Law Times

Law Times • November 12, 2018 Page 9 www.lawtimesnews.com Insurance Act has its own interpretation Decision highlights how spouse is defined BY SHANNON KARI For Law Times T he definition of spouse may have evolved and expanded in the fam- ily law context, but that does not affect how it should be interpreted in the Insurance Act, an Ontario Superior Court of Justice judge has concluded. "The fact that both statutes both use the word 'spouse' or 'conjugal relationship' does not mean that they have the same contextualized meaning," stated Justice Edward Morgan in his decision in Royal and Sun Al- liance v. Desjardins. The findings of an arbitrator were quashed on judicial review in litigation over which insurer was a higher priority to pay the accident benefit claims of a woman injured in a car accident in the parking lot of where she worked. The woman sought benefits from Royal and Sun Alliance Insurance Company of Cana- da through her male partner's policy. The court heard that the couple were in a relationship for five years but maintained sepa- rate residences and finances. It was about one year before the ac- cident that they actually moved in together. A "spouse" under the Insur- ance Act is defined as "two per- sons" who are married to each other or have lived together in a conjugal relationship outside marriage for a period of not less than three years. A relationship of "some per- manence" — such as being the joint parents of a child — also qualifies under the definition of spouse. In her decision, the arbitra- tor examined family law defini- tions of spouse and used "a more global or unitary" approach, noted Morgan, which the Supe- rior Court judge found to be an error. Some of the cases included those related to benefits for same-sex couples, such as the Supreme Court of Canada's 1999 decision in M. v. H. "Much of this, the court indi- cated, turns on how the couple is socially perceived — especially in the context of a same-sex re- lationship which was at issue in M v. H — as different types of relationships may be subject to varying social perceptions," Morgan wrote in his decision is- sued July 9. "The arbitrator embraced a body of Family Law Act cases that eschew a literal interpreta- tion of the phrase 'live together in a conjugal relationship,' in favour of an interpretation that plugs that phrase into the dis- tinctive policy context of spou- sal support. She then applied those cases to the Insurance Act without explaining why a policy interpretation from family law should apply there," stated Mor- gan. He added that the Ontario Court of Appeal found in a rul- ing two decades ago that the meaning of spouse is not the same in the two statutes. Lawyers for both parties were unavailable for comment. Desjardins did not file an ap- peal of the Superior Court rul- ing. After it was issued, however, it generated some legal com- mentary because the definition of spouse under the Insurance Act has not been explicitly ad- dressed by the courts in 20 years. Justin Necpal, a Toronto- based civil litigator, says he thinks the Superior Court was correct to quash the decision of the arbitrator. "For policy reasons, there might be legitimate reasons to have a more narrow definition of spouse under the Insurance Act" than under the Family Law Act, says Necpal, who heads Necpal Litigation. "The two pieces of legislation are directed at two very differ- ent purposes. It is not surprising they would have different defini- tions for spouse," he notes. If aspects of a term are not clearly defined, he says, looking to other statutes or areas of the law may be appropriate. "But you don't look at anoth- er act to find out what a defined term is. You can't import anoth- er definition," says Necpal. The definition of spouse re- quires "two persons" who are not married to have lived togeth- er for at least three years, so it applies equally to same-sex and opposite-sex couples. "It [is] not discriminatory to require you to have to live together" to meet the definition, Necpal says. Despite finding that the ar- bitrator erred in her ruling, the Superior Court judge concluded that the standard of review was reasonableness. "Even if the Arbitrator's ap- proach was wrong, was it unrea- sonable?" he asked. Morgan found that it was unreasonable because of a lack of proper analysis and incon- sistency with underlying legal principles. "The arbitrator failed to ar- ticulate reasons why Family Law Act cases should apply to the Insurance Act other than to point to the literal similarity of the words used. There might be a reason to apply family law concepts to an insurance law context other than a coincidence of wording in the legislation, but the arbitrator did not provide one," wrote Morgan. "The outcome of the decision was to find persons who admit- tedly have not lived together for three years to have notionally lived together for three years," he added. LT FOCUS Justin Necpal says he thinks the Superior Court of Justice was correct to quash the decision of an arbitrator, after a woman sought benefits through her male partner's policy. Your injured client needs more than a settlement. Small structures can do big things. STRUCTURE IT EVERY TIME. 1.800.265.8381| www.mckellar.com Untitled-5 1 2018-11-06 3:07 PM

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