Case information

Administrative law – Judicial review – Standard of review – Arbitration – Contracts – Legislation – Interpretation – Insurance – Automobile insurance – Whether parties can contract into a standard of review on appeal in an arbitration agreement – Whether an appellate court must abide by the standard of review agreed to in an arbitration agreement absent statutory or regulatory provisions which impose a standard of review – Arbitration Act, 1991, ss. 3, 6 and 45.

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.

F was injured while test driving a customer’s vehicle brought to his automobile repair shop. He applied for statutory accident benefits (“SABs”) under the repair shop policy with the respondent insurer (“Dominion”). Dominion delivered a notice to the applicant insurer (“Unifund”), with whom F has a liability policy for his personal vehicle, claiming Unifund was in higher priority to pay F’s claim under s. 268(2) of the Insurance Act, R.S.O. 1990, c. I.8. Dominion’s notice to Unifund was within the 90 day period required by regulation. Approximately two years later, after the arbitration proceedings had commenced, Dominion informed F of the priority dispute and his right to object to the transfer of his claim and participate in any proceeding. F did not respond to the notice, but attended an examination under oath and continued to receive benefits from Dominion, although his SABs claim remains unresolved.

Dominion and Unifund entered into an agreement to arbitrate, in which they reserved a right of appeal on questions of law or mixed fact and law, on a standard of review of correctness or reasonableness, respectively. The arbitrator dismissed Unifund’s preliminary issue, holding that Dominion was not precluded from raising the priority dispute because of its failure to give F timely notice under Ontario Regulation 283/95. Applying a correctness standard, a Judge of the Ontario Superior Court of Justice allowed Unifund’s appeal of that decision. The Court of Appeal of Ontario allowed the appeal and reinstated the arbitrator’s decision, holding that notwithstanding the parties’ choice to the contrary, a reasonableness standard of review applied.