A new decision was just released regarding the definition of “regular use” for the purpose of priority disputes. Argued ably by Miller Thomson’s very own Nicholaus de Koning on behalf of Dominion, this decision helps clarify and narrow the definition of “regular use” such that a claimant can be deemed to be a named insured for the purpose of the Statutory Accident Benefits Schedule (the “SABS”).

In the decision of The Dominion of Canada General Insurance Company v. Certas Direct Insurance Company, released December 7, 2015, Arbitrator Philippa Samworth was asked to determine who was higher in priority for payment of accident benefits to the claimant, Cory Parchment. The undisputed facts of the matter were as follows:

  • At the time of the accident, Dominion insured a truck owned by One Thirteen Haulage (“OTH”). Mr. Parchment was working for OTH and was driving the truck in the course of his employment on the date of loss.
  • Certas insured Mr. Parchment’s wife’s vehicle on the date of loss.
  • Mr. Parchment applied to Dominion for benefits under his employer’s policy of insurance.
  • Dominion served a Notice to Applicant of Dispute Between Insurers on Certas, taking the position that Mr. Parchment was the spouse of a named insured under Certas’ policy and Certas was therefore the priority insurer.
  • Certas did not accept priority, stating that Mr. Parchment was a deemed named insured under the Dominion policy, as he had regular use of the truck insured by Dominion, thereby placing Dominion higher in priority.

Both parties agreed that OTH was making the truck available for Mr. Parchment’s use on the date of loss. The issue was whether the use was “regular”. Determination of this issue appeared to turn on the length of time that he had been employed by OTH.

The duration of Mr. Parchment’s employment was contentious at arbitration, with it being unclear whether he had been employed full-time, part-time, or in fact only on the date of loss. According to Mr. Parchment, he had been working for OTH for approximately one month full-time prior to the accident. According to management at OTH, Mr. Robinson, he had only worked on the date of loss to fill in for the regular driver.

The Law

The laws regarding priority among insurers are dictated by Section 268 of the Insurance Act.

Pursuant to subsection 268(2)(1)(i), an insured primarily has recourse against the insurer of an automobile in respect of which he is an insured before pursuing any other insurers for benefits.

Pursuant to subsection 268(5), if the person is the spouse of a named insured, he is considered a named insured under the spouse’s policy (paraphrased).

Pursuant to subsection 268(5.2), if there is more than one insurer against which he can claim (i.e. an insured under two policies), he must claim against the insurer of the automobile in which he was an occupant.

Finally, pursuant to subsection 3(7)(f)(i) of the SABS, an individual who is living and ordinarily present in Ontario is deemed to be a named insured under a policy insuring an automobile if, at the time of the accident, the insured automobile was being made available for the individual’s regular use by a corporation, unincorporated association, partnership, sole proprietorship or other entity (emphasis added).

Analysis

Arbitrator Samworth determined that the burden of proof falls upon Certas. She cited decisions of both Arbitrators Scott Densem and Shari Novick, finding that the burden of proving “regular use” falls on the party wishing to establish that fact.

Agreeing with the definitions of regular use as outlined by Arbitrator Scott Densem in The Dominion of Canada General Insurance Company v. Federated Insurance Company of Canada, Arbitrator Samworth stated that regular use requires that the use of the truck by Mr. Parchment must be routine, habitual or occurring over a predictable pattern. This requires an examination of the pattern of prior use.

Having found, on the balance of probability, that Mr. Parchment was only employed by OTH on the date of loss, Arbitrator Samworth ultimately decided that use of the truck on one day does not establish a pattern of use that one would consider regular. It was not normal, habitual nor occurring uniformly, or use that was in a predictable time or manner. As well, there was no evidence that the truck was available to Mr. Parchment for his use in the days prior to the accident. As a result, she determined that Mr. Parchment did not have regular use of the truck, and is not a deemed named insured under Dominion’s policy. Certas was found to be highest in priority for payment of benefits to Mr. Parchment. 

This decision is significant in that employment in businesses requiring use of their vehicles alone does automatically constitute regular use for the purpose of determining priority. As stated by Arbitrator Samworth, there must be a pattern that the vehicle was available to the claimant for normal, habitual use. This may prove to be a contentious issue in the future in situations regarding employees who have access to the company vehicles sporadically or on certain occasions but not all occasions.

In addition, this decision opens up questions as to when use becomes regular for new employees driving company vehicles. Three days? A week? A month? Only time, and further arbitration decisions, will tell.