Allstate Insurance Company v. Her Majesty the Queen in Right of Ontario as represented by the Minister of Finance (the "Motor Vehicle Accident Claims Fund")

[Indexed as: Allstate Insurance Co. v. Ontario (Minister of Finance)]

Ontario Reports

Ontario Superior Court of Justice

Davies J.

February 6, 2020

149 O.R. (3d) 761 | 2020 ONSC 830

Case Summary

Administrative law — Appeals — Standard of review — Insured with canceled automobile policy applying to Motor Vehicle Accident Claims Fund for accident benefits — Fund paying benefits and claiming reimbursement from automobile insurer for invalid cancellation — Arbitrator ruling in favour of Fund — Appeal dismissed on correctness standard of review.

Arbitration — Arbitration agreement — Interpretation — Standard of review — Insured with canceled automobile policy applying to Motor Vehicle Accident Claims Fund for accident benefits — Fund paying benefits and claiming reimbursement from automobile insurer for invalid cancellation — Arbitrator ruling in favour of Fund — Arbitration agreement not changing the fact that appeal arose from statutory appeal mechanism — Appeal dismissed on correctness standard of review.

Insurance — Automobile insurance — Arbitration — Appeals — Insured with canceled automobile policy applying to Motor Vehicle Accident Claims Fund for accident benefits — Fund paying benefits and claiming reimbursement from automobile insurer for invalid cancellation — Arbitrator ruling in favour of Fund — Appeal dismissed on correctness standard of review.

Insurance — Automobile insurance — Cancellation — Notice — Insured with automobile policy canceled for non-payment of premiums applying to Motor Vehicle Accident Claims Fund for accident benefits — Fund paying benefits and claiming reimbursement from automobile insurer for invalid cancellation — Arbitrator ruling in favour of Fund — Notice failed to include an address where insured could pay outstanding premiums to avoid cancellation — Appeal dismissed on correctness standard of review — Arbitrator's interpretation consistent with plain language of regulation and nature and purpose of legislation.

Insurance — Automobile insurance — Disputes between insurers — Motor Vehicle Accident Claims Fund — Insured with automobile policy canceled for non-payment of premiums applying to Motor Vehicle Accident Claims Fund for accident benefits — Fund paying benefits and claiming reimbursement from automobile insurer for invalid cancellation — Arbitrator ruling in favour of fund — Notice failed to include an address where insured could pay outstanding premiums to avoid cancellation — Appeal dismissed on correctness standard of review — Arbitrator's interpretation consistent with plain language of regulation and nature and purpose of legislation.

The appellant issued an automobile policy to the insured in July 2012. The policy was canceled in April 2013 for non-payment of premiums. The insured [page762] paid the amount owing on the canceled policy and obtained a new policy effective for a year commencing March 22, 2014. In May 2014, the appellant sent the insured a notice by registered mail that his policy would be canceled on June 14 if he did not pay outstanding premiums. The notice was returned to the appellant and marked "Moved/Unknown". The insured suffered catastrophic injuries in a single vehicle accident in October 2014. Because the appellant took the position that the policy was canceled before the accident, the insured submitted a claim for Statutory Accident Benefits to the Motor Vehicle Accident Claims Fund. The fund paid the claim and sought reimbursement from the appellant on the ground that the notice of termination was defective. An arbitrator ruled that the notice was defective in two respects. It did not provide an address where the insured could pay the outstanding premiums to avoid cancellation, and it was not sent to the insured's latest post office address as notified to the appellant. The appellant appealed.

Held, the appeal should be dismissed.

The appropriate standard of review was correctness. Typically, insurance arbitration decisions were reviewed under an administrative law framework with a reasonableness standard. However, the issue had to be revisited in light of the decision in Vavilov in which the Supreme Court of Canada reconsidered the approach it had established in Dunsmuir. The new framework focused on giving effect to choices made by legislatures and established a reasonableness standard as a starting point with certain circumstances in which the presumption of reason-ableness review would be rebutted. The provincial legislature had decided that priority disputes between insurers would be resolved through arbitration with a limited right of appeal to the Superior Court of Justice. There was an arbitration agreement stating an appeal was available "on a point of law or mixed point of law and fact". The fact that the legislation allowed the parties to agree on the scope of an appeal did not change the fact that the appeal arose out of a statutory appeal mechanism such that the appellate standard applied. The arbitrator's interpretation of the regulation governing the content of the notice was a question of law with a correctness standard. Whether the notice met the statutory requirements was a question of mixed fact and law and assuming the arbitrator did not err in his interpretation of the regulation, his conclusion that the content of the notice was deficient should not be set aside absent a palpable and overriding error.

The arbitrator was correct to conclude that an insurer seeking to rely on a unilateral cancellation of a policy mid-term had to demonstrate compliance with the statutory conditions, including the provision of an address in Ontario where the payment of the amount owing was to be delivered to avoid the pending termination. Such an interpretation was consistent with the plain language of the regulation and with the nature and purpose of the legislation. The arbitrator's conclusion was not tainted by a palpable and overriding error for failure to consider the insured's actual knowledge of the pending termination. The arbitrator noted in his reasons that the insured knew about the pending termination, but that knowledge was not dispositive of the issue of whether the policy was properly canceled. In light of that conclusion, it was unnecessary to consider the issue of whether the notice was sent to the latest post office address.

Canada (Minister of Citizenship and Immigration) v. Vavilov, [2019] S.C.J. No. 65, 2019 SCC 65, 2020EXP-27, 441 D.L.R. (4th) 1, 59 Admin. L.R. (6th) 1, 69 Imm. L.R. (4th) 1, EYB 2019-335761, folld

Other cases referred to

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633, [2014] S.C.J. No. 53, 2014 SCC 53, 373 D.L.R. (4th) 393, 461 N.R. 335, [2014] 9 W.W.R. 427, [page763] J.E. 2014-1345, 358 B.C.A.C. 1, 59 B.C.L.R. (5th) 1, 25 B.L.R. (5th) 1, 242 A.C.W.S. (3d) 266, 2014EXP-2369; Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, [2008] S.C.J. No. 9, 2008 SCC 9, 291 D.L.R. (4th) 577, 372 N.R. 1, J.E. 2008-547, 329 N.B.R. (2d) 1, 69 Admin. L.R. (4th) 1, 64 C.C.E.L. (3d) 1, [2008] CLLC para. 220-020, 69 Imm. L.R. (3d) 1, 164 A.C.W.S. (3d) 727, 95 L.C.R. 65, EYB 2008-130674, 2008 DFQ para. 10,098, D.T.E. 2008T-223, 170 L.A.C. (4th) 1; Economical Mutual Insurance Co. v. Wawanesa Mutual Insurance Co., unreported (February 8, 2011), Arbitrator Bialkowski; Gore Mutual Insurance Co. v. Lombard General Insurance Co. of Canada, unreported (June 21, 2010), Arbitrator Bialkowski; Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991, 2002 DFQ para. 10,056; Inforica Inc. v. CGI Information Systems and Management Consultants Inc. (2009), 97 O.R. (3d) 161, [2009] O.J. No. 3747, 2009 ONCA 642, 311 D.L.R. (4th) 728, 254 O.A.C. 117, 97 Admin. L.R. (4th) 159, 80 C.P.C. (6th) 197 (C.A.); Intact Insurance Co. v. Allstate Insurance Co. of Canada (2016), 131 O.R. (3d) 625, [2016] O.J. No. 4113, 2016 ONCA 609, 403 D.L.R. (4th) 438, 351 O.A.C. 1, 60 C.C.L.I. (5th) 1, 268 A.C.W.S. (3d) 425, 2016 OABC para. A-1226 (C.A.); Lombard Canada v. Kent & Essex Mutual Insurance Co., 2008 55468 (ON SC), [2008] O.J. No. 4314, 67 C.C.L.I. (4th) 88, 74 M.V.R. (5th) 225, 170 A.C.W.S. (3d) 844 (S.C.J.); Lumbermens Mutual Casualty Co. v. Stone, 1955 55 (SCC), [1955] S.C.R. 627, [1955] S.C.J. No. 40, [1955] 4 D.L.R. 167, [1955] I.L.R. para. 1-196; Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] 1 S.C.R. 986, [1992] S.C.J. No. 41, 91 D.L.R. (4th) 491, 136 N.R. 40, J.E. 92-783, 53 O.A.C. 200, 40 C.C.E.L. 1, 33 A.C.W.S. (3d) 256; Merino v. ING Insurance Co. of Canada, [2019] O.J. No. 2128, 2019 ONCA 326, 39 M.V.R. (7th) 1, 434 D.L.R. (4th) 604, 88 C.C.L.I. (5th) 175, [2019] I.L.R. para. I-6152 (C.A.); Ontario (Minister of Finance) v. Traders General Insurance Co. (c.o.b. Aviva Traders) (2018), 142 O.R. (3d) 45, [2018] O.J. No. 3328, 2018 ONCA 565, 29 M.V.R. (7th) 1, 82 C.C.L.I. (5th) 1, [2018] I.L.R. para. I-6074, 293 A.C.W.S. (3d) 836 (C.A.); Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193, 221 N.R. 241, J.E. 98-201, 106 O.A.C. 1, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 CLLC para. 210-006, 76 A.C.W.S. (3d) 894, D.T.E. 98T-154

Statutes referred to

Arbitration Act, 1991, S.O. 1991, c. 17, s. 45 [as am.]

Insurance Act, R.S.O. 1990, c. I.8, ss. 268(4) [as am.], (8) [as am.]

Interpretation Act, R.S.O. 1990, c. I.11 [rep.], s. 10

Rules and regulations referred to

Disputes Between Insurers, O. Reg. 283/95, ss. 7(1) [as am.], 8(1)

Statutory Conditions — Automobile Insurance, O. Reg. 777/93, ss. 11, (1.3), (b), (2), 12

Authorities referred to

Sullivan, Ruth, Construction of Statutes, 5th ed. (Toronto: LexisNexis, 2008)

APPEAL from an arbitrator's decision in an insurance priority dispute.

Nawaz Tahir, for appellant.

Marie Sydney, for respondent. [page764]

DAVIES J.: —

A. Overview

[1] Daniel Miller suffered catastrophic injuries in a single motor vehicle accident on October 3, 2014. He is now a quadriplegic.

[2] Allstate Insurance Company ("Allstate") first issued Mr. Miller an automobile insurance policy in July of 2012. That policy was cancelled for non-payment of premiums in April of 2013. In March of 2014, Mr. Miller paid the amount owing on the cancelled policy and applied for a new insurance policy. Allstate issued a policy to Mr. Miller effective March 22, 2014 to March 22, 2015.

[3] On May 12, 2014, approximately six months before the accident, Allstate sent Mr. Miller a notice by registered mail that his policy would be cancelled on June 14, 2014 if he did not pay the outstanding premiums. The notice was returned to Allstate and was marked "Moved/Unknown".

[4] Allstate takes the position that Mr. Miller's insurance policy was cancelled before his accident. As a result, Mr. Miller submitted a claim for Statutory Accident Benefits ("SABS") to the Motor Vehicle Accident Claims Fund (the "fund") in accordance with s. 268(4) of the Insurance Act (the "Act").[^1] His claim has been paid pursuant to s. 268(8) of the Act.

[5] The fund then took the position that Allstate's notice of termination was defective, and Mr. Miller was still insured by Allstate at the time of the accident. The fund sought reimbursement from Allstate for the benefits paid in accordance with O. Reg. 283/95: Disputes Between Insurers.

[6] An arbitration proceeded on the issue of whether Allstate had properly cancelled Mr. Miller's policy. The arbitrator found that Allstate failed to comply with two statutory conditions to terminate an insurance policy. First, the notice did not contain an address where Mr. Miller could pay the outstanding premiums and fees to avoid the cancellation of his policy as required by s. 11(1.3)(b) of O. Reg. 777/93. Second, the notice of termination was not sent to "the insured's latest post office address as notified to the insurer" as required by s. 12 of O. Reg. 777/93.

[7] Because of the defects in the notice, the arbitrator found that Mr. Miller's insurance policy had not been terminated and he remained insured by Allstate on the date of the accident. The arbitrator found that Allstate is the priority insurer and is required to reimburse the fund for Mr. Miller's SABS benefits and administrative costs arising from the accident. Allstate [page765] appeals the arbitrator's decision under s. 45 of the Arbitration Act, 1991.[^2]

[8] While the arbitrator concluded that Allstate failed to comply with two statutory conditions, either one of the deficiencies would be sufficient to find that Allstate had not effectively terminated Mr. Miller's policy and that Allstate is the priority insurer. If I find that the arbitrator did not err in relation to either of the two deficiencies found, this appeal must be dismissed.

B. Issues to be Determined

[9] As a preliminary matter, I must determine whether the Supreme Court of Canada's decision in Canada (Minister of Citizenship and Immigration) v. Vavilov change the applicable standard of review in this case. For the reasons set out below, the appellate standard of review applies. In other words, questions of law must be reviewed on a correctness standard. A more deferential standard applies to questions of mixed fact and law.

[10] There are four other potential issues on this appeal:

(1) Was the arbitrator correct that a notice of termination for non-payment of premiums must include an address where the insured person can pay the amount due in order to avoid termination of the policy?

(2) If this is so, was the arbitrator's conclusion that the notice of termination issued by Allstate in this case did not comply with the requirement to contain an address tainted by a palpable and overriding error?

(3) Was the arbitrator correct in that the phrase "as notified to the insurer" in s. 12 of O. Reg. 777/93 does not necessarily mean "as notified to the insurer by the insured"?

(4) Was the arbitrator's conclusion that the insurer was notified by means other than from Mr. Miller that they had an incorrect address for him tainted by a palpable and overriding error?

[11] I find that the arbitrator was correct to conclude that s. 11(1.3)(b) of O. Reg. 777/93 requires the insurer to include an address where the insured person can pay the amount due in order to avoid termination of the policy. I also find that the arbitrator made no error in finding that the notice sent to Mr. Miller did not contain an address and was, therefore, defective. In light of this [page766] finding, I do not need to resolve the other two issues and the appeal is dismissed with costs.

C. Preliminary Issue: Did the Supreme Court of Canada's Decision in Canada (Minister of Citizenship and Immigration) v. Vavilov Change the Standard of Review?

[12] Until very recently, insurance arbitration decisions dealing with priority disputes were generally reviewed on a reasonableness standard. The reasonableness standard applied even if the appeal involved an "extricable question of law regarding SABS".[^3] It was only if the appeal raised a jurisdictional issue or a constitutional question or a general question of law of central importance to the legal system that is outside the arbitrator's area of expertise that a correctness standard would apply.[^4]

[13] In the past, the standard of review of insurance arbitration decisions was determined by applying the administrative law framework, not the appellate framework. This was true even though the review of an insurance arbitration is styled as an appeal under s. 45 of the Arbitration Act, 1991.[^5]The rationale for applying a reasonableness standard to insurance arbitration appeals, even those raising questions of law, was essentially two-fold.[^6] First, the expertise of the arbitrators, who are chosen by the parties because of their expertise, favoured a reasonableness standard.[^7] Second, the legislation limits the right of the parties to an arbitration to appeal, which was seen to be similar to a legislative [page767] privative clause. Under the old regime, this factor also favoured a reasonableness standard.[^8] It would only be in very limited circumstances when the nature of the question under review would dictate a correctness standard of review:

The nature of the question has rebutted the presumption of reasonableness review in two kinds of cases. The first is where the decision maker at issue and the courts share jurisdiction over the same legal question at the first instance: McLean [v. British Columbia (Securities Commission),2013 SCC 67], at para. 24. The second is where the question is one of those "exceptional" kinds of questions -- questions of jurisdiction, constitutional questions, or general questions of law that are both of central importance to the legal system as a whole and outside the adjudicator's specialized area of expertise -- where courts will apply a correctness standard of review: McLean, at paras. 25-26.[^9]

[14] In December of 2019, the Supreme Court revised the approach to determining the standard of review that applies when the merits of an administrative decision are challenged in court.[^10] The Supreme Court recognized that certain aspects of the existing framework, established in Dunsmuir,were "unclear and unduly complex".[^11] Given the prevalence and importance of administrative decisions, and in response to growing judicial and academic criticism of the existing approach to the standard of review, the court held that a new approach was needed.[^12]

[15] The court identified a number of concerns with how the law on the standard of review had evolved since Dunsmuir. One specific concern was that the reasonableness standard of review, which is premised on the notion of judicial restraint when reviewing questions that the legislature intended to be decided by administrative bodies, was routinely being applied "even when the legislature has provided for a different institutional structure through a statutory appeal mechanism".[^13]

[16] The new framework in Vavilov, therefore, focuses on respecting and giving effect to the choices made by the legislatures about the structure of administrative decision-making processes. The standard of review applied by the court must reflect the legislature's intent "with respect to the role of the reviewing court, [page768] except where giving effect to that intent is precluded by the rule of law".[^14] The expertise of the decision maker is no longer a relevant factor in determining the standard of review.[^15]

[17] The starting point is a presumption that courts will apply a reasonableness standard when reviewing the merits of an administrative decision:

Where a legislature has created an administrative decision maker for the specific purpose of administering a statutory scheme, it must be presumed that the legislature also intended that decision maker to be able to fulfill its mandate and interpret the law as applicable to all issues that come before it. Where a legislature has not explicitly prescribed that a court is to have a role in reviewing the decisions of that decision maker, it can safely be assumed that the legislature intended the administrative decision maker to function with a minimum of judicial interference.[^16]

[18] There are, however, circumstances in which the presumption of reasonableness review will be rebutted, including when the review is the result of a statutory appeal mechanism.[^17] When the legislation includes a statutory appeal mechanism, that signals that the legislature intends the court to perform an appellate function in respect of that decision and the court hearing the appeal is to apply appellate standards of review:

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 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.[^18]

[19] Based on the Supreme Court's decision in Vavilov, the standard of review in appeals from insurance arbitrations mandated by legislation must be revisited. [page769]

[20] Allstate's appeal from the arbitrator's decision is a statutory appeal. Section 7(1) of O. Reg. 283/95: Disputes Between Insurers, states that if insurers cannot agree on who is liable to pay the SABS, "the dispute shall be resolved through an arbitration under the Arbitration Act, 1991".[^19] Under s. 45 of the Arbitration Act, 1991, a party to an arbitration can appeal an arbitration award on a question of law with leave of the court unless the arbitration agreement provides a broader right of appeal on a question of law without leave, or on a question of mixed fact and law, or on a question of fact. The Arbitration Act, 1991 is silent on the standard of review to be applied by the court on an appeal. The provincial legislature has, therefore, decided that priority disputes between insurers will be resolved through arbitration with a limited right of appeal to the Superior Court of Justice.

[21] The arbitration agreement in this case states that any party to the arbitration may appeal the arbitrator's decision "on a point of law or mixed point of law and fact to a Judge of the Ontario Superior Court of Justice, without leave of the Court". The fact that the legislation allows the parties to agree on the scope of an appeal from an arbitration award does not change the fact that this appeal arises out of a statutory appeal mechanism and, as a result, the appellate standard applies.[^20]

[22] Some of the issues raised by Allstate are questions of law. For example, the arbitrator's interpretation of the regulation governing the content of a notice of termination is a question of law. The appropriate standard of review in relation to that issue is correctness.

[23] Other issues raised by Allstate involve questions of mixed fact and law. For example, the question of whether the notice generated by Allstate in this case met the statutory requirements for a notice of termination is a question of mixed fact and law. This question involves applying the legal test to the facts, as found by the arbitrator. Assuming the arbitrator did not err in his interpretation of the regulation, the arbitrator's conclusion that the content of the notice was deficient should not be set aside absent a palpable and overriding error.[^21] [page770]

D. Was the Arbitrator Correct that a Notice of Termination for Non-Payment of Premiums must Include an Address where the Insured Person can Pay the Amount Due in Order to Avoid Termination of the Policy?

[24] An insurance contract can be terminated by the insured person at any time for any reason on request.[^22] By contrast, the legislation sets out the reasons that an insurer can use to terminate a policy. Non-payment of premiums owed under an insurance contract is one of the reasons an insurer is permitted to terminate an automobile insurance policy in Ontario. However, O. Reg. 777/93 contains a very detailed procedure the insurer must follow to terminate an insurance contract for non-payment of premiums. In particular, the required content of a notice of termination in cases involving non-payment of the premiums due under an insurance contract is itemized in s. 11(1.3) of O. Reg. 777/93:

11(1.3) A notice of termination mentioned in subcondition (1.2) shall,

(a) state the amount due under the contract as at the date of the notice; and

(b) state that the contract will terminate at 12:01 a.m. of the day specified for termination unless the full amount mentioned in clause (a), together with an administration fee not exceeding the amount approved under Part XV of the Act, payable in cash or by money order or certified cheque payable to the order of the insurer or as the notice otherwise directs, is delivered to the address in Ontario that the notice specifies, not later than 12:00 noon on the business day before the day specified for termination.

[25] The notice of termination for non-payment of premiums sent to Mr. Miller by Allstate says his policy would be terminated at 12:01 a.m. on June 14, 2014 unless the amount past due was paid. The notice sets out that Mr. Miller was required to pay $335.74 in the form of guaranteed funds to avoid termination of his policy. The notice also says that he must pay the amount outstanding through his Allstate representative, Brantford Commons Agency. The notice contains a phone number for the Brantford Commons Agency but does not provide an address where the payment of the amount due must be delivered to avoid termination of the policy.

[26] The legal question raised in this appeal is whether a notice of termination is invalid if it does not include an address where the [page771] insured person is to deliver the unpaid premiums and administrative fees. The answer to this question turns on the proper interpretation of s. 11(1.3) of O. Reg 777/93, which says that a notice of termination for non-payment of premiums shall include the following information:

(i) the amount due as of the date of the notice;

(ii) that the contract will terminate at 12:01 a.m. on a specific date; and

(iii) that the contract will not be terminated if the insured person delivers the amount due plus any administration fee "to the address in Ontario that the notice specifies" by 12:00 noon the day before the termination date.

[27] The plain language of the regulation requires the termination notice to include the address to which the insured person must deliver the amount owing to avoid the termination of their policy.[^23] However, statutory interpretation cannot be based on the wording of the legislation alone. The interpretation given to the regulation in this case must also be consistent with the object of the regulation and the intention of the legislature.[^24]

[28] Section 10 of the Interpretation Act states that every Act in Ontario will be deemed to be remedial and must be given "such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit".[^25] In other words, the Insurance Act and the regulations are deemed to have been enacted to protect insured people in Ontario and they must be interpreted in a manner that best achieves those goals.

[29] The statutory procedure for an insurance company to unilaterally terminate an insurance contract is designed to ensure fair notice to the insured person and protect the insured person against unfair treatment from the insurance company. The termination provisions give an insured person time and opportunity to rectify the non-payment to avoid termination or to arrange alternate coverage before the termination takes effect.[^26] [page772]

[30] As the Court of Appeal noted in Merino, "[t]he scheme of the Act and its regulations prescribes the rights and obligations of the insured and insurer under the automobile provisions, requires strict compliance, and provides an orderly and predictable set of consequences for compliance and non-compliance".[^27] One of the consequences for an insurer whose notice of termination does not strictly comply with s. 11 of O. Reg. 777/93 is that the insurance contract remains in force.[^28]

[31] The arbitrator concluded that the notice is intended to be a "one-stop source for necessary information" about how to avoid the termination of an insurance policy. The arbitrator further concluded that the absence of an address for the delivery of the amount owing is a significant defect in the notice that "meaningfully detracts from its purpose to directly supply necessary information". The arbitrator's conclusion is consistent with the plain meaning of the regulation. It is also consistent with the remedial nature of the legislation and its purpose.

[32] The arbitrator also noted that to approve a practice of not including information required in the regulation "would serve to reduce the insurer incentive to comply with this provision". When legislation is designed to protect the public or a section of the public, an interpretation that encourages full compliance to ensure that the beneficial social goals sought by the legislation are achieved is to be preferred over one that does not.[^29] This principle of statutory interpretation provides further support for a strict reading of the notice requirements in s. 11(1.3) of O. Reg. 777/93.

[33] The arbitrator was correct to conclude that an insurer seeking to rely on a unilateral cancellation of a policy mid-term must demonstrate they complied with the statutory conditions, including the provision of an address in Ontario where the payment of the amount owing is to be delivered to avoid the impending termination. This interpretation is consistent with the plain language of the regulation. It is also consistent with the purpose and policy rationale for the regulation. [page773]

[34] Counsel for Allstate relied on two arbitration decisions -- Gore Mutual Insurance Company v. Lombard General Insurance Company of Canada and Economical Mutual Insurance Company v. Wawanesa Mutual Insurance Company -- to suggest that there are only three essential elements that must be contained in a notice of termination for it to be valid:

(1) the amount due, together with administration fee being sought;

(2) the date on which the termination is to take place; and

(3) that the insurer has a right to avoid termination by paying the amount outstanding and the specified administration fee by noon on the day before the date on which the termination is to take place.[^30]

[35] The arbitrator referred to both decisions in his reasons but concluded that the address to which the amount due and administration fee are to be delivered is also required, and he was correct to do so.

[36] Counsel for Allstate argues that notwithstanding the language of the regulation, the address for payment of the overdue amount is not an essential element that must be contained in the notice. The decisions in Gore Mutual and Economical Mutual do not support that position. Neither of those cases dealt with a situation where the termination notice failed to include an address where the past due amount was to be delivered by the insured person. In Gore Mutual, the notice of termination failed to advise the insurer that he could avoid the termination if he paid the amount set out in the notice.[^31] In Economical Mutual, the notice instructed the insured person to contact their insurance broker for information about how the past due amount could be paid and included the broker's address.[^32]

[37] More importantly, in Economical Mutual, the arbitrator held that for a letter of termination to be effective, "there must be strict compliance to the extent that the 'essential elements' of [page774] the legislative requirements are contained in the notice letter".[^33] Gore Mutual and Economical Mutual do not support the position that the provision of an address in Ontario where the past due amount is to be delivered is not an "essential element" of a valid termination notice. Such a finding would be inconsistent with both the plain language and the intention of the legislation.

E. Was the Conclusion that the Notice of Termination did not Comply with the Requirement to Provide an Address Tainted by a Palpable and Overriding Error?

[38] The content of the notice of termination in this case is not in dispute. It set out the past due amount and the administrative fee Mr. Miller owed. It also says that he must pay the amount outstanding through his Allstate representative, Brantford Commons Agency, in the form of guaranteed funds to avoid termination of his policy. The notice contains a phone number for the Brantford Commons Agency but does not provide an address where the payment can be delivered to avoid the termination of the policy. The envelope in which the notice was sent had a return address for Allstate's head office in Mississauga.

[39] While a standard of perfection is not required in the notice of termination, this is not a case of a minor typographical error in the address provided. Allstate failed entirely to include an address for Brantford Commons Agency, where Mr. Miller was directed to pay the amount due. There is no evidence that Mr. Miller could have paid the amount past due at the address on the envelope for Allstate's head office rather than at Brantford Commons Agency as the notice directs.

[40] The agreed statement of facts in this case states that "by the end of May 2014, Mr. Miller was aware that his policy would be cancelled for non-payment unless he made payment under the policy". Allstate argues that the arbitrator erred in failing to consider Mr. Miller's actual knowledge of the pending termination. The arbitrator noted that Mr. Miller knew about the pending termination in his reasons but did not consider it in his analysis of the validity of the notice. The fact that Mr. Miller knew that his policy was at risk of being cancelled is not dispositive of the issue of whether his policy was properly cancelled by Allstate.[^34]

[41] The onus is on Allstate to strictly comply with the regulation if it wants to unilaterally terminate an insurance policy mid- contract. It failed to do that in this case. The arbitrator did not make any error in finding that the notice of termination sent to Mr. Miller was deficient and, as a result, the policy remained in effect at the time of his accident.

F. Conclusion

[42] In light of my findings in relation to the validity of the notice of termination, I need not address the issue of whether Allstate sent the notice to the "insured's latest post office address as notified to the insurer".

[43] The parties agreed that costs in the amount of $5,000, inclusive of disbursements and HST, should be awarded to the successful party on the appeal.

[44] The appeal is dismissed. Allstate is to pay the fund $5,000 in costs.

Appeal dismissed.

Notes

[^1]: R.S.O. 1990, c. I.8, as amended.

[^2]: S.O. 1991, c. 17.

[^3]: Intact Insurance Co. v. Allstate Insurance Co. of Canada (2016), 131 O.R. (3d) 625, [2016] O.J. No. 4113, 2016 ONCA 609 (C.A.), at para. 53.

[^4]: Intact Insurance Co., at para. 53.

[^5]: Dunsmuir v. New Brunswick , [2008] 1 S.C.R. 190, [2008] S.C.J. No. 9, 2008 SCC 9, Intact Insurance Co., at para. 25.

[^6]: In the context of private commercial arbitrations, there was the added rationale that the parties to the arbitration expressly elect to have their dispute resolved by an arbitrator, not by the courts. In that context, arbitration is seen as an autonomous, self-contained process in which the courts generally should not intervene: Inforica Inc. v. GCI Information Systems & Management Consultants Inc. (2009), 97 O.R. (3d) 161, [2009] O.J. No. 3747, 2009 ONCA 642 (C.A.), at para. 14; and Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633, [2014] S.C.J. No. 53, 2014 SCC 53, at paras. 104-106. This rationale does not apply to insurance arbitration where regulation mandates the parties to resolve any dispute through arbitration. In the context of disputes between insurers, resort to arbitration is required. It is not a deliberate choice by the parties to engage a process independent of the court.

[^7]: Intact Insurance Co., at paras. 49-50.

[^8]: Intact Insurance Co., at para. 48.

[^9]: Intact Insurance Co., at para. 51.

[^10]: Canada (Minister of Citizenship and Immigration) v. Vavilov, [2019] S.C.J. No. 65, 2019 SCC 65.

[^11]: Vavilov, at para. 21.

[^12]: Vavilov, at para. 10.

[^13]: Vavilov, at para. 8.

[^14]: Vavilov, at para. 23.

[^15]: Vavilov, at para. 31.

[^16]: Vavilov, at para. 24.

[^17]: Vavilov, at para. 36.

[^18]: Vavilov, at para. 36-37.

[^19]: O. Reg. 283/95, 222, ss. 7(1) and 8(1).

[^20]: The Supreme Court made it clear that the appellate standard of review applies to any statutory appeal process, even if the statute requires the party to apply for leave to appeal. This supports the position that regardless of the scope or manner of appeal, the appellate standard articulated in Housen v. Nikolaisen will apply to an appeal from an administrative decision maker: Vavilov, at para. 45.

[^21]: Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, at paras. 26-37.

[^22]: O. Reg 777/93, s. 11(2).

[^23]: O. Reg 777/93, s. 11(1.3).

[^24]: Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 21.

[^25]: Interpretation Act, R.S.O. 1990, c. I.11, s. 10.

[^26]: Merino v. ING Insurance Co. of Canada, [2019] O.J. No. 2128, 2019 ONCA 326 (C.A.), at para. 42.

[^27]: Merino, at para. 43.

[^28]: Merino, at para. 43; Ontario (Minister of Finance) v. Traders General Insurance (c.o.b. Aviva Traders) (2018), 142 O.R. (3d) 45, [2018] O.J. No. 3328, 2018 ONCA 565 (C.A.), at para. 43; Lumbermens Mutual Casualty Co. v. Stone, 1955 55 (SCC), [1955] S.C.R. 627, [1955] S.C.J. No. 40, at p. 635 S.C.R.

[^29]: Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] 1 S.C.R. 986, [1992] S.C.J. No. 41, at 1003 S.C.R.; Rizzo & Rizzo Shoes Ltd., (Re), supra, note 24, at para. 24; R. Sullivan, Construction of Statutes, 5th ed. (Toronto: LexisNexis, 2008), at pp. 196-97.

[^30]: Gore Mutual Insurance Co. v. Lombard General Insurance Co. of Canada, unreported (June 21, 2010), Arbitrator Bialkowski, at p. 6 ("Gore Mutual"); and Economical Mutual Insurance Co. v. Wawanesa Mutual Insurance Co., unreported (February 8, 2011), Arbitrator Bialkowski, at p. 5 ("Economical Mutual").

[^31]: Gore Mutual, at p. 6.

[^32]: Economical Mutual, at p. 6.

[^33]: Economical Mutual, at p. 5.

[^34]: Lombard Canada v. Kent & Essex Mutual Insurance Co., 2008 55468 (ON SC), [2008] O.J. No. 4314, 67 C.C.L.I. (4th) 88 (S.C.J.), at para. 27.