In its judicial review of an administrative appeal from a statutory arbitration decision, Ontario’s Divisional Court in Belair Direct Insurance Company v. Green, 2018 ONSC 2782, asserted the limited scope granted for that appeal. By quashing and upholding parts of that appeal decision, Mr. Justice Frederick L. Myers, writing for the court, reiterated the limited role facts can play on an appeal limited to a question of law and the deference the court has for decisions taken on questions of law.
Belair Direct Insurance Company (“Belair Direct”) applied to the Divisional Court under sections 2 and 6(1) of the Judicial Review Procedure Act, RSO 1990, c J.1 for review of a decision taken by a Director’s Delegate appointed under the Insurance Act, RSO 1990, c I.8. The Director’s Delegate had allowed in part an appeal from an arbitrator’s decision dismissing Respondent’s (“Ms. Green”) claim for no-fault statutory accident benefits under the Statutory Accident Benefits Schedule – Accidents on or After November 1, 1996, O Reg 403/96 (“SABS”).
For reasons more fully set out in the Myers J.’s decision, the arbitrator had, among other things dismissed Ms. Green’s claim for:
(1) the cost of a follow-up in-home assessment; and,
(2) reimbursement of a fee allowed under section 38.2(9) of the Insurance Act’s SABS for the preparation of a number of claims later held to have either not been provided or unnecessary.
The Director’s Delegate allowed Ms. Green’s appeal in part. He (a) remitted to a different arbitrator the claim for the follow-up in-home assessment and (b) allowed the claim for the reimbursement of the fee related to preparing the claims.
Belair Direct objected to the Director’s Delegate “interfering” with the arbitrator’s findings of fact and objected to having to reimburse a fee for drafting claims which were held to be improper.
The parties agreed that the standard of review is reasonableness. Myers J. referred to the standard as elaborated on by Agyapong v. Jevco Insurance Company et al, 2018 ONSC 878 at paras 12-13.
(1) In-home assessment – The arbitrator made factual determinations regarding Ms. Green’s testimony and stated the reasons why he rejected her testimony. The Director’s Delegate “expressly re-weighed the evidence” and came to an opposite conclusion and quashed the arbitrator’s decision.
Myers J. observed that, under the Insurance Act, an appeal from an arbitrator’s decision to the Director’s Delegate is limited to questions of law. The Director’s Delegate had correctly identified the rule that an error made finding facts may amount to an error of it there is no evidence to support the finding. He then referenced Housen v. Nikolaisen,  2 SCR 235, 2002 SCC 33 but incorrectly reframed it as his guide for a review limited to a question of law, stating that:
“an error of fact becomes an error of law where, on appeal, it is determined that the trier of fact made a palpable and overriding error coming to a factual conclusion.”
Myers J. wrote that the Director’s Delegate’s formulation of the rule was incorrect and did not apply to a review limited to a question of law.
“ However, this is not a correct statement of the law from the Housen case. The “palpable and overriding error” standard is the deferential test applicable on appeals where the appeal court or tribunal is entitled to review decisions for errors of fact or mixed fact and law. No case law allows an appellate body, whose jurisdiction is limited to reviewing errors of law, like the Director’s Delegate, to review errors of fact. It can be an error of law to find a fact based on a misapplication of a legal principle or with no supporting evidence as noted above. But an appeal court or tribunal whose jurisdiction is limited to reviewing errors of law is decidedly not entitled to review findings of fact just because it believes the findings to be palpably and overridingly wrong unless the tribunal committed an identified error of law.”
Myers J. held that the Director’s Delegate’s was not authorized to review questions of fact and therefore his decision was not within the range of what was reasonable. Given that the Director’s Delegate’s decision on the in-home assessment was unreasonable, Myers J. set it aside.
(2) Fee to prepare claims – The Director’s Delegate held that the arbitrator had erred in law by relieve Belair Direct from its obligation under section 38.2(9) of the SABS to pay the fee Ms. Green claimed for filling out the form. Section 38.2(9) provides that an insurer must object within ten (10) days of receipt of the claims made, failing which it was deemed to have accepted it.
“The Director’s Delegate noted the consumer protection purpose of the SABS. He reasoned that there was a greater risk of harm in allowing insurers to decline payments where they challenge the need for or propriety of an approved or deemed approved application compared to the harm of requiring insurers to pay where the insurer had the chance to object to an application and did not do so. While the odd outlier may exist where an injustice may appear to be done to an insurer, and perhaps this is one such case, the Director’s Delegate determined that it is more important to give the words of the statute their plain and ordinary meaning so as to protect the integrity of the checks and balances already built into the system that adequately protect all parties in the vast majority of cases.”
Myers J. noted that, on the facts, including new evidence permitted on the judicial review, the result may be that it could appear unfair to the insurer. That said, the issue considered by the arbitrator and by the Director’s Delegate was a question of law that fell with the appellate jurisdiction of the Director’s Delegate and his decision was entitled to deference from the court.
Myers J. upheld the Director’s Delegate’s decision on the reimbursement of the fee to prepare the claims.