Determination of the validity of a policy termination may not be suitable for resolution by summary trial
Summary judgment application by the insurer on the basis that the action was untenable at law. The Court dismissed the motion finding that there was a tenable action, and that there were genuine issues, including the validity of a policy termination, which required a trial.
Ontario (Minister of Finance) v. Traders General Insurance Co. (c.o.b. Aviva Traders) [2011] O.J. No. 3506, July 8, 2011, Ontario Superior Court of Justice, D.S. Gunsolus J.
Mark Apollinaro was driving a vehicle owned by Peter Leonard when he lost control and the vehicle struck a tree. Mr. Apollinaro died and Dragan Bogdanovic, a passenger in the vehicle, was rendered a quadriplegic.
Although the vehicle was owned by Mr. Leonard, his wife, Anne Leonard, was the named insured under the policy. Two months prior to the accident, Ms. Leonard received a registered letter from the insurer cancelling the policy for non-payment of premiums. Ms. Leonard called the insurer to indicate that she wished to reinstate her insurance. The insurer advised Ms. Leonard that if she sent $455.64 in guaranteed funds to the insurer by the end of the week, the policy would be reinstated. No funds were sent to the insurer.
Mr. Bogdanovic applied to the Motor Vehicle Accident Claims Fund (the “Fund”) for payment of statutory accident benefits and started a tort action against Mr. Apollinaro and Mr. Leonard. The Fund defended the action on behalf of Mr. Apollinaro. The tort action and the benefits claim were settled and the Fund subsequently paid the monies to Mr. Bogdanovic.
The Fund was not satisfied that the insurer validly terminated the insurance policy and the Minister of Finance (who was responsible for administration of the Motor Vehicle Accident Claims Fund) commenced an action against the insurer claiming that the insurer did insure the vehicle at the time of the accident and sought restitution from the insurer for the judgment the Fund paid to Mr. Bogdanovic.
The insurer brought a summary judgment application on the basis that the action was untenable at law. Three arguments were advanced by the insurer: the Minister had no status to bring the action, the limitation period had expired, and the insurance policy was validly terminated for non-payment.
The Court held that although the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M. 41 contains no specific mechanism for the Minister to commence an action against an insurance company for the reimbursement of funds it has paid out, the Act does not prohibit the Minister from instituting common law actions, including a restitution action.
The former limitation period of six years was held to apply by virtue of sections 24(2) and (4) of the Limitations Act, S.O. 2002, C. 24 Schedule B. The cause of action arose in April 2003, when Mr. Bogdanovic applied to the Fund for payment of the judgment, or in May 2003, when the Fund paid the judgment. The action was commenced in December 2006.
Lastly, the Court found that there were genuine issues requiring a trial. The record before the Court did not explain why Ms. Leonard was listed as the named insured on an “owner’s policy” when Mr. Leonard was the owner of the vehicle. The validity of the termination would likely flow from the answer to that question. The Court concluded that that question could only be determined with the forensic machinery of a trial. Thus, the insurer’s motion was dismissed.
This case was digested by Aaron D. Atkinson and edited by David W. Pilley of Harper Grey LLP.
