In the recent decision Gore Mutual Insurance Company v. Hamilton Township Mutual Insurance Company, 2026 ONSC 2550, https://canlii.ca/t/kkrjc, the Ontario Superior Court of Justice upheld Arbitrator Bialkowski’s decision holding that Gore Mutual Insurance Company is the priority insurer and is therefore liable to indemnify Hamilton Mutual Insurance Company for payment of the Claimant’s accident benefits. In doing so, the Court brought clarity to the principles guiding the interpretation and application of the Disputes Between Insurers Regulation, O. Reg. 283/95, including what constitutes “regular use” and being “made available” under the Regulation.
Underlying Events
In October 2020, the Claimant was driving a 2004 Chevrolet Silverado pickup truck owned by his elderly mother and insured by Gore Mutual when he was injured in a car accident. He was a listed driver on the policy issued by Gore Mutual, and the principal operator of the 2004 Silverado. The Claimant applied to Hamilton Township Mutual Insurance Company (“HTM”), the insurer of two other vehicles co-owned by the Claimant and his wife, for payment of statutory accident benefits as a named insured under the HTM policy.
The Claimant was also the principal operator of a Ford F-250 pickup truck owned by Korel Farms Inc. and insured by HTM. He held the position of director, manager and vice-president of Korel Farms, of which his mother was a shareholder, and he managed the company’s day-to-day operations.
After receiving the Claimant’s application for accident benefits, HTM notified Gore Mutual of its intention to dispute its priority to pay the Claimant’s accident benefits in accordance with the Disputes Between Insurers Regulation, O. Reg. 283/95 (“the Regulation”). As such, the parties proceeded to an arbitration before Arbitrator Bialkowski to resolve the dispute.
The Arbitrator’s Decision
The central issue before Arbitrator Bialkowski was whether the Claimant was a “deemed insured person” pursuant to section 3(7) (f)(i) of the Statutory Accident Benefits Schedule (SABS). This provision reads as follows:
- An individual who is living and ordinarily present in Ontario is deemed to be the named insured under the policy insuring an automobile at the time of an accident if, at the time of the accident, the insured automobile is being made available for the individual’s regular use by a corporation, unincorporated association, partnership, sole proprietorship or other entity.
After reviewing the submissions and evidence of both insurers, Arbitrator Bialkowski found that the Claimant had regular use of the 2004 Silverado. Further, he concluded that the vehicle was made available to the Claimant at the time of the accident by Korel Farms, a “corporation”, or in the alternative, by an “other entity”, namely a “family unit” or joint venture. As such, the Arbitrator determined that the Claimant was a “deemed insured person” under section 3(7)(f)(i) of the SABS and consequently, Gore Mutual was the priority insurer required to pay the Claimant’s accident benefits pursuant to subsection 268(2) of the Insurance Act.
Gore Mutual appealed this decision.
Before the Superior Court of Justice
Gore Mutual appealed Arbitrator Bialkowski’s decision on two primary grounds. First, Gore Mutual argued that Arbitrator Bialkowski had misapprehended and misapplied the onus of proof on Gore Mutual rather than HTM. Second, Gore Mutual argued that the Arbitrator erred in finding that the 2004 Silverado was made available to the Claimant for his regular use by a corporation or other entity as required to be a deemed insured person under the SABS.
However, the Court disagreed with Gore Mutual’s submissions to the effect that the 2004 Silverado had been made available to the Claimant by his mother in her capacity as an individual. As such, the Court upheld the Arbitrator’s decision as reasonable based on the totality of the available evidence.
Regular Use
Reviewing the evidence, the Arbitrator had concluded that the 2004 Silverado was regularly used by the Claimant in the course of working as the general manager of Korel Farms. The Claimant would occasionally use this vehicle to pick up various parts for farm equipment. More notably, the Claimant would frequently use the 2004 Silverado to transport hay bales in the course of his work for Korel Farm’s operations. As such, the Claimant’s use of the vehicle was “regular” for the purpose of section 3(7)(f)(i) of the SABS. Madam Justice Des Rosiers found no errors with the Arbitrator’s analysis in this respect.
Made Available by a Corporation or Other Entity
In his decision, the Arbitrator had concluded that the 2004 Silverado was made available to the Claimant by the Claimant’s mother in her capacity as a shareholder and director of Korel Farms , and not in her capacity as an individual registered owner of the that vehicle as argued by Gore Mutual. While the Arbitrator acknowledged that some of the evidence was equivocal, when assessed as a whole, he held that this conclusion was strongly supported by the weight of all of the available evidence. The vehicle was insured for pleasure use. However, records suggested that the vehicle’s mileage was significantly greater than it would have been if the vehicle was only used for personal use.
Further, the Claimant’s own testimony suggested that his two other co-owned vehicles were the primary vehicles on which he relied for personal activities. More importantly, the treatment of the 2004 Silverado for tax purposes revealed strong ties to Korel Farms. The vehicle’s fuel, maintenance, and repair expenses were all claimed as business expenses by Korel Farms. Justice Des Rosiers again held that the Arbitrator’s decision was reasonable: he considered the evidence in its entirety, and was convinced on a balance of probabilities that at the time of the accident, the 2004 Silverado was being made available to the Claimant for his regular use by a corporation, or by an other entity as required to make the Claimant a deemed named insured.
Gore Mutual had argued that there was no evidence of any formal contractual relationship between Korel Farms and another corporation owned by the Claimant and his wife, but as stated by Justice Des Rosiers at paragraphs 31 and 32:
- [31] It was a reasonable conclusion on the part of the Arbitrator that the family operated as a unit to manage the two farms and that the Claimant had the discretion to use cars and trucks as he saw fit to respond to his needs, those of the family and of the farming operations. I also conclude that the Arbitrator was correct in his legal interpretation of “other entity”. The Arbitrator concluded that the caselaw on section 3(7)(f)(i) recognizes that “other entities” may be family purposes or joint ventures. In my view, it was not an error to conclude that a “joint venture”, informal and fluid as in the present case, may give rise to the deeming provision.
- [32] The Arbitrator concluded that the Claimant had control of the vehicle and use it regularly to drive between the two farms and engage in a variety of purposes, including supporting the farming operations. Such conclusion is not beyond the scope of the intent of the section, it reflects a recognition that the Claimant had a substantial connection with the vehicle that was use regularly to support the farming operations. I see no error in the Arbitrator’s decision.
The Court therefore agreed with the Arbitrator that the totality of the evidence supported the conclusion that the 2004 Silverado was made available to the Claimant by Korel Farms or by another entity for his regular use at the time of the accident, such that Gore Mutual’s appeal was dismissed.
Conclusion
The statutory scheme and corresponding regulations governing priority disputes between insurers is intended to promote their quick and efficient resolution. However, the way in which these rules apply to a specific set of facts can be difficult to determine. As such, insurers faced with a complex priority dispute should ensure that they are represented by competent counsel that has experience with the rules.
Daniel Hinds is an articling student at ZTGH and the author of this blog. If you have any questions about this blog, please contact Daniel by email at [email protected].
