[2009] O.J. No C.C.L.L (4th) CarswellOnt 4135 [2009] LL.R A.C.W.S. (3d) 188. Ontario Superior Court of Justice

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1 Page 1 ofll Case Name: Dominion of Canada General Insurance Co. v. Certas Direct Insurance Co. RE: The Dominion of Canada General Insurance Company, Appellant (Respondent on Cross-Appeal), and Certas Direct Insurance Company, Respondent (Appellant on Cross-Appeal) [2009] O.J. No C.C.L.L (4th) CarswellOnt 4135 [2009] LL.R A.C.W.S. (3d) 188 Court File No. CV Ontario Superior Court of Justice I.A. MacDonnell J. Heard: May 27, Judgment: July 15,2009. (42 paras.) Alternative dispute resolution -- Binding arbitration -- Appeals and judicial review -- Jurisdiction of court to review -- Review for lack or excess of jurisdiction -- Appeal by insurer fi-om arbitrator's ruling that it was not entitled to dispute priority between insurers for liability to pay statutory benefits allowed; cross-appeal by respondent insurer challenging arbitrator's ruling that appellant had complied with saving provisions regarding notice dismissed -- Once arbitrator determined that appellant had complied with saving provision permitting notice of dispute outside time specified, no time limit applied and arbitrator lackedjurisdiction not to extend time -- There was no error of law or wrong conclusion in arbitrator's determination that appellant complied with saving provisions -- Arbitrator applied proper test and his reasoning was compelling. Insurance law -- Automobile insurance -- Accident benefits -- Appeal by insurer from arbitrator's ruling that it was not entitled to dispute priority between insurers for liability to pay statutory benefits allowed; cross-appeal by respondent insurer challenging arbitrator's ruling that appellant had complied with saving provisions regarding notice dismissed -- Once arbitrator determined that appellant had complied with saving provision permitting notice of dispute outside time specified, no time limit applied and arbitrator lacked jurisdiction not to extend time -- There was no error of law or wrong conclusion in /2011

2 Page 2 of 11 arbitrator's determination that appellant complied with saving provisions -- Arbitrator applied proper test and his reasoning was compelling. Appeal by Dominion of Canada General Insurance Co. ("Dominion") from arbitrator's ruling that it had complied with saving provisions regarding notice, but was not entitled to serve notice disputing priority and cross-appeal by Certas Direct Insurance Company ("Certas") challenging arbitrator's ruling that Dominion had complied with saving provisions regarding notice. In November 2001, a motor vehicle which was insured by Dominion was involved in an accident in which a passenger suffered injuries. At the time of the accident, the passenger was legally married but living separate from her spouse who held a motor vehicle insurance policy with Certas under which she was insured. In December 2001, Dominion received a completed application for accident benefits from the passenger in which she indicated she was single and not covered under any other insurance policy. The passenger also indicated in an interview with an insurance adjuster with Dominion that she was single and had not owned or insured a vehicle at any time. Based on the passenger's answers in the application and interview, the adjuster determined that Dominion was first-in-line under the priority rules. The passenger subsequently commenced an action against Dominion arising out of her accident benefits claim and a tort action against the driver of the other vehicle. In April 2003, while being examined for discovery, the passenger made statements that suggested that at the time of the accident she was married. Approximately one year after discovering that the passenger was married, Dominion learned that her husband was insured by Certas and immediately provided Certas with written notice disputing priority. Certas disputed that Dominion had complied with the notice provisions of the priority regulation and the matter was referred to arbitration. The arbitrator determined that Dominion was misled by the incorrect application for insurance benefits, but that it had not simply relied on the truthfulness of the application and had conducted a reasonable investigation. The arbitrator also found that 90 days was not sufficient time to determine that another insurer might have had priority. However, the arbitrator further found determined that Dominion was barred from disputing priority as it did not move with reasonable diligence to dispute authority after learning the passenger might have been married at the time of the accident. HELD: Appeal allowed and cross-appeal dismissed. The arbitrator erred in ruling that Dominion was not entitled to dispute its responsibility for paying the passenger's accident benefits. The arbitrator determined that Dominion had complied with the priority regulation, but rather than giving effect to that determination by resolving the dispute in Dominion's favour, the arbitrator held that he had the authority not to extend the time frame for giving notice and in doing so he exceeded his authority under the legislation and the arbitration agreement. The arbitrator's task was not to decide if the limitation period for disputing priority should be extended, but rather whether it applied at all. If the arbitrator determined that the saving provisions had been complied with, an insurer could dispute priority not because the time limited for so doing had been extended but because no time limited applied. In making the decision he did, the arbitrator both assumed a jurisdiction he did not have and failed to exercise the jurisdiction he did have. The arbitrator made no error of law or came to any wrong conclusion in determining that Dominion had complied with the saving provisions regarding notice as he properly applied the first branch of the test and his reasoning with respect to the reasonableness of the investigation conducted by Dominion was compelling. Statutes, Regulations and Rules Cited: Arbitration Act, 1991, , c. 17, s. 45(2), s. 45(3) Insurance Act, R , c. I.8, s. 268, s. 268(2) Ontario Regulation 283/95, s. 1, s. 2, s. 3(1), s. 3(2), s. 3(2)(a), s. 3(2)(b), s. 3(3), s /03/2011

3 Page 3 of 11 Ontario Regulation 403/96, Counsel: D'Arcy McGoey, for the Appellant (Respondent on Cross-Appeal). Sean A. Brown, for the Respondent (Appellant on Cross-Appeal). ENDORSEMENT 1 I.A. MacDONNELL J.:-- This is an appeal by The Dominion of Canada General Insurance Company ("Dominion") from a decision in an arbitration conducted pursuant to ss. 3(3) and 7 of Ontario Regulation 283/95 ("the Priority Regulation"), made under the Insurance Act, R.S.O. 1990, chapter 1.8. The purpose of the arbitration was to resolve a dispute between Dominion and the respondent Certas Direct Insurance Company ("Certas") as to who was liable to pay a claim for statutory accident benefits. The specific question presented to the arbitrator was whether Dominion, which had not served a notice disputing its liability to pay within the 90-day period required by ss. 3(1) of the Priority Regulation, had complied with the saving provisions of ss. 3(2). 2 The arbitrator ruled that Dominion had complied with ss. 3(2). Nonetheless, he held that Dominion was not entitled to serve a notice disputing priority. Dominion challenges that determination. In response, Certas submits that the arbitrator correctly held that Dominion could not dispute priority, but in the alternative brings a cross-appeal to challenge the arbitrator's initial ruling that Dominion had complied with ss. 3(2). A. The Background 3 Pursuant to the motor vehicle insurance scheme in force in Ontario, a person injured in a motor vehicle accident is entitled to accident benefits, regardless of fault. In most cases, those benefits are available from the person's own insurer or from the insurer of the vehicle in which he or she was an occupant. Under the scheme, however, there may be several insurers who are potentially responsible for payment. To deal with this situation, ss. 268(2) of the Insurance Act provides a set of 4 'priority rules' for the determination of which insurer will be liable. Only the first two rules are relevant in this case. Under the first rule, an occupant of a motor vehicle "has recourse against the insurer of an automobile in respect of which the occupant is an insured". The second rule provides that "if recovery is unavailable under [the first rule 1 the occupant has recourse against the insurer of the automobile in which he or she was an occupant". 4 To ensure that accident victims are not caught in the middle of disputes among insurance companies with respect to the application of the priority rules, s. 2 of the Priority Regulation provides that the first insurer to receive a completed application is responsible for payment of accident benefits pending the resolution of any dispute as to priority. If that insurer claims that another insurer has a higher priority, it must give written notice to the other insurer within 90 days of receiving the application. If it fails to do so, it may not dispute its obligation to pay unless it can bring itself within ss. 3(2) ofthe Priority Regulation, which provides that an insurer may give notice after the 90-day period if (a) 90 days was not sufficient to make a determination that another insurer had priority, and (b) within the 90-day period, the insurer made the reasonable investigations necessary to determine if another insurer was liable %3 A /03/2011

4 Page 4 of 11 5 On November 9, 2001, a motor vehicle in which Julia Gordyukova was a passenger was involved in an accident and Ms. Gordyukova suffered injuries. Dominion was the insurer of that motor vehicle, and therefore under the second rule described above it was potentially liable for her statutory accident benefits. Dominion was only liable, however, if Ms. Gordyukova did not have "recourse against the insurer of an automobile in respect of which [she was] an insured". At the time of the accident, Ms. Gordyukova was legally married to but living separate from John Nanos, who held a motor vehicle insurance policy with Certas. Pursuant to the definition of insured in the statutory accidents benefits schedule, 1 Ms. Gordyukova was an insured under Mr. Nanos's policy. Accordingly, Certas's obligation to pay Ms. Gordyukova's statutory benefits was first-in-line under the priority rules. 6 On December 10,2001, Dominion received a completed application for accident benefits from Ms. Gordyukova. The form that Ms. Gordyukova submitted required her to declare her marital status. Six options were provided, namely "single", "married", "common-law", "separated", "divorced" and "widow (er)". Ms. Gordyukova put an "x" in the box beside "single". The form also contains a section headed "Details of Automobile Insurance". Under that heading, the form states: In order to determine which automobile insurer is responsible for paying benefits, it is necessary to know whether you have your own policy or whether you are covered by someone else's insurance. To help make that determination, please complete the following: Are you covered under any of the following automobile insurance policies? Your own policy Your spouse's policy The policy of any person on whom you are dependent (e.g. - a parent) A policy that lists you as a driver (i.e. a company vehicle) Ms. Gordyukova answered "No" to each of those questions. 7 In addition, the application form contained a section dealing with income tax status. Under the question "Marital status for tax purposes?" were three options: "Single", "Married" and "Equivalent to Married". Ms. Gordyukovaput an "x" beside "Single". 8 Prior to receiving Ms. Gordyukova's application, Dominion became aware that she might make a claim for accident benefits. On November 29,2001, Lilya Kogut, the adjuster with responsibility for the file, assigned Angie Giuntoli to interview Ms. Gordyukova. On December l3, Mr. Giuntoli met with Ms. Gordyukova for an hour and a half to two hours and took a detailed statement from her, which Ms. Gordyukova signed. In that statement, Ms. Gordyukova stated: I am not married and I do not have any children. I do not live common law with anyone, I live reside alone at 393 King Street West... I have resided at this address fro the past two years. I have not owned or insured a vehicle at any time.. 9 Based on the assertions made by Ms. Gordyukova in her Application for Benefits and in her December l3, 2001 statement, Ms. Kogut determined that she was not married and that Dominion was first-in-line under the priority rules. Accordingly, Dominion did not dispute its obligation to pay accident benefits. obhandle= 1843 %3A /2011

5 Page 5 of Subsequently, Ms. Gordyukova commenced an action against Dominion arising out of her accident benefits claim. She also brought a tort action against the driver of the other vehicle involved in the accident. On April 30, 2003, while being examined for discovery by counsel for the tort defendant, in the presence of counsel for Dominion, Ms Gordyukova made statements suggesting that she might have been married to Mr. Nanos at the time of the accident. Within days of this revelation, counsel for Dominion recommended to his client that an investigator be retained immediately to locate Mr. Nanos to detennine whether he had insurance at the material time. About five weeks later, Dominion's adjuster agreed to do this. For reasons that are not apparent, an investigator was not retained until November That investigator made cursory efforts to find Mr. Nanos. On March 30, 2004, Dominion retained another investigator. On the same day Ms. Gordyukova's lawyer agreed to make best efforts to obtain insurance particulars ofmr. Nanos. On April 28, 2004, some 25 months after the 90 day period for disputing priority had expired, and almost exactly a year after discovering the possibility that Ms. Gordyukova was married, Dominion learned that Mr. Nanos was insured by Certas. Dominion immediately provided Certas with written notice disputing priority. B. The Arbitration 11 Obviously, Dominion had not given Certas written notice within the 90-day period set forth in ss. 3 (I) of the Priority Regulation. It claimed, however, to be entitled to do so after the expiry of that time period on the basis of ss. 3(2). Certas did not accept that Dominion had complied with the requirements of that provision. 12 Section I of the Priority Regulation provides that "all disputes as to which insurer is required to pay benefits under s. 268 of the Act shall be settled in accordance with this Regulation." The dispute as to whether Dominion or Certas was required to pay was with respect to whether Dominion had complied with ss. 3(2) of the Regulation. Subsection 3(3) provides that such a dispute "shall be resolved in an arbitration under section 7". Section 7 provides that the arbitration is to be conducted under the Arbitration Act, Accordingly, on July 15, 2005, Dominion and Certas entered into an arbitration agreement for the resolution of, inter alia, the following question: Did Dominion of Canada serve a Notice of Dispute within the time frame required as set out in Regulation 28/95 [sic], and if not, do the saving provisions apply? [emphasis added] 13 While on its face, that question contained two parts, the only live issue was with respect to the second, namely whether the saving provisions of ss. 3(2) applied. 14 The arbitration hearing proceeded on July 17,2007 and February 12,2008. Both viva voce and documentary evidence were presented to the arbitrator. On May 23, 2008, the arbitrator released his decision. With respect to the question submitted to him pursuant to the arbitration agreement, the arbitrator stated: With regard to the 90 day issue, I am satisfied that Dominion has satisfied both parts of the test. It conducted what was in the circumstances of this particular case, a reasonable investigation. It was mislead [sic] by the incorrect application for accident benefits form. This is a factor to be considered but not in and of itself necessarily sufficient reason to extend the 90 day notice period. An insurer can not simply sit back and basically do no investigation (see: Primmum Insurance Company o/canada vs. Aviva Insurance Company o/canada, decision of Justice Ducharme released April 7, 2005, court file 04-CV (M2)). However, in our particular case Dominion did more than simply rely on the truthfulness of the application. It obtained 09/

6 Page 6 of 11 a signed statement wherein the applicant said she was not married, not living common law and had no children. Counsel for Certas suggested that the adjuster taking the signed statement should have explained the importance of the question as they related to priority, and also listed the various categories of married status, such as "separated" etc. One must remember that the test is one of reasonable and is not perfection, and in this case I find that the adjuster acted reasonably in what was already a one and half to two hour meeting. I am also satisfied in the circumstances, 90 days was not sufficient time to determine that another insurer might have been in priority. Certainly, more inquiries could have been made, but at some point a decision has to be made that sufficient information has been obtained and the adjuster moves on to providing the benefits and otherwise adjusting the file. Insurance companies do not have unlimited resources to investigate every potential lead. Here Dominion had no real reason to conduct any further investigation when it made the decision that it did. 15 However, notwithstanding that conclusion, the arbitrator ruled that "Dominion is barred from disputing its obligation to pay accident benefits for its failure to comply with Regulation 283/95." In his view, Dominion did not move with reasonable diligence to dispute priority after learning in April 2003 that Ms. Gordyukova might have been married at the time ofthe accident. He held that he was entitled to take that lack of diligence into account in determining whether to "extend" the time frame for disputing priority. He reasoned as follows: Counsel for Dominion submits that having decided Dominion had satisfied the 90 day test, that is the end of the inquiry and they must be allowed to pursue their claim by way of this arbitration. Counsel cites section 3(2) of Regulation 283/95 which states "an insurer may give notice after the 90 day period if" and then goes on to state the two-part test. This does not, in my view, exclude the arbitrator from examining what transj)ired after the 90 days in order to determine ifthe arbitration should be allowed to proceed. If the insurer acts with reasonable diligence after discovering the new information, outside the 90 days, then the arbitrator should grant the extension. If, however, the insurer comes across new information outside the 90 day period, but then still delays for an umeasonable J)eriod of time, the arbitrator has the discretion not to extend the time frame. As arbitrators and judges have commented upon on numerous occasions, there is a need for certainty and closure in these matters. While I am prepared to allow some latitude for delays in conducting investigations, and taking into account busy schedules and lack of co-operation in the part of nonparties, I am troubled by the length of delay from April 2003, when the presence of John Nanos first became known, until April 2004 when notice was finally given. There was, in my view, an umeasonable delay in retaining investigators to locate Mr. Nanos and determine his insurance particulars. In light of the above, I am not prepared to extend the time for proceeding with the arbitration and accordingly Dominion may not continue with the arbitration against Certas. [emphasis added] /2011

7 Page 7 of 11 C. Discussion (i) The Standard of Review 16 Pursuant to ss. 45(2) and (3) ofthe Arbitration Act. 1991, a party to an arbitration may appeal to the Superior Court of Justice on a question oflaw, a question of fact or a question of mixed fact and law, if the arbitration agreement so provides. The agreement in this case provided that "either party may appeal the decision [of the arbitrator] within thirty days... on a question oflaw or mixed fact and law." 17 The issue raised by Dominion is whether the arbitrator exceeded his jurisdiction in holding that, notwithstanding that it had established compliance with ss. 3(2) of the Priority Regulation, it was barred from disputing its obligation to pay accident benefits to Ms. Gordyukova. That is a question oflaw. The parties agree that with respect to questions of law the standard of review is correctness. 18 On its cross-appeal, Certas raises both an issue oflaw and issues of mixed fact and law. The issue oflaw concerns the arbitrator's interpretation of ss. 3(2)(a) of the Priority Regulation. As I have said, the standard of review in relation to issues of law is correctness. The parties disagree with respect to the standard of review on questions of mixed fact and law. Relying on, inter alia, the decision of Strathy J. in Lombard Canada Limited v. Royal & SunAlliance Insurance Company and Motor Vehicle Accident Claims Fund (2008),94 O.R. (3d) 62, at paragraph 42 (Sup. Ct.), Certas submits that the standard is correctness. Relying on, inter alia, the decision of D. Brown, J. in Zurich Insurance Company v. The Personal Insurance Company, [2009] O.J. 2157, at paragraph 29 (Sup. Ct.), Dominion submits that the standard is reasonableness. 19 In the circumstances of this case, I do not find it necessary to resolve that issue because regardless of which standard applies, the result is the same. As I will explain, assuming that the determination that Dominion complied with ss. 3(2) is to be reviewed on a standard of correctness, I conclude that the arbitrator's decision was correct. (ii) Dominion's Appeal 20 In my respectful view, the arbitrator erred in ruling that Dominion was not entitled to dispute its responsibility for paying Ms. Gordyukova's accident benefits. 21 An arbitrator has no inherent jurisdiction. An arbitral tribunal gets its jurisdiction only from the instrument appointing it (either an agreement or a statute): see, e.g., Cumandra v. Cumandra, [2004] 0.1. No (Sup. Ct.); Canadian Musical Reproduction Rights Agency Ltd. v. Canadian Recording Industry Assn [2005] OJ. No. 6387, at paragraph 9 (Sup. Ct.); Re Ozark Farms Ltd. and Sarno Investments Ltd., [1963] 0.1. No. 726, [1963]2 OR 315 (H.C.J.). 22 In Faubert & Wattsv. Temagami Mining Co.,[1959] 0.1. No. 29,17 D.L.R. (2d) 246 (Ont. c.a.), affirmed [1960] S.C.R. 235, Laidlaw 1.A. stated, at paragraph 29: It is necessary to bear in mind certain rules and principles to which I shall make brief reference. Firstly, an "important rule is that the arbitrator must decide neither more nor less than the dispute submitted to him, otherwise the award may be set aside." Russell on Arbitration, Sixteenth Edition, p "An award which does not decide the differences referred to arbitration is bad and unenforceable. So also is an award which purports to determine matters not comprised in the agreement of reference... " Halsbury's Laws of England, 3rd Ed. Vol. 2, p. 43, 97. Another important rule is stated in these words: "On a reference on the ordinary terms, the arbitrator must 09/03/2011

8 Page 8 of 11 decide the very question submitted to him, and is not justified in lieu thereof in directing what seems to him an equitable arrangement on the whole." Russell on Arbitration, Sixteenth Edition, p See also Jager v. Tolme (1916) 1 K.B. 939, in which it was held that an award substituting a new contract for the old was bad in the particular circumstances of the case. It has also been stated with authority that "it is the duty of an arbitrator, in the absence of express provision in the submission to the contrary, to decide the question submitted to him according to the legal rights of the parties, and not according to what he may consider fair and reasonable under the circumstances." Jager v. Tolme, supra. See also Vulcaan v. Mowinckels Rederi Als, etc. (1938) 2 All E.R [emphasis added] 23 The dispute with respect to who should pay Ms. Gordyukova's accident benefits revolved around a single issue: had Dominion established compliance with ss. 3(2) of the Priority Regulation. That was the question contemplated by ss. 3(3), and more importantly it was the question submitted to the arbitrator in the arbitration agreement. The arbitrator answered that question in the affirmative. However, rather than giving effect to that determination by resolving the priority dispute in Dominion's favour, the arbitrator held that he had the authority "not to extend the time frame" for giving notice. In that respect, he exceeded his authority under the legislation and the arbitration agreement. 24 As I read his reasons, the arbitrator held that he had a discretion with respect to whether the 90-day period set forth in ss. 3(1) should be extended. In the course of its submissions in support ofthe arbitrator's decision, Certas submitted that pursuant to ss. 3(2) an arbitrator can not only "determine if the time for giving notice will be extended beyond the 90 day time frame [but also] to what date the extension will be granted. "2 It submitted that "there is nothing within section 3(2)... which states that the arbitrator must extend the time to give notice to the date that notice was actually given. It merely states that the Arbitrator must decide ifthe time for giving notice will be extended.'" [italics in the original] 25 In my view, both the arbitrator and Certas misconceive the effect of ss. 3(1) and (2) of the Priority Regulation. The Regulation does not state "that the Arbitrator must decide if the time for giving notice will be extended". Rather, it provides that in the circumstances set out in ss. 3(2), the 90-day limitation period set forth in ss. 3(1) does not apply. If there is a dispute with respect to whether those circumstances exist, the issue is referred to an arbitrator. When that occurs, the arbitrator is not called upon to exercise a discretion but rather to decide if ss. 3(2) has been complied with. That is, the task of the arbitrator is not to decide whether the 90-day limitation period for disputing priority should be extended but rather whether it applies at all. If the arbitrator decides that ss. 3(2) has been complied with, an insurer may dispute priority, not because the time for so doing has been extended but because no time limit is applicable. 26 In taking the approach that he did, the arbitrator effectively rewrote the regulatory scheme. The Legislature has decided that an insurer who receives an application for accident benefits may serve a notice disputing priority outside of the initial 90-day window if two criteria can be established. In essence, the arbitrator amended the scheme by adding a third criterion, namely a requirement that the insurer move with reasonable dispatch after discovering that another insurer may be liable. It may well be that this would be a sensible and fair amendment, but it was not the arbitrator's function to make it. Both under the arbitration agreement and ss. 3(3) of the Regulation, the task he was assigned was confined to determining whether Dominion had complied with ss. 3(2). 27 Counsel for Certas submits that arbitrators have broad authority to decide questions that arise out of priority disputes: Primmum Insurance Company v. ING Insurance Company o/canada, [2007] O.J. obhandle= 1843 %3 A /

9 Page 9 of 11 No. 413 (Sup. Ct.) at paragraphs I accept that submission, subject to the obvious qualification that the questions must be ones that are necessary to resolve the dispute that has been submitted to the arbitrator. The authority cannot be construed as a source of general jurisdiction to resolve a different dispute, or as a basis for doing whatever the arbitrator feels is fair and reasonable. 28 The issue before the arbitrator, as framed by the arbitration agreement and as contemplated by the Priority Regulation, was narrow. The arbitrator resolved that issue. Unfortunately, rather than proceeding to make an award based on that determination, he took it upon himself to consider a separate and distinct issue, namely whether the result was fair. That was not an issue that he was entitled to consider. In doing so, he both assumed a jurisdiction that he did not have and failed to exercise the jurisdiction that he did have. (iii) The Cross-appeal by Certas 29 On its cross-appeal, Certas submits that the arbitrator erred in holding that Dominion had established compliance with the two-part test set forth in ss. 3(2) of the Priority Regulation. In this respect, Certas makes two submissions. 30 First, Certas submits that the arbitrator misconceived ss. 3(2)(a), which requires that it be shown that "90 days was not a sufficient period of time to make a determination that that another insurer or insurers is liable under s. 268 of the Act". Certas submits that this requirement could not be satisfied in this case because Dominion did in fact make a determination, albeit an incorrect one, within 90 days. This submission raises a question of law and it is common ground that the standard of review is correctness. 31 Second, Certas submits that the arbitrator erred in holding, on the facts of this case, (i) that 90 days was not sufficient for Dominion to make the determination referred to in ss. 3(2)(a), and (ii) that Dominion had made the reasonable investigations referred to in ss. 3(2)(b). This submission raises questions of mixed fact and law. As I indicated earlier, I am prepared to assume that the standard of review on those questions is correctness. 32 With respect to its first submission, Certas argues that "the focus of the inquiry [under ss. 3(2)(a)] is not necessarily whether 90 days was enough time for an insurer to make the correct determination [of priority] but rather, whether that time frame is sufficient to allow the insurer to gather the necessary information to make a determination. "4 (emphasis in the original) Certas states: It is respectfully submitted that Arbitrator Jones was incorrect when he failed to find that Dominion had, in fact, made a determination of priority within 90 days of receiving the Application. Having found that Dominion had made a determination within 90 days, Arbitrator Jones should not have decided that 90 days was not a sufficient period of time to make a determination If Certas is arguing that it is irrelevant that inaccurate information with respect to marital status is provided to an insurer by a claimant for accident benefits, and irrelevant that the insurer reasonably relies on that information in accepting responsibility to pay accident benefits, I disagree. The same argument was rejected by Justice Ducharme in Re Primmum Insurance Co. and Aviva Insurance Co. of Canada, [2005] O.J. No In that case, Justice Ducharme stated, at paragraph 24: Obviously incomplete or inaccurate reporting of material facts by an insured may adversely impact the ability of an insurer to gather the requisite facts needed to assess the liability of the various potentially involved insurance policies rendering the 90- day period insufficient. The fact that a determination was made within the 90 day 0 bhandle= 1843 %3A /

10 Page 10 of11 should not be determinative. The Arbitrator erred in concluding that this fact precluded Primmum from satisfying s. 3(2)(l)Jsic]. [emphasis added] 34 Justice Ducharme's conclusion is consistent with common sense and I see no reason not to adopt it. I reject the submission that the arbitrator misconceived the first branch of the test set forth in ss. 3(2). 35 With respect to Certas's second submission, counsel submitted that the information that would have led Dominion to the realization that Certas was first-in-line under the priority rules was available to Dominion within the 90-day period if only it had asked the right questions. He noted that in the interview of December 13, 2001, Ms. Giuntoli did not specifically ask Ms. Gordyukova if she was separated. He also noted that Dominion failed to pick up on the fact that the T1 that Ms. Gordyukova submitted to Dominion along with her application for benefits indicated that she was separated. He submitted that the inference that the arbitrator should have drawn is that Dominion failed to conduct the kind of "searching assessment" contemplated by cases such as Re Primmum Insurance Co. and Aviva Insurance Co. of Canada, supra. 36 In his ss. 3(2) analysis, the arbitrator specifically referred to both of the circumstances mentioned by counsel. With respect to whether Ms. Giuntoli might have asked a further question, he stated: While, with the benefit of hindsight, this might have been desirable, one must look at what is reasonable in each particular case. I accept Ms. Giuntoli's evidence that Ms. Gordyukova seemed quite capable of understanding and answering the questions. Ms. Giuntoli covered off the various ways that Ms. Gordyukova could have been considered married, for the purposes of the statutory accident benefits schedule in that she asked if she was living common law, or had children. Ms. Gordyukova clearly stated that she was not married. In the particular circumstances of this case I am satisfied that what Ms. Giuntoli did was reasonable. 37 With respect to the submission that the T1 should have put Dominion on notice that there was an issue concerning Ms. Gordyukova's marital status, the arbitrator observed: The accident was in 200 I and the tax form was for the year prior to the accident and so it is not inconsistent with what Ms. Gordyukova indicated in her application for accident benefits and her signed statements. One must be very careful when reviewing, in hindsight, the actions of an extremely busy accident benefits adjuster. While there was, of course, no inconsistency with the 2000 income tax retum, there were other documents that came in subsequently, which supported the theory that she was not married. For example, an "in home assessment" report dated December 24, 2001, indicated that Ms. Gordyukova was a "single female" and a "Home Functional Assessment" indicated that the claimant "lives alone". 38 As I have said, I am prepared to assume that no deference is owed to the arbitrator's assessment of those issues. However, I find his reasoning compelling and I agree with it. As he pointed out, the standard expected of an insurer under ss. 3(2) is not perfection. In Re Primmum Insurance Co. and Aviva Insurance Co. of Canada, supra, Justice Ducharme stated, at paragraph 31 : In considering the adequacy of the investigation it is important to stress that section 3 (2)(b) requires that the investigation be "reasonable," not that it be perfect. This could not be otherwise since, when viewed through the often omniscient lens of hindsight, it would be the rare investigation that could not be improved upon. In making this assessment of reasonableness, it is appropriate to consider both what was done to /2011

11 Page 11 of 11 investigate the claim as well as what was not done. As is evident, from the passage of his reasons quoted at paragraph 15, supra, this is precisely the approach taken by the Arbitrator. I see no error in either his approach or his conclusion 39 Certas has not persuaded me that the arbitrator made any error of law or came to any wrong conclusion on the issues presented to him in relation to ss. 3(2). Having reviewed the evidence in relation to those issues, I would reach the same conclusion as did the arbitrator. D. Disposition 40 Dominion's appeal succeeds and the cross-appeal is dismissed. The matter is remitted to the arbitrator to continue with the arbitration in accordance with these reasons. 41 I would expect that counsel can agree on the costs of this appeal. In the unlikely event that they cannot, Dominion may file submissions, not to exceed two pages double spaced exclusive of a costs outline, within 30 days of the release of this endorsement. Certas may file a response within 15 days thereafter. 42 This matter has been argued in an able and helpful manner, and I am obliged to both Mr. McGoey and Mr. Brown. LA. MacDONNELL J. cp/e/qlafr/qljxr/qlmxb/qlaxw/qlcntlqlaxr/qlhcs/qlcal I Ontario Regulation 403/96. 2 Certas factum, paragraph 48 3 Ibid, paragraph 49 4 at paragraph 83 of its factum. 5 at paragraphs 86 and /2011