



COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Finance) v. Traders General Insurance
    (Aviva Traders), 2018 ONCA 565

DATE: 20180621

DOCKET: C62983

Feldman, MacPherson and Huscroft JJ.A.

BETWEEN

Her Majesty the Queen in Right of Ontario as
    Represented by the Minister of Finance, Pursuant to the provisions of the
Motor
    Vehicle Claims Act

Plaintiff (Respondent)

and

Traders General Insurance operating as Aviva
    Traders

Defendant (Appellant)

Eric K. Grossman, for the appellant

Harold W. Sterling and Todd M. Wasserman, for the
    respondent

Heard: November 9, 2017

On appeal from the judgment of Justice Mary A. Sanderson
    of the Superior Court of Justice, dated October 27, 2016, with reasons reported
    at 2016 ONSC 6663.

Feldman J.A.:

[1]

This action arose out of a catastrophic car accident involving a 1991
    Hyundai owned by Peter Leonard. The accident occurred a couple of weeks after
    the appellant insurer purported to terminate its policy of insurance on the
    vehicle. The driver, a friend of Peter Leonards son, was killed. The
    passenger, another friend, was seriously injured, claimed statutory accident
    benefits, and also sued Peter Leonard for damages. The appellant insurer did
    not defend the action on behalf of Peter Leonard, because it had cancelled the owners
    policy insuring the Hyundai for non-payment of premiums before the accident
    occurred.

[2]

After Peter Leonard settled the action for $234,574.33, the passenger
    assigned the judgment to the respondent, representing the Motor Vehicle Accident
    Claims Fund. The Fund paid the amount of the judgment to the passenger and
    began to obtain re-imbursement from Peter Leonard. The Fund also sued the
    appellant insurer in this action for restitution based on unjust enrichment,
    claiming that the appellant insurer had not effectively terminated its policy, that
    the policy remained in force at the date of the accident and that it should
    have responded to the passengers claim.

[3]

The termination issue arose because the owners policy was obtained not
    by Peter Leonard, but by Anne Leonard, his wife, and it was Anne Leonard who
    was named as the insured on the policy, although she did not own the vehicle.
    The appellant sent the termination notice to the named insured, Anne Leonard,
    and not to Peter Leonard, the owner of the vehicle.

[4]

The trial judge found that the
Insurance Act
, R.S.O. 1990, c. I.8
, required that the
    notice of termination be sent to the insured, that the insured was the owner
    of the vehicle, and, therefore, by sending the notice only to Anne Leonard, the
    appellant did not effectively terminate the policy, which remained in force at
    the date of the accident.

[5]

The trial judge also found that the respondent was entitled to bring a claim
    for restitution. As a result, there was no limitation issue.

[6]

I agree with the trial judge that the respondent Fund is entitled to
    obtain reimbursement in this action from the appellant insurer for the amount
    of the judgment it paid to the injured passenger. For the reasons that follow,
    I would dismiss the appeal.

Background Facts

[7]

In 1999, Anne Leonard purchased automobile insurance from GAN Canada
    Insurance. In the Leonard family, she was the one who dealt with financial
    matters, and, as a school bus driver, she could obtain a group rate on
    automobile insurance. Anne Leonard contacted GAN by telephone, and spoke with a
    representative, Brian Down, who issued her an Owners Policy for two
    vehicles. However, Anne Leonards husband, Peter Leonard, was actually the
    registered owner of the two insured vehicles.

[8]

Neither Anne Leonard nor Mr. Down had any specific recollection of the
    call. Mr. Down maintained that he would have asked Anne Leonard whether she was
    the owner of the vehicle, and that she must have said she was the owner, or
    else he would not have issued the policy. His notes, taken contemporaneously to
    the call, do not suggest that he asked Anne Leonard about ownership. They
    indicate that she provided drivers licence numbers and driving histories for
    herself, her husband and their son, as well as the VIN numbers for the vehicles
    and information about who would be driving each vehicle. GAN did not obtain a written
    application, as required by ss. 232(1) and 232(2) of the
Insurance Act
,
    from Anne Leonard.

[9]

A few weeks later, Anne Leonard called and spoke to someone else at GAN,
    and substituted the 1991 Hyundai that was later in the accident for one of the
    originally-insured vehicles.

[10]

Anne
    Leonard testified that she knew her husband was the owner of the vehicles, but
    that Mr. Down did not ask who the owner was, and that, had she been asked, she
    would have answered truthfully. GAN was later acquired by the appellant. The appellant
    renewed the policy, with Anne Leonard as the sole named insured.

[11]

When
    the appellant was unable to withdraw premium amounts from Anne Leonards bank
    account in September 2001, it sent a notice of termination for failure to pay
    premiums dated September 21, 2001 by registered mail addressed to Anne Leonard.
    Anne Leonard did not tell her husband that the car insurance on his vehicles
    had been cancelled. The appellant later sent her a small refund of $12.94 by
    cheque dated October 10, 2011, which she cashed.

[12]

On
    November 10, 2001, the Leonards son, John, was out with friends. He allowed
    his friend, Mark Apollinaro, to drive his fathers 1991 Hyundai. Unfortunately,
    Mr. Apollinaro lost control of the vehicle, causing a serious accident. Mr. Apollinaro
    was killed, while another friend, Dragan Bogdanovic, was severely injured in
    the accident. Mr. Bogdanovic, then a first-year University of Toronto student,
    did not have his own automobile insurance or access to family coverage. The
    only possibility for him to recover accident benefits was through insurance taken
    out on the Hyundai, or, if there was no coverage, through the Fund.

[13]

Mr.
    Bogdanovic applied to the Fund for statutory accident benefits in December,
    2001 and eventually received $1,680,304.57. The appellants liability to
    reimburse the Fund for that amount is not a direct issue in this action.

[14]

On
    February 12, 2002, Mr. Bogdanovics counsel wrote to the appellant notifying it
    that he intended to start an action against Peter Leonard as owner of the Hyundai.
    The appellant replied on February 25, 2002 that the policy was no longer in
    force because, on September 21, 2001, it had sent Anne Leonard a notice of termination
    of the policy due to non-payment, and on October 10, 2001, it had issued a
    refund cheque in the sum of $12.94 to Anne Leonard, which she cashed.

[15]

Around
    March 6, 2002, when the adjusters for the Fund commenced a priority dispute, the
    appellant was advised that Mr. Bogdanovic had made a claim to the Fund for
    accident benefits. Around March 25, 2002, the appellant wrote to the Fund to
    advise that it was unable to accept Mr. Bogdanovics claim, asserting that the
    policy for the Hyundai had been cancelled effective October, 2001.

[16]

On
    June 20, 2002, Mr. Bogdanovic brought an action against Mr. Apollinaros estate
    and Peter Leonard as owner of the Hyundai. The action was eventually resolved
    by the Fund, without any involvement or input from the appellant, on the basis
    that Mr. Bogdanovic was entitled to recover from the Estate of Mr. Apollinaro
    and from Peter Leonard. On March 27, 2003, judgment in the amount of $234,574.33
    was granted to Mr. Bogdanovic.

[17]

On
    April 28, 2003, Mr. Bogdanovic assigned the judgment in favour of the Fund. The
    assignment was required under s. 9 of the
Motor Vehicle Accident Claims Act
,
    R.S.O. 1990, c. M.41. By letter dated April 29, 2003, Mr. Bogdanovic applied to
    the Fund for payment of the judgment under s. 7 of the
Motor Vehicle
    Accident Claims Act
, and on or about May 23, 2003, the Fund paid him $234,574.33,
    as it was required to do under the Act. As of the date of trial, the Fund had
    collected $47,500.00 from Peter Leonard as the registered owner of the Hyundai
    and as a judgment debtor.

[18]

The
    Fund issued the statement of claim in this action on December 11, 2008, some
    5.5 years after Mr. Bogdanovic obtained the judgment against Peter Leonard and
    assigned the judgment to it.

[19]

The
    appellant defended the action, mainly by arguing that GAN was justified in
    failing to include Peter Leonard as a named insured on the policy and not
    sending him a notice of termination, because the GAN representative had asked
    Anne Leonard about ownership of the vehicles to be insured and she advised
    erroneously that she was the owner. Therefore, when GAN issued the policy, it
    was not required to verify that incorrect information.

[20]

During
    the trial, the appellant sought an adjournment to interview other insurance
    providers so that it could introduce similar fact evidence, including
    underwriting files from three other insurance companies and searches from Autoplus
    and the Ministry of Transportation.

[21]

This evidence indicated that Anne Leonard was the named insured on other
    motor vehicle policies obtained after the policy in issue in this action, but was
    not the owner of the insured vehicles. The appellant sought to show that this
    evidence demonstrated a pattern of behaviour from which the trial judge should infer
    that Anne Leonard must have advised the GAN representative that she was the
    owner of the vehicles she was seeking to insure.

Findings made by the trial judge

[22]

The
    trial judge accepted Anne Leonards evidence that had she been asked by GAN,
    she would have told the representative that her husband was the owner of the
    vehicles to be insured, and based on the notes and records produced from GANs
    files, the representative did not ask about ownership. The trial judge
    therefore found that Anne Leonard did not misrepresent that she was the owner
    of the vehicles, and that it was GAN that made the error by issuing the policy
    naming Anne Leonard as the insured.

[23]

Section
    232 of the
Insurance Act
requires an insurer to provide an application
    form to a proposed insured for completion. That form requires the name of the
    owner of the car. The trial judge found that no such form was sent to Anne
    Leonard and no written application was completed and submitted by her. The appellant
    objected that it was not given sufficient notice to retain all of its records
    from that time, but the trial judge rejected that objection, finding that the appellant
    knew of the accident within a few months, and was put on early notice that the
    Fund would be looking to it for reimbursement, on the basis that the policy had
    not been effectively cancelled before the accident. The appellant was therefore
    on notice that it should retain any relevant documentation, if it existed, and
    should have done so.

[24]

Based
    on the record, the trial judge concluded that GAN never sent Anne Leonard an
    application and that it failed in its statutory obligation to obtain written
    information from her regarding the ownership of the vehicle to be insured.

[25]

Statutory
    condition 11(1) of O. Reg. 777/93 provides the method for an insurer to
    terminate a policy, while s. 12(1) of the
Compulsory Automobile Insurance
    Act
,
R.S.O. 1990, c. C.25,
    lists the circumstances that allow an insurer to do so, including non-payment
    of premiums. Statutory condition 11(1) provides:

Subject to section 12 of the
Compulsory Automobile
    Insurance Act
and sections 237 and 238 of the
Insurance Act
, this
    contract may be terminated by the insurer giving to the insured fifteen days'
    notice of termination by registered mail or five days' written notice of
    termination personally delivered.

[26]

At
    trial, the appellant conceded that if GAN knew or should have known that Peter
    Leonard was the registered owner of the vehicles insured under the policy, then
    the appellant was required to give him notice of termination of the policy.
    Having found that GAN should have known that Peter Leonard was the registered
    owner of the Hyundai, the trial judge found that under statutory condition
    11(1), the appellant could not validly cancel the policy unless it gave Peter
    Leonard, as the insured under an owners policy, 15 days notice, which it did
    not do. Therefore, the policy remained in effect at the date of the accident
    and should have responded to the claim made against Peter Leonard.

[27]

Finally,
    the trial judge rejected the argument that the Fund was precluded from bringing
    an action for restitution by the
Motor Vehicle Accident Claims Fund

Act
.
    She found that no provision of that Act, either expressly or by implication, removed
    the right of the Fund, like any other litigant, to bring an action in
    restitution, in this case against the appellant for its failure to pay under the
    policy. Further, it was just and equitable for the appellant to repay to the
    Fund the full amount it paid to Mr. Bogdanovic in respect of his judgment
    against Peter Leonard, particularly as the Fund undertook to the court that it
    would reimburse Peter Leonard for the amounts he paid to the Fund in
    satisfaction of the Bogdanovic judgment.

[28]

As
    a result, the trial judge granted judgment to the Fund in the amount of
    $234,574.33 plus prejudgment interest from March 23, 2003.

[29]

In
    supplementary reasons, the trial judge explained why she did not admit the
    proposed similar fact evidence regarding Anne Leonard obtaining other insurance
    policies in her name for vehicles registered to her husband.

[30]

The
    proposed evidence was that, after the accident, other insurers had issued
    policies to Anne Leonard as the named insured for vehicles owned by Peter
    Leonard. Although the appellant conceded that this evidence did not show a
    misrepresentation by Anne Leonard, the appellant sought to use it to ask the
    court to infer that, because Anne Leonard had been named as insured in
    subsequent owners policies, she must have misrepresented to those insurers
    that she was the owner of the vehicles.

[31]

The trial judge found that the probative value and relevance of the
    proposed evidence was limited and was outweighed by its prejudicial effect. The
    evidence was not specific enough to draw the inferences or conclusions the
    appellant sought, particularly as it was unclear what questions other insurers
    had asked Anne Leonard regarding ownership and what answers she had given.
    Further, as the request to obtain this evidence was made mid-trial, the trial
    judge concluded that it did not warrant any further delay in the proceeding.

Issues on the Appeal

[32]

This
    appeal engages the following four issues:

1.

Did the trial judge err in law by finding that the notice of termination
    was ineffective because it was not sent to the actual owner of the insured
    vehicle, when it was sent to the named insured?

2.

Did the trial judge err by refusing to admit the proposed similar fact
    evidence?

3.

Was the Fund required to bring its action under s. 258(1) of the
Insurance
    Act
, and if so, is the action-statute barred because it was brought years
    after the expiry of the one-year limitation period in s. 258(2)?

4.

Did the trial judge err in law by granting the Fund judgment based on
    unjust enrichment, rather than requiring it to bring its claim under s. 258(1)
    of the
Insurance Act
?

Analysis

Issue 1: Did the
    trial judge err in law by finding that the notice of termination was
    ineffective because it was not sent to the actual owner of the insured vehicle,
    when it was sent to the named insured?

[33]

The
    appellants theory of the case at trial was that Anne Leonard misrepresented
    herself as the owner of the insured vehicle and that the insurers, GAN and
    later Traders, were entitled to rely on her misrepresentations. That theory
    failed because the trial judge found that Anne Leonard made no such
    misrepresentation, and that the GAN representative, Brian Down, never asked who
    the owner of the vehicle was. Nor did GAN obtain a written application for
    insurance, which would have asked Anne Leonard to identify the registered owner
    of the vehicle to be insured.

[34]

On
    appeal, the appellant frames the argument on the basis that the trial judge
    erred by requiring insurers to investigate representations made by an applicant
    for an owners policy  in this case, Anne Leonard  to verify information
    regarding the ownership of vehicles insured by the policy.

[35]

The
    appellant conceded at trial that if GAN, and later Traders, knew or should have
    known that Peter Leonard was the registered owner of the insured vehicle, then
    it was required to send the notice of termination to him. Because the trial
    judge found that Anne Leonard made no misrepresentation, that GAN should have
    known that Peter Leonard was the owner and that it issued the policy naming
    Anne Leonard as the insured in error, therefore the appellants concession was
    determinative of the ineffectiveness of the termination. It is therefore
    unclear on what basis the appellant now seeks to argue on the appeal that neither
    it nor GAN had a duty to inquire into the accuracy of any ownership information
    provided by Anne Leonard.

[36]

Subsection
    233(3) of the
Insurance Act
governs when an automobile insurer may
    rely on a representation by an applicant for insurance. It provides:

No statement of the applicant shall be used in defence of a
    claim under the contract unless it is contained in the signed written
    application therefor or, where no signed written application is made, in the
    purported application, or part thereof, that is embodied in, endorsed upon or
    attached to the policy.

[37]

In
    this case, there was no written application. Therefore, there was no written or
    oral misrepresentation by Anne Leonard. There is therefore no basis for the
    appellant to raise misrepresentation as a ground of appeal, subject only to the
    challenge to the evidentiary ruling on similar fact evidence that I address
    below.

[38]

The
    appellant also submits that it was entitled to cancel the policy by sending the
    termination notice to Anne Leonard as the named insured under the policy. For
    this submission, the appellant refers to s. 236 of the
Insurance Act
,
    which prescribes that where an insurer does not intend to renew a policy, it
    must give the named insured 30 days notice.

[39]

However,
    in this case, the appellant purported to cancel an existing policy for non-payment
    of premiums, relying on statutory condition 11(1), which requires the notice to
    be given to the insured. O. Reg. 777/93 provides for the statutory conditions
    that must be in all policies of automobile insurance. In that regulation,
    insured is defined as follows:

In these statutory conditions, unless the context otherwise
    requires, the word insured means a person insured by this contract, whether
    named or not.

[40]

The
    policy that the appellant purported to terminate is an owners policy, which is
    defined in s. 1 of the
Insurance Act
as:

A motor vehicle liability policy insuring a person in respect of
    the ownership, use or occupation of an automobile
owned by that person
and within the description or definition thereof in the policy. [Emphasis
    added.]

[41]

It
    was never an issue in this case that before the purported termination, the
    policy was valid insurance that insured Peter Leonard as the owner of the
    insured vehicle.

[42]

Therefore,
    because the policy at issue was valid, and because it was an owners policy,
    the insured under that policy was Peter Leonard, the owner of the vehicles
    insured by the policy.

[43]

To summarize, the only issue was whether the notice of termination had
    the effect of terminating that policy. The notice was only sent to Anne Leonard,
    who was not the insured for the 1991 Hyundai vehicle because she did not own
    it. Because the notice of termination was not sent to the insured, as required
    by statutory condition 11(1), it was not effective to terminate the policy, and
    the trial judge made no error in so holding.

Issue 2: Did the
    trial judge err by refusing to admit the proposed similar fact evidence?

[44]

Whether
    to admit similar fact evidence is based on an analysis of its relevance and a
    balancing of its probative value against its prejudicial effect and is a
    discretionary decision, which is owed significant deference on appeal:
R.
    v. Harvey
, 57 O.R. (3d) 296, at paras. 43-44, affd 2002 SCC 80, [2002] 4
    S.C.R. 311.

[45]

Relevance
    is the most basic and important criterion for the admission of potentially
    prejudicial evidence such as similar fact evidence. The trial judge found the proposed
    evidence, which suggested that after obtaining the policy in this case other
    policies were issued to Anne Leonard for non-owned vehicles, to be minimally
    relevant to the factual issue she was asked to determine: whether Anne Leonard
    misrepresented to Brian Down that she was the owner of the vehicles to be
    insured. The trial judge similarly found it not to be probative of the question
    to be decided. She explained that when she first granted the appellant an
    adjournment mid-trial to investigate the issue, she believed the proposed
    evidence related to insurance applications that pre-dated the one in issue.
    However, they all occurred after the policy in this case. Most significantly,
    there was again no evidence of any misrepresentation by Anne Leonard. It
    follows that even had the trial judge admitted the evidence, she would not have
    found it helpful.

[46]

Finally,
    the trial judge also included in her reasoning the fact that a further delay
    was required by the appellant to continue to investigate, and she exercised her
    judicial role to manage the process as part of her reason to refuse any further
    adjournment that would have been required in order to receive the proposed
    evidence.

[47]

I see no basis for interfering with the trial judges exercise of her
    discretion.

Issue 3: Was the
    Fund required to bring its action under s. 258(1) of the
Insurance Act
,
    and if so, is the action statute-barred because it was brought years after the
    expiry of the one-year limitation period in s. 258(2)?

[48]

In
    oral argument, the appellant appropriately abandoned its initial reliance on
    the limitation period contained in statutory condition 9(4) in O. Reg. 777/93,
    which applies to claims for damage to the automobile.

[49]

The
    appellant submits, however, that having obtained an assignment of the
    passengers judgment against the owner of the vehicle, Peter Leonard, the Fund was
    obliged to bring its action against his insurer, Traders, under s. 258(1) of
    the
Insurance Act
, and further that the one-year limitation period provided
    in s. 258(2) bars any such claim.

[50]

Subsection
    258(1) provides:

Any person who has a claim against an insured for
    which indemnity is provided by a contract evidenced by a motor vehicle liability
    policy, even if such person is not a party to the contract, may, upon
    recovering a judgment therefor in any province or territory of Canada against
    the insured, have the insurance money payable under the contract applied in or
    towards satisfaction of the person's judgment and of any other judgments or
    claims against the insured covered by the contract and may, on the person's own
    behalf and on behalf of all persons having such judgments or claims, maintain
    an action against the insurer to have the insurance money so applied.

[51]

Prior
    to its repeal in 2004, s. 258(2) provided:

No action shall be brought against an insurer under
    subsection (1) after the expiration of one year from the final determination of
    the action against the insured, including appeals if any.

[52]

The
    appellant argues that Mr. Bogdanovic could have sued the appellant insurer
    under s. 258(1) and would have been bound by the limitation in s. 258(2).
    Because the Fund took an assignment of the Bogdanovic judgment, the appellant argues
    that the Fund stood in the shoes of the assignor and had to bring its action
    within the same time limit. It argues further that the Fund was therefore precluded
    from bringing its claim as an action for unjust enrichment.

[53]

The
    validity of this submission turns on whether it was mandatory for the Fund to
    make its claim under s. 258(1). That question turns on whether the Crown on
    behalf of the Fund was bound by the provisions of the
Insurance Act
at
    the relevant time, or whether it had Crown immunity.

[54]

Section
    11 of the
Interpretation Act
, R.S.O. 1990, c. I.11, which was in force
    until July 2007, provided that specific words were required for an act to bind
    the Crown:

No Act affects the rights of Her Majesty, Her heirs
    or successors, unless it is expressly stated therein that Her Majesty is bound
    thereby.

[55]

Section
    71 of the
Legislation Act, 2006
, S.O. 2006, c. 21, Sch. F, which
    replaced the
Interpretation Act
, continues this provision:

No Act or regulation binds Her Majesty or affects Her
    Majestys rights or prerogatives unless it expressly states an intention to do
    so.

[56]

These
    provisions constitute the codification of the common law principle of Crown
    immunity. In
Canada (Attorney General) v. Thouin
, 2017 SCC 46, [2017]
    2 S.C.R. 184, the Supreme Court stated at para. 20, following
Friends of
    the Oldman River Society v. Canada (Minister of Transport)
, [1992] 1
    S.C.R. 3, that the equivalent section in the federal
Interpretation Act
, R.S.C. 1985, c. I
‑
21,
is treated as a starting point for
    the immunity analysis, so that where there are no express words in an Act
    making it applicable to the Crown, it  remains to be decided whether the
    Crown is bound by necessary implication.

[57]

There
    was no express provision in the
Insurance Act
that bound the Crown in
    2003, when Mr. Bogdanovic obtained judgment against Peter Leonard and assigned
    that judgment to the Fund, or in 2008, when this action was commenced.

[58]

Nor
    was the Crown bound by necessary implication. The only reference to the Crown
    in the 2003 Act was s. 101(5), which describes when certain returns of insurers
    become a debt owing to the Crown. The Act was also amended in May 2008 to
    include in s. 1 the definition of entity as including the Crown. However, the
    references to entity in the Act are discrete and involve provisions dealing
    with corporate law rules and investment rules for various entities operating in
    the insurance context.

[59]

There
    were also a number of sections that refer to the Fund, specifically: ss. 268(2),
    268.0.1(2), and 267.12(2)(b). These bind the Fund specifically in the
    particular circumstances described in those sections. Paragraph 267.12(2)(b)
    sets out how to calculate the insurance coverage entitlements of lessors. Subsections
    268(2) and 268.0.1(2) both allow for recovery of statutory accident benefits
    from the Fund in certain circumstances. None of these provisions relate or
    apply to s. 258.

[60]

Traders
    nonetheless relies on
Allstate v. Motor Vehicle Accident Claims Fund
,
    2007 ONCA 61, 84 O.R. (3d) 401, to argue that the Fund is deemed to be an
    insurer for the purposes of the whole of the
Insurance Act
, and that
    therefore the Fund was obliged to bring its claim by relying on s. 258.

[61]

Traders
    reliance on
Allstate
is misplaced. In
Allstate
, this court held
    at para. 37 that, [l]iterally, of course, the Fund is not an insurer.
    However, because s. 6 of the
Motor Vehicle Accident Claims Act
deems
    any reference to insurer in the Statutory Accident Benefits Schedule to be a
    reference to the Fund, the court concluded that Fund is considered an insurer for
    the purpose of resolving disputes over the payment of accident benefits. The
    court did not conclude that the Fund is considered an insurer for the whole of
    the
Insurance Act
.

[62]

As
    there was nothing in the
Insurance Act
in 2003 or 2008 that either
    expressly or by necessary implication made the Act bind the Crown, except in
    specific provisions, the Crown enjoys immunity and was not bound to use s. 258
    of the Act to bring its claim against Traders.

[63]

Having
    said that, the Crown was not precluded from bringing a claim under s. 258(1),
    and had it chosen to do so, it would have been obliged to bring its claim
    within the one-year limitation provided in s. 258(2)
[1]
.
    As Ruth Sullivan explains in
Sullivan on the Construction of Statutes
,
    6th ed. (Toronto: LexisNexis Canada, 2014), this is the benefit/burden
    exception to Crown immunity: if the Crown chooses to take the benefit of a
    statutory provision, it must also accept any conditions that are imposed.

[64]

In this case, the Fund did not pursue an action using s. 258(1): it did
    not invoke that provision, and therefore was not caught by the corresponding
    burden imposed by s. 258(2). Instead, the Fund brought its claim as an action
    for unjust enrichment. It was entitled to do so, as it was not bound either
    expressly or by necessary implication to assert a cause of action under s.
    258(1).

Issue 4: Did the
    trial judge err in law by granting the Fund judgment based on unjust
    enrichment, rather than requiring it to bring its claim under s. 258(1) of the
Insurance
    Act
?

[65]

The
    trial judge found that the appellant was unjustly enriched because its policy
    was in force at the time of the accident and it should have responded to the
    claim against Peter Leonard, its insured, and the Fund was correspondingly
    deprived by paying the judgment. This finding is not challenged on appeal.
    Traders does not suggest that there was any juristic reason for it not to pay
    if its cancellation of the policy was ineffective; as the trial judge pointed
    out, Traders was contractually obligated to pay the Bogdanovic judgment under
    Peter Leonards policy. Further, the finding of unjust enrichment is supported
    by the record. Therefore, there is no reason to interfere with the trial
    judges conclusion that Traders was unjustly enriched at the expense of the
    Fund.

[66]

However,
    the appellant argued at trial, and argues again on appeal, that the trial judge
    was not entitled to exercise discretion to award a restitutionary remedy when a
    statutory remedy was available, relying on
Royal Insurance Co. of Canada v.
    Aguiar

(1984), 48 OR (2d) 705 (C.A.). This argument is ill-conceived
    for three reasons.

[67]

First,
    while the effect of making a finding of unjust enrichment was to grant the Fund
    restitution from the appellant, in so doing, the trial judge was not exercising
    discretion to award an equitable remedy instead of a legal remedy for a cause
    of action where alternative remedies were available. She was granting the
    ordinary form of relief for a claim in unjust enrichment: Peter D. Maddaugh and
    John D. McCamus,
The Law of Restitution
, loose-leaf ed. (Toronto: Thomson
    Reuters Canada Limited, 2017), at pp. 3-7, 3-8 and 4-10; and
Kerr v.
    Baranow
,
2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 46-47.
    Paragraph 1 of the judgment makes no reference to restitution  it merely
    grants judgment in the amount of $234,574.33.

[68]

In
Apotex Inc. v. Eli Lilly and Company
, 2015 ONCA 305, 334 O.A.C. 99, at
    paras. 52-54, I addressed the difference between substantive and remedial restitution:
    the former recognizes unjust enrichment as a stand-alone cause of action, while
    the latter occurs where a party seeks a disgorgement of profit as a remedy for
    an independent legal wrong, such as a tort or breach of contract. Although
    remedial restitution for an independent legal wrong is an exceptional remedy
    that should not be invoked unless other available remedies are inadequate (see
Apotex
,
    at para. 56), here the Fund did not plead an independent legal wrong and seek a
    restitutionary remedy in relation to that legal wrong. Rather, it pleaded
    substantive restitution as a stand-alone cause of action and the trial judge
    found that the Funds claim in unjust enrichment was made out. In these circumstances,
    the trial judge did not err in restoring to the Fund the monetary amount that
    it was deprived of by Traders corresponding unjust enrichment.

[69]

Second,
    the appellants first argument was that the Crown was obliged to bring its
    action using s. 258. That argument failed because of Crown immunity in respect
    of the
Insurance Act
(except for the specific sections already
    discussed). If the Crown were to be precluded from bringing its claim in unjust
    enrichment because of the availability of a claim under s. 258, the effect
    would be to undermine the Crowns immunity from having to bring a claim under s.
    258.

[70]

Third,
    in
Aguiar
, similar to this case, an insurer (not the Fund) paid its
    insured under the uninsured motorist provision, then sought reimbursement from
    the uninsured driver. As a subrogated claim, the insurers action was out of
    time and statute barred. The insurer then argued that it could claim
    restitution from the uninsured driver not only as a subrogated claim, but on
    the basis that its payment discharged the liability of the uninsured driver. On
    that formulation, the action was not statute barred. The court held that that
    argument could not succeed because in fact, the payment did not discharge that
    liability. However, contrary to the submission of the appellant, this court did
    not suggest that the appellant would not be able to bring its claim on the
    alternative basis and avoid the limitation problem, had the facts been found in
    its favour.

Conclusion

[71]

I
    agree with the trial judge that the Fund was entitled to claim unjust
    enrichment rather than bring its claim under s. 258 of the
Insurance Act
.

[72]

I
    would therefore dismiss the appeal with costs fixed in the amount of $30,000
    inclusive of disbursements and HST.

Released: K.F. June 21, 2018

K. Feldman J.A.

I agree. J.C. MacPherson
    J.A.

I agree. Grant Huscroft J.A.





[1]
See
Grenier v. Canadian General Insurance Co.
(1999), 43 O.R. (3d) 715
    (C.A.), for a discussion of when the limitation period commences under that
    section.


