft of information that it amounted to a literally incomplete application. As Wawanesa points out, the boxes under "Part 3 - accident details and health information " were completed, and the OCF-1 provided sufficient information to allow Allstate to commence handling the claim, to ascertain the claimant was a passenger in a vehicle, and to confirm that there would be a police report identifying the insurer of the subject vehicle. While the Arbitrator's reasons did not delve into great detail on the "genuinely complete" point, his reasoning that the OCF-1 was filled out and signed is sound.

[75] On the "functionally incomplete" aspect, Allstate submits that, on any standard of review, the Arbitrator's finding that Allstate received sufficient information to trigger the 90-day time limit on or before April 1, 2014 is untenable. Allstate submits that the application it received on March 12, 2014 did not include the information necessary to conduct an insurance search on the subject vehicle and, in the alternative, it made prompt and extensive efforts to investigate priority.

[76] While the Arbitrator found that Allstate's first request for the police report was in a letter of June 25, 2014, Allstate points out that Paula DeJesus, an Allstate representative, requested the police report while conducting an initial file review on March 27, 2014. Thereafter, Allstate took various steps that it says were timely and reasonable which nevertheless resulted in Allstate only receiving the police report on July 11, 2014, at which point Allstate immediately put Wawanesa on notice. The steps included: Allstate retaining an independent adjuster who met with the claimant on May 8, 2014; the adjuster asking the claimant's accident benefits specialist for the police report on May 12, but the specialist refused to allow the claimant to sign authorizations for the report; the adjuster doing a "drive by" of the claimant's residence on May 22, which did not yield useful information; and Allstate receiving a letter from the claimant's lawyer on June 4, which indicated that the claimant was in a car driven by someone else, and that his lawyer had information about the subject vehicle.

[77] I find that Allstate's arguments do not undermine the Arbitrator's conclusion that Allstate had sufficient information from the outset of the application, which started the 90-day clock ticking; and that Allstate started too late (i.e. June 25, 2014) to request the police report. I note that Ms. DeJesus' "request for the police report" was an internal note within Allstate. It was not a request to the claimant or his representative. In Allstate's April 1, 2014 letter to the claimant, no request for the police report was made. Further, and as the Arbitrator noted, while the independent adjustor requested a copy of the police report from the claimant lawyer's file on May 12, 2014, there was no deadline set for its receipt, no explanation provided for its importance, nor any follow-up by the adjustor. The Arbitrator's conclusion that Allstate did not make sufficient efforts to identify the other insurer until June 25, 2014, by which time the 90 days had run out, is sound.

[78] Allstate also criticizes the Arbitrator's reasoning for improperly conflating the requirements for section 2 of the Regulation (sufficiency of application to pay benefits out to a claimant) with section 3 (sufficiency to investigate a priority dispute). This goes to Allstate's criticism of the Arbitrator's reasoning both with respect to a "functionally complete" application, and a "treated as complete" application. I agree that there are points in the Arbitrator's analysis, such as where he finds that Allstate treated the application as complete because it paid out several claims for benefits, as eliding the distinction between the two sections. However, the Arbitrator's overall reasons properly focused on Allstate's early awareness of a priority dispute based on sufficient information, which triggered the 90-day clock, and its lack of reasonable efforts during the 90 days to advance the priority investigation in a timely manner.

[79] Allstate focuses on the following passage from the Pilot decision to argue that the Arbitrator misstated the functionally complete test:

[55] To be functionally adequate for the purposes of s. 3 -- and thus trigger the 90-day period an insurer has to notify another insurer that it is disputing its obligation to pay benefits -- an application must contain sufficient information to allow the first insurer to give notice of dispute to another insurer. This interpretation applies in this case.

[80] Allstate claims that the Arbitrator instead used a more liberal test that would be harsher on Allstate, namely "a functionally adequate application need only provide sufficient information to allow reasonable priority investigations to begin". However, the Arbitrator clearly indicated, in a footnote, that his test was based on the Waterloo Insurance decision (referenced above), which itself relied on Pilot. In Waterloo Insurance, Chiappetta J. held with respect to section 3 of the Regulation:

[54] In my view, the legislation contemplates that the insurer will be conducting investigations during the 90 days pursuant to s. 3(1) to determine if another insurer is liable and only if, after conducting the necessary reasonable investigations within the time allotted, without success, will the 90 days be extended to continue the investigations to determine if another insurer is liable. It follows that the legislative purpose of a functionally adequate application is one that provides the first insurer with information sufficient to commence its investigations to determine whether another insurer is liable. To conclude otherwise would render the savings provision of s. 3(2) meaningless. [emphasis added]

[81] The Arbitrator's reasoning is also consistent with a different passage from the Pilot decision where the court, relying on the earlier Lombard decision, held that "[T]he 90-day clock will start to run when an insurer fails to fulfill its obligation to 'take steps to ascertain the missing information'": Pilot, at para. 58.

[82] Here, the Arbitrator found, and I agree, that Allstate received sufficient information to commence its priority investigation, which is indicated by Allstate's notes, by on or around March 12, 2014 and certainly by April 1, 2014. However, Allstate failed to pursue its investigation into identifying the other insurer in a diligent manner. For instance, there was over a one-month gap between April 2, 2014, when the claimant was discharged to his home, and May 8, 2014 when the insurance adjustor met with the claimant to obtain a statement from him. There is also a critical 3-week gap between Allstate receiving a letter from the claimant's lawyer on June 4, 2014, which Allstate states still did not identify another insurer, and June 25, 2014 when Allstate finally wrote to the claimant requesting the police report.

[83] Paying "respectful attention" to the Arbitrator's reasons, I find that they demonstrate sufficient transparency, intelligibility, and justification to be upheld with respect to the conclusion that that Allstate did not provide notice to Wawanesa within 90 days of receiving a completed application.

[84] In the event that I am wrong about the standard of review of reasonableness applying, I would have found the Arbitrator's decision to be correct.

(d) The Arbitrator was reasonable in determining that Allstate failed to satisfy the test for notifying Wawanesa after 90 days.

[85] Under section 3(2) of the Regulation, an insurer may also give notice after the 90-day period if it can satisfy a two-part test:

(a) 90 days was not a sufficient period of time to make a determination that another insurer is liable under Section 268 of the Insurance Act, and,

(b) the insurer made the reasonable investigations necessary to determine if another insurer was liable within the 90-day period.

[86] Here, the Arbitrator found that Allstate failed both parts of the test.

[87] Allstate argues that, while the Arbitrator correctly cited the law that an insurer is not held to a standard of perfection with respect to section 3(2), this is, in fact, the standard that the Arbitrator applied.

[88] In its factum on appeal, Allstate describes the reasons why it went past 90 days in putting Wawanesa on notice:

In this case, it was not possible to put Wawanesa on notice until Allstate received the police report showing the other vehicle in the accident. Allstate made repeated and varied efforts to obtain the report. Allstate requested the report from police prior to March 28, 2014, but lacked the proper authorization for it to be released to them. Allstate obtained a statement from the applicant on May 8, 2014, at which time his lawyer refused him (sic) to sign any authorizations. Allstate requested the police report from the applicant's paralegal on May 12, 2014. Allstate requested the police report again from the applicant and his lawyer on June 25, 2014. Allstate received the report on July 11, 2014. These efforts were made in the midst of other priority investigations.

[89] I find that the Arbitrator took all of Allstate's above reasons into account but nevertheless concluded that more diligent efforts should have been made. The Arbitrator's reasons state:

The first OCF-1 [received March 12, 2014] was sufficient for Allstate to appreciate that there was a priority dispute requiring a duly diligent investigation. Allstate did not request the police report from the claimant until June 25, 2014….I have received no evidence from Allstate as to why an earlier request for the police report was not made by Allstate of the claimant with a copy to the claimant's counsel (as compared to the email exchanged between Allstate's independent adjuster and the claimant's paralegal, discussed below).

I note that the independent adjuster did request a copy of the police report in an email sent to the claimant's paralegal on May 12, 2014. I have received no evidence as to why no follow-up was sent by the independent adjuster to the paralegal or to the lawyer or why no correspondence was sent by Allstate in advance of June 25, 2014. I have not received any evidence as to why the content of the police report, identifying Wawanesa as the insurer of the vehicle within which the claimant was riding, was not requested of the claimant or of the claimant's paralegal despite the statement indicating that this information is in the possession of the claimant's lawyer.

[90] I disagree that the Arbitrator held Allstate to a standard of perfection. While Allstate was clearly making some efforts to obtain the police report within the 90 days, those efforts were simply insufficient. Where the lack of consent is a roadblock to obtaining a document, the focus must move to diligently obtaining the consent. Where the claimant's intermediaries are not reasonably forthcoming with information, the focus must move to diligently obtaining the information directly from the claimant and/or the claimant's lawyer. These are not unrealistic expectations of an insurer. I find the Arbitrator's decision was based on an internally coherent and rational chain of analysis and that it is justified in relation to the relevant facts and law.

Conclusion

[91] The Arbitrator correctly determined that the first application received by Allstate on March 12, 2014 was a completed application because it was on the OCF-1 and signed, even though it was not signed by the claimant. The 90-day period started running because the application was completed within the definition of a completed application under section 3 of the Regulation and the applicable case law, including the Pilot decision. The Arbitrator's conclusion that Allstate did not satisfy the statutory criteria for putting Wawanesa on notice past the 90-day period was sound. In the event that I should have selected a standard of review of correctness throughout, I would have also found the Arbitrator's decision to be correct. The appeal is dismissed and the Arbitrator's decision with respect to the priority dispute is upheld.

[92] Wawanesa is awarded its costs on the appeal and in the arbitration below. If the parties are unable to agree on costs, they shall make written submissions as to costs within 10 days of the release of these Reasons. Such written submissions shall not exceed three (3) double-spaced pages, exclusive of Costs Outlines, Bills of Costs, Offers to Settle and authorities and are to be forwarded to me via my judicial assistant. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs.

Pinto J.

Released: October 26, 2020

COURT FILE NO.: CV-19-612900

DATE: 20201026

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Allstate Insurance Company of Canada

Appellant

– and –

The Wawanesa Mutual Insurance Company

Respondent

REASONS FOR JUDGMENT

Pinto J.

Released: October 26, 2020