*Since the writing of this blog the decision has been reversed.
Justice Mario Faeita granted an appeal from the arbitral decision of Shari Novick in Dominion v. Unifund.
The facts of the case are straight forward. On January 4, 2012, Dominion received an Application for Accident Benefits from claimant JHF in respect of an accident that occurred on November 29, 2011. On January 24, 2012, Dominion delivered a Notice of Dispute Between Insurers to Unifund. Dominion commenced an arbitration against Unifund on November 5, 2012. It was not until June 23, 2014 that Unifund delivered a notice to JHK of its dispute over priority. This was long after the arbitration had been commenced.
In her decision dated October 20, 2015, Arbitrator Shari Novick found that while the notice obligations are mandatory, there is no specific timeline by which an insured must be put on notice of a priority dispute. However, having conducted numerous such disputes over the last ten years, the arbitrator found it difficult to understand the reasons for permitting claimants to participate in these proceedings, noting that she has yet to preside over a case in which the claimant’s participation has affected the outcome. Claimants rarely resist the transfer of claims from one insurer to another, and if they do, it is often for reasons unrelated to the priority regime.
On appeal, Justice Faieta reversed the arbitrator, finding the decision was incorrect at law.
He found, as a matter of statutory interpretation, that the 90 day time limits found in section 3 also apply to section 4 of the Regulation, dealing with notice to the insured person. In reviewing the Regulation, he noted that pursuant to section 7(3), an insured person who wishes to dispute the transfer of priority must also commence any arbitration within one year of the notice delivered to the insurer as per section 3. Thus, if the notice to the insured person found in section 4 did not have to be delivered within the same 90 day time frame as the notice to the insurer in section 3, there would be inconsistency of interpretation. As such, the same 90 day time frame has to apply.
He further found that relief from forfeiture was not an available remedy, where the priority regulation is a code onto itself. Further, where there is a limited ability to extend the 90 days found in the Regulation, it is not within the jurisdiction of a judge to grant relief from forfeiture, as per the Court of Appeal decision in Kingsway v West Wawanosh (2002) 58 OR (3d) 251.
The decision of Justice Faieta stands for the proposition that if notice of a priority dispute is not given to the INSURED within 90 days even if it is given to the insurer within 90 days, the Regulation has been breached, and there is no basis upon which to grant relief from forfeiture. Therefore, before an insurer goes about accepting priority after having satisfied itself that it has been given notice in a timely way, and it is indeed at priority, it behooves the insurer to establish that all of the notice provisions of the Disputes Between Insurers Regulation have been complied with, and specifically, that the insured person was also put on notice of the priority dispute within 90 days of receipt of the completed application for benefits.