The Ontario Court of Appeal has found that in a priority dispute between insurers, the first insurer to receive a claim for accident benefits cannot claim it did not receive a “completed application” if it was not diligent in investigating the missing information.
In Ontario (Finance) v. Pilot Insurance Company, an unidentified motorist hit an uninsured cyclist. Since no insurer could be identified, the injured cyclist filed a claim for accident benefits with the Motor Vehicle Accident Claims Fund. Administered by Ontario’s Finance Ministry, the Fund provides compensation to people injured in motor vehicle accidents when no insurance exists to respond to their claim.
If, after receiving a claim, the Fund discovers that another insurer may be liable, it can dispute its obligation to pay benefits. But the Fund cannot dispute its obligation to pay benefits unless it gives written notice to the insurer it believes responsible for paying the benefits within 90 days of receipt of a “completed” application for benefits.
In this case, the court had to consider when the Fund received a “completed” application for the purpose of triggering the 90-day notice period.
The injured cyclist did not include a police report of the accident along with his application. This may have indicated the name of the driver and the driver’s insurer. Instead, based on a discussion with the cyclist, the Fund sought to obtain the records of a 911 call the cyclist said the unidentified motorist had made to the police.
The police informed the Fund that it could only obtain the 911 call information in one of two ways: a Freedom of Information (FOI) request or a court order.
The cyclist applied to the Fund for benefits on Mar. 7, 2007. The Fund twice tried to obtain the 911 call details through FOI requests. Its second and final request was denied on Jan. 17, 2008.
Subsequently, on Sept. 4, 2008, the Fund obtained an unopposed court order to provide particulars of the 911 call. Four days later, using the 911 records, the Fund determined the identity of the driver and that Pilot Insurance Company was the driver’s insurer.
The Fund argued before the court that it had a “completed application” only after it had received the 911 records in September 2008. Only at that point did the Fund have enough information to determine Pilot was the insurer, thus triggering the 90-days notice period.
But the Ontario Appeal Court restored the decision of the original arbitrator, finding that the Fund should have applied for the court order for the 911 records in February 2008 at the latest, just after the second denial of its FOI request.
Had the Fund not delayed in this step until September, the 90-day notice period would have been triggered in February instead, the Appeal Court found. At that point, the Fund would have had enough information to notify Pilot, since at that time the Fund would have received a “functionally adequate” (i.e. completed) application.
“The arbitrator indicated that he was relying on [R. v. Lombard Insurance Company of Canada] for the principle that the first insurer should be treated as receiving a completed application when it does not act diligently in attempting to obtain missing information,” the Court of Appeal wrote, in restoring the arbitrator’s initial decision.
The full case can be found at: