A party to a settlement (Mr. D’Ettorre) applied for judicial review of a decision made by a “delegate” from the Financial Services Commission of Ontario. The Delegate held that an assignment of Statutory Accident Benefits was not valid. The Respondent, Coachman Insurance Company, succeeded in having the application for review dismissed.

23. October 2012 0

Administrative law – Decisions of administrative tribunals – Financial Services Commission – Arbitration and award – Judicial review – Compliance with legislation – Statutory provisions – Interpretation – Remedies –  Damages – Assignment – Validity – Settlements – Trial – Definition

D’Ettorre v. Coachman Insurance Co., [2012] O.J. No. 4443, 2012 ONSC 3613, Ontario Superior Court of Justice, June 21, 2012, J.R.R. Jennings, J. Mackinnon and G.M. Mulligan JJ

The Applicant, Mr. D’Ettorre, was a plaintiff in a tort action. He was receiving statutory accident benefits (SABs) from the Respondent, Coachman Insurance Company (Coachman). Mr. D’Ettorre entered into a settlement in the tort action. As part of the settlement, Mr. D’Ettorre assigned his entitlement to SABs to his insurer in the tort action (Nordic Insurance Company of Canada). The assignment was included in the consent Order. Coachman was not a party to the settlement reached in the tort action.

The court reviewed the settlement because one of the plaintiffs was a minor. The court approved the settlement, including the assignment of SABs.

In the subsequent arbitration relating to SABs, Coachman sought a ruling that the assignment was void due to section 65 of the SABs Schedule. The Arbitrator was a representative of the Financial Services Commission of Ontario (the Commission).

Section 65 says that an assignment of SABs is void except where the assignment is under section 267.8 of the Insurance Act. Section 267.8 says, “the court that heard and determined the action for loss or damage for bodily injury…may order that…the plaintiff who recovered damages…assign to the plaintiffs or the defendants’ insurers all rights in respect of all payments…after the trial of the action”. The Arbitrator determined that the assignment in the consent order was valid.

Coachman appealed the arbitrator’s decision to the Delegate of the Commission’s director. Coachman alleged the assignment was not valid because there had been no “hearing or determination” by way of a trial. The Delegate overruled the Arbitrator’s decision.

The Applicant sought judicial review of the Delegate’s decision. The Applicant argued that the phrase “trial of an action” should be read as a “determination of the action” in section 267.8 of the Insurance Act. Coachman argued an assignment of benefits can only be ordered in limited circumstances by the court that “heard and determined” the action for loss or damage from bodily injury and “after the trial of the action”.

The parties agreed that the interpretation of section 267.8 of the Insurance Act was a question of law. However, the issue for the standard of review analysis was whether the standard was correctness or reasonableness. The Court refrained from deciding this issue due to its decision on the merits of the application for review.

The Court reviewed definitions of “trial” and found a “trial” is not what occurred when the settlement was reviewed by the Court in this case. The Court held that the phrase “after the trial of the action” could not be interpreted to mean “after the determination of the action by consent judgment”.

The Court dismissed the application for judicial review. The Court awarded costs to the Respondent.

This case was digested by Scott J. Marcinkow of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact him directly at smarcinkow@harpergrey.com or review his biography at http://www.harpergrey.com.

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