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BLAWG Post

Feb 4, 2017

Ont. C.A. finds no abuse of process in re-litigating in SABS priority dispute whether claimant vehicle was insured

Posted in Accident Benefits

Authors Bevin Shores and Michael S. Teitelbaum

Related Lawyers Bevin Shores and Greg Bailey

Hearty Congratulations and a tip of the advocacy chapeau to our very own Greg Bailey and Bevin Shores on their successful efforts before the Ontario Court of Appeal in Intact Insurance Company v. Federated Insurance Company of Canada!

The Court's 23-page reasons deal with a SABS priority dispute where the question was whether re-litigating the issue of whether the claimant's vehicle was insured was an abuse of process.

Many thanks to Bevin for preparing the following note about the decision:

Intact v Federated arose from a priority dispute between insurers. It was not in dispute that if Intact had validly cancelled the policy insuring the owner/operator of the claimant vehicle (Cadieux), priority would rest with Federated; and if Intact had not, priority would rest with Intact. As Justice Doherty observed at para 9, “it is sufficient to say that the evidence raised legitimate questions about Intact’s notification to Mr. Cadieux of the policy cancellation.” Cadieux, however, was convicted of operating a vehicle without insurance contrary to s 2(1) of the Compulsory Automobile Insurance Act. Intact sought to rely on this conviction as proof that Cadieux was not insured by Intact at the time of the accident, and that priority therefore rested with Federated.

At the preliminary issue hearing before Arbitrator Kenneth Bialkowski, Intact took the position that it is an abuse of process to re-litigate the CAIA conviction and that Federated is barred by s 22.1 of the Evidence Act from leading evidence that Cadieux was insured at the time of the accident.

For reference, because it plays centrally in this decision, s 22.1 of the Evidence Act provides:

Proof of conviction or discharge

22.1  (1)  Proof that a person has been convicted or discharged anywhere in Canada of a crime is proof, in the absence of evidence to the contrary, that the crime was committed by the person, if,

(a) no appeal of the conviction or discharge was taken and the time for an appeal has expired; or

(b) an appeal of the conviction or discharge was taken but was dismissed or abandoned and no further appeal is available.

At the preliminary issue hearing, Arbitrator Bialkowski disagreed with Intact, and concluded that Federated may lead evidence contrary to the conviction.

Intact appealed by bringing an application in Superior Court before Justice James Diamond. Justice Diamond allowed the appeal, finding that Federated had failed to lead any “evidence to the contrary” and that Arbitrator Bialkowski had erred in law in refusing to apply the abuse of process doctrine to prevent Federated from leading evidence that the claimant vehicle was insured at the time of the accident.  

Federated appealed to the Court of Appeal after having been granted leave. Justice Doherty, writing for the Court, allowed the appeal. The main points are as follows:

  • The Court clarified the interaction between s 22.1 of the Evidence Act and the abuse of process doctrine, and in particular, that they are two distinct concepts. Justice Doherty explained at para 21: “The operation of s. 22.1 and the abuse of process doctrine intersect at the phrase “evidence to the contrary” in s. 22.1.  A party may lead ‘evidence to the contrary’ to avoid the evidentiary rule established in s. 22.1.  The abuse of process doctrine operates to foreclose a party from leading that ‘evidence to the contrary’ when to do so would constitute an abuse of the court’s process”. The application judge had confused the operation of s 22.1 of the Evidence Act and the abuse of process doctrine, thus erring in law (paras 25-26).

      

  • There is no “closed list” of the circumstances in which re-litigation may be warranted (para 28). “The court, in considering the various factors, must balance the damage done by re-litigation to systemic interests, including finality and consistency of result, against fairness to the litigant seeking to re-litigate a previously determined finding” (para 30).

     

  • The onus is on a party “seeking to re-litigate” to show that re-litigation would not constitute an abuse of process (para 50).

     

  • Section 22.1 of the Evidence Act applies to provincial regulatory offences as well as convictions for criminal offences (para 18). While this point was elucidated in Andreadis v Pinto (2009), 98 OR (3d) 701 (SCJ) and has been generally accepted, it appears not to have been previously considered at the appellate level.

In the result, the Court concluded that fairness dictated that Federated should have an opportunity to demonstrate that Intact’s insured was insured at the time of the accident, and that re-litigation of the insurance status in the context of a private arbitration has no negative impact on the integrity of the overall adjudicative process and may in fact enhance that integrity by generating a more reliable result. Federated had therefore satisfied its onus to show that re-litigation would not constitute an abuse of process.

Keywords

  • abuse of process
  • priority dispute
  • priority between auto insurers
  • SABS

Related Team

Bevan Shores

Bevin Shores

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P: (905) 577-4050 ext 595 (905) 577-4050 ext 595

Hamilton (877) 858-8234 (877) 858-8234

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Greg Bailey

Greg Bailey

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P: (905) 577-4050 ext 544 (905) 577-4050 ext 544

Hamilton (877) 858-8234 (877) 858-8234

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