



COURT OF APPEAL FOR ONTARIO

CITATION: The Dominion of Canada General Insurance Company v.
    State Farm Mutual Automobile Insurance Company, 2018 ONCA 101

DATE: 20180202

DOCKET: C62714 & C63539

Hoy, A.C.J.O., van Rensburg and Roberts JJ.A.

In the
    Matter of the Insurance Act, R.S.O. 1990, c.18, s. 268 (2) and Ontario
    Regulations 34/10 and 283/95 thereunder;

And in
    the Matter of the Arbitration Act, 1991, S.O. 1991, c.17;

And in
    the Matter of an Arbitration:

BETWEEN

The Dominion of Canada General Insurance Company

Applicant
(Respondent in Appeal)

and

State Farm Mutual
    Automobile Insurance Company

Respondent
(Appellant in Appeal)

AND BETWEEN

Belairdirect Insurance

Applicant
(Respondent in Appeal)

and

Dominion of Canada
    General Insurance Company (Travelers)

Respondent
(Appellant in Appeal)

Mark K. Donaldson, for the appellant, State Farm Mutual
    Automobile Insurance Company

Daniel Strigberger and Timothy W. Gillibrand, for the
    respondent, The Dominion of Canada General Insurance Company

Neil Colville-Reeves and Julianne Brimfield, for the
    appellant, Dominion of Canada General Insurance Company (Travelers)

Tracy L. Brooks and Antonietta Alfano, for the
    respondent, Belairdirect Insurance

Heard: June 22, 2017

On appeal from the order of Justice K. Wright of the
    Superior Court of Justice, dated October 26, 2015 and from the order of Justice
    J. Akbarali of the Superior Court of Justice, dated March 6, 2017, with reasons
    reported at 2017 ONSC 367.

Roberts J.A.:

Overview

[1]

These two appeals were heard together because they give rise to the same
    main issues: the standard of review applicable to insurance arbitral decisions resolving
    priority disputes arising from the statutory accident benefits regime under the
Insurance Act
, R.S.O. 1990, c. I.8, and statutory and contractual
    interpretation issues affecting the priority question.

[2]

Both appeals involve arbitral decisions concerning the interpretation
    of insured person under s. 3(1) of the
Statutory Accident Benefits
    Schedule  Effective September 1, 2010
, O. Reg. 34/10 (SABS), as applied
    to the particular provisions of the claimants respective insurance policies. The
    question is whether the claimants, who were both listed as excluded drivers on
    their parents automobile policies, were covered for SABS when not driving the
    vehicles to which their driving exclusions applied. This will determine which
    insurer has first priority to respond to the claimants SABS claims.

[3]

The appeal judgments diverge on the standard of review that ought to
    apply to an arbitrators decision on the issue of priority, as well as the
    interpretation of an insured person under s. 3(1) of the SABS, in the context
    of the excluded driver provisions under the claimants insurance policies. Under
    s. 3(1) of the SABS, an insured person is defined as any person specified in
    the policy as a driver of the insured automobile.

[4]

In the arbitration that was the subject of the State Farm appeal (State
    Farm arbitration), the arbitrator found that an excluded driver can be an
    insured person under the SABS. The appeal judge applied a standard of
    correctness and overturned the arbitrators decision. In the arbitration
    leading to the Dominion appeal (the Dominion arbitration), the arbitrator was
    also of the view that an excluded driver can be an insured person under the
    SABS. However, he concluded that he was bound by the appeal decision in the State
    Farm appeal. The appeal judge, who was not similarly bound, applied a
    reasonableness standard to the arbitrators underlying reasoning and found that
    his original interpretation was reasonable.

[5]

For the reasons that follow, I would allow the appeal from the order of the
    appeal judge dated October 26, 2015 (the State Farm appeal), and dismiss the
    appeal from the order of the appeal judge dated March 6, 2017 (the Dominion
    appeal).

Factual background and summary of decisions below

(a)

State Farm appeal

[6]

The SABS claimant, Umberto Rupolo (Umberto), was injured in February
    2012 while riding as a passenger in his girlfriends car. His girlfriends car
    was insured by State Farm Mutual Automobile Insurance Company (State Farm). Umberto
    applied for accident benefits from his parents insurer, The Dominion of Canada
    General Insurance Company (Dominion).

[7]

In 2008, Umbertos parents applied for insurance for their two vehicles.
    In their application, they listed the names of all the drivers of the vehicles
    in the household. The risk was bound on June 23, 2008. Dominion issued a
    Certificate of Insurance listing the entire Rupolo family, including Umberto, as
    Drivers Insured (later changed to Listed Drivers) on the front page of the
    Certificate.

[8]

After the risk was bound, however, Dominion informed the Rupolos that they
    required an Excluded Driver Endorsement with respect to Umberto due to his
    poor driving record. Umberto and his parents signed the Endorsement, which is also
    known as an OPCF 28A form. It provides that if Umberto drives either of the two
    vehicles insured under the policy, [e]xcept for certain Accident Benefits,
    there would be no coverage under the policy for property damage and bodily
    injury, damage to the automobile(s) and most Accident Benefits. As of the
    effective date of September 24, 2008, Umberto was a Listed Driver, but under
    the Rating Information section, the Certificate indicated that Umberto was
    excluded from driving either of the two vehicles specified in the Endorsement.

[9]

Dominion took the position that Umberto did not meet the statutory
    definition of an insured person for the purposes of the SABS. Dominion argued
    that Umberto was not specified in the policy as a driver of the insured
    automobile because he was listed as an excluded driver and therefore
    precluded from driving the automobiles insured under the policy.

[10]

State
    Farm took the opposite view. Dominion agreed to provide benefits pending the
    outcome of the arbitration to which the parties referred their priority dispute.

[11]

The
    arbitrator agreed with State Farms position, holding that the SABS legislation
    was to be given a broad and liberal interpretation, and that any ambiguity was
    to be resolved in favour of Umberto. In that regard, he determined that there
    is sufficient ambiguity to an individual reading the OPCF 28A to think there
    would still be full accident benefits if not driving the excluded vehicle and
    even limited accident benefits if driving the excluded vehicle.

[12]

The
    arbitrator concluded that because the Certificate of Insurance specifically
    listed Umberto as a listed driver, he was entitled to accident benefits from
    Dominion so long as he was not injured while driving one of the vehicles in
    respect of which he was an excluded driver. The arbitrator succinctly stated
    the reasons for his conclusions in the following paragraphs:

It appears to me that the reason why Dominion required the OPCF
    28A was to address the risk of Umberto Rupolo driving the insured automobiles. That
    risk was addressed by the execution of the Endorsement by Umberto Rupolo and
    his parents. In my view, no other rights or entitlements were taken away by the
    OPCF 28A. Umberto was a passenger in his girlfriends vehicle. He was not
    violating the terms of the Excluded Driver Endorsement.

The clear language of the Endorsement states that Umberto would
    only be excluded from claiming certain accident benefits if he was
driving
either of the vehicles identified in the policy. There is no bar to his right
    to claim SABS if he is a
passenger
in his girlfriends vehicle. Equally,
    there would be no bar if he were a passenger in someone elses vehicle or
    simply a pedestrian on the street. He is only barred if he is
driving
the automobile identified in the Endorsement, and then, he is only barred from
    receiving
most
accident benefits. In fact, in cross examination, Mr.
    Wilson [from Dominions underwriting department] seemed to admit that the OPCF
    28A only applied if driving his parents[] vehicles but as a passenger accident
    benefits coverage would not be reduced. [Emphasis in original.]

[13]

Dominion
    appealed. The appeal judge allowed the appeal, concluding that Umberto was not
    an insured person and therefore State Farm had first priority to respond to
    Umbertos SABS claim.

[14]

With
    respect to the standard of review applicable to the arbitrators decision, the appeal
    judge wrote at para. 2 of her reasons: The standard of review on this appeal
    is one of correctness and the parties take no issue with that.

[15]

The
    entirety of the appeal judges analysis concerning the arbitrators error is
    contained in para. 10 of her reasons:

After a thorough review of the materials, the case law, the
    applicable legislation and the submission of counsel, I can find the arbitrator
    fell into error when he found Rupolo to be an insured person in accordance with
    the SABS. The arbitrator concluded that because Rupolo was listed in the
    Certificate of Insurance as a driver, he fell with [sic] the definition of an
    insured driver, despite being an excluded driver and was entitled to some
    insurance coverage. The legislation clearly states that an insured driver is
    one who is specified in the policy as a driver of the insured automobile. Despite
    being listed as a driver, Rupolo was clearly not a driver of an insured
    automobile and thereby not entitled to coverage.

[16]

State
    Farm appealed to this court.

(b)

Dominion appeal

[17]

Matthew
    Bortolus (Matthew) was driving an uninsured motorcycle when he was involved
    in an accident with a vehicle insured by Belairdirect Insurance (Belair). Matthew
    applied to Belair for accident benefits.

[18]

Matthews
    parents are the named insured persons under a policy of insurance issued by
    Dominion for one vehicle, a 2009 Toyota Corolla. The listed drivers under the
    policy are Matthews parents and Matthew. Like the claimant in the companion
    appeal, Matthew and his parents signed an Excluded Driver Endorsement. It
    provides that if Matthew drives the Corolla, [e]xcept for certain Accident
    Benefits, there would be no coverage under the policy for property damage and
    bodily injury, damage to the automobile and most Accident Benefits.

[19]

The
    question of whether Dominion or Belair has the higher priority to respond to
    Matthews claim for accident benefits was arbitrated. The arbitrator concluded
    that Matthew was an insured person under the Dominion policy such that Dominion
    had the higher priority to respond to his SABS claim. However, notwithstanding
    this conclusion, the arbitrator held that he was bound by the earlier noted
October 26, 2015
State Farm decision, which is subject
    to this appeal:

But for the amended endorsement of Justice K.P. Wright in
Dominion
    of Canada v. State Farm
, I would find in favour of Belair and rule that
    Matthew was an insured person under the Dominion policy such that Dominion has
    the higher priority to respond to Matthews claim for statutory accident
    benefits. However, I am unable to do so as I am obliged to follow the decision
    of a Superior Court judge despite the fact that I may disagree with the
    analysis and the result. I am unable to circumvent what I believe is a binding
    precedent directly relevant and applicable to the matter before me. As a
    result, I find that Matthew was not an insured person under the Dominion policy
    such that Belair has the higher priority to respond to Matthews claim for
    statutory accident benefits. (P. 10)

[20]

The
    appeal judge overturned the arbitrators decision. She determined that the
    appropriate standard of review was reasonableness, for the reasons set out at
    para. 16 of her decision:

The question of the appropriate standard of review is answered
    definitively in
Intact Insurance Company
at para. 53. Even an
    extricable question of law is reviewed on a reasonableness standard. This
    standard of review recognizes the expertise of insurance arbitrators: see
    paras. 49-50. Where a decision maker is interpreting its home statute, or
    statutes closely connected to its function, there is a presumption that a
    reasonableness standard will apply: see para. 47.

[21]

The
    appeal judge explained that none of the exceptions to the reasonableness
    standard applied here and that the arbitrators decision was within his
    specialized expertise:

The exceptions to the reasonableness standard do not apply here.
    The question of which insurer has priority is not a question over which the arbitrator
    and the court share jurisdiction at first instance. It is not an exceptional
    question, those being questions of jurisdiction, constitutional questions, or
    general questions of law that are both of central importance to the legal
    system as a whole and outside the arbitrators specialized area of expertise: see
Intact Insurance Company
at para. 51. To the contrary, the question of
    the priority of the insurers involves the interpretation of the policy, the
Insurance
    Act
, and the SABS  all squarely within the expertise of the insurance arbitrator.
    (Para. 17)

[22]

The
    appeal judge held that she was not bound by the appeal judges decision in
    State Farm, and concluded that it was superseded on the question of the
    standard of review by this courts decision in
Intact Insurance Company v.
    Allstate Insurance Company of Canada,
2016 ONCA 609, 131 O.R. (3d) 625,
    leave to appeal refused, [2016] S.C.C.A. No. 392. She went on to find that the arbitrators
    initial determination that Matthew meets the definition of an insured person
    under s. 3(1) of the SABS was reasonable, and agreed that he is a person
    specified in the [Dominion] policy as a driver of the insured automobile. As a
    result, she concluded that Dominion is the insurer with the higher priority to
    respond to Matthews accident benefits claim.

[23]

Dominion
    appealed to this court.

Analysis

(i)

Statutory Framework

[24]

It
    is helpful to set out the statutory provisions that frame the issues under
    appeal.

[25]

The
    determination of the payor of statutory accident benefits in priority disputes
    is resolved in accordance with the rules set out in s. 268(2) of the
Insurance
    Act
. The relevant portion of that provision reads as follows:

268(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

[26]

Section
    275(4) of the
Insurance Act
requires insurers to refer any unresolved
    priority dispute to arbitration under the
Arbitration Act, 1991
, S.O.
    1991, c. 17.

[27]

In
    both the State Farm and Dominion arbitrations, the arbitrators had to determine
    which insurer had priority to respond to the occupants respective claims for
    statutory accident benefits pursuant to ss. 268(2)1(i) and (ii):

(i)

If Umberto Rupolo was an insured
    under the Dominion policy, Dominion would have priority over his claim,
    pursuant to s. 268(2)1(i). If he was not an insured under the Dominion policy,
    State Farm would have priority over his claim, pursuant to s. 268(2)1(ii).

(ii)

If Matthew Bortolus was an
    insured under the Dominion policy, Dominion would have priority over his claim,
    pursuant to s. 268(2)1(i). If he was not an insured under the Dominion policy, Belair
    would have priority over his claim, pursuant to s. 268(2)1(ii).

[28]

The
    full definition of insured person appears in s. 3(1) of the SABS
, as follows:

insured person means
, in respect of a particular motor vehicle liability policy,

(a)  the named insured,
any person
    specified in the policy as a driver of the insured automobile
and, if the
    named insured is an individual, the spouse of the named insured and a dependant
    of the named insured or of his or her spouse,

(i)  if the named
    insured, specified driver, spouse or dependant is involved in an accident in or
    outside Ontario that involves the insured automobile or another automobile, or

(ii)  if the named
    insured, specified driver, spouse or dependant is not involved in an accident
    but suffers psychological or mental injury as a result of an accident in or
    outside Ontario that results in a physical injury to his or her spouse, child,
    grandchild, parent, grandparent, brother, sister, dependant or spouses
    dependant,

(b)  a person who is involved in an accident
    involving the insured automobile, if the accident occurs in Ontario, or

(c)  a person who is an occupant of the
    insured automobile and who is a resident of Ontario or was a resident of
    Ontario at any time during the 60 days before the accident, if the accident
    occurs outside Ontario [Emphasis added.]

[29]

The
    interpretation of the highlighted passage was in issue in both arbitrations. It
    is common ground that neither claimant was a dependant or a spouse for the
    purposes of this definition. The question before the arbitrators was whether
    Umberto and Matthew were, respectively, any person specified in the policy as
    a driver of the insured automobile.

(ii)

Standard of review applicable to insurance arbitral decisions

[30]

These
    appeals effectively turn on the question of whether the appeal judges below
    erred in their determination of the appropriate standard of review to be
    applied to the arbitrators decisions.

[31]

It
    is not disputed that on this appeal, the standard of review applicable to the
    appeal judges determination of the standard of review is a correctness
    standard:
Intact
, at para. 33;
Dr. Q v. College of Physicians and
    Surgeons of British Columbia
, 2003 SCC 19, [2003] 1 S.C.R. 226, at para.
    43. As a result, no deference need be shown by this court to the appeal judges
    selection of the standard of review.

[32]

State
    Farm submits that this courts decision in
Intact
has settled this
    question and that the applicable standard of review from an insurance arbitral
    decision is one of reasonableness. To the contrary, Dominion submits that
Intact
has been overtaken by the Supreme Courts judgment in
Ledcor Construction
    Ltd. v. Northbridge Indemnity Insurance Co.
, 2016 SCC 37, [2016] 2 S.C.R.
    23, and that correctness is the appropriate standard of review.

[33]

For
    the reasons that follow, I am of the view that the result reached in
Intact
is not inconsistent with the judgment of the majority in
Ledcor
and
    that the standard of review applicable to appeals from insurance arbitral
    decisions resolving priority disputes under the SABS is reasonableness. This
    requires me to set out in some detail the reasons for the conclusions reached
    by the court in
Intact
, and then to compare them with the decision in
Ledcor
.

This courts
    decision in Intact

[34]

Similar
    to the present appeals,
Intact
involved an insurance arbitrators
    determination of a priority dispute between two insurers concerning the payment
    of statutory accident benefits. To resolve this issue in
Intact
, the arbitrator
    had to determine whether the claimants were principally dependent for financial
    support on the insured, their mothers new partner. This required the arbitrator
    to make factual findings concerning the relationship between the claimants and
    the insured, in accordance with the arbitrators interpretation of the relevant
    insurance policy and statutory provisions.

[35]

Dominion
    argues that
Intact
is clearly distinguishable on the basis that it was
    a dependency case where the factual matrix dominated. A reasonableness standard
    of review was appropriate in
Intact
because of the importance of the
    factual matrix which grounded the case between the parties to the particular
    litigation, pursuant to the Supreme Courts reasoning in
Ledcor
and in
Sattva Capital Corp. v.
    Creston Moly Corp.
, 2014 SCC 53, [2014]
    2 S.C.R. 633
. Dominion emphasizes that in the present case,
    however, the arbitrator was faced with a pure question of law, that is, the
    interpretation of a standard form contract in the absence of any meaningful factual
    matrix. As the arbitrator noted at p. 2 of his decision in the Dominion arbitration,
    the arbitration proceeded before him on a written record of facts that were not
    in dispute.
As a result,
t
here was no need for the arbitrator
    to make findings of fact or to apply the law to findings of fact, so there were
    no factual or mixed questions to which a standard of reasonableness would apply.

[36]

I
    do not accept these submissions. In my view, Dominions characterization of
Intact
as a fact-driven dependency case is too narrow. Indeed, this depiction of the standard
    of review dispute as simply one of choosing between a mixed fact and law exercise
    or an extricable legal error, without regard for the nature of the
    decision-maker, was explicitly rejected by this court in
Intact
.

[37]

The
    Supreme Court also recently confirmed in
Teal Cedar Products Ltd. v.
    British Columbia
, 2017 SCC 32, 411 D.L.R. (4th) 385, at paras. 74-76, that
    while the nature of the question (whether legal, factual, or mixed) is
    dispositive of the standard of review applicable to appeals from civil litigation
    judgments by courts, it is not dispositive in the context of commercial arbitral
    awards by specialized arbitrators: [T]he mere presence of a legal question
    does not, on its own, preclude the application of a reasonableness review in a
    commercial arbitration context.

[38]

The
    decision in
Intact
focussed on the nature of the decision-maker and,
    next, on the question of whether the decision in issue required the application
    of the specialized expertise of the decision-maker. Writing for the court, LaForme
    J.A. commenced his analysis by applying the methodology endorsed by the Supreme
    Court in
Mouvement laïque québécois v. Saguenay (City)
, 2015 SCC 16, [2015]
    2 S.C.R. 3, at para. 31. Specifically, LaForme J.A. considered whether he
    should apply appellate standards as if the decision were that of a trial court
    or rely on administrative law principles related to judicial review of a
    specialized tribunals decision, to determine the appropriate standard of
    review.

[39]

LaForme
    J.A. concluded that the administrative law framework, associated with
Dunsmuir
    v. New Brunswick
, 2008 SCC 9, [2008] 1 S.C.R. 190, was applicable to
    determine the standard of review on an appeal from an insurance arbitration
    decision. As he noted, SABS arbitrations occur within a distinct regime that
    efficiently resolves priority disputes between insurers while ensuring that
    beneficiaries receive their benefits promptly, and he likened the decision of
    a SABS arbitrator to that of a specialized administrative tribunal, where, as the
    court explained in
Saguenay
, whether on a judicial review or a
    statutory appeal, the standard of review must be determined on the basis of
    administrative law principles:
Intact
, at paras. 24-30.

[40]

LaForme
    J.A. noted, at para. 35, that, generally, determining whether a person is
    principally dependent on another is a question of mixed fact and law, which
    is presumptively reviewed for reasonableness. Responding to Intacts argument
    that the arbitrator had committed an extricable legal error by importing a
    permanence requirement into the definition of dependency, LaForme J.A. went on
    to consider the standard of review for an insurance arbitrators interpretation
    of SABS, and in particular the meaning of dependency for purposes of that
    regulation (at para. 37).

[41]

LaForme
    J.A. applied the two-step process for determining the standard of review under the
    administrative law principles set out in
Dunsmuir
,
at para. 62:

First, courts ascertain whether the jurisprudence has already
    determined in a satisfactory manner the degree of deference to be accorded with
    regard to a particular category of question. Second, where the first inquiry
    proves unfruitful, courts must proceed to an analysis of the factors making it
    possible to identify the proper standard of review.

[42]

First,
    LaForme J.A. determined that the existing jurisprudence had already settled that
    the reasonableness standard of review is applicable to questions of law that
    are within the specialized experience and expertise of insurance arbitrators in
    interpreting insurance law. He referred specifically to the Supreme Courts
    statement in
Sattva
, that [i]n
    the context of commercial arbitration, where appeals are restricted to
    questions of law, the presumptive standard of review is reasonableness: para.
    106. The court in
Sattva
made clear that this will almost always be the case, except in the rare
    circumstances where an arbitrator is faced with a question that goes beyond
    the dispute between the parties and the interpretation of the home statute, and
    therefore warrants a correctness standard, such as a constitutional question
    or a question of law of central importance to the legal system as a whole and
    outside the adjudicators expertise: para. 75.
LaForme J.A.
    explained his reasoning as follows, at para. 45:

The question at issue here  determining dependency for
    purposes of
SABS
and insurance priority disputes  does not rebut the
    presumption of reasonableness review established in
Sattva
. It is not
    a question of jurisdiction, a constitutional question, or a general question of
    law that is of central importance to the legal system as a whole and outside
    the adjudicators expertise.

[43]

Although
    this obviated the need to proceed to the second analytical step from
Dunsmuir
,
    LaForme J.A. concluded that a contextual analysis also confirmed that the
    reasonableness standard of review was appropriate. Notably, he came to this conclusion
    not because of the fact-specific nature of the question of dependency, as
    suggested by Dominion, but primarily because the question required the arbitrator
    to engage his specialized expertise in interpreting his home statute:
Intact
,
    at paras. 46-52.

[44]

LaForme
    J.A. observed that, while an appeal to the Superior Court from an insurance
    arbitration regarding a priority dispute will generally engage questions of
    mixed fact and law that must be reviewed for reasonableness, even a question of
    law regarding SABS will generally involve a reasonableness standard of review
    because it requires the application of the specialized insurance arbitrators
    expertise for determination:
Intact
, at para. 53. He left open the
    possibility that a correctness standard of review may be applicable to the rare
    exceptional questions of law listed in
Sattva
: para. 53.

The Supreme Courts
    decision in Ledcor

[45]

Nothing
    in the courts reasoning in
Intact
clashes with the Supreme Courts
    discussion of the standard of review applicable to standard form contracts in
Ledcor
.
Intact
and
Ledcor
involved fundamentally different contexts
    for determining the appropriate standard of review. Most importantly, the
    decision in
Ledcor
must be understood in its particular context.
    Unlike
Intact
, in
Ledcor
, there was no expert arbitral
    decision-maker involved. Rather, the court in
Ledcor
was dealing with
    an appeal from a trial judges interpretation of a standard form contract.

[46]

In
Ledcor
, the Supreme Court articulated the interpretation of a standard
    form contract as an exception to the courts holding in
Sattva
that
    contractual interpretation by a specialized arbitrator is a question of mixed
    fact and law subject to deferential review on appeal. The court held that an
    appeal from a trial judges interpretation of a standard form contract, that
    has precedential value and does not require engagement with any meaningful factual
    matrix, is a question of law that should be reviewed for correctness:
Ledcor
,
    at para. 46. The court reasoned that this standard of review is more consistent
    with the respective roles of trial and appellate courts:

These particular functions of appellate courts  ensuring
    consistency in the law and reforming the law  justify reviewing pure questions
    of law on the standard of correctness. By contrast, appellate courts defer to
    findings of fact in part because they can discharge their mandate without
    second-guessing trial courts factual determinations. [Citations omitted.]

[47]

In
Ledcor,
the court was not assessing a specialized arbitrators interpretation
    of the home statute and the exercise of specialized expertise, which would have
    given rise to a deferential standard of review. Rather, as already noted, the court
    was focussing on a question of law relative to the interpretation of a standard
    form contract, in the context of appeals from trial and appellate courts, and
    on the specific and respective roles of trial and appellate courts in resolving
    such questions.

[48]

This
    distinction was recently illustrated in the following two cases.

[49]

Intact
    Insurance Company v. Federated Insurance Company of Canada
, 2017 ONCA 73, 134
    O.R. (3d) 241, leave to appeal refused, [2017] S.C.C.A. No. 98, involved an appeal
    from an insurance arbitrators decision. This court concluded, at para. 14,
    that correctness was the appropriate standard of review in relation to the arbitrators
    determination of general issues of law arising from the interpretation and
    application of s. 22.1 of the Ontario
Evidence Act
, R.S.O. 1990, c.
    E.23 and its interplay with the common law doctrine of abuse of process, which did
    not require the application of the arbitrators specialized expertise or
    interpretation of the home statute.

[50]

In
Sabean v. Portage La Prairie Mutual Insurance Co.
, 2017 SCC 7, [2017]
    1 S.C.R. 121, the Supreme Court considered the correct interpretation of a
    standard form excess insurance policy in relation to the question of whether
    CPP disability benefits were deductible from the amount recoverable under the
    policy. While not explicitly stating the applicable standard of review, in
    expressly following the analytical approach set out in
Ledcor
, the
    court reviewed the lower courts interpretation of the standard form contract through
    a correctness lens.

[51]

For
    these reasons, the reasoning of this court in
Intact
, in my view, has
    not been overtaken by
Ledcor
. As a result, the principles articulated
    in
Intact
are relevant to the decisions under appeal in the present
    case.

(iii)

Should the underlying arbitral decisions have been reviewed for reasonableness
    or correctness?

[52]

With
    these principles in mind, I turn finally to the appeal judges respective decisions.

[53]

The
    decision-making process that the arbitrators were required to undertake in the State
    Farm and Dominion arbitrations is clearly distinguishable from the task facing the
    trial judge in
Ledcor
.
The arbitrators were not simply analyzing a standard form contract in isolation.
    Rather, they were required to apply their specialized expertise to evaluate
    each SABS claim in the context of the home statute. Specifically, they had to
    determine whether Umberto and Matthew, respectively, qualified as insured
    drivers under the SABS, in order to ultimately resolve the priority dispute
    under s. 268(2) of the
Insurance Act
.

[54]

This
    distinction was succinctly articulated by the appeal judge in the Dominion appeal
    as follows, at para. 21:

[T]his appeal involves more than the interpretation of a
    standard form contract; it involves the interpretation of provisions of the
    SABS and the
Insurance Act
. This appeal asks how the policy of
    insurance interacts with the legislative framework. Intact Insurance Company
    clearly finds that even extricable questions of law relating to the legislative
    framework are reviewed for reasonableness.

[55]

Neither
    appellant has identified an exceptional question that would serve to rebut the
    reasonableness standard. As such, the appeal judges were required to review the
    arbitral decisions in both cases from a deferential posture, to consider whether
    each decision fell within a range of reasonable outcomes.

[56]

The
    reasonableness standard of review that the appeal judges were required to apply
    in the present case was comprehensively described by D.M. Brown J. (as he then
    was) in
Zurich Insurance Company v. The Personal Insurance Company
,
    2009 CanLII 26362 (Ont. S. C.), at para. 20, in the context of an insurance
    arbitral decision concerning a priority dispute:

Reasonableness is the deferential standard and flows from the recognition
    that certain questions that come before administrative tribunals do not lend
    themselves to one specific, particular result, but to a number of possible,
    reasonable conclusions:
Dunsmuir
, para. 47. Reasonableness is
    concerned mostly with the existence of justification, transparency and
    intelligibility within the decision-making process, as well as with whether
    the decision falls within a range of possible, acceptable outcomes which are
    defensible in respect of the facts and law:
Dunsmuir
, para. 47. As
    re-iterated by the [Supreme] Court in
Khosa
, when applying a reasonableness
    standard:

[A]s long as the process and the
    outcome fit comfortably with the principles of justification, transparency and
    intelligibility, it is not open to a reviewing court to substitute its own view
    of a preferable outcome.

[57]

In
    the State Farm arbitration, the arbitrator was required to determine the
    question of whether Umberto Rupolo was an insured person under s. 3 of the SABS,
    the arbitrators home statute.

[58]

In
    my view, the appeal judge in the State Farm appeal erred in reviewing the arbitrators
    decision for correctness. There was no reason to displace the deference owed to
    the arbitrator, who was applying his home statute and his specialized expertise
    to the policy language
[1]
.
    The arbitrators decision was reasonable because it fell within a range of
    possible, acceptable outcomes which are defensible in respect of the facts and
    law:
Dunsmuir
, para. 47.

[59]

In
    these circumstances, the appeal judge in the State Farm appeal erred in
    substituting her interpretation for that of the arbitrator. Her decision must
    be set aside and the arbitrators decision restored.

[60]

The
    same legal issues were before the arbitrator in the Dominion arbitration. Specifically,
    the arbitrator was required to interpret and apply the meaning of insured
    person in accordance with his home statute and drawing on his specialized
    expertise.

[61]

As
    noted earlier, the arbitrator in the Dominion arbitration would have concluded
    that Matthew was an insured person, except for the fact that he was bound by
    the decision of the appeal judge in the State Farm appeal.

[62]

The
    appeal judge in the Dominion appeal, who was not similarly bound, appropriately
    applied the reasonableness standard of review. I see no error in her thorough
    review of the arbitrators decision. For the reasons that she expressed, I
    agree with her conclusion that the arbitrators underlying conclusion was
    reasonable.

Disposition

[63]

Accordingly,
    I would allow the State Farm appeal and dismiss the Dominion appeal.

[64]

The
    parties have agreed on the disposition of the costs of the appeals: State Farm
    is entitled to $15,000 and Belair is entitled to $15,000. Both amounts are
    inclusive of disbursements and applicable taxes. The parties also agreed that
    State Farm is entitled to the costs of the appeal below.

Released: February 2, 2018

L.B. Roberts
    J.A.

I agree Alexandra
    Hoy A.C.J.O.

I agree K. van
    Rensburg J.A.





[1]

I also note that the Certificate of Insurance at issue was not
    a standard form contract: its format was not prescribed under the
Insurance
    Act
nor followed by other insurance companies.


