Security National Insurance Co. v. Markel Insurance Co., (2012) 298 O.A.C. 62 (CA)

• Judge: Simmons, Armstrong and Pepall, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 11, 2012
• Jurisdiction: Ontario
• Citations: (2012), 298 O.A.C. 62 (CA);2012 ONCA 683

Security Nat. Ins. v. Markel Ins. (2012), 298 O.A.C. 62 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. OC.015

Security National Insurance Company (applicant/respondent) v. Markel Insurance Company (respondent/appellant)

(C52873)

Kingsway General Insurance Company (applicant/appellant) v. Gore Mutual Insurance Company (respondent/respondent)

(C52924; 2012 ONCA 683)

Indexed As: Security National Insurance Co. v. Markel Insurance Co.

Ontario Court of Appeal

Simmons, Armstrong and Pepall, JJ.A.

October 11, 2012.

Summary:

Section 66(1) of the Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, deemed individuals to be a "named insured" for the purposes of s. 268(2) of the Insurance Act if "the insured automobile is being made available for the individual's regular use by a corporation, unincorporated association, partnership, sole proprietorship or other entity". In two separate cases, sole proprietorships had owner/operator agreements with transport companies. The sole proprietors owned the vehicles. The transport companies' insurers provided fleet coverage on all vehicles owned and operated on behalf of the transport companies (commercial insurers). The sole proprietors were both injured. Their respective personal use automobile insurers paid their accident benefits, but both claimed that under the priority provisions of s. 268(2) the commercial insurers were liable to pay the benefits because the sole proprietors were "named insureds" under the commercial policies. The commercial insurers argued that neither sole proprietor could be a "named insured" under s. 66(1), because s. 66(1) did not apply where an insured vehicle was made available for an individual's regular use by that individual's sole proprietorship. One arbitrator ruled for the commercial insurer. Another arbitrator ruled for the personal use insurer. On appeals to the Ontario Superior Court ([2010] O.T.C. Uned. 5308 and [2010] O.T.C. Uned. 5309), both courts held that both sole proprietors were "named insureds" under s. 66(1) and, accordingly, the commercial insurers were liable to pay the accident benefits. The commercial insurers appealed both decisions. The appeals were heard together.

The Ontario Court of Appeal dismissed both appeals. Both the language and evident intent of s. 66(1) permitted an insured vehicle to be made available for an individual's regular use by the individual's sole proprietorship. Accordingly, both sole proprietors were "named insureds" in the commercial insurers' policies and, pursuant to s. 268(1), the commercial insurers, not the personal use insurers, were responsible for paying the accident benefits.

Insurance - Topic 789

Insurers - Liability - Where two or more policies cover risk - Named insurer - Section 66(1) of the Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, deemed individuals to be a "named insured" for the purposes of s. 268(2) of the Insurance Act if "the insured automobile is being made available for the individual's regular use by a corporation, unincorporated association, partnership, sole proprietorship or other entity" - Sole proprietorships had owner/operator agreements with transport companies - The sole proprietors owned the vehicles - The transport companies' insurers provided fleet coverage on all vehicles owned and operated on behalf of the transport companies (commercial insurers) - The sole proprietors were both injured - Their respective personal use automobile insurers paid their accident benefits, but both claimed that under the priority provisions of s. 268(2) the commercial insurers were liable to pay the benefits because the sole proprietors were "named insureds" under the commercial policies - The commercial insurers argued that neither sole proprietor could be a "named insured" under s. 66(1), because s. 66(1) did not apply where an insured vehicle was made available for an individual's regular use by that individual's sole proprietorship - The Ontario Court of Appeal held that both the language and evident intent of s. 66(1) permitted an insured vehicle to be made available for an individual's regular use by the individual's sole proprietorship - Accordingly, both sole proprietors were "named insureds" in the commercial insurers' policies and, pursuant to s. 268(1), the commercial insurers, not the personal use insurers, were responsible for paying the accident benefits.

Cases Noticed:

AXA Insurance Co. v. Markel Insurance Co. of Canada (1997), 37 O.T.C. 78 (Gen. Div.), refd to. [para. 13].

AXA Insurance Co. v. Markel Insurance Co. of Canada (2001), 140 O.A.C. 109 (C.A.), refd to. [para. 53].

Statutes Noticed:

Insurance Act, R.S.O. 1990, c. I-8, sect. 268(2), sect. 268(5), sect. 268(5.2) [para. 41].

Insurance Act Regulations (Ont.), Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Reg. 403/96, sect. 66(1) [para. 3].

Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996 - see Insurance Act Regulations (Ont.).

Authors and Works Noticed:

VanDuzer, J. Anthony, The Law of Partnerships & Corporations (3rd Ed. 2009), p. 7 [para. 61].

Counsel:

J. Claude Blouin, for the appellant, Markel Insurance Co.;

Harry P. Brown, for the appellant, Kingsway General Insurance Co.;

George Frank, for the respondent, Security National Insurance Co.;

Mark Donaldson, for the respondent, Gore Mutual Insurance Co.

These appeals were heard on May 3, 2012, before Simmons, Armstrong and Pepall, JJ.A., of the Ontario Court of Appeal.

On October 11, 2012, Pepall, J.A., released the following judgment for the Court of Appeal.