Those insurers frustrated by the delay in having an
"accident" determination adjudicated under the dispute
resolution process should take heed of the recent decision of Mr.
Justice Sweeny in Ayr Farmers Mutual Insurance Company v.
Wright, 2015 ONSC 6219. Mr. Justice Sweeny was asked
to address a pre-emptive Application under Rule 14 for a
determination of "accident" based on a three line
description contained in the OCF-1. The insurer refused to
attend or participate in a FSCO mediation and unilaterally
attempted to seek adjudication of the "accident" issue
outside the parameters of the dispute resolution process.
In justifying their approach, the insurer argued that there were
many instances where decisions were made on Application by the
insurer to the courts for a determination of the matter. Mr.
Justice Sweeny acknowledged this to be the case (and would not
preclude such Application in the appropriate circumstances) but
noted that Ayr Farmers was proceeding on a unilateral basis in this
instance. Further, Ayr Farmers argued that the dispute
resolution process would not be engaged unless it was first
determined that an accident had occurred. Without such
determination, Mr. Wright was not an "insured person" who
could initiate mediation.
Mr. Wright, for his part, submitted that the dispute resolution
process applies to a determination of accident and that is where
the jurisdiction for such determination resided. Furthermore,
as the insurer's Application did not proceed on agreed facts,
there were factual issues in dispute. As such, the
Application went beyond the scope of pure contractual/statutory
interpretation and could not be properly adjudicated under Rule
Not surprisingly, the judge agreed with Mr. Wright on all
points, confirming that the dispute resolution process set out in
the Insurance Act (the "Act") was the
process to be applied with respect to such determinations.
Entitlement to benefits includes, on a plain reading, whether or
not a person was involved in an accident. The definition of
"insured person" should not be read so narrowly as to
exclude a person seeking a determination of whether or not an
accident had occurred.
In a tip of the hat to the soon-to-be abolished mediation
process, Mr. Justice Sweeny noted that the process allows for an
opportunity for an exchange of positions and had been designed with
an unrepresented insured in mind. For an insurer to simply
issue an Application in Superior Court without the benefit of the
mediation process would expose their insured to potential cost
consequences and result in "upsetting the delicate balance
struck by the legislature". To allow an insurer to move
unilaterally for a determination of an insured person's rights
would not be consistent with the principles of the Act and
the regulation. Accordingly, the dispute resolution process
was the process to be used for such determination.
Furthermore, Mr. Justice Sweeny noted on the materials before
him that there was no Agreed Statement of Fact, there was no sworn
evidence from the insured, and there was only limited information
before the court on which to make a determination. Absent agreed
facts, a determination of whether an incident was an accident would
require an examination of the surrounding circumstances, such that
a Rule 14 Application was not the appropriate tool for such
Of note, Mr. Justice Sweeny's decision does not prohibit the
use of the Rule 14 Application process in the appropriate
circumstances. In fact, as acknowledged by Mr. Justice
Sweeny, this process has been used on a number of occasions to the
benefit of both the insured and the insurer when seeking an
expeditious determination. In this regard, such an
Application could have been brought on the basis of a
contractual/statutory interpretation in order to determine the
rights of the parties, including whether or not an accident had
occurred, supported with either agreed facts or sufficient evidence
in the Application and Responding Records to allow for such a
determination. Presumably, both parties would be in agreement
that the Application process would be sufficient for such
determination. Absent those factors, it is unlikely that a court
would be inclined to entertain the matter for the very reasons
articulated by Mr. Justice Sweeny. (Recourse to the courts
for such determinations will be precluded with the implementation
of Bill 15.)
The decision also reinforces the concept that disputes
concerning entitlement to benefits include a determination of the
statutory pre-conditions, including whether or not an accident
occurred, and those determinations dependent on status such as
whether the injury was a minor injury as defined and whether or not
an impairment is a catastrophic impairment. The reasons for
judgment are set out below:
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).