The Financial Services Commission of Ontario ('FSCO") decision by Arbitrator Osundi in Jama and Aviva Canada Inc. (FSCO A13-004308) (“Jama”) is the most recent decision considering the territorial limits of the Statutory Accident Benefits Schedule (“SABS”).
In this case, the Applicant was the surviving widow of an individual who passed away in a motor vehicle accident in Somaliland, Africa in May 2012. The Applicant applied for death and funeral benefits.
The Arbitrator concluded that the Applicant was precluded from claiming accident benefits because the accident was outside of the territorial limits considered by Section 2(3) of the SABS.
As identified by the Arbitrator, the crux of the Applicant’s case rested on whether there was ambiguity in Section 2(3). Section 2(3) of the SABS states:
(3) The benefits set out in this Regulation shall be provided in respect of accidents that occur in Canada or the United States of America, or on a vessel plying between ports of Canada or the United States of America. O. Reg. 34/10, s. 2(3).
Section 243(2) of Insurance Act also deals with the territorial limitations. It provides:
(2) Statutory accident benefits provided under section 268 apply to the use or operation of any automobile in Canada, the United States of America and any other jurisdiction designated in the Statutory Accident Benefits Schedule, and on a vessel plying between ports of Canada, the United States of America or a designated jurisdiction. 1996, c. 21, s. 20.
Arbitrator Osundi found that there was no ambiguity in either the SABS or the Insurance Act.
The Applicant relied solely on the decision of the Superior Court of Justice in TD Insurance Co. v Vaughan (“Vaughan”) in support of their position that there was ambiguity in the SABS. In that case, the accident occurred in the United States Virgin Islands and as such, there was ambiguity in what was meant by Section 2(3). Specifically, it wasn’t clear if the United States of America included any of the three unincorporated organized territories, one of which was the United States Virgin Islands. The Court concluded that the doctrine of contra proferentem applied to resolve the ambiguity in favour of the insured.
In contrast, in the subject case, the accident happened in another part of the world - Somaliland, Africa. The Arbitrator found that the ambiguity that existed in the Vaughan case was only as it related to the United States of America and not other parts of the world. Arbitrator Osundi concluded that the legislature intended to restrict claims for accident benefits to only those that happen in Canada or the United States of America or a vessel plying between ports of Canada or the United States of America.
Accordingly, the Applicant was precluded from bringing a claim for accident benefits.
While not entirely ground breaking, this most recent case confirms the strict meaning of the territorial limits set forth in the SABS.