Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Insurance – Automobile insurance – Insurance arbitration – Principally dependant for financial support – Administrative law – Standard of review applicable to insurance arbitrator’s decision – How should “principally dependent for financial support” be determined for purposes of automobile insurance policy – Whether arbitrator erred in considering permanence of relationship as factor – In appeals from decisions of private arbitrators and administrative tribunals, what constitutes improper substitution of desired outcome – How does requirement for deference to tribunal and arbitral fact finding manifest itself in second guessing arbitrator’s fact driven choice.

Either the applicant, Allstate Insurance Company of Canada, or the respondent, Intact Insurance Company, is responsible for statutory accident benefits owed to the claimants, Paula Chartrand and her two daughters, after they were injured in an accident on August 21, 2010. The claimants received accident benefits from Intact, the insurer of the vehicle they were riding in at the time of the accident. Intact subsequently took steps to recover from Allstate on the basis that Allstate insured two vehicles owned by Kyle Houghton, with whom Ms. Chartrand was having a relationship and with whom the claimants had lived for seven weeks at the time of the accident. Intact took the position that the claimants were “principally dependent for financial support” on Mr. Houghton per s. 2(6) of the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996, O. Reg. 403/96, and were therefore insureds under his Allstate policies. The parties submitted their priority dispute to an arbitrator, who decided that the claimants were not “principally dependent for financial support” on Mr. Houghton at the time of the accident because the “relationship was not one of permanence”. Intact was therefore found responsible for the accident benefits. Intact appealed the arbitrator’s decision to the Ontario Superior Court of Justice under the terms of the parties’ arbitration agreement.

Adopting a correctness standard of review, the Ontario Superior Court of Justice allowed Intact’s appeal, set aside the arbitrator’s decision, and concluded Allstate was responsible for paying the accident benefits. The Ontario Court of Appeal found the appropriate standard of review that should have been adopted by the court below was reasonableness and not correctness, but nevertheless dismissed the Allstate’s appeal because it found the arbitrator’s decision was unreasonable.