Federation Ins. v. Markel Ins., (2012) 290 O.A.C. 75 (CA)

JurisdictionOntario
JudgeGoudge, Sharpe and Blair, JJ.A.
Neutral Citation2012 ONCA 218
Citation(2012), 290 O.A.C. 75 (CA),2012 ONCA 218,109 OR (3d) 652,290 OAC 75,(2012), 290 OAC 75 (CA),290 O.A.C. 75,109 O.R. (3d) 652
Date15 March 2012
CourtCourt of Appeal (Ontario)

Federation Ins. v. Markel Ins. (2012), 290 O.A.C. 75 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. AP.011

Markel Insurance Company of Canada (applicant/respondent in appeal) v. ING Insurance Company of Canada (respondent/appellant)

(C54601)

Federation Insurance Company of Canada (applicant/appellant) v. Kingsway General Insurance Company (respondent/respondent in appeal)

(C54554; 2012 ONCA 218)

Indexed As: Federation Insurance Co. of Canada v. Markel Insurance Co. of Canada

Ontario Court of Appeal

Goudge, Sharpe and Blair, JJ.A.

April 5, 2012.

Summary:

At issue in these appeals was when the limitation period began to run for a "loss transfer claim" made by one insurer against another for indemnification for statutory accident benefits paid to an insured. Loss transfer claims, brought pursuant to s. 275 of the Insurance Act were fault-based claims available as between insurers for different classes of vehicles as defined by regulation. In Federation Insurance Co. of Canada v. Kingsway General Insurance Co., the arbitrator held that the limitation period began to run the day after the insurer seeking indemnification made a demand for loss transfer. In Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, the arbitrator found that the limitation period ran only from the date the second insurer definitively refused to indemnify. Federation and Markel appealed the arbitral decisions.

The Ontario Superior Court, in a decision reported at [2011] O.T.C. Uned. 6496, upheld the approach of the arbitrator in Federation v. Kingsway and rejected that of the arbitrator in Markel v. ING. Federation and ING appealed.

The Ontario Court of Appeal dismissed the appeals.

Insurance - Topic 5246

Automobile insurance - Compulsory government schemes - Subrogation or indemnity - Arbitration (incl. limitation period) - At issue in these appeals was when the limitation period began to run for a "loss transfer claim" made by one insurer against another for indemnification for statutory accident benefits paid to an insured - Loss transfer claims, brought pursuant to s. 275 of the Insurance Act were fault-based claims available as between insurers for different classes of vehicles as defined by regulation - In Federation Insurance Co. of Canada v. Kingsway General Insurance Co., the arbitrator held that the limitation period began to run the day after the insurer seeking indemnification made a demand for loss transfer - In Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, the arbitrator found that the limitation period ran only from the date the second insurer definitively refused to indemnify - Federation and Markel appealed the arbitral decisions - The Superior Court judge upheld the approach of the arbitrator in Federation v. Kingsway and rejected that of the arbitrator in Markel v. ING - Federation and ING appealed - The Ontario Court of Appeal dismissed the appeals - All parties agreed that the limitation period for loss transfer claims was two years and that the two-year limitation period started to run on the day the claim was "discovered" by the first party insurer - The first party insurer suffered a loss from the moment the second party insurer could be said to have failed to satisfy its legal obligation to satisfy the loss transfer claim - The court agreed with the arbitrator in Federation v. Kingsway that the first party insurer suffered a loss caused by the second party insurer's omission in failing to satisfy the claim the day after the request for indemnification was made.

Limitation of Actions - Topic 4802

Arbitration - General - Application of Limitations Acts - [See Insurance - Topic 5246 ].

Cases Noticed:

State Farm Mutual Automobile Insurance Co. v. Dominion of Canada General Insurance Co. (2005), 205 O.A.C. 270; 79 O.R.(3d) 78 (C.A.), refd to. [para. 11].

York Fire & Casualty Insurance Co. v. Co-operators, [1999] O.J. No. 4172 (S.C.), refd to. [para. 32].

Hare v. Hare (2006), 218 O.A.C. 164; 83 O.R.(3d) 766 (C.A.), dist. [para. 35].

Authors and Works Noticed:

Financial Services Commission of Ontario, Bulletin, Loss Transfer: Standardized Forms and Procedures, online: <http://www.fsco.gov.on.ca/en/auto/autobulletins/archives/Pages/a-11_94.aspx>, [para. 7].

Counsel:

Joseph Lin and Alex Dirlis, for ING Insurance Company of Canada;

Pamela A. Brownlee, for Markel Insurance Company of Canada;

Daniel Strigberger, for Federation Insurance Company of Canada;

Frank A. Benedetto, for Kingsway General Insurance Company.

These appeals were heard on March 15, 2012, by Goudge, Sharpe and Blair, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Sharpe, J.A., on April 5, 2012.

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