Ing Insurance Company of Canada v. Co-Operators Insurance Company, 2013 ONSC 4885

CITATION: Ing Insurance Company of Canada v. Co-Operators Insurance Company, 2013 ONSC 4885 COURT FILE NO.: 8589/12 DATE: 20130911 ONTARIO SUPERIOR COURT OF JUSTICE IN THE MATTER OF

SECTION 268 OF THE INSURANCE ACT, R.S.O. 1990, C. I.8 , AND O. REG. 283/95 thereunder; AND IN THE MATTER OF AN APPLICATION UNDER

SECTION 45 OF THE ARBITRATION ACT, 1991, S.O. 1991, C. 17. B E T W E E N: ) ) Ing Insurance Company of Canada ) ) ) D.A. Wallace and Sean Millar, for the Applicant ) Applicant ) ) - and - ) ) ) The Co-Operators Insurance Company ) ) ) M. K. Donaldson, for the Respondent ) Respondent ) ) ) ) HEARD: July 8, 2013 LEITCH J. [ 1 ] The applicant appeals the award of arbitrator Bruce Robinson dated September 28, 2012. In his award, the arbitrator concluded that Amy Gordon and Jason Orr were “spouses” under the Insurance Act , R.S.O. 1990, c.

I.8 (“the Act ”). [ 2 ] As a result of the arbitrator’s finding, the applicant is liable to pay statutory accident benefits to Jason Orr arising out of injuries he sustained in a motor vehicle accident on May 28, 2008. [ 3 ] Mr. Donaldson, on behalf of the respondent, agreed that if the appeal is allowed, the appropriate relief is as requested by Mr. Wallace on behalf of the applicant.

That is, the award of the arbitrator will be set aside and a declaration made that Amy Gordon and Jason Orr were not spouses at the time of the accident, with the result that the applicant is not liable to pay accident benefits to Jason Orr arising out of injuries sustained in the motor vehicle accident on May 28, 2008. Standard of Review

[4] The standard of review of an arbitrator’s award is correctness in relation to questions of law and reasonableness in relation toquestions of mixed fact and law: see Zurich Insurance Co. v. Personal Insurance Co., (ON SC), 73 C.C.L.I. (4th)301 (Ont. S.C.), at para. 29, citing Oxford Mutual Insurance Co. v. Co-operators General Insurance Co. (2006), (ON CA), 83 O.R. (3d) 591 (C.A.). [5] The arbitrator’s

interpretation of the term “spouse” in s. 224(1) of the Act is challenged on this appeal. This is a clear question ofstatutory

interpretation, which is a question of general law outside the arbitrator’s specialized area of expertise. As a result, the allegederror committed by the arbitrator is one of law and should be scrutinized under a correctness standard. [6] As outlined by the Supreme Court of Canada in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at para. 50: When applying the correctness standard, a reviewing court will not show deference to the decision maker’s reasoning process; it willrather undertake its own analysis of the question.

The analysis will bring the court to decide whether it agrees with the determination ofa decision maker; if not, the court will substitute its own view and provide the correct answer. From the outset, the court must askwhether the tribunal’s decision was correct.

The Relevant Definition in Issue [7] For the purpose of this appeal, a “spouse” is defined under s. 224(1) of the Act as either of two persons who have lived togethercontinuously in a conjugal relationship outside marriage for a period of not less than three years. [8] Jason Orr and Amy Gordon were not married and thus, in order to be “spouses”, they must have lived together continuously andin a conjugal relationship for the three- year period prior to the motor vehicle accident on May 28, 2008.

The Arbitrator’s Award [9] The arbitrator considered the agreed statement of facts filed by the parties, as well as the evidence of Jason Orr, Amy Gordon,Jason Orr’s parents, and Amy Gordon’s mother.

As he noted, there was “little, if any, conflict between the parties with regard to thefacts leading up to the accident”. [10] The arbitrator found that Amy Gordon and Jason Orr, who were both 20 years of age at the time of the accident, “had been in acontinuous, exclusive and supportive relationship from the age of 13”. [11] He found that their “conjugal relationship started when they were approximately 15 years of age.

As time progressed, theirrelationship blossomed from a boyfriend/girlfriend relationship to a mature and adult relationship”. [12] The arbitrator referred to the dictionary definition of “conjugal” as an adjective meaning “relating to marriage or the relationshipbetween husband and wife”. [13] The arbitrator referred to the Supreme Court of Canada’s decision in M. v. H., (SCC), [1999] 2 S.C.R. 3, wherethe court at para. 59 referenced Molodowich v. Penttinen (1980), (ON SC), 17 R.F.L. (2d) 376 (Ont. Dist.

Ct.), whichsets out the generally accepted characteristics of a conjugal relationship. [14] The arbitrator then applied each of these criteria to the relationship between Amy Gordon and Jason Orr. [15] The arbitrator also referenced a list of criteria arbitrators have used in considering spousal relationships: duration of relationship,existence of children, stability of the relationship, inter-dependence of the parties, co-habitation, conjugal relationship, personal relations,responsibility for household services, interaction in a family in a social context, financial arrangements and support, responsibilitytowards children, temporary interruptions and physical living arrangements, the expectation of the parties, and the intention of theparties. [16] He ultimately concluded that Amy Gordon and Jason Orr were spouses under the Act.

The Grounds of Appeal [17] The applicant submits that the arbitrator erred by failing to determine precisely when Jason Orr and Amy Gordon began livingtogether in a conjugal relationship continuously; by failing to analyze the nature of the relationship for the full three years preceding theaccident; by misinterpreting the legal meaning of “conjugal”; and by improperly expanding the scope of “spouse” under the Act contraryto the legislature’s intention. [18] With respect to the latter assertion, I do not agree with the applicant’s contention that the arbitrator improperly expanded thescope of “spouse” under the Act contrary to the legislature’s intention.

Rather, it is clear from his reasons that the arbitrator was awarethat in order for him to find that Jason Orr and Amy Gordon were spouses, he had to find that they lived together, that their relationshipwas conjugal, and that they had lived together continuously for three years prior to the accident. [19] With respect to the assertion that the arbitrator misinterpreted the meaning of the word “conjugal”, the applicant suggested thatthe arbitrator confused the meaning of the word “conjugal” with “sexual” because the evidence indicated that the sexual relationshipbetween Jason Orr and Amy Gordon started at 15 years of age, the same age at which the arbitrator made his finding that their conjugalrelationship started. [20] The arguments on the appeal focused on the applicant’s submission that the arbitrator failed to analyze when the conjugalrelationship began and failed in his determinations of “living together continuously” and “conjugal”.

Summary of Facts Relating to the Issue on the Arbitration

[ 21 ] As of the date three years prior to the accident (that is May 28, 2005), Jason Orr and Amy Gordon were 17 and in grade 11 at the same high school. [ 22 ] Jason Orr lived with his parents. [ 23 ] In January 2005, Amy, then 16, moved out of her family’s home. She lived with her friend’s family on a full-time basis until September 2005, at which time when she returned to her own family’s home.

While living with her friend’s family, and then after returning to her own family’s home in September 2005, Amy spent weekends and holidays at the Orr residence. [ 24 ] After she turned 18 in February 2006, Amy spent a couple of nights per week at the Orr residence if Jason had a day off, in addition to the weekends. [ 25 ] In November 2007, Amy’s family moved to another community and she continued to live at her family’s old home on the same basis as she had previously.

According to Amy’s mother, between November 2007 and May 2008, Amy spent approximately three nights per week at her mother’s residence and the remaining other nights at the Orr residence.

Amy estimated that during that time period, she spent 70% of her nights sleeping over with Jason at her family’s old home (prior to its sale in February 2008) or at the Orr residence. [ 26 ] For the month of April 2008, Amy stayed weeknights at the Orr residence approximately 50% of the time and returned to her family’s home for the remaining weekdays. [ 27 ] Amy did not move out entirely from her family’s home prior to the accident. [ 28 ] Jason’s family paid for his food, shelter, and household expenses. [ 29 ] Amy kept her clothes spread evenly between her family’s home and the Orr residence.

She had toiletries, a television, and a futon couch at the Orr residence. [ 30 ] While Jason Orr’s mother had designated a separate room for Amy to sleep in, Jason and Amy would often sleep in the same room. [ 31 ] After completing grade 11, Jason worked full-time at a restaurant; however, he did not make any financial contribution to Amy’s tuition or books while she attended school. [ 32 ] Amy worked full-time in the summers and after graduating from high school, she attended community college and worked part- time until she obtained a full-time position shortly after the accident. [ 33 ] Amy received a car from her stepfather.

On her application for car insurance, which she paid for, she identified herself as single.

Jason was not permitted to drive Amy’s car. [ 34 ] Jason’s mother identified him as single on his application for accident benefits. [ 35 ] Amy described herself as single on her income tax returns in 2007. [ 36 ] Amy did not list Jason or any of his family members as her emergency contact. [ 37 ] While Jason had given Amy a birthstone ring, they were not engaged prior to the accident. [ 38 ] Throughout the time prior to the accident, Amy continued to receive mail at her family’s home, her “permanent address”. [ 39 ] Amy and Jason kept separate finances.

Position of the Applicant and Respondent [ 40 ] The applicant relies on the grounds of appeal set out above and takes the position that the arbitrator undertook no analysis with respect to whether a 17 year old sleeping over on weekends and holidays at her boyfriend’s parents’ home is sufficient to constitute “living together continuously” as required by the statutory definition of “spouse” in issue, noting that as set out by Vogelsang J. in Broadbear v.

Prothero , 2011 ONSC 3656 , at para. 18 , the nature of Jason Orr and Amy Gordon’s cohabitation must be examined objectively. [ 41 ] The applicant emphasizes as set out in para. 22 of its factum that Jason Orr and Amy Gordon: did not live in the same residence on a continuous basis, spent only days each week at one another’s residence, provided few domestic chores for each other, had no consistent division of household expenses or chores (of which most were paid and completed by their respective parents) and had no joint bank account or property. [ 42 ] And further, at para. 27 of its factum, the applicant submits that: As at May 2005, the evidence discloses two 17 year old teenagers were “dating”, while attending high school and living primarily in their parents’ home.

Amy had recently started sleeping over at the Orr residence on the weekends to spend more time with her boyfriend. They maintained separate finances (to the extent that they had any money) and their living expenses were funded by their parents. To the extent that Amy and Jason provided financial contribution to one another, it consisted of occasionally giving each other money when needed. Jason did not pay for Amy’s tuition, clothing, car insurance, or household expenses. [ 43 ] The respondent’s position is that there was more than enough evidence for the arbitrator to find that Jason Orr and Amy Gordon

had been in a conjugal relationship for more than three years prior to the accident and that the arbitrator properly applied the facts to theappropriate legal definition. Disposition [44] The term “conjugal” is a legal term that generally seems to be defined as “a marriage-like relationship outside marriage”: see e.g.Broadbear, at para. 18. A flexible approach should be employed when gauging a conjugal relationship, as was indicated in M. v. H., atparas. 59-60. [45] In determining a conjugal relationship, Cory and Iacobucci JJ. in M. v. H., at para. 59, stated: Molodowich v.

Penttinen (1990) (ON SC), 17 R.F.L. (2d) 376 (Ont. Dist. Ct.) sets out the generally acceptedcharacteristics of conjugal relationship. They include shared shelter, sexual and personal behaviour, services, social activities, economicsupport and children, as well as a societal perception of a couple. However, it was recognized that these elements may be present invarying degrees and not all are necessary for the relationship to be found to be conjugal. [46] The arbitrator considered these criteria, which remain the authority on the elements of a conjugal relationship.

The arbitratortherefore applied the correct law; however, in my view, he applied it incorrectly. While not all criteria need to be present, and each casemust be judged on its own facts, a consistent sense of “conjugal” must be apparent for the three years prior to the accident. In my view,the arbitrator did not apply the Molodowich criteria to the full three years as a whole. [47] In addition, I agree with the applicant’s contention that the arbitrator confused the term “sexual” with “conjugal”. It isundisputed that Amy and Jason had sexual relations at times throughout the relevant period.

However, when the arbitrator stated early inhis award that he “found as a fact that there was a conjugal and sexual relationship between Jason and Amy”, it implies that someconfusion may have occurred. As indicated by Molodowich, sexual relations are but only one of many elements of a conjugalrelationship. [48] However, even assuming there has been no confusion between “conjugal” and “sexual”, the arbitrator still failed to determineprecisely when Jason and Amy engaged in a continuous conjugal relationship.

Rather, he merely stated that he found “that their conjugalrelationship started when they were approximately 15 years of age”. And he further stated that “as time progressed, the relationshipblossomed from a boyfriend/girlfriend relationship to a mature and adult relationship”.

He did not provide a date as to when the nature ofthe relationship changed. [49] Also, even if a sexual relationship had started by the age of 15, there is no evidence upon which it can be reasonably determinedthat Jason and Amy started living together and acknowledging each other as husband and wife at the age of 15, or for that matter, in myview, at any time in the three years prior to the accident.

When considering the whole of the evidence, Amy and Jason were not engagedin a marriage-like relationship throughout the three-year period prior to the accident. [50] Further, as regards the requirement that they “lived together … continuously”, the arbitrator did not address when the periodbegan in which Jason and Amy lived together continuously as husband and wife and whether that period started at least three years priorto the accident.

The arbitrator employed a dictionary definition to define “continuous” as “uninterrupted time, sequence, or essence;going on without interruption”, but he did not define, nor attempt to define, the element of “lived together”. [51] While I note that Molodowich makes clear that the fact that one party continues to maintain a separate residence does notpreclude a finding that parties are living together in a conjugal relationship, it is difficult to accept that Jason and Amy “lived together”for the purpose of the spousal definition under the Act for the three-year period leading up to the accident.

Amy lived full-time with herfriend’s family from January to September 2005, a time frame encompassing part of the relevant period for the definition of spouse thatbegan to run as of May 28, 2005. During the relevant period, she only began to sleep over at the Orr residence on weekends andholidays. From September 2005 onward, Amy lived at her parents’ home during the week and her family allowed her to spendweekends at the Orr residence. While she spent more time at the Orr residence thereafter, the fact remains that the full three years priorto the accident must be considered.

Amy stayed at the Orr residence only on weekends and holidays, gradually increasing this time in theyear prior to the accident, but still splitting the week between her mother’s house and the Orr residence. [52] I note that the arbitrator included in his award the following statement: I find that the expectations of Jason and Amy, and their lengthy and exclusive relationship, to be the most important factors in thismatter.

Furthermore, it appears from the evidence of the parents that their expectation was that Jason and Amy would continue theirrelationship, get engaged and become married. [53] Under the Act, it does not matter what was to happen in the future. The three years prior to the accident is the relevant time framethat must be assessed, and in my view, the evidence does not demonstrate that Amy and Jason were “spouses” within the meaning of theAct for those three years. [54] Accordingly, for these reasons, the appeal is allowed.

In accordance with the agreement of counsel, the award of the arbitrator isset aside and a declaration is made that Amy Gordon and Jason Orr were not spouses at the time of the accident, with the result that theapplicant is not liable to pay accident benefits to Jason Orr arising out of injuries sustained in the motor vehicle accident on May 28,2008. [55] This is an unfortunate consequence for Jason Orr, but as a matter of law, I am satisfied that Jason and Amy did not live togethercontinuously in a conjugal relationship throughout the three year period prior to the accident, and therefore cannot be considered“spouses” under the Act. [56] I trust the issue of costs can be resolved between counsel, but if necessary, counsel may file brief submissions on costs within thenext 30 days.

“ Justice L. C. Leitch” Justice L. C. Leitch Released: September 11, 2013