Respondent - Your Web Department · time Deodat Khemraj the deceased was killed in an accident that occurred in the trailer yard of Indis Inc Mr Khernraj was unfortunately crushed

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IN THE MATTER OF the insurance Act R S O 1990 c 1 8 as amended

AND IN THE MATTER of the Arbitration Act 5 0 1991 c 17 as amended

AND IN THE MATTER of an Arbitration

BETWEEN

WAWENESA MUTUAL INSURANCE COMPANY

and

NORTHBRIDGE COMMERCIAL INSURANCE CORPORATION

and

ALLSTATE INSURANCE COMPANY OF CANADA

Applicant

Respondent

Respondent

AWARD

Appearances

Wawanesa Mutual Insurance Company Applicant Daniel Strigberger

Northbridge Commercial Insurance Corporation Respondent Daniel Himelfarb

Allstate Insurance Company of Canada Respondent Ashleigh Leon

Introduction

This matter comes before me pursuant to the Arbitration Act 1991 to arbitrate a dispute asbetween insurers with respect to a priority issue pursuant to the insurance Act and itsRegulations specifically Regulation 283 95 as amended

This claim arises out of a fatal motor vehicle accident that occurred on May 30 2014 At that

time Deodat Khemraj the deceased was killed in an accident that occurred in the trailer yardof Indis Inc Mr Khernraj was unfortunately crushed between two containers when a tractoroperated by Mr Lai backed up to attach his container At that time Mr Khemraj was the

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named insured under a policy of insurance with Allstate Insurance Company of Canadahereinafter referred to as Allstate that insured his personal vehicle Mr Khemrars spouseChanderdai Khemraj was the named insured for her personal vehicle under a policy of

insurance with Wawanesa Mutual Insurance Company hereinafter referred to asWawanesa Northbridge Commercial Insurance Corporation hereinafter referred to asNorthbridge insured IBL Transport Company Ltd This company was the owner of the plate

on a tractor trailer owned by Mr Khemraj and or his numbered corporation Broadly speakingthe issue before me is which of these insurance companies is the priority insurer with respect tovarious Statutory Accident Benefits that have been advanced for death benefits by thedeceaseds spouse and two dependent children and for claims for psychological injuries alsoadvanced by the deceaseds spouse and the dependent children A number of sub issues flowfrom the broader priority dispute The arbitration in this matter took place on April 24 2018No witnesses were called The parties filed the following exhibits

Exhibit 1 Arbitration Agreement dated April 24 2018

Exhibit 2 Document Brief of Wawanesa Mutual Insurance Company 8 tabs

Exhibit 3 Document Brief of Allstate Insurance Company 4 tabs

The Issues in Dispute

Although the broad issue is one of priority as among the three insurers the sub issues that Ihave been asked to decide in order to determine priority are as follows

1 Was the tractor trailer unit insured by Northbridge made available for Mr Khemrarsregular use by a corporation unincorporated association partnership soleproprietorship or other entity so that he would be the deemed named insured underthe policy pursuant to Section 3 7 f

2 If the tractor trailer was provided to Mr Kheniraj for his regular use so that he is adeemed named insured under the Northbridge policy which of Wawanesa Northbridgeand Allstate would be the priority insurer with respect to the payment of death benefitsunder Section 26 of the SABS

3 If the tractor trailer was provided to Mr Khemraj for his regular use so that he is adeemed named insured under the Northbridge policy which of Wawanesa Northbridgeand Allstate would be the priority insurer responsible for payment of Statutory Accident

Benefits to the deceaseds spouse and his dependent children for psychological injuriessustained as a result of the physical injury to their father

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4 If as a result of the decision with respect to the above two or more insurers rank

equally pursuant to Section 268 of the insurance Act does the spouse of the deceasedand the dependents have a right to choose as between those equal ranking insurers orwas that choice already made by submitting an OCF 1 to Wawanesa

Facts

The parties provided an Agreed Statement of Facts and various documents were submittedthrough Document Briefs relevant to all the issues outlined above I will look at each issueseparately outline the relevant facts the arguments presented and my conclusion for each ofthose issues

Regular Use Deemed Named Insured

There was no disagreement as to how the accident on May 30 2014 occurred and it isimportant to understand the circumstances of the loss

On the day of the accident the deceased had driven his tractor trailer to a trailer yard where hewas planning to pick up a container for 1BL Mr Lai also drove his tractor trailer to the yard that

day to pick up a container for IBL The containers were empty and both were to be delivered toan address in Mississauga

Mr Lai arrived first and located his container and backed his tractor up to it In the meantime

Mr Khemraj arrived and he parked his tractor in front of Mr Lais and then went on footbetween the two containers to be picked up in order to identify his container The deceasedscontainer was located immediately behind the container being picked up by Mr Lai Mr Lai

intended to move his container so that the deceased could get to the other container

However when Mr Lai reversed his tractor to fully attach it unbeknownst to Mr Lai thedeceased was between the two containers The movement of Mr Lais truck in connecting to

the container resulted in the container moving and crushing the deceased between the two

containers

The tractor trailer operated by the deceased was owned by the deceased and or his numberedcompany 2045003 and or HKB Trucking HKB Trucking Deodat Khemraj entered into anagreement with 1BL Transport Company known as an owner operator contract While the

deceased purchased his tractor through his corporation the plates were in accordance withthe owner operator agreement registered in the name of 1BL Transport Company Furtherpursuant to that same agreement IBL undertook to arrange insurance on the tractor trailer

The owner operator agreement provided that 1BL would provide fleet insurance for the tractortrailers and would charge the contractor for the insurance The cost of the plates was alsocharged back to the contractor

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As part of that agreement were the following terms

1 The contractor is responsible for repairs replacements upkeep and expenses incurred

as a result of normal usage on their equipment and a contractor had to undertake to

properlymaintain the equipment

2 The company retained the right to inspect the contractors equipment at any time

3 Any drivers of the vehicle had to be approved by the company IBL The company wouldsupply IBL Transport decals and other permits

4 It was agreed that the contractor was a subcontractor

There was also evidence in this case that a contact had been made to the WSIB to determine

whether or not Mr Khemraj would be eligible for benefits with the WSIB The WSIB repliedthat they had reviewed the contract conditions of employment and that the WSIB consideredMr Khemraj to be an independent contractor and therefore having not applied for optionalinsurance coverage he would not be eligible for benefits with WSIB

It should also be noted here that prior to the arbitration hearing commenced Northbridgeaccepted that at the time that this accident occurred Mr Khemraj was an occupant of histractor trailer

I also reviewed a transcript of an interview with David Tso the owner of 1BL who wasinterviewed on May 30 2014 In that interview he took the position that as part of the owneroperator arrangement that Mr Khemraj was not allowed to work for any other truckingcompanies With respect to driving jobs the work orders would come in to IBL and then IBLsdispatchers would assign the drivers

As part of Exhibit 2 were some driver daily run sheets that drivers such as Mr Khemraj

submitted to 1BL His corporation was paid by IBL for the driving jobs he performed

Position of the Parties

Both Wawanesa and Allstate submitted that Mr Khemraj through his corporation that ownedthe tractor trailer made that vehicle available for Mr Khemrajs regular use and that that issufficient to qualify him as a deemed named insured pursuant to the SABS

Northbridge argues that that is not the case Firstly Northbridge argues that IBL at no timemade the tractor trailer available for the regular use of Mr Khemraj That appears to beagreed However Northbridge takes the position that in order to qualify as a deemed named

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insured that it would have to be IBL who provided the vehicle to Mr Khemraj for his regularuse It is not sufficient that Mr Khemrars corporation provided it to him for his regular use

Analysis

Section 3 7 f of the SABS sets out the situations where a person can be a deemed named

insured under a particular policy The relevant provision is 3 7 f 1 That provides that aperson will be the deemed named insured when

The insured automobile is being made available for the individuals regular use by acorporation unincorporatedassociation partnership sole proprietorshipor other

entity

In this particular case the insured automobile is a tractor trailer insured with Northbridge Thattractor trailer was being made available for Mr Khemrajs regular use by a corporation2045002 Ontario Inc Mr Khemrals numbered corporation that owned the tractor trailer Isee nothing in the wording of the relevant Section noted above that requires that the

corporation that makes the vehicle available for regular use has to be the corporation that is

the named insured under the policy of insurance being examined In other words I do not

agree with Northbridge that in order for this Section to apply the corporation that provides theregular use must be IBL in order to attract coverage through the Northbridge policy

I feel that this is an area that is really settled law The Court of Appeal in Security NationalInsurance Company v Markel Insurance Company 2012 0 N C A 683 CanLII in almost identical

circumstances to the ones in this arbitration held that there was no legitimate reason why asole proprietorship should not be permitted to make a vehicle available for the regular use ofthe sole proprietor The court felt there was nothing in the wording that would preclude a oneperson company from making a vehicle available to him or herself In those circumstances if

such a vehicle is made available for regular use by that corporation then the risk is to be borneby the insurer of that vehicle The court stated at paragraph 64

As with a company or rental automobile if the vehicle is made available for regular

use by any of the listed entities the risk is to be borne by the insurer of that vehicleThis in my view makes sense and should be so in spite of any past practices in the

insurance industry

In that case the insurers of the commercial vehicle were found to have priority even though the

company that was the named insured was not the company that provided the vehicle forregular use

A similar result was also reached in the decision of Arbitrator Scott Densem in Economical

insurance Group v Kingsway General Insurance Company a decision of August 9 2010 Thefacts of that case were again almost identical to the facts in this case In that case the insurer of

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the commercial vehicle argued that in order for there to be a deemed named insured under

the policy that the corporation making the vehicle available must also be the named insured

under the policy of insurance They argued it was not sufficient that any corporation made thevehicle available for regular use Rather it had to be the corporation that was also the named

insured

Arbitrator Densem found that to interpret the deemed insured provisions in that manner

would result in either adding words to the Section that are not there or changing the plain

meaning of the words I agree with Arbitrator Densem that there is no ambiguity in thewording that would support interpreting a corporation to mean the named insured and thus

require that the tractor trailer would have to be provided for regular use by the named insuredas opposed to the corporation that owned the vehicle A similar conclusion was reached by

Justice PereII in the case of Kingsway General Insurance Company v Gore Mutual Insurance

Company 210 ONSC 5308 CanLII para 30

Therefore I conclude on the facts of this case and the case law outlined above that 2045003

Ontario Inc the owner of the tractor trailer provided the vehicle to Mr Khemraj for his regular

use As a corporation provided it to an individual for his regular use he is therefore a deemednamed insured under the Northbridge policy which insures the tractor trailer

Therefore at this point in the analysis there are now two policies of insurance under which thedeceased is a named insured and one policy of insurance under which his spouse is the namedinsured The next question is which of these three insurers are the priority insurer for thebenefits being claimed by the spouse and the children

Death Benefits

The deceaseds wife applied to her insurance company Wawanesa for death benefits forherself and her children Wawanesa argues that as Mr Khemraj was an occupant of theNorthbridge vehicle on the date of loss that priority should rest with Northbridge Allstatemakes similar submissions

Northbridge on the other hand submits that occupancy should not be relevant for the purposesof a death benefit All counsel made various submissions with respect to death benefits versus

benefits payable to the spouse and children for psychological injuries arising as a result of thedeath of Mr Khemraj I will deal with those benefits later

Death benefits are covered under Section 26 of the SABS Section 26 provides

The insurer shall pay a death benefit in respect of an insured person who dies as a

result of an accident

Section 279 of the Insurance Act provides as follows

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For the purposes of Sections 280 to 283

Insured person means a person who is claiming funeral expenses or a deathbenefit under the Statutory Accident Benefit Schedule

Also relevant is the definition of insured person which is found in Section 3 1

Insured person means in respect of a particular motor vehicle liability policy the namedinsured any person specified in the policy as the driver of the insured automobile and if

the named insured is an individual the spouse of a named insured and a dependent ofthe named insured or his or her spouse

Wawanesa argues that when taking into consideration Section 26 that the key wording is thatthe insurer is to pay a death benefit in respect of an insured person who dies Wawanesa and

Allstate argue that therefore the starting point in determining which policy should respond is tolook at the insured person who dies They argue that claims for death benefits are derivativein nature and flow from the insured person who died

Northbridge argues that it is not a derivative benefit and that it is the individual claim of theinsured advancing the claim of the death benefit in this case the spouse or the children that is

determinative of what policy responds Northbridge argues that as the spouse is a namedinsured under the Allstate policy that Allstate should respond Northbridge also argues whichwill be discussed later that the fact that Mr Khemraj was an occupant of the Northbridgevehicle is not relevant

I agree with Wawanesa and Allstate that with respect to the death benefit that the policy torespond is the policy that covers the insured person who dies Therefore in determiningwhichof the policies should respond to the death benefits I look to see under which policies MrKhemraj would be considered an insured person This bring us back to all three policies as hewould be a deemed named insured under the Northbridge policy the named insured under theAllstate policy and the spouse of the named insured under the Wawanesa policy

The question of occupancy becomes relevant at this stage Section 268 of the Insurance Act

sets out the priority rules Section 268 2 provides that for an occupant of a vehicle they mustfirst have recourse against the insurer of an automobile in respect of which they are an insuredThat brings us again to all three policies providing potential coverage to Mr Khemraj

Section 268 4 provides that Mr Khemraj would have in his absolute discretion the opportunityto decide from which of those three insurers he would claim benefits However that discretion

is taken away by Sections 5 and 5 2 These Sections provide that if a person is a namedinsured under a contract or is the spouse or dependent of a named insured then they must

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make a claim under that policy However 5 2 provides that if there is more than one insurerfrom whom this person may claim benefits and the person must make a claim against theinsurer of the vehicle of which they were an occupant I quote 5 2 below

If there is more than one insurer against which a person may claims benefits undersubsection 5 and the person was at the time of the incident an occupant of an

automobile in respect of which the person is the named insured or the spouse or a

dependentof the named insured the person shall claim Statutory Accident Benefitsagainst the insurer of the automobile in which the person was an occupant

Therefore while I accept that Mr Khemraj would ostensibly be put to a choice pursuant toSection 268 4 268 5 and 268 5 1 that choice is effectively removed from him where he isan occupant of a vehicle in which he is the named insured

It has been agreed Mr Khemraj was an occupant of the Northbridge vehicle Therefore I findpursuant to 268 5 2 that Mr Khemraj must apply for benefits to the vehicle of which he wasan occupant Therefore his spouse and children must advance their derivative death benefit

claim to the same insurer Northbridge

Therefore in this case for the purposes of death benefits I find that Northbridge is the priorityinsurer for the reasons outlined above

Benefits Payable for Psychological Injuries

The deceaseds spouse and his children also applied to Wawanesa advancing claims that theyare entitled to various benefits under the SABS due to psychological injuries sustained as aresult of the death of their father husband Under Section 3 of the SABS definitions an

insured person in respect of a particular motor vehicle liability policy is also defined as

If the name insured specified driver spouse or dependent is not involved in anaccident but suffers psychological or mental injury as a result of an accident in or

outside Ontario that results in a physical injury to his or her spouse child grandchildparent grandparent brother sister dependent or spouses dependent

This extends coverage to family members who were not involved in the accident but sustainedpsychological injuries because of either a death to a family member or injuries to a familymember

Wawanesa argues that this claim for psychological injuries is no different than the claim fordeath benefits and it is derivative Therefore if I direct that the claim for death benefits should

go to Northbridge because the deceased was an occupant of the Northbridge vehicle I shouldalso direct that Northbridge is in priority for the purposes of payments for benefits forpsychological impairments

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Allstate also advances that position

Northbridge submits that the claim for psychological injuries is a distinct and separate claim andnot derivative from the deceased They point to the wording of Section 26 1 referred to

above that the death benefits are payable in respect of an insured person who dies Similarwording is not found in the definition of insured providing coverage to individuals not involvedin the accident Northbridge argues that this is a separate and distinct claim that is personal tothe individual who suffers the psychological injury Therefore one does not look for coverageunder the policy where the deceased is a named insured but rather one looks for a policy for

the person making the claim for psychological injuries to see whether they are covered as anamed insured or spouse

Northbridge argues that therefore occupancy is not relevant as occupancy only applies to

determine the deceaseds coverage and not the coverage of the individual claims for

psychological injuries being made by the spouse and the dependants

Northbridge argues that the spouse and the dependants have three policies available to themThe spouse is a named insured under the Wawanesa policy she is the spouse of the namedinsured under the Allstate policy and she is the spouse of the deemed named insured under theNorthbridge policy Therefore Northbridge submits pursuant to Section 268 of the Insurance

Act Section as there is more than one insurer against whom the spouse and the dependants canmake a claim they in their discretion can decide which insurer they will claim benefitsNorthbridge goes on to submit that they have already chosen Wawanesa Allstate also submits

that on these circumstances the spouse and children have already chosen Wawanesa

I find that the claim of the spouse and her children is not a derivative claim I find that it is a

separate claim based on their own status as an insured under the Statutory Accident Benefits

Schedule for individuals who have sustained psychological injuries as a result of an injury or

death to a family member I find that Mrs Khemraj is the spouse of a deemed named insuredunder the Northbridge policy a named insured under the Wawanesa policy and the spouse of a

named insured under the Allstate policy and all of these rank equally under Section 268 of theInsurance Act for both she and her children

I therefore find that Northbridge is not the priority insurer for Mrs Khemraj and her childrenwith respect to their individual claims for psychological injuries In this case occupancy is notrelevant

This then brings us to perhaps the thorniest issue in this arbitration and that is whether or notin the circumstances of this case Mrs Khemraj has chosen Wawanesa as her insurer pursuantto Section 286 5 1 of the Insurance Act

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Election Choice of Benefits

Having found that Mrs Khemraj and her children have the right to make a choice among thethree insurers involved in this priority dispute I must now deal with the arguments by counselas to whether or not that choice has already been made

Allstate and Northbridge submit that in the circumstances of this case and based on thedocuments before me that I must find that Mrs Khemraj and the children for the purposes oftheir claim for psychological impairment and relevant benefits have alreadychosen Wawanesaas their insurer Wawanesa on the other hand takes the position that Mrs Khemraj and herchildren could not have chosen which insurer they wished to make an Application to as at the

time her OCF 1 Application for Accident Benefits was forwarded to Wawanesa neither she norher counsel were aware that there was any other actual insurer that was available to

potentially provide coverage for their various claims Wawanesa submits that in order to

choose one must be aware that there is a choice to be made

Facts

An Application for Accident Benefits 0CF 1 was submitted on behalf of Mrs Khemraj toWawanesa The date of the Application was June 19 2014 It was signed by Mrs Khemraj Iunderstand that similar Applications were made at the same time to Wawanesa on behalf ofthe children Tyler and Kenny Wawanesa received the Applications on June 25 2014

In the documents put into evidence at this hearing was a letter dated June 25 2014 from AaronWaxman counsel to the Khemraj family The letter was directed to Wawanesa The variousOCF 1s are referenced in the letter Mr Waxman says the following with respect to theavailabilityof other potential insurers

Lastly I advise that the deceased may have been insured under another automobile

insurance policy with another automobile insurer and I unable to confirm the

particulars of this insurance or if it even exists

Wawanesa as required pursuant to the Insurance Act and Regulation 283 95 accepted theApplication and began adjusting the benefits on behalf of Mrs Khemraj and the children

On September 15 2014 Wawanesa served a Notice to Applicant of Dispute Between Insurerson Northbridge On October 23 2015 Northbridge served Allstate with a Notice of Submissionto Arbitration It is important to point out that at the time this arbitration proceededNorthbridge was continuing to dispute that the deceased was a deemed named insured undertheir policy for the purposes of the Statutory Accident Benefits being claimed by his spouse andchildren Allstate accepted that the deceased was a named insured under their policy

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There was no evidence before me from Mrs Khemraj with respect to why she did or did notchoose Wawanesa There was no information provided by her counsel There was noExamination Under Oath to determine whether in fact Mrs Khemraj was aware of any otherpolicies and if she therefore made a choice of Wawanesa over and above other policies shewas aware of

Position of the Parties

Allstate and Northbridge take the position that the OCF 1 together with the letter from AaronWaxman and in the absence of any other evidence to the contrary indicates that Mrs Khemraj

made a choice to make a claim against Wawanesa as opposed to any other insurers Theysubmit that the onus was on Wawanesa to provide evidence to show that Mrs Khemraj did notmake a deliberate choice to Wawanesa Northbridge and Allstate argue that in order forWawanesa to meet its onus that it should have led evidence as to what Mrs ithemraj did or didnot know about the availability of other policies and why she through her counsel applied toWawanesa Allstate also submits that Mrs Khemraj was represented by counsel at that timeand therefore any action taken by Mr Waxman is presumed to be as her agent If Mr Waxmanas her agent chose to file with Wawanesa then that is determinative of an election made byMrs Khemraj

Allstate also submits that the fact that there may be some lack of clarity with respect towhether the Northbridge policy would provide coverage or not should not have any bearing onmy determination as to whether or not Mrs Khemraj made an election FinallyAllstate submitsthat Wawanesa has failed to provide any evidence to rebut the presumption that the OCF 1submitted by Mrs Khemraj to Wawanesa was done so by informed counsel acting on herinstructions

On the other hand Wawanesa submits that neither Mrs Khemraj nor her children have as yetexercised any right to make a choice Wawanesa submits that when one looks at the wording ofSection 268 with respect to the right to make a choice that it is clear that the insured has to beaware that there is such a choice and that choice is as between two or more insurers that

qualify under the provisions of Section 268

Wawanesa further submits that for anyone to make a decision or make a choice they mustknow what the choices are available to them They note that making such a choice is animportant consumer right and that adequate information should be provided to the insured sothat they can have a reasonable opportunity to make an educated choice

Finally Wawanesa submits that the simple submission of an OCF 1 to an insurer does notnecessarily mean that the insured has exercised their discretion to choose as between insurersThere must be evidence that they knew there were other insurers to which they could make anApplication and that they have chosen one insurer over the other However Wawanesa does

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not advance any evidence as to what Mrs Khemraj did or did know in terms of choice at thetime she sent in her OCF 1

Analysis

There are two provisions within Section 268 of the Insurance Act which provide an insured withthe right to make a choice While often this is referred as an election it should more properlybe referred to as a choice as that is the wording under the insurance Act

Section 268 4 provides as follows

Choice of insurer

4 If under paragraph i or iii of paragraph 1 or subparagraph i or iii ofparagraph 2 of subsection 2 a person has recourse against more thanone insurer for the payment of Statutory Accident Benefits the person inhis or her absolute discretion may decide the insurer from which he or

she will claim benefits

5 1 Subject to subsection 5 2 if there is more than one insurer against whicha person may claim benefits under subsection 5 the person in his or her

discretion may decide the insurer from which he or she will claim

benefits

During the course of argument counsel noted that subsection 4 contains the words absolutediscretion while subsection 5 1 does not include the word absolute Subsection 5 1 is the

applicableSection for the insureds in this case with respect to making a choice I do not knowwhat policy reason there was for excluding the word absolute under 5 1 However for thepurposes of this arbitration I find that the difference in the wording has no bearing on mydecision

The wording of Section 5 1 makes it clear that in order for that Section to be applicable theremust be more than one insurer against which a person may claim benefits In my view that

assumes that the individual claiming benefits is aware that there is more than one insurerOtherwise the Section would have no meaning While I agree with counsel for Allstate andNorthbridge that it would certainly have been helpful to have had some direct evidence fromMrs Khemraj with respect to her knowledge or lack of knowledge about the availabilityof theNorthbridge or the Allstate policies I still find I have sufficient evidence before me that I canmake a determination as to whether or not Mrs Khemraj made a choice by applying toWawanesa

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Of importance is the OCF 1 part 4 where details of automobile insurance is to be provided bythe Applicant The Applicant is asked to check off various boxes indicating what other policiesshe may be covered under as of the date of loss The items listed are

Your own policy

Your spouses policy

The policy of any person on whom you are a dependent

A policy that lists you as a driver

Your employers policy eg company car or spouses employers policy

A policy insuring long term rental cars

Mrs Khemraj completed all relevant parts relating to these questions She answered no tobeing covered under any of the policies listed above other than under her own policy withWawanesa Specifically she checked off the box no to say she was not covered under herspouses policy She also checked off the box no where she was asked whether she wascovered under her employers policy or her spouses employers policy I find as a fact that bycompleting part 4 in the manner that she did Mrs Khemraj clearly indicated that she was not

aware of being covered under an automobile policy that covered her spouse or her spousesemployer Those would have been the Northbridge and Allstate policies

This indicates to me that she was not aware that there was any choice to be made One would

conclude that if Mrs Khennraj were aware that there was coverage available under any of thoseother policies that she would have answered yes I note that the OCF 1 requires the insured tostate the following

I certify that the information provided is true and correct

I understand that it is an offence under the Insurance Act to knowinglymake a falseor misleadingstatement or representation to an insurer under a contract of insurance

I further understand it is an offence under the Federal Criminal Code for anyone bydeceit falsehood or other dishonest act to defraud or to attempt to defraud an

insurance company

Mrs Khennraj signed her name beneath that certification

Turning to Mr Waxmans letter it seems quite clear to me that at best counsel for Mrs Khemrajwas vaguely aware that there may be some potential coverage under some other policiesHowever he states and I quote I sic unable to confirm the particulars of this insurance or if it

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even exists If Mr Waxman could not determine whether or not this other insurance even

existed then I doubt that Mrs Khemraj could have determined whether it existed at the timeshe completed the OCF 1 It further goes to the truth of her statement in completing theApplication that she was not aware of any other policies I am therefore satisfied as a fact thatat the time Mrs Khemraj applied to Wawanesa for benefits on behalf of herself and herchildren for psychological injuries she was not aware that there was a policy with Northbridgeor a policy with Allstate that might be responsive to her claims

I therefore find that as Mrs Khemraj was not aware that there was a choice to be made asbetween insurers that the application to Wawanesa by way of an OCF 1 did not constitute achoice I find that Mrs Khemraj and her children must now be put to a choice as to which ofWawanesa Northbridge and Allstate she chooses in her discretion to provide her withStatutory Accident Benefits

There is case law that supports my analysis Arbitrator Lee Samis in the decision SecurityNational Insurance Company Markel Insurance Company November 20 2039 dealt with asimilar issue While there was evidence directly from the insured in that case with respect tothe knowledge of the insured as to the availability of the other insurers the evidence beforeArbitrator Samis was consistent with the evidence as I have found it in this case Arbitrator

Samis noted that the record and evidence before him suggested that the claim made by way ofan OCF 1 was made to the sole source recognized at that time I find that to be the case with

respect to Mrs Khemraj

Arbitrator Samis concluded that the insureds in that case were not aware of the possibleselection available for them to choose between multiple insurers Therefore when the insured

submitted his Application for Accident Benefits Arbitrator Samis concluded that no one actuallymade a decision about what insurer they would claim benefits from That was because no suchdecision could be made if no one was aware that there was an actual choice He concluded on

those facts which are similar to the facts here that the insured did not exercise the power of

decision under Section 268 5 1 of the Insurance Act Arbitrator Samis stated and I quote

I do not go so far as to conclude that it will be necessary for a person to have details

about particulars of every possible insurer in order to make that decision It might bethat an insured person would have a general understanding that there was more thanone insurer that might be called to respond and that the person would then make an

application to a single identified insurer However in this case McK had no idea aboutthere being another insurer that might be called on to respond Therefore I do notthink that mere filing of an application with the sole known insurer can constitute a

decision preconditioned by there being more than one insurer against which aperson may claim benefits

I agree with Arbitrator Samis In this particular case I conclude that Mrs Khemraj did not havea general understanding that there was more than one insurer that she might be able to call

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upon to respond Her OCF 1 suggested to the contrary Her own counsel in his communicationindicated that he was not even sure if any other such insurer existed

I agree with Wawanesa that in order for someone to make a choice that someone must be

aware of the choices available

I also agree with Wawanesa that the right to choose is an important consumer right In orderto exercise that choice an insured person should have adequate information and a reasonableopportunity to make that choice While the facts are somewhat different the principle is thesame and the importance of the consumer nature of this choice was clearly set out by DirectorDelegate David Draper in the case of Allianz insurance Company of Canada General AccidentInsurance Company of Canada OIC Appeal P97 00012 May 6 1998

Therefore I find that Mrs Khemraj and the two dependent children must be put to a choice asamong Wawansea Northbridge and Allstate with respect to the handling of the claims for

psychological impairments and the various benefits that flow from that

Order

1 Northbridge Commercial Insurance Corporation is the priority insurer with respectto the claim for death benefits on behalf of Mrs Khemraj and the two dependentchildren arising out of the death of Deodat Khernraj

2 With respect to the claim of Mrs Khemraj and the two children for psychologicalimpairment and the benefits that flow from that I find each of Wawanesa MutualInsurance Company Northbridge Commercial Insurance Corporation and Allstate

Canada are all equal in priority I therefore find that Mrs Khemraj is to be put to a

choice as to which one of the three insurers she elects in her discretion to providebenefits Mr Khemraj is also to make that choice for the two children

Costs and Other Matters

The Order I have made above would therefore require Northbridge to reimburse Wawanesawith respect to any benefits paid out pursuant to the death benefit provisions I am assumingthere is no issue with respect to quantum but if so then a further prehearing should bescheduled to discuss that

With respect to the second part of my award I suggest that the three counsel work together to

prepare a draft fetter that they are satisfied in terms of the wording that can be sent to MrsKhemraj and her counsel with respect to the election choice of insurers Once that election is

made then subject to further issues being raised by counsel or their clients then an Orderwould follow that the chosen insurer by the one to pay the Statutory Accident Benefits to themother and two children for the psychological related claims If that insurer is not Wawanesa

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then the chosen insurer would be obliged to reimburse Wawanesa for any benefits paid to dateunder the psychological impairment benefit category Again if some issue arises with respect toquantum I can be spoken to I am assuming counsel can reach some agreement once thatchoice is made

This then brings me to the question of costs According to the Arbitration Agreement costs arein my discretion I am also asked to take into consideration any formal offerof settlement and I

have not been referred to any so I am assuming there is none

In reviewing all the issues that were brought before me and the result there has been mixed

success Wawanesa has been successful in having Northbridge declared the priority insurerwith respect to the death benefit issue However Wawanesa was not successful in having the

non derivative benefits relating to the individuals psychological impairment shiftedWawanesa may still have the responsibility to pay depending on what choice Ms Khemraj

makes Arguably that would not indicate a total success on the part of Wawanesa SimilarlyAllstate remains exposed to have a priority on the non derivative claims

Thanks to the efficiency of counsel it is hard to divide up the time spent in hearing evidence and

argument with respect to any one issue Therefore in view of the mixed result my award with

respect to costs is to find that each party will bear their own legal costs I also find that the

Arbitrators account will be split equally among the three insurers

As each party will bear their own costs we do not have to schedule a further prehearing for the

purposes of any cost submissions with respect to quantum

DATED THIS 4th day of May 2018 at Toronto

Arbitrator Philippa G SamworthDUTTON BROCK LLP

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Documents

Respondent - Your Web Department · time Deodat Khemraj the deceased was killed in an accident that occurred in the trailer yard of Indis Inc Mr Khernraj was unfortunately crushed