The Superior Court has recently had the opportunity to revisit an issue that has not been addressed by the courts in twenty years: whether the Family Law Act definition of "spouse" applies to the Insurance Act definition of "spouse". For ease of reference, both statutes in part define a spouse as being someone "who has lived together in a conjugal relationship, whether inside or outside marriage" with the other person for a requisite period of time. Under the Insurance Act, the requisite period of time is three years.
In Royal and Sun Alliance Company of Canada v. Desjardins/Certas, 2018 ONSC 4284 (CanLII), Justice E.M. Morgan, was tasked with judicially reviewing the private arbitration decision of Shari Novick, which found that RSA was the priority insurer for an accident benefits claim involving the claimant, Ms. Halliday, following her involvement in a motor vehicle accident that occurred in March 2014. Arbitrator Novick found that Ms. Halliday was the spouse, as defined in the Insurance Act, of RSA insured Mr. Zorony. Ms. Halliday and Mr. Zorony had been seriously dating since 2008 and had moved in together in February/March 2013. Prior to moving in together, the couple maintained separate residences and spent the weekends together, usually at Mr. Zorony's home.
Arbitrator Novick reviewed the case law which dealt with the definition of spouse under the Family Law Act, noting that the definitions in the Family Law Act and the Insurance Act are the same. Case law had developed in the family law context to apply appropriate flexibility to the definition of spouse which requires a more global or unitary approach and focuses on how the couple is socially perceived. It was acknowledged that a literal interpretation of the definition would seem to necessitate that the couple actually live together (ie. in the same residence) but this literal interpretation of the definition was rejected by the arbitrator in favour of the family law interpretation that favours a more inclusive approach. Arbitrator Novick eventually found that despite only living together in the same residence for a year before the accident, Ms. Halliday and Mr. Zorony had been living together in a conjugal relationship outside of marriage for at least three years before the accident.
On appeal, Justice E.M. Morgan reverted to case law from 1995 and 1998 to overturn the arbitration decision on the basis of it being unreasonable. The court relied upon the earlier principle that the Insurance Act requires a context specific approach of its own and unlike in family law the insurance context contains no imperative to deviate from the ordinary understanding of what it means for two person to "live together". In essence, Justice Morgan found that the sociologic factors which create the need to consider a more inclusive interpretation of the words "live together" in the family law context such as lifestyle, social habits, career support, financial status, etc. do not have a place in the insurance setting. Therefore, a person can be a spouse under the Family Law Act but may not also be a spouse for the purposes of insurance coverage.
This creates an interesting dichotomy in Ontario, especially as the case law has always acknowledged the purpose of insurance as being remedial and consumer protectionist in nature. In most other areas of insurance, the statute is given a broad and liberal interpretation, with the understanding that the legislation is meant to be inclusive, not exclusive. We will have to wait and see if this decision will be appealed further and allow the Court of Appeal reconsider the outcome of this line of jurisprudence in light of the expanding acceptance of sociologic factors in determining the nature of a spousal relationship in the family context.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
