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Summary

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Arbitration — Abuse of process — Automobile accident — Dispute between insurance companies over payment of statutory accident benefits — Driver convicted of a criminal offence for operating his motor vehicle on a highway without insurance — Preliminary issue raised before the arbitrator on the proof of conviction — Was the Court of Appeal for Ontario correct in holding that the role the party seeking to relitigate played in the initial proceedings is of paramount importance in determining whether fairness dictates that relitigation be permitted? — Was the Court of Appeal for Ontario correct in holding that a privately appointed arbitrator is in a better position to determine an individual’s insurance status than the Ontario Court of Justice, the court tasked with convicting or acquitting individuals charged with the offence of operating a motor vehicle without insurance? — Evidence Act, R.S.O. 1990, c. E.23, s. 22.1.

Pursuant to the regulation under the Insurance Act R.S.O. 1990, c. I.8., the applicant, Intact Insurance Company, entered into an agreement with the respondent, Federated Insurance Company of Canada, to arbitrate a dispute related to the payment of statutory accident benefits. The applicant cancelled the policy of the driver involved in a road accident five days before the event for non-payment of premiums. It appears that the driver was convicted of a criminal offence under the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, for operating his motor vehicle on a highway without insurance. The applicant contends that the responsibility to pay the statutory accident benefits falls on the respondent which insured the other vehicle involved in the accident. As a result, the applicant raised by way of preliminary hearing before the arbitrator, the issue of the abuse of process doctrine to prevent the respondent from adducing evidence contrary to the essential facts underlying the conviction. In his decision, the arbitrator found that the doctrine does not apply and, in the alternative, it falls within the fairness exception as set out by the Court in Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77. The applicant appealed the arbitrator’s decision by way of an application to the Superior Court of Justice.

Lower Court Rulings