



COURT OF APPEAL FOR ONTARIO

CITATION:
Security
    National Insurance Company v. Markel Insurance Company, 2012
    ONCA 683

DATE: 20121011

DOCKET: C52873  C52924

Simmons, Armstrong and Pepall JJ.A.

BETWEEN                                                                                         C52873

Security National Insurance Company

Applicant (Respondent)

and

Markel Insurance Company

Respondent (Appellant)

AND BETWEEN                                                                                 C52924

Kingsway General
    Insurance Company

Applicant (Appellant)

and

Gore Mutual Insurance
    Company

Respondent (Respondent)

J. Claude Blouin, for the appellant Markel Insurance
    Company

Harry P. Brown, for the appellant Kingsway General
    Insurance Company

George Frank, for the respondent Security National
    Insurance Company

Mark Donaldson, for the respondent Gore Mutual Insurance
    Company

Heard: May 3, 2012

On appeal from the order of Justice Paul M. Perell of the
    Superior Court of Justice, dated September 27, 2010, with reasons reported at
    2010 ONSC 5309, allowing an appeal from a decision of Arbitrator Lee Samis,
    dated November 20, 2009.

On appeal from the order of Justice Paul M. Perell, dated
    September 27, 2010, with reasons reported at 2010 ONSC 5308, 104 O.R. (3d) 61,
    dismissing an appeal from a decision of Arbitrator Kenneth J. Bialkowski, dated
    October 15, 2009.

Pepall
    J.A.:

INTRODUCTION

[1]

These
    two appeals involve priority disputes between insurers arising from the
    interpretation of s. 66(1) of the
Statutory Accident Benefits Schedule

Accidents on or after November 1, 1996
, O. Reg. 403/96 (SABS), enacted
    pursuant to the
Insurance Act
, R.S.O. 1990, c. I.8.

[2]

Section
    66(1) deems certain persons to be named insureds for the purposes of s. 268(2)
    of the
Insurance Act
. This affects the priority in which insurers are
    to pay statutory accident benefits under s. 268 of the Act.

[3]

Section
    66 is headed Company Automobiles and Rental Automobiles. Section 66(1) states:

(1) An individual who is living and ordinarily present in
    Ontario
shall be deemed
for the purpose of this Regulation
to
    be the named insured
under the policy insuring an automobile at
    the time of an accident if, at the time of the accident,

(a)
the
    insured automobile is being made available for the individuals regular use by
    a corporation, unincorporated association, partnership, sole proprietorship or
    other entity;
[Emphasis added.]

[4]

In cases
    with comparable facts, two arbitrators interpreted s. 66(1) differently and
    therefore reached different legal conclusions. Those awards were appealed to
    the Superior Court of Justice. Perell J. (the appeal judge) overturned one and
    upheld the other. The unsuccessful insurance companies now appeal to this
    court.  For the reasons that follow, I would dismiss the appeals.

BACKGROUND FACTS

(A)
Security
    National Insurance Company v. Markel Insurance Company

(a)

Contractual Relationship

[5]

Pinnacle
    Transport Ltd. (Pinnacle) operated a transport company. Markel Insurance
    Company (Markel) issued a motor vehicle liability policy to Pinnacle as named
    insured, which provided coverage for all vehicles owned, registered, leased and/or
    operated on behalf of the named insured.

[6]

Duncan
    McKerchar carried on business as a sole proprietorship with the business name
    The Tidy Scot. Mr. McKerchar bought a 1998 GMC truck from Pinnacle and paid
    for it in bi-weekly instalments.

[7]

Pinnacle
    and The Tidy Scot entered into an Independent Contractor Agreement, dated
    September 14, 2005 (the Agreement).   It provided that:

(i)  The Tidy Scot, as an independent contractor, would perform
    such transportation and ancillary services, including loading and unloading as
    requested by Pinnacle. The Agreement expressly provided that the relationship
    was not one of master/servant, principal/agent or employer/employee.

(ii) Pinnacle agreed to use the truck that was owned or leased
    by The Tidy Scot, but The Tidy Scot agreed to update the truck when and if required
    by Pinnacle and/or the Insurance Company. (The Insurance Company was not
    identified in the Agreement.)

(iii) During the term of the Agreement, The Tidy Scot would
    have full control and possession of the truck and assumed total responsibility
    for the operation, supervision and maintenance of the truck in a safe and
    proper working condition and in appearance satisfactory to Pinnacle. The Tidy
    Scot agreed to pay and to indemnify Pinnacle for all expenses arising out of
    the operation, maintenance and repair of the truck.

(iv) If required by Pinnacle, The Tidy Scot was to affix
    Pinnacles logo/identification to the truck.

(v) The Tidy Scot agreed to enrol in Pinnacles fleet public
    liability and property damage and cargo insurance coverage. The Tidy Scot was
    responsible for the deductibles and was to pay $145 per pay period for the
    insurance coverage.

(vi) Pinnacle would buy the licence plate for the truck but The
    Tidy Scot would pay for it.

(vii) The Tidy Scot was not to use the truck as a personal vehicle
    and was not to operate the truck for any other carrier or operator while it was
    being operated under Pinnacles licence and insurance.

(viii) The Tidy Scot received 75 per cent of the revenues
    generated by the truck each pay period and Pinnacle received 25 per cent.

[8]

The
    vehicle registration shows Duncan R. B. McKerchar/The Tidy Scot as the owner of
    the vehicle but Pinnacle is listed as the owner on the plate portion of the
    registration.

[9]

Consistent
    with the terms of the Agreement, the truck was never used by The Tidy Scot for
    anybody other than Pinnacle. Pinnacle issued a Professional Driver Manual
    setting out the rules and guidelines applicable to drivers.  Pinnacle also
    assigned pick-ups and deliveries. Pinnacles name and logo were affixed to the
    doors and the rear panel of the truck. The Tidy Scots $145 bi-weekly insurance
    payment amounted to approximately $3,770 annually, and Pinnacle deducted this
    amount from the cheques it issued to The Tidy Scot.  Similarly, Pinnacle
    recovered the entire cost of the plates from The Tidy Scot.

(b)

The Accident

[10]

On April 4, 2006, Mr.
    McKerchar was injured.  He attempted to jump on to his moving truck, which was
    being operated by another driver, fell under it and was run over. Mr. McKerchar
    was not a named insured nor a listed driver on the Markel policy of insurance
    issued to Pinnacle. He claimed statutory accident benefits from Security
    National Insurance Company (Security National), the insurer of his personal use
    vehicle. Security National paid the statutory accident benefits but instituted
    a claim that the obligation to pay these benefits rested with Markel as the
    insurer of Pinnacles fleet of vehicles.

(c)

Arbitration

[11]

The parties remitted
    the dispute to Arbitrator Lee Samis in accordance with the
Arbitration Act,
    1991,
S.O. 1991, c.17.  Among other things, he was required to consider
    whether Mr. McKerchar was deemed to be a named insured under the Markel policy.
    If the truck that was insured by Markel was being made available for Mr.
    McKerchars regular use at the time of the accident by a sole proprietorship or
    other entity, Mr. McKerchar would be deemed to be a named insured under the
    Markel policy.

[12]

In his award dated
    November 20, 2009, Arbitrator Samis found that there was no
de facto
difference between Mr. McKerchar and The Tidy Scot. In essence, they were
    one and the same entity. The Arbitrator also concluded that Mr. McKerchar was
    an occupant of the truck at the time of the accident.

[13]

The Arbitrator applied
    a line of authorities commencing with
Axa Insurance v. Markel Insurance
    Company of Canada
(Arbitrator Fidler, December 9, 1996), affd [1997] O.J.
    No. 2186 (Gen. Div.). He concluded that it would strain the wording of s. 66 to
    say that the truck was made available by Mr. McKerchar/The Tidy Scot to Mr. McKerchar.
    Nor could he see any evidence of a joint venture between Mr. McKerchar and
    Pinnacle or other entity for the purpose of s. 66(1). Therefore Mr. McKerchar
    was not a deemed named insured under the Markel policy.  In the result,
    Security National was required to pay the statutory accident benefits.

(B)
Kingsway
    General Insurance Company v. Gore Mutual Insurance
Company

[14]

Trowbridge Transport Ltd.
    (Trowbridge) operated a transport company. Kingsway General Insurance Company
    (Kingsway General) issued a fleet policy in favour of Trowbridge as named
    insured, which provided coverage for all vehicles owned and operated on behalf
    of the named insured.

[15]

William Higgs owned a
    freightliner tractor.  He worked as a self-employed owner/operator for
    Trowbridge. He had worked in this capacity since 2002 when he entered into the
    first of a series of owner/operator agreements between his sole proprietorship,
    Bill Higgs & Sons, and Trowbridge. In August 2007, Mr. Higgs
    registration of his business name expired.

[16]

Trowbridge entered
    into an Owner/Operator Agreement with Bill Higgs & Sons, dated January 1,
    2008 (the Agreement).  It provided that:

(i)    Bill Higgs & Sons, as an independent contractor, was
    to lease its freightliner tractor to Trowbridge and perform haulage services for
    Trowbridge. The Agreement expressly provided that the relationship created was
    that of an independent contractor and was not an employment relationship.

(ii)   Bill Higgs & Sons was obliged to equip its
    freightliner tractor in accordance with Trowbridges standards. It was
    responsible for maintenance of the vehicle and Trowbridge was responsible for
    maintenance of any trailers.

(iii) Trowbridge would obtain and maintain in force policies of
    insurance.  The policies would be purchased on behalf of Bill Higgs & Sons,
    which was responsible for payment of all deductibles.

(iv)  Trowbridge would pay for the licence plate on behalf of
    Bill Higgs & Sons.

(v)   Restrictions were placed on the use of alternate drivers and
    passengers were not permitted without Trowbridges approval.

[17]

Consistent with the
    terms of the Agreement, Mr. Higgs/Bill Higgs & Sons freightliner tractor
    was plated in the name of Trowbridge and Trowbridge obtained vehicle insurance
    from Kingsway General. The freightliner tractor was a scheduled vehicle on the
    Kingsway General policy and Mr. Higgs was a listed driver but not a named
    insured on the policy.

(
a
)     The Accident

[18]

In February 2008, Mr.
    Higgs was injured in an accident while he was driving the freightliner tractor.

[19]

At the time of the
    accident, Mr. Higgs was the named insured under the automobile insurance policy
    issued by Gore Mutual Insurance Company (Gore Mutual) for his 1996 Oldsmobile
    personal use automobile.

[20]

After the accident, Mr.
    Higgs applied to Kingsway General for statutory accident benefits. Kingsway
    General paid the accident benefits but served Gore Mutual with a notice of
    dispute between insurers. Kingsway General took the position that Gore Mutual
    should be the insurer liable to pay the accident benefits. Gore Mutual
    disagreed.

(
b
)     The Arbitration

[21]

The two insurance
    companies proceeded with an arbitration before Arbitrator Bialkowski. He held
    that Mr. Higgs was a deemed named insured under s. 66(1) of the SABS because
    the freightliner tractor was made available to Mr. Higgs by: (a) the sole
    proprietorship of Bill Higgs & Sons, or (b) another entity, namely, the
    joint venture comprised of Bill Higgs & Sons and Trowbridge under the
    Agreement. Arbitrator Bialkowski concluded that the legislative intent of s.
    66(1) was to place the freightliner tractor insurer in priority to the
    individuals personal use vehicle insurer in circumstances in which the
    accident involved the freightliner tractor in the course of the commercial
    arrangement between the parties. As such, he determined that Kingsway General,
    as the insurer of the freightliner tractor, was the priority insurer
    responsible to pay all accident benefits to Mr. Higgs.

APPEAL TO SUPERIOR COURT

[22]

The unsuccessful
    insurance companies in both arbitrations appealed the awards to the Superior
    Court of Justice.

[23]

The appeal judge dismissed
    the appeal from Arbitrator Bialkowski and allowed the appeal from Arbitrator
    Samis. The appeal judge declined to apply the line of cases beginning with
Axa
    Insurance v. Markel Insurance Co. of Canada
.  He held that an individual
    who is a sole proprietor may make an insured vehicle available to him or
    herself and be deemed to be a named insured, thereby satisfying the
    requirements of s. 66(1) of the SABS.

[24]

As such, the sole
    proprietorship of The Tidy Scot made the truck available to Mr. McKerchar and
    Mr. McKerchar was therefore deemed to be a named insured under the Markel policy.

[25]

Similarly, Mr. Higgs,
    as a sole proprietor, made the freightliner tractor available to himself and he
    was therefore deemed to be a named insured under the Kingsway General policy.

ISSUES

[26]

There are two key
    issues to be considered.

[27]

The first issue is
    whether an insured vehicle may be made available for an individuals regular use
    by that individuals sole proprietorship.

[28]

The second issue is
    whether the Agreements may be construed as creating joint ventures and, if so,
    does a joint venture constitute an other entity within the meaning of s. 66(1)
    of the SABS?

POSITIONS OF THE PARTIES

(a)     Sole Proprietorship

[29]

On the first issue, the
    insurers of the fleet vehicles, namely Markel and Kingsway General, advance
    similar arguments.

[30]

Firstly, they submit
    that there is extensive case law, including the 1996
Axa Insurance
decision,
that favours their position and
    the appeal judge should have shown deference to it. The appeal judges decision
    will have serious ramifications in the insurance industry since it represents a
    change in the law which will affect the insurance premiums charged by
    commercial insurers and the way in which the commercial and personal insurers
    interact in priority disputes between insurers.

[31]

Secondly, they argue
    that the appeal judge failed to take into account the commercial relationship
    of the parties to the insurance transactions and the Agreements.

[32]

Thirdly, they state
    that the appeal judge erred in his interpretation that an individual who was a
    sole proprietor may make an insured vehicle available to him or herself.

[33]

In submitting that
    the appeals should be dismissed, on the first issue the insurers of the
    personal use vehicles, Security National and Gore Mutual, argue  that the
    legislative intent was to place the risk on the insurer of the commercial
    vehicle. The commercial insurer should be responsible for accident benefits
    arising from a commercial operation.

[34]

Secondly, in their
    submission there is nothing in the wording of s. 66(1) of the SABS that
    requires that the individual be a different individual from the operator of the
    sole proprietorship.

[35]

Thirdly, they contend that
    a sole proprietorship is analogous to a single person corporation and a
    corporation may make a vehicle available to that individual under s. 66(1).

[36]

Lastly, they note that
    there are decisions that support the interpretation adopted by the appeal
    judge.

(b)     Joint Venture

[37]

On the second issue
    relating to the joint venture, Markel supports Arbitrator Samis conclusion
    that there was no joint venture and that the relationship between Pinnacle and
    The Tidy Scot consisted of two separate entities performing their respective obligations
    specifically without the creation of a new entity. Kingsway submits that the
    appeal judge erred in finding that a joint venture or commercial partnership
    existed between Mr. Higgs and Trowbridge and that there was no analysis by
    either the appeal judge or Arbitrator Bialkowski in reaching that conclusion.

[38]

In contrast, the
    personal use vehicle insurers, Security National and Gore Mutual, both support
    the interpretations applied by the appeal judge and Arbitrator Bialkowski, and
    also argue that there is case law that allows for a joint venture to constitute
    an other entity within the meaning of s. 66(1).

ANALYSIS

(a)     Context

[39]

Section 2 of the SABS defines
    an insured person very broadly. Among other things, an insured person is the
    named insured or a person who is involved in an accident involving the insured
    automobile and, in respect of accidents outside Ontario, the person who is an
    occupant of the insured automobile and who was a resident of Ontario at some
    point during the 60 days before the accident. The term named insured is not
    defined but is understood to refer to someone who is identified or named as an
    insured in an insurance policy.

[40]

In these appeals, both
    Mr. McKerchar and Mr. Higgs were named insureds in the policies for their personal
    use vehicles.  If by virtue of s. 66(1), they were deemed to be named insureds
    under the policies insuring the trucks, a priority dispute could arise.

[41]

Given  the broad definition
    of insured under the SABS, an individual may fall within the definition of
    insured on more than one insurance policy and, as such, have access to a number
    of insurers for payment of accident benefits. For this reason, s. 268 of the
Insurance
    Act
addresses the priority of liability for payment of statutory accident
    benefits. The relevant subsections of s. 268 state:

(2)     The following
    rules apply for determining who is liable to pay statutory accident benefits:

1.  In respect of an occupant of an automobile,

i.        the occupant has
    recourse against the insurer of an automobile in respect of which the occupant
    is an insured,

ii.       if recovery is
    unavailable  under subparagraph i, the occupant has recourse against the
    insurer of the automobile in which he or she was an occupant,

iii.       if recovery is
    unavailable under subparagraph i or ii, the occupant has recourse against the
    insurer of any other automobile involved in the incident from which the
    entitlement to statutory accident benefits arose,

iv.      if recovery is unavailable
    under subparagraph i, ii, or iii, the occupant has recourse against the Motor Vehicle
    Accident Claims Fund.



(5)     Despite
    subsection (4), if a person is a named insured under a contract evidenced by a
    motor vehicle liability policy or the person is the spouse or a dependant, as
    defined in the
Statutory Accident Benefits Schedule
, of a named
    insured, the person shall claim statutory accident benefits against the
    insurer, under that policy.



(5.2)  If
    there is more than one insurer against which a person may claim benefits under
    subsection (5) and the person was, at the time of the incident, an occupant of
    an automobile in respect of which the person is the named insured or the spouse
    or a dependant of the named insured, the person shall claim statutory accident
    benefits against the insurer of the automobile in which the person was an
    occupant.

[42]

Accordingly, if the
    claimant is, or is deemed to be, a named insured under more than one policy,
    the claimant shall receive benefits from the insurer of the vehicle in which
    the person was an occupant. That is, the insurer of a vehicle in which a named
    insured was an occupant at the time of the accident is the insurer highest in
    priority to pay accident benefits to that insured. As Mr. McKerchar and Mr.
    Higgs were found to be occupants, the insurer of the commercial vehicles would
    be required to pay the statutory accident benefits if the two men were deemed
    to be named insured on the fleet policies.

[43]

Arbitrator Samis
    described in some detail the historical and contextual background to the issue
    in dispute. In 1990, the Government of Ontario passed legislation that
    introduced the concept of no fault compensation for personal injury arising
    out of motor vehicle accidents. As he explained, since 1990, Ontario has
    operated in a compensation environment of restricted tort access, operating in
    parallel with elaborate no fault benefits: p. 2. Now injured persons claim
    their no fault benefits (statutory accident benefits), based on the contract
    between the insurer and the individual, or his or her family, and not
    necessarily on those arrangements governing the vehicle: p. 3.

[44]

He discussed the
    company car scenario and the purpose of s. 66, at pp. 3-4:

When the government changed the priority rules to bring
    claimants to a closer relationship with their own insurance company, by requiring
    payment of the statutory accident benefits by that company regardless of
    involvement of the insured vehicle, they had to recognize the existence of
    fairly common relationships that give rise to use of vehicles on a personal
    basis, but where the purchaser of the insurance is not the regular user of the
    vehicle. The traditional company car scenario involves situations where a
    business purchases a vehicle, and insurance for the vehicle, and then makes
    that vehicle available for the regular, personal, and frequent use of its
    employees or officers.  Similarly, the practice of renting and leasing vehicles
    might result in the creation of a contract of automobile insurance in the name
    of a vehicle owner but which is truly the personal vehicle of someone other
    than the registered owner.  Given the known frequency of these types of
    transactions, the legislature attempted to address how the new priority rules
    would apply to these situations. The result was regulation provisions, now
    embodied in section 66 of the SABS.
The apparent purpose of the regulation
    provision is to deem the person, for whom a vehicle is made available for
    regular use, to be a named insured.  This is clearly a recognition that in
    these types of transactions the regular user is in such a relationship with the
    vehicle and the vehicle insurer that that person should claim their benefits
    first from the insurer of the vehicle, rather than claim the benefits from some
    other insurance company
. [Emphasis added.]

[45]

He also discussed, at
    p. 4, the situation, like the ones here, where the owner of the vehicle is not
    the named insured under the insurance policy:

The[r]e are cases where the true owner of the vehicle is not
    the named insured under the policy of insurance but is an additional named
    insured, or listed driver, at best.  In these arrangements, it is common that
    the true owner of the vehicle has committed the vehicle to some commercial
    endeavour that includes obtaining insurance and other obligations in the
    business relationship. In these transactions, the policy of insurance is
    primarily a contractual relationship between the insurer and a non-owner. Given
    the commercial relationships in operation, the non-owner has some element of
    control, and some factual expectation of loss in the event of a liability
    claim. Accordingly, there is legitimate interest in procuring and maintaining
    adequate insurance with respect to the vehicle. The net result, however, is
    that a policy of insurance is effectively procured by someone who is not the
    owner of the vehicle.

[46]

The leading case
    addressing the situation described by Arbitrator Samis is
Axa Insurance.
The
    case involved facts similar to those in the cases before this court. The
    individual in
Axa Insurance
was an independent contractor who had agreed
    to work for a transport company pursuant to an owner/operator agreement whereby
    he transported loads using his own truck. Arbitrator Fidler determined that he
    was making his vehicle available for use by the transport company, not the
    other way around, and that the individual was not a deemed named insured. Accordingly,
    the injured truckers personal vehicle insurer was responsible for paying his statutory
    accident benefits.

[47]

In spite of his
    conclusion, Arbitrator Fidler was not very comfortable with the outcome,
    stating at p. 7:

Unfortunately the decision that I
    have come to does not result in a common sense solution to this problem. It
    troubles me that when a truck driver has an accident while operating his truck
    in the course of transporting goods pursuant to an owner/operator agreement,
    that he should have to go back to his own personal vehicle insurance to claim,
    when his personal vehicle had nothing to do with the accident.

[48]

Notwithstanding his
    concerns, Arbitrator Fidler felt bound by the wording of s. 91(4), the
    predecessor provision to s. 66(1).

[49]

On appeal and in brief
    oral reasons, Day J. of the Ontario Court of Justice (General Division) upheld
    his decision.

[50]

A number of decisions
    have followed
Axa Insurance.
These include:
Markel Insurance
    Company of Canada v. State Farm Mutual Automobile Insurance Company
(April
    12, 2000, Arbitrator Drew Hudson);
Axa Assurance Company v. ING Insurance
    Company of Canada
(May 25, 2006, Arbitrator Samis); and
Certas Direct
    Insurance Company v. Insurance Corporation of British Columbia
(June 2009,
    Arbitrator Shari Novick).

[51]

The question in these
    cases differed from that before this court. The arbitrators in those cases had asked
    the question that is not before us, namely,  whether the sole proprietor had
    made the vehicle available to the trucking company or whether the trucking
    company had made the vehicle available to the sole proprietor. They never asked
    whether for the purposes of s. 66(1), the sole proprietorship could make the
    vehicle available to the individual who was the sole proprietor.

[52]

In reaching a
    different conclusion from that reached by

Arbitrator Fidler in the
Axa
    Insurance
decision
,
Arbitrator Bialkowski determined that the legislative
    intent

behind s. 66(1) must have been to make the commercial insurer the
    insurer with

liability priority.

I, like Arbitrator Fidler am

troubled when a truck
    driver

has an accident while operating his truck in the course of
    transporting goods pursuant to an owner/operator agreement, that he would have
    to go to his own personal vehicle insurance to claim, when his personal

vehicle
    had nothing to do with the accident.  Insurance

premiums are collected
    on the basis of the particular risk of being insured. The risks of operating a
    heavy

commercial vehicle for distances far in excess of those normally
    driven by a private automobile should

be borne

by the insurer
    insuring the

commercial vehicle. Those additional risks would be unknown
    to the private

automobile insurer given the standard information
    contained in the application for insurance. I am fully satisfied that the
    legislative intent of Section 66(1)(a) is to have the commercial insurer
    responsible for accident benefit claims arising from the commercial operation.

[53]

Arbitrator Bialkowski
    reviewed many arbitral decisions in which injured persons were deemed to be
    named insureds:
TD General Insurance Co. v. Pilot Insurance Co.
(May 31,
    2007, Arbitrator Torrie);
Co-operators General Insurance Co. v. Cigna
    Insurance Company of Canada
(October 26, 1998, Arbitrator Robinson), affd
    (January 7 2000) 755/98 (Div. Ct.);
Co-operators Insurance Co. v. Oppenheim
(August 2002, Arbitrator Guy Jones);
Axa Insurance Co. v. Markel Insurance
    Co. of Canada
(December 18, 1998)
,
revd [1999] O.J. No. 5724 (Gen
    Div.), affd (2001), 140

O.A.C.

109
.

[54]

With this background
    in mind, I turn to s. 66(1)(a) itself. For the sake of convenience and given
    the importance of the wording, I repeat the provision:

(1) An individual who is living and ordinarily present in
    Ontario shall be deemed for the purpose of this Regulation to be the named
    insured under the policy insuring an automobile at the time of an accident if,
    at the time of the accident,

(a)
the insured automobile is being made available for the
    individuals regular use

by a
corporation, unincorporated association,
    partnership,
sole proprietorship
or other entity; [Emphasis added.]

[55]

Unlike the
Axa Insurance
case, the question before this court is whether s. 66(1)(a) permits an
    insured vehicle to be made available for an individuals regular use by the individuals
    sole proprietorship.

[56]

In my view, s.
    66(1)(a) permits an insured vehicle to be made available for an individuals
    regular use by the individuals sole proprietorship. This is evident from the
    language of the provision and its legislative purpose.

(b)     Language of s. 66(1)(a)

[57]

First I will consider
    the language of the section.

[58]

The appeal judge found
    no problem with the language and considered that its meaning was plain.  In
    contrast, Arbitrator Samis considered that the language directed one to look for
    a relationship between two parties and that the interpretation advanced by the
    personal use insurer would place a strain on the wording of the provision.

[59]

I start by observing
    that s. 66(1)(a) is not preclusive. There is nothing in subsection (a) that precludes
    a sole proprietorship from making a vehicle available to the sole proprietor.

[60]

The first descriptive entity
    included on the list is a corporation. Certainly there is nothing in s.
    66(1)(a) that would preclude a one person company from making a vehicle
    available to him or herself. The second entity on the list, an unincorporated
    association, does not have a separate legal status divorced from its members
    nor does a partnership but under the subsection, both entities are permitted to
    make vehicles available to their members.

[61]

A sole proprietorship
    is the entity in issue in this appeal. J. Anthony VanDuzer describes the nature
    of a sole proprietorship in his book
The Law of Partnerships &
    Corporations
3d ed. (Toronto: Irwin Law, 2009), at p. 7. It is the
    simplest form of business organization. It comes into existence whenever an
    individual starts to carry on business for her own account without taking the
    steps necessary to use some other form of organization, such as a
    corporation.  From a legal and practical standpoint, there is no separation
    between the sole proprietorship business organization and the person who is the
    sole proprietor. As a result, all benefits from the business accrue to the
    sole proprietor and all obligations of the business are his responsibility.

[62]

As with the other
    organizations, I see no legitimate reason why a sole proprietorship should not
    be permitted to make a vehicle available to the sole proprietor. The subsection
    contemplates that an individual operating a sole proprietorship can make a
    vehicle available to him or herself. Put differently, there is no requirement
    that the two parties be divorced from one another. In my view, on a plain
    reading of s. 66(1)(a), this is clear.

(c)     Legislative
    Intent

[63]

This brings me to a
    discussion of the legislative intent.  I agree with Arbitrator Bialkowski that
    the intent of the section is that the commercial insurer should be responsible
    for the accident benefits arising from the operation of the commercial vehicle.

[64]

The substance of the
    subsection is consistent with that conclusion.  The section is headed Company
    Automobiles and Rental Automobiles.  While not determinative, the heading does
    provide some context.  As with a company or rental automobile, if a vehicle is
    made available for regular use by any of the listed entities, the risk is to be
    borne by the insurer of that vehicle. This, in my view, makes sense and should
    be so in spite of any past practice in the insurance industry.

[65]

I therefore conclude
    that both the language and the evident intent of s. 66(1) permits an
    insured vehicle to be made available for an individuals regular use by the
    individuals sole proprietorship.

(d)

Application to these Cases

[66]

In the two cases
    before me, both drivers operated as sole proprietors. Mr. McKerchar operated as
    a sole proprietorship using the name The Tidy Scot, and entered into the
    Agreement with Pinnacle under that business name. Likewise, Mr. Higgs operated
    as a sole proprietorship using the business name Bill Higgs & Sons and
    entered into the Agreement with Trowbridge under that business name. While Mr.
    Higgs business name had expired several months before the accident, he nonetheless
    continued to carry on his business as a sole proprietorship. A sole proprietor
    may operate under his or her own name or may operate under a registered
    business name: VanDuzer, at p. 9.
[1]


[67]

Accordingly, in my
    view, it can be said that the sole proprietorships in both cases regularly made
    the insured vehicles available to Mr. Higgs and Mr. McKerchar. There was nothing
    in the parties commercial relationship with the trucking companies that
    precluded such a result.  In conclusion, both gentlemen are deemed insureds for
    the purposes of s. 66(1). The insurers of the commercial vehicles, Markel and
    Kingsway General, are therefore responsible for payment of their accident
    benefits.

(e)

Joint Venture

[68]

While I agree with the
    appeal judge that a joint venture for business purposes may be an other
    entity for the purposes of s. 66(1), given my conclusion on the first issue, it
    is unnecessary to address the joint venture issue and I decline to do so.

CONCLUSION

[69]

For the reasons given,
    I would dismiss the appeals. I would award Gore Mutual its costs of the appeal
    fixed, as agreed, in the amount of $7,500 inclusive of disbursements and
    applicable taxes. Similarly, I would award Security National the same amount in
    costs.

Released: October 11, 2012 JS

S.E.
    Pepall J.A.

I
    agree Janet Simmons J.A.

I
    agree Robert P. Armstrong J.A.





[1]
While registration of a business is required if a sole proprietor
    is using a name other than his or her own, the question of whether Mr. Higgs
    ought to have been registered at the relevant time is not before this court:
    see
Business Names Act
, R.S.O. 1990, c. B.1
7
,
    s. 2(2).


