State Farm Mutual Automobile Insurance Co. v. Old Republic Insurance Co. of Canada, (2015) 341 O.A.C. 377 (CA)

JudgeSimmons, Gillese and Rouleau, JJ.A.
CourtCourt of Appeal (Ontario)
Case DateApril 28, 2015
JurisdictionOntario
Citations(2015), 341 O.A.C. 377 (CA);2015 ONCA 699

State Farm v. Old Republic Ins. (2015), 341 O.A.C. 377 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. OC.023

State Farm Mutual Automobile Insurance Company (applicant/respondent) v. Old Republic Insurance Company of Canada (respondent/appellant)

(C59786; 2015 ONCA 699)

Indexed As: State Farm Mutual Automobile Insurance Co. v. Old Republic Insurance Co. of Canada

Ontario Court of Appeal

Simmons, Gillese and Rouleau, JJ.A.

October 20, 2015.

Summary:

At issue was whether Old Republic Insurance Co. had to indemnify State Farm Mutual Automobile Insurance Co. for statutory accident benefits (SABs) paid by State Farm as a result of a chain reaction accident. A Pepsi truck (i.e., a heavy commercial vehicle) insured by Old Republic rear-ended a Dodge stopped near an intersection. The impact caused the Dodge to rear-end a Nissan also stopped at the intersection. All automobiles were travelling in the same direction and in the same lane. The Nissan was insured by State Farm. There was never any contact between the Pepsi truck and the Nissan. The driver of the Nissan was injured and collected statutory accident benefits (SABs) from State Farm. State Farm claimed indemnification from Old Republic for the SABs payments under the Loss Transfer provisions of the Insurance Act (s. 275) and related regulations (i.e., including the Fault Determination Rules (FDRs), s. 9(4)). An arbitrator held that the FDRs applied, notwithstanding that there was no collision between the Pepsi truck and the Nissan and, therefore, Old Republic was required to indemnify State Farm for the SABs payments. Old Republic appealed.

The Ontario Superior Court, in a decision with neutral citation 2014 ONSC 3887, dismissed the appeal, upholding the arbitrator's decision. Old Republic appealed again.

The Ontario Court of Appeal allowed the appeal, set aside the arbitrator's order and substituted an order providing that Old Republic was not required to indemnify State Farm for SABs payments.

Insurance - Topic 5009

Automobile insurance - Compulsory government schemes - Fault determination rules - The Ontario Court of Appeal discussed the purpose of the Fault Determination Rules enacted under the Insurance Act - See paragraphs 29 to 50.

Insurance - Topic 5009

Automobile insurance - Compulsory government schemes - Fault determination rules - Pursuant to s. 9(4) of the Fault Determination Rules, in a three vehicle chain reaction type "incident", if only the rear vehicle is in motion when the "incident" occurred: (a) in the collision between the front and middle vehicle, neither driver was at fault for the incident; and (b) in the collision between the middle and rear vehicle, the driver of the middle vehicle was not at fault and the driver of the rear vehicle was 100 per cent at fault for the "incident" - At issue was whether there was any apportionment between a front and rear vehicle in a multi-vehicle accident where there was no collision between those vehicles (i.e., whether the driver of the front vehicle was entitled to indemnification from the driver of the rear vehicle) - The Ontario Court of Appeal held that applying the modern rule of statutory interpretation to s. 9(4), the word "incident" as it appeared in sub-clauses (a) and (b) of s. 9(4) referred only to the collision identified in the particular sub-clause and not to the entire chain reaction (i.e., the driver of the front vehicle was not entitled to indemnification from the driver of the rear vehicle) - See paragraphs 51 to 94.

Insurance - Topic 5009

Automobile insurance - Compulsory government schemes - Fault determination rules - A Pepsi truck (i.e., a heavy commercial vehicle) insured by Old Republic rear-ended a Dodge stopped near an intersection - The impact caused the Dodge to rear-end a Nissan also stopped at the intersection - The Nissan was insured by State Farm - All automobiles were travelling in the same direction and in the same lane - There was never any contact between the Pepsi truck and the Nissan - The Nissan driver was injured and collected statutory accident benefits (SABs) from State Farm - State Farm claimed indemnification from Old Republic for the SABs payments under the Loss Transfer provisions of the Act and s. 9(4) of the Fault Determination Rules (FDRs) - The Ontario Court of Appeal held that, reading s. 9(4) in the context of the FDRs and the Loss Transfer provisions as a whole, the Pepsi truck was 100% at fault only for the collision between it and the Dodge - Therefore, Old Republic was not required to indemnify State Farm for SABs payments paid to the driver of the Nissan - See paragraphs 1 to 15 and 51 to 94.

Insurance - Topic 5207

Automobile insurance - Compulsory government schemes - Recovery by insurer - Indemnity from second party insurer - [See second Insurance - Topic 5009 ].

Statutes - Topic 2601

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - General principles - The Ontario Court of Appeal stated that "The modern approach to statutory interpretation requires that the words of a statute be read 'in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament' ... The rules governing statutory interpretation apply equally to regulations. Importantly, a regulation must be read in the context of the enabling Act, having regard to the purpose of the enabling provisions ..." - See paragraphs 67 and 68.

Words and Phrases

Incident - The Ontario Court of Appeal interpreted the meaning of the word "incident" as it appeared in s. 9(4) of the Fault Determination Rules, R.R.O. 1990, Reg. 668 - See paragraphs 51 to 94.

Cases Noticed:

Jevco Insurance Co. v. Canadian General Insurance Co. (1993), 65 O.A.C. 236; 14 O.R.(3d) 545 (C.A.), refd to. [para. 49].

Jevco Insurance Co. v. York Fire & Casualty Co. (1996), 89 O.A.C. 155; 27 O.R.(3d) 483 (C.A.), refd to. [para. 50].

Jevco Insurance Co. v. Halifax Insurance Co., (1994), 27 C.C.L.I. (2d) 64 (Ont. C.J.), refd to. [para. 50].

GAN General Insurance Co. v. State Farm Mutual Automobile Insurance Co., [1999] O.T.C. 165; 19 C.C.L.I.(3d) 266 (Sup. Ct.), folld. [para. 52].

Royal & Sunalliance Insurance Co. of Canada v. AXA Insurance (Canada), [2012] O.T.C. Uned. 3095; 2012 ONSC 3095, not folld. [para. 54].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 67].

Bristol-Myers Squibb Co. et al. v. Canada (Attorney General) et al., [2005] 1 S.C.R. 533; 334 N.R. 55; 2005 SCC 26, refd to. [para. 68].

Statutes Noticed:

Automobile Insurance Regulation - see Insurance Act Regulations (Ont.), Automobile Insurance Regulation.

Fault Determination Rules - see Insurance Act Regulations (Ont.), Fault Determination Rules.

Insurance Act, R.S.O. 1990, c. I-8, sect. 224(1) [para. 1, footnote 2, Appendix]; sect. 275(1) [para. 18, Appendix]; sect. 275(3) [para. 23, Appendix].

Insurance Act Regulations (Ont.), Fault Determination Rules, R.R.O. 1990, Reg. 668, sect. 9(1), sect. 9(2), sect. 9(3), sect. 9(4) [para. 48, Appendix].

Insurance Act Regulations (Ont.), Automobile Insurance Regulation, R.R.O. 1990, Reg. 664, sect. 9(1), sect. 9(2), sect. 9(3) [para. 22, Appendix].

Counsel:

Kadey B.J. Schultz and Jason R. Frost, for the appellant;

Daniel Strigberger, for the respondent.

This appeal was heard on April 28, 2015, before Simmons, Gillese and Rouleau, JJ.A., of the Ontario Court of Appeal. The following decision was delivered for the court by Simmons, J.A., on October 20, 2015.

To continue reading

Request your trial
6 practice notes
  • Ontario Court Of Appeal Summaries (May 27 – 31, 2019)
    • Canada
    • Mondaq Canada
    • June 17, 2019
    ...Motors Ltd. v. Canada, [1997] 2 SCR 336, State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699, Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, Transport North American Express Inc. v. New Solutions Financial Corp., 200......
  • Meloche v. Meloche,
    • Canada
    • Court of Appeal (Ontario)
    • September 22, 2021
    ...S.C.R. 336, 148 D.L.R. (4th) 1, at para. 37; State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699, 127 O.R. (3d) 465, at para. 68. As noted by this court, regulations “will generally be interpreted using the same rules and techniqu......
  • Court Of Appeal Summaries (October 19, 2015 – October 23, 2015)
    • Canada
    • Mondaq Canada
    • November 2, 2015
    ...guarantee to be in writing to be enforceable. State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699 [Simmons, Gillese and Rouleau K. B.J. Schultz and J. R. Frost, for the appellant D. Strigberger, for the respondent Keywords: Insurance Law......
  • No Direct Impact? Still No 'Leapfrogging'
    • Canada
    • Mondaq Canada
    • February 6, 2017
    ...Company, 2017 ONSC 498 (CanLII) Footnotes 1 State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Co. of Canada, 2015 ONCA 699 2 Ibid. at para. 72. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought......
  • Request a trial to view additional results
2 cases
  • Meloche v. Meloche,
    • Canada
    • Court of Appeal (Ontario)
    • September 22, 2021
    ...S.C.R. 336, 148 D.L.R. (4th) 1, at para. 37; State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699, 127 O.R. (3d) 465, at para. 68. As noted by this court, regulations “will generally be interpreted using the same rules and techniqu......
  • Kingsway General Insurance Company v. Dominion of Canada General Insurance Company,, 2017 ONSC 498
    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • January 27, 2017
    ...between two vehicles if they directly collide: State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Co of Canada, 2015 ONCA 699 (CanLII). To the conclusion in the vernacular of the insurance industry, the third vehicle insured by Dominion cannot “leapfrog” ......
4 firm's commentaries
  • Ontario Court Of Appeal Summaries (May 27 – 31, 2019)
    • Canada
    • Mondaq Canada
    • June 17, 2019
    ...Motors Ltd. v. Canada, [1997] 2 SCR 336, State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699, Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, Transport North American Express Inc. v. New Solutions Financial Corp., 200......
  • Court Of Appeal Summaries (October 19, 2015 – October 23, 2015)
    • Canada
    • Mondaq Canada
    • November 2, 2015
    ...guarantee to be in writing to be enforceable. State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699 [Simmons, Gillese and Rouleau K. B.J. Schultz and J. R. Frost, for the appellant D. Strigberger, for the respondent Keywords: Insurance Law......
  • No Direct Impact? Still No 'Leapfrogging'
    • Canada
    • Mondaq Canada
    • February 6, 2017
    ...Company, 2017 ONSC 498 (CanLII) Footnotes 1 State Farm Mutual Automobile Insurance Company v. Old Republic Insurance Co. of Canada, 2015 ONCA 699 2 Ibid. at para. 72. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought......
  • Court Of Appeal Finds Break In Chain For Loss Transfer
    • Canada
    • Mondaq Canada
    • October 26, 2015
    ...2015, the Court of Appeal rendered its decision in State Farm Automobile Insurance Company v. Old Republic Insurance Company of Canada, 2015 ONCA 699. The decision involved the correct interpretation of subsection 9(4) of the Fault Determination At arbitration, the parties had submitted an ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT