IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Evancio v. Geico General Insurance Company, |
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2025 BCSC 1915 |
Date: 20250910
Docket: S221510
Registry: Vancouver
Between:
Desiree Hope Evancio by her Litigation Guardian, Ashley Dahn
Plaintiff
And
Geico General Insurance Company and Geico Casualty Company
Defendants
Before: The Honourable Mr. Justice Veenstra
Oral Reasons for Judgment
In Chambers
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Counsel for the Plaintiff: |
V.G. Critchley, K.C. J. Corbett |
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Counsel for the Defendants: |
R. Johal |
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Place and Date of Hearing: |
Vancouver, B.C. September 5, 2025 |
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Place and Date of Judgment: |
Vancouver, B.C. September 10, 2025 |
Table of Contents
The Insurance Policy and the PAU
[1] THE COURT: The defendants apply for an order dismissing this action on the ground that the claims advanced are within the exclusive jurisdiction of the Civil Resolution Tribunal (the “CRT”).
[2] The defendants are out-of-province insurers of a vehicle from Illinois that was involved in a motor vehicle accident in Vancouver in which the plaintiff was injured.
[3] The application raises questions as to the scope and nature of a Power of Attorney and Undertaking (“PAU”). The purpose and general effect of the PAU system was explained by Justice Binnie in Unifund Assurance Co. v. Insurance Corp. of British Columbia, 2003 SCC 40, [2003] 2 S.C.R. 63, at para. 92:
The PAU system is an interprovincial (and interstate) web of interlocking arrangements for substitutional service and undertakings designed to ensure that travelling motorists are financially responsible for their actions in other provinces and participating states, by confirming that their insurers will respond to claims in respect of an accident which occurs outside of the insured’s home jurisdiction. It tracks the ordinary law. An out-of-province motorist can be required to defend an action in the jurisdiction where the accident occurred, and an insurer is contractually bound to the defendant to provide a defence in that place, whether there is a PAU in place or not.
[4] A PAU also provides confirmation that the foreign insurer will extend statutory minimum coverages when a motor vehicle accident involving their insured occurs within British Columbia and will not raise any defence to a claim that would be unavailable to a local insurer.
[5] In this case, what is specifically in issue is first-party accident benefits for medical and rehabilitation expenses and wage loss.
[6] The plaintiff was injured on October 12, 2019, when, as a pedestrian, she came into contact with a Chevy van and trailer owned by a Mr. Young and driven by a Mr. Swartwood. Both the owner and the driver were from Chicago, Illinois, and the van and trailer were insured by the defendants.
[7] On February 24, 2022, the plaintiff commenced the present action against the defendants. The claim (as amended) pleads that:
5. At all material times the Chevy Van was insured under an insurance policy … issued by [the defendants] …
6. [The defendants] filed a [PAU] with the Superintendent of Financial Institutions in the Province of British Columbia on or about Dec. 13, 1996. …
7. The [PAU] … obligated [the defendants] to provide medical, rehabilitation and wage loss benefits to claimants of benefits under the Policy, including the plaintiff, in amounts and at levels at least equal to the level of benefits prescribed under Part 7 of the Insurance (Vehicle) Regulation, BC Reg 447/83.
…
11. The plaintiff is entitled to be paid benefits by [the defendants] under the Policy, and in accordance with the [PAU] including medical and rehabilitation benefits and wage loss benefits. The plaintiff has demanded payment of benefits under the Policy from [the defendants].
12. [The defendants] have refused or neglected to pay the plaintiff benefits under the Policy.
[8] The action claimed a declaration that the plaintiff is entitled to medical, rehabilitation and wage loss benefits, an order for payment of such benefits that are due and owing to date, and damages for breach of contract of insurance.
[9] In their Response to Civil Claim, the defendants acknowledge having filed the PAU. They plead in Part 3 that:
1. The Plaintiff is not entitled to Auto Medical Payments coverage under Section II of the Policy. In the alternative, if the Defendants are required to provide benefits similar to the statutory minimum benefits under Part 7 of the Insurance (Vehicle) Regulation, BC Reg 447/83 (“Part 7”) to the Plaintiff as a result of Geico being a signatory to the PAU, then the matter is within the jurisdiction of the Civil Resolution Tribunal (“CRT”) and this action has been brought outside the applicable limitation period and is statute barred.
[10] The defendants expand on this by quoting the specific wording of the contract of insurance, which they say does not extend any coverage to the plaintiff as she did not fall within the definition of "additional insured" in the policy. They then acknowledge that Part 7 provides a broader definition of "insured" than the policy, and:
11. Thus, the Plaintiff may qualify as an “insured” under Part 7 as a result of the PAU, while not qualifying for coverage under the Policy directly.
[11] With respect to Part 7, the defendants plead that:
12. If the plaintiff is entitled to Part 7 benefits, then the proper forum to claim entitlement is the CRT and not this Court.
13. Pursuant to section 133(1)(a) of the Civil Resolution Tribunal Act [SBC 2012] CHAPTER 25, the CRT has “exclusive jurisdiction” concerning the “determination of entitlement to benefits paid or payable under the Insurance (Vehicle) Act [the “Act”]” for accidents occurring on or after April 1, 2019.
14. The applicability of this exclusive jurisdiction is for any insurer providing benefits under the terms of the Act and Regulations and not limited to ICBC.
15. Accordingly, since the Accident occurred after April 1, 2019, and on October 12, 2019, then the CRT has exclusive jurisdiction concerning the Plaintiff’s claim for Part 7 benefits against Geico.
[12] The defendants acknowledge that there was an automatic suspension of the limitation periods in 2020 as a result of the COVID pandemic, but say that:
22. Since the automatic suspension of limitation periods did not apply to the CRT, and because the CRT no longer has the discretion to waive, suspend or extend mandatory time periods, the Plaintiff’s period for challenging her benefits under Part 7 benefits has expired.
[13] The insurance policy, by which the defendants insured the Chevy van, included a " SECTION II – AUTO MEDICAL PAYMENTS: Protection for You and Your Passengers for Medical Expenses." This section provides first-party coverage for:
… all reasonable expenses actually incurred by an insured within one year from the date of accident for necessary medical, surgical, x-ray, dental services, prosthetic devices, ambulance, hospital, professional nursing and funeral services.
[14] The declarations page included a limit of $50,000 per person for this coverage.
[15] In terms of who could recover on this policy, the following language governed:
This Coverage applies to:
1. You and each relative who sustains bodily injury caused by accident:
(a) While occupying the owned auto; or
(b) While occupying a non-owned auto if you or your relative reasonably believe you have the owner’s permission to use the auto and the use is within the scope of that permission; or
(c) When struck as a pedestrian by an auto or trailer.
2. Any other person who sustains bodily injury caused by accident while occupying the owned auto while being used by you, a resident of your household, or other persons with your permission.
[16] It was common ground that, had this accident happened in Illinois, then on the terms of the policy as written, the Auto Medical Payments coverage would not extend to the plaintiff.
[17] As referenced above, the plaintiff's claim is based on a PAU filed by one of the defendants in December 1996. Although the PAU was filed only by GEICO, no issue was taken with its application in this matter generally. By that document, the defendants appoint the Superintendent of Insurance of British Columbia as their attorney to accept service of process. As well, the defendants undertake to appear in an action commenced in British Columbia against it or its insured. They also undertake:
C. Not to set up any defence to any claim, action, or proceeding, under a motor-vehicle liability insurance contract entered into by it, which might not be set up if the contract had been entered into in, and in accordance with the laws relating to motor vehicle liability insurance contracts or plan of automobile insurance of the Province or Territory of Canada in which such action or proceeding may be instituted, and to satisfy any final judgement rendered against it or its insured by a Court in such Province or Territory, in the claim, action or proceeding, in respect of any kind or class of coverage provided under the contract or plan and in respect of any kind or class of coverage required by law to be provided under a plan or contracts of automobile insurance entered into in such Province or Territory of Canada up to the greater of
(a) the amounts and limits for that kind or class of coverage or coverages provided in the contract or plan, or
(b) the minimum for that kind or class of coverage or coverages required by law to be provided under the plan or contracts of automobile insurance entered into in such Province or Territory of Canada, exclusive of interest and costs and subject to any priorities as to bodily injury or property damage with respect to such minimum amounts and limits as may be required by the laws of the Province or Territory.
[18] It is common ground, at least for purposes of this application, that by virtue of these provisions and provided that her claim is made properly, the plaintiff is entitled to claim from the defendants first‑party benefits to which she would have been entitled under Part 7 had the vehicle in the accident been insured by ICBC under the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231 [IVA]. That is because, pursuant to s. 78 of the Insurance (Vehicle) Regulation, B.C. Reg. 447/83 [Regulation], a "pedestrian who collides with a vehicle described in an owner’s certificate" is an insured for purposes of Part 7 and entitled to the benefits provided for in Part 7.
[19] It was also common ground that the form of undertaking common from 1964 to 1988 contained wording that extended third‑party liability coverage but did not obligate the out-of-province insurer to pay no-fault accident insurance benefits like those in issue in the present case. This was confirmed in Batchelder v. Filewich, 2004 BCCA 50.
[20] The PAU in the present case is in the "new" form of undertaking that became common after 1988. As confirmed in Court v. Alberta Motor Assn. Insurance Co. (1994), 90 B.C.L.R. (2d) 195, 1994 CanLII 1605 (S.C.), this document makes the out-of-province insurer liable to pay no-fault benefits at least in the amounts prescribed by Part 7.
[21] The defendants say in their notice of application that:
25. The Supreme Court has not considered whether it has jurisdiction to consider entitlement to first party benefits owed by an out-of-province insured now that the CRT has exclusive jurisdiction over first party benefits as a result of the current legislative scheme. However, the reasoning should be consistent with Batchelder, which obligated out-of-province insurers that have filed a PAU to follow the “ordinary law” in British Columbia and that would include having disputes about the entitlement to benefits determined by the CRT.
[22] The defendants base this assertion on a review of the various legislation that was in effect in October 2019. They begin with s. 78 of the Regulation, which contains a definition for purposes of Part 7 of the word "insured." That definition includes “a cyclist or pedestrian who collides with a vehicle described in an owner's certificate.” The balance of Part 7 describes the various benefits that are available to such an insured.
[23] Part 10 of the Civil Resolution Tribunal Act, S.B.C. 2012, c. 25 [CRT Act], sets out the various areas in which the CRT has jurisdiction. Division 7 of Part 10 deals with accident claims. Section 133 (as in effect in October 2019) provided that:
(1) Except as otherwise provided in section 113 [restricted authority of tribunal] or in this Division, the tribunal has jurisdiction in a dispute, in respect of an accident, over a claim concerning one or more of the following:
(a) the determination of entitlement to benefits paid or payable under the Insurance (Vehicle) Act;
(b) the determination of whether an injury is a minor injury for the purposes of the Insurance (Vehicle) Act;
(c) liability and damages, if the amount, excluding interest and any expenses referred to under section 49 [order for payment of expenses], is less than or equal to the tribunal limit amount.
(2) For the purposes of this Act, the tribunal
(a) has exclusive jurisdiction in respect of claims described in subsection (1)(a) or (b) of this section, and
(b) is to be considered to have specialized expertise in respect of claims described in subsection (1) (c) of this section.
(3) For certainty, a person may make a request for tribunal resolution in more than one tribunal proceeding relating to an accident.
[24] The defendants rely upon s. 133(1)(a) and say that this is a case in which the subject matter of the dispute is a determination of entitlement to benefits paid or payable under the IVA and that, as a result, the CRT has "exclusive jurisdiction" pursuant to s. 133(2)(a).
[25] The defendants note the definition of "accident" in s. 132, which says that the word:
(b) in respect of the benefits referred to in section 133 (1) (a) of this Act, has the same meaning as in
(i) section 1.1 [definitions] of the Insurance (Vehicle) Act for benefits payable under Part 1 of that Act …
[26] "Accident," as defined in s. 1.1 of the IVA, means “an accident arising out of the use or operation of a vehicle.” The definitions in s. 1 of the IVA include:
“vehicle” means motor vehicle or trailer;
“motor vehicle” means a motor vehicle as defined in the Motor Vehicle Act;
[27] The defendants say that as a result of these definitions, the provisions of the CRT Act apply regardless of whether the motor vehicle in issue is insured in British Columbia.
[28] The defendants then rely on s. 16.1(1) of the CRT Act, which says:
Subject to subsection (2) and section 16.4 (1) and (2) [bringing or continuing claim in court], if, in a court proceeding, the court determines that all matters are within the jurisdiction of the tribunal, the court must,
(a) in the case of a claim within the exclusive jurisdiction of the tribunal, dismiss the proceeding,
(b) in the case of a claim in respect of which the tribunal is to be considered to have specialized expertise, dismiss the proceeding unless it is not in the interests of justice and fairness for the tribunal to adjudicate the claim, or
(c) in any other case, stay or dismiss the proceeding, as the court considers appropriate, unless it is not in the interests of justice and fairness for the tribunal to adjudicate the claim.
[29] The defendants say that because the plaintiff's claim was within the exclusive jurisdiction of the CRT, the Court must dismiss the action.
[30] The defendants submit that these statutory provisions are applicable on their face to all plaintiffs seeking benefits under Part 7, and they are equally applicable to a plaintiff seeking similar benefits from a foreign insurer. They draw analogies to the conclusion in Moldovan v. Republic Western Insurance Company, 2011 BCCA 418, at para. 24, in which it was concluded that a two-year limitation period under s. 103 of the Regulation was applicable in a claim by a plaintiff against an out-of-province insurer.
[31] The defendants say that the statutory provisions that create the plaintiff's entitlement are those found in Part 7. It is the IVA and the Regulation that create and define the plaintiff's entitlement and, as a result, the plaintiff was bound to bring any dispute in accordance with the statutory scheme to the body with jurisdiction to administer and determine that entitlement.
[32] The plaintiff submits that she is not claiming benefits that are paid or payable under the IVA and thus the CRT Act is not applicable. The plaintiff says that her claim is a claim against a private insurance company from a different country on a contract of insurance and is not properly characterized as a claim for statutory benefits.
[33] The plaintiff says that:
A) The IVA sets out the terms of a statutory contract of insurance between the Insurance Corporation of BC (“ICBC”) and those who are insured by ICBC;
B) The only party who can be sued under Part 7 is ICBC; and
C) She has no right to sue the defendants under any provisions of the IVA.
[34] The plaintiff says that her only entitlement to sue the defendants comes from the PAU. It is the PAU that creates a legal relationship between the plaintiff and the defendants, and its legal effect, as explained in the cases, is that the plaintiff has become an insured under the policy of insurance issued by the defendants to Mr. Young. The plaintiff's claim is in contract.
[35] The plaintiff says that the only legal relevance of the IVA in this case is that it reflects de facto statutory minimum entitlements that are effectively imported into the contract of insurance issued by the defendants. By virtue of the PAU, the defendants cannot raise as a defence that the plaintiff is not an insured, and the defendants are required to pay benefits up to at least the minimum benefits that would be available to the plaintiff if she was able to claim under the IVA. The IVA creates a floor, but it does not subsume the coverage provided by the terms of the policy issued by the defendants or the policy terms as a whole. The fundamental nature of the plaintiff's claim remains one in contract, and the contract is only varied to the extent necessary to reflect the statutory minimums.
[36] The plaintiff submits that while the effect of the PAU is that the defendants cannot raise any defence that ICBC would not be permitted to raise under the IVA, that does not mean that the defendants can raise any defence or rely on any statutory regime that ICBC can raise or rely on. Those are two very different things. The plaintiff's claim against the defendants is governed by the policy issued by the defendants, except to the extent that the coverage falls below the floor provided by BC law.
[37] The plaintiff says that the Moldovan case relied on by the defendant is one in which a claim had been commenced against ICBC for Part 7 benefits with the plaintiff at a later time seeking to add an out-of-province insurer as a defendant. The issue discussed in the portion of the judgment relied upon by the defendants was what limitation period applied. But the plaintiff says that the Court in Moldovan was very clear that the claim against the out-of-province insurer was a claim in contract and not a claim under the statutory regime.
[38] The 2000 decision of Justice Cohen in Diotte v. ICBC, 2000 BCSC 1779, provides a useful summary of cases decided up to that time. In the case before Justice Cohen, the plaintiffs had been injured while passengers in British Columbia, riding in a vehicle from Alaska insured by Progressive Specialty Insurance Company. Because it was understood that Progressive had not filed a PAU, claims for Part 7 benefits were initially brought against ICBC. However, after the accident and after the action was commenced but before a statement of defence was filed, Progressive did file a PAU.
[39] Having considered a number of authorities and confirmed that the PAU filed by Progressive was of the more modern form, Justice Cohen noted at para. 28 that:
[28] Thus, once the PAU has been filed, the extraprovincial or foreign insurer is precluded by law from setting up any defence on the basis that the contract of insurance does not include a provision for Part 7 benefits. Because all contracts of insurance issued in B.C. contain provisions for the payment of Part 7 benefits, an extraprovincial or foreign insurer who has filed a PAU is obliged to pay Part 7 benefits up to the limits prescribed in this province.
[40] Justice Cohen then turned to a consideration of the nature of the PAU:
[30] The determination of this Stated Case turns on the proper interpretation to be given to the PAU. It is necessary to decide what effect the PAU has on Progressive’s ability to set up a defence to the plaintiffs’ claims for Part 7 benefits. In short, does the PAU preclude Progressive from setting up a defence to the plaintiff’s claim for Part 7 benefits?
[31] Progressive relied on s. 134(9) and the provisions of the Interpretation Act, R.S.B.C. 1996, c. 238, to contend that the PAU is of a statutory nature and that it must be interpreted by reference to the rules of statutory interpretation. Progressive placed great emphasis on the use of the words "prescribe" and "form" in s. 134(9), submitting that this terminology carried the implication of regulation making since similar terminology is used in s.1 of the Interpretation Act and the definitions of the words "enact”, and "regulation" contained therein. Progressive argued that it follows from the statutory nature of the PAU that it should not be given retrospective effect. As a result, Progressive submitted that the PAU should operate only in respect of claims which occurred after the date that the PAU was filed.
[41] Having considered various definitions in the Interpretation Act, Justice Cohen explained:
[34] What is required to indicate a regulation then, is language reflecting the intention of the legislature to delegate regulation making authority over the matter to the Superintendent. The use of the word "prescribe" in s. 134(9) implies that the legislature did intend to confer legislative authority on the Superintendent to prescribe the appropriate standard form PAU.
[35] The nature of the standard form PAU and the PAU filed in this case is complicated by the fact that no regulation dealing with the form of the PAU has been deposited with the Registrar of Regulations (the “registrar”). Thus, it would seem that the form of the PAU is not a regulation by virtue of s. 3 of the Regulations Act which says that “a regulation has no effect unless it or a copy of it is deposited with the registrar.” Despite this technical irregularity, I am satisfied that if the form of the PAU had been deposited with the registrar and appeared as a regulation to the Insurance Act, I believe that the standard form PAU would be subject to the rules of statutory interpretation.
[36] What remains at issue, however, is whether a PAU, once completed and filed with the Superintendent, as distinct from a standard form PAU appearing as a regulation, retains its statutory character. ICBC contends that the PAU is not a statutory instrument arguing that, while based upon statutory language, the completed form is not statutory. ICBC argues that the PAU is a standardized form which, when completed by a signatory insurer, is reduced to the status of a private document that should be interpreted according to the principles of contract law. I agree with this contention.
[37] The fact that Progressive is bound by the PAU once it is filed is indicative of the nature of the PAU. Because a foreign insurance company cannot be bound by B.C. legislation, it seems that the PAU, by virtue of its power to bind a foreign insurer is more contractual in nature than statutory. A further reason that I do not think that the PAU can be classified as statutory is that it creates enforceable rights in favour of a certain class of people. The significance of this is that a breach of the promise contained in the PAU could give rise to an action by some member of that class. By filing a PAU with the Superintendent, Progressive is doing more than simply complying with a statutory obligation: Progressive is voluntarily opting into the scheme of compulsory universal automobile insurance in B.C., thereby creating enforceable rights and obligations.
[38] This conclusion is consistent with the description given to PAU’s in earlier cases in which the courts have indicated that the PAU is distinct from statute. In Cunningham et al. v. Manitoba Public Insurance Corporation (1979), 13 B.C.L.R. 199 (C.A.), Lambert J.A. recognized, at p. 203, that the requirement of extraprovincial and foreign insurers not to set up a defence in proceedings in B.C. that a B.C. insurer could not set up was accomplished “by requiring the filing of an undertaking and not by attempting to impose a direct statutory obligation.” In Shea, supra, the PAU was described in the following terms, at pp. 97-98:
It is a promise to the world, not a promise to the insured. ... [T]he undertaking, by limiting the defences available to [the] Manitoba Public Insurance Corporation, give to this plaintiff rights that would not be available if the accident had happened in Manitoba.
[39] Based on these cases and the reasons given above, I am of the opinion that the PAU signed and filed by Progressive is not a statutory instrument. Rather, the PAU, once signed and filed, provides a promise, in the nature of a contract. While this list is not exhaustive, the PAU is a promise by Progressive to, at minimum, (1) every person with whom Progressive has a contract of insurance; (2) every person who qualifies as an insured under a contract of insurance between Progressive and another party, including the plaintiffs; (3) the Superintendent; and, (4) all other insurers who carry on business in B.C.
[40] Since the PAU filed by Progressive is not, in my opinion, a statutory instrument, Progressive’s submission that the PAU should be subject to the ordinary rules of statutory interpretation, including the presumption against the retrospective application of statutes, must be rejected. Instead, I think that given the contractual nature of the PAU, the PAU should be interpreted in accordance with the rules of construction used in contract law. …
[Emphasis added.]
[42] In Unifund, the Supreme Court of Canada considered a dispute between two insurers. As noted in the headnote:
Mr. and Mrs. B, Ontario residents, were injured when their rented car was struck by a tractor‑trailer in British Columbia. All the vehicles involved in the accident were registered in British Columbia and insured by the appellant (ICBC). After their return to Ontario, both Mr. and Mrs. B received substantial statutory accident benefits (SABs) under their Ontario policy from their Ontario insurer, the respondent (Unifund). Subsequently they were awarded substantial damages in an action brought in British Columbia against the negligent truck owner, truck driver and truck repair shop, all of whom were insured by the appellant. Pursuant to s. 25 of the British Columbia Insurance (Motor Vehicle) Act, the appellant deducted the no-fault benefits paid to the Bs from the award of damages in British Columbia.
Both the Ontario insurer and the British Columbia insurer were parties to a Power of Attorney and Undertaking (the “PAU”) exchanged by motor vehicle insurers to denote compliance with minimum coverage requirements and to facilitate acceptance of service. The PAU is part of a reciprocal scheme for the enforcement of motor vehicle insurance claims in Canada.
Under s. 275 of the Ontario Insurance Act, the payor of the SABs is entitled to seek indemnification from the insurer of any heavy commercial vehicle involved in the accident. The respondent applied to the Ontario Superior Court of Justice for the appointment of an arbitrator to determine the question of indemnification.
[43] At para. 18, Justice Binnie described the PAU as being part of a “reciprocal scheme for the enforcement of motor vehicle liability insurance policies in Canadian provinces and territories”. At para. 96, he concluded that the PAU had “no application to the facts” of the case before him. At para. 97, he commented that:
Moreover, even if the PAU could be interpreted to require the appellant’s appearance to defend the claim in Ontario, I do not think the appellant would be precluded by the PAU in general or its third undertaking in particular from contesting the application of the Ontario Insurance Act to impose a civil obligation on an out-of-province insurer in respect of an out-of-province motor vehicle accident. Such a defence does not arise under its “motor vehicle liability insurance contract.”
[44] At para. 98, Justice Binnie cited, with approval, the judgment of Justice Zuber in MacDonald v. Proctor (1977), 86 D.L.R. (3d) 455, 1977 CanLII 50 (Ont. C.A.), commenting that:
[W]here the insurers wished to incorporate Ontario statutory provisions in the PAU (as in the case of policy limits), they did so expressly (at pp. 457-58):
I am unable to read the undertaking as an agreement to incorporate into extraprovincial policies all those items that the Ontario Insurance Act obliges an Ontario policy to include ...
Although we have not been provided with the details of the Manitoba policy, it appears that it must contain benefits very similar to (or perhaps the same as) those set out in Sch. E. However, the coverage providing those benefits is included in the policy by the Manitoba Public Insurance Corporation in the fulfilment of its own responsibilities; not because those benefits have been impressed into the policy by Ontario legislation.
... an undertaking by the Manitoba Public Insurance Corporation to, in effect, observe Ontario rules to a certain extent, where its insured is involved in Ontario proceedings, does not render the Manitoba policy one that is “made in Ontario.” [Emphasis added.]
[45] At paras. 100-101, Justice Binnie commented:
100 The PAU is about enforcement of insurance policies, not about helping insurance companies, which have been paid a premium for the no-fault coverage, to seek to recover in their home jurisdictions their losses from other insurance companies located in a different jurisdiction when the accident took place in that other jurisdiction, and where the claims arising out of the accident were litigated there. The appellant referred us to the observation of Professor Black:
The reciprocal system, of which the PAU is a key part, thus has what might loosely be described as a pro-compensation, consumer-protection function.
(V. Black, “Interprovincial Inter-Insurer Interactions: Unifund v. ICBC” (2002), 36 Can. Bus. L.J. 436, at p. 444)
101 I agree. …
[46] Both parties relied in their submissions on the decision of Justice Newbury in Moldovan. At para. 1, Justice Newbury described the key issues before her:
Section 103 of Part 7 of the Insurance (Vehicle) Regulation, B.C. Regulation 447/83, as amended, provides that “No person shall commence an action in respect of benefits” under Part 7 unless the action is commenced within two years after the date of the accident for which the benefits are claimed or, where benefits have been paid, the date of the last such payment. The first issue raised by this appeal is whether an out-of-province insurer may rely on s. 103 in defence of a claim for Part 7 benefits.
[47] In Moldovan, the plaintiff was a passenger in a rented vehicle owned by U‑Haul which collided with another vehicle on June 8, 2005. U‑Haul was insured under a policy entered into in Arizona with Republic Western. As noted at para. 3:
The vehicle rental agreement between the driver of the rented vehicle and U-Haul made it clear that unless required by law, U-Haul would not provide any no-fault benefits except to the extent required by applicable law, in which event the “minimum benefits” required by law would be provided after all other insurance avenues were exhausted.
[48] In 2007, counsel commenced various legal proceedings, including an action against ICBC for Part 7 benefits. In 2009, ICBC advised counsel for the plaintiff that it was not responsible for Part 7 benefits, but that the plaintiff should instead look to Republic Western. A PAU had been filed by U‑Haul.
[49] As noted at para. 8:
Due to inadvertence on the part of his solicitors, it was not until after the two-year period referred to in s. 103 had expired that the plaintiff sought Part 7 benefits from RWIC. The insurer refused, and the plaintiff applied in Supreme Court to have it added as a defendant in this action pursuant to R. 15(5)(a) of the Supreme Court Rules. Rule 15(5)(a) permits the court to add a person as a party where there may exist, between that person and any party to the existing proceeding, a question or issue relating to or connected with the subject matter of the proceeding “which in the opinion of the court it would be just and convenient to determine as between the person and that party.”
[50] The conclusion of Justice Newbury was set out at para. 17:
As will be seen below, I am of the opinion that while s. 103 would normally be available to RWIC to assert in defence of the plaintiff’s claim, s. 4(1)(d) of the Limitation Act nevertheless does permit the court to join RWIC as an additional defendant. I also conclude that RWIC should be so joined in the circumstances of this case.
[51] Although the case was determined on the basis of s. 4(1), Justice Newbury did provide a detailed review of the s. 103 issue at paras. 18-25:
[18] The submissions of counsel on this appeal evolved into a rather abstract debate about the nature of foreign insurers’ obligations under PAUs, leaving behind the specific question before us – whether a statutory provision applicable on its face to all plaintiffs seeking benefits under Part 7 is nevertheless inapplicable to a foreign insurer. RWIC began with the proposition, adopted in Diotte, supra, that a PAU is a contractual rather than statutory instrument, or at least “more contractual in nature than statutory.” In Diotte, the Court held that a PAU that had been filed subsequent to the motor vehicle accident in question nevertheless operated to prevent a foreign insurer from setting up a defence (the fact that its policy did not provide for accident benefits) that could not have been set up had the contract of insurance been entered into in British Columbia, where such benefits are compulsory. Cohen J. observed in passing that:
A further reason that I do not think that the PAU can be classified as statutory is that it creates enforceable rights in favour of a certain class of people. The significance of this is that a breach of the promise contained in the PAU could give rise to an action by some member of that class. By filing a PAU with the Superintendent [the foreign insurer] is ... voluntarily opting into the scheme of compulsory universal automobile insurance in B.C., thereby creating enforceable rights and obligations.
This conclusion is consistent with the description given to PAUs in earlier cases in which the courts have indicated that the PAU is distinct from statute. In Cunningham et al. v. Manitoba Public Insurance Corporation (1979), 13 B.C.L.R. 199 (C.A.), Lambert J.A. recognized, at p. 203, that the requirement of extraprovincial and foreign insurers not to set up a defence in proceedings in B.C. that a B.C. insurer could not set up was accomplished “by requiring the filing of an undertaking and not by attempting to impose a direct statutory obligation.” In Shea, supra, the PAU was described in the following terms, at pp. 97-98:
It is a promise to the world, not a promise to the insured. ... [T]he undertaking, by limiting the defences available to [the] Manitoba Public Insurance Corporation, give to this plaintiff rights that would not be available if the accident had happened in Manitoba.
Based on these cases and the reasons given above, I am of the opinion that the PAU signed and filed by Progressive is not a statutory instrument. Rather, the PAU, once signed and filed, provides a promise, in the nature of a contract. [At paras. 37-9; emphasis added.]
[19] Relying also on Anderson v. Co-Operators General Insurance Co. (1990) 75 D.L.R. (4th) 359 (B.C.C.A.) and McIlvenna, supra, RWIC contended in the case at bar that by filing the PAU it had “opted in” to the British Columbia scheme of compulsory car insurance. In its submission, the chambers judge was wrong to conclude that a PAU is “nothing more than a promise that [RWIC] will not rely on any limits of liability contained within its policy that are more restrictive than those minimum limits that must be made available under a policy issued in British Columbia”. Instead, the insurer says, it has adopted the same obligations as ICBC has to its insureds, and is entitled to the same rights, including the right to rely on the limitation in s. 103. The result of the chambers judge’s decision is said to be anomalous in that unlike other insureds in the province, the plaintiff is subject to no time limit or alternatively, to a six-year limitation (which may be postponed in certain circumstances) for claiming Part 7 benefits.
[20] Mr. Moldovan advocates a narrower view of the effect of PAUs. He emphasizes that his claim against the insurer is framed in breach of contract for failing to pay no-fault benefits. As seen above, clause 4 of U-Haul’s standard form rental agreement obliged RWIC to pay “the minimum benefits required by applicable law” – in this case, the law of British Columbia. However, the wording used in the rental agreement does not incorporate the entirety of Part 7 – which includes provisions with respect to the timing and method of making a claim, among other things – into the contract and does not provide for any contractual limitation period. The plaintiff characterizes s. 103 as a “contractual limitation” that is not part of the contract between himself and the insurer. He denies that the chambers judge’s decision creates any anomaly or uncertainty, submitting that the fact the plaintiff may have different or lesser obligations towards RWIC than an ICBC-insured has towards ICBC arises because “the contracts are different”. Mr. Moldovan continues in his factum:
Conversely, the Agreement in this case does not expressly set out a limitation period. Again, that does not leave RWIC without rights (and its insureds without obligations) in this area. Rather, the provisions of [the] Limitation Act govern the limitation period. There is no need to imply or impose terms. They are addressed through legislation. In this case it is a breach of contract claim. The applicable limitation period is six years.
Put simply, RWIC did not contract with the plaintiff on the same terms as ICBC contracts with its insureds. If RWIC wanted to impose on its insureds the same obligations as are owed by ICBC insureds to ICBC, it could have specified those obligations in its contract, either expressly or by reference to the legislation. It did not do so. As such, there is no basis to impose upon the plaintiff a greater obligation than that which is set out in the contract. [Emphasis added.]
[21] The plaintiff relies in part on MacDonald v. Proctor, supra, where the Court rejected the proposition that the effect of a PAU was to incorporate into extraprovincial policies “all those items that the Ontario Insurance Act obliges an Ontario policy to include.” Consequently, a resident of Manitoba who had been injured in an accident in Ontario was not required to deduct disability benefits she had received from the Manitoba Public Insurance Corporation. Zuber, J.A. for the Court observed:
... in my opinion, an undertaking by the Manitoba Public Insurance Corporation to, in effect, observe Ontario rules to a certain extent, where its insured is involved in Ontario proceedings, does not render the Manitoba policy one that is “made in Ontario”.
It may be desirable that so-called no-fault benefits paid under an insurance policy, wherever made, should release proportionately a defendant in an action, but, in my respectful opinion, s. 237(2) of the Insurance Act is confined to policies made in Ontario and does not accomplish that purpose. [At paras. 14-5.]
(See also this court’s decision in Batchelder v. Filewich, supra.)
[22] As well, the plaintiff referred us to Unifund, supra, where the plaintiffs were Ontario residents who were injured in an accident in British Columbia. After returning to Ontario, they received substantial statutory accident benefits from their Ontario insurer, ‘Unifund’. Later they were awarded damages in their British Columbia action against the negligent truck owner and others, all of whom were insured by ICBC. The latter insurer purported to deduct the no-fault benefits they had paid to the plaintiffs, from the British Columbia award, applying s. 25 of the Insurance (Motor Vehicle) Act. Both the Ontario and British Columbia insurers were parties to PAUs filed in the other province. The Supreme Court of Canada held that the PAU filed in Ontario by ICBC had no application to the facts of the case, relying in part on MacDonald v. Proctor. The Court went on to observe:
The PAU is about enforcement of insurance policies, not about helping insurance companies, which have been paid a premium for the no-fault coverage, to seek to recover in their home jurisdictions their losses from other insurance companies located in a different jurisdiction when the accident took place in that other jurisdiction, and where the claims arising out of the accident were litigated there. The appellant referred us to the observation of Professor Black:
The reciprocal system, of which the PAU is a key part, thus has what might loosely be described as a pro-compensation, consumer-protection function.
...
As stated earlier, the fact that the appellant, ICBC, has on occasion attorned to Ontario in defending British Columbia motorists involved in accidents in that province does not constitute a general attornment to Ontario in respect of all accidents wherever they take place and any consequent proceedings.
The courts should strive to give full effect to voluntary, interprovincial arrangements that seek to overcome some of the practical difficulties inherent in our federal structure. The danger, however, is that if the courts overstate the effect of these voluntary arrangements, and thereby impose on the parties obligations that were never in their contemplation, cooperation may no longer be forthcoming. In my view, the respondent’s argument attempts to push the PAU beyond its intended scope. Acceptance of its argument would undermine rather than enhance voluntary interprovincial cooperation in the field of motor vehicle insurance. If the insurers wish to expand their voluntary cooperation, the PAU can be amended to achieve this purpose.
If, as I concluded earlier, the appellant is not otherwise within the legislative jurisdiction of Ontario, the PAU does not put it there by agreement. [At paras. 100, 102-04; emphasis added.]
[23] The facts of Unifund are very different from those of this case, but the plaintiff emphasizes the Court’s statement that “The PAU is about enforcement of insurance policies, not about helping insurance companies ...” Mr. Moldovan states in his factum:
This purpose is consistent with [the] nature of the PAU. It must be remembered, and as the Court stated in Shea, supra, the PAU is an undertaking, a promise, by the insurer to do, or refrain from doing certain things. Conversely, the insured promises nothing in the PAU. In fact, the insured is not a party to the PAU.
In this context, there is nothing in the wording of the PAU by which the insurer is granted rights over and above those set out in the contract, or by which the insured accepts any obligations which are not in the contract. Since the insured is not a party to the PAU, it is difficult to conceive of a valid basis upon which the PAU could be found to have the effect of granting to the insurer contractual rights that it had not expressly obtained (negotiated) in the contract and without the consent of the insured. [Emphasis added.]
[24] With respect, I cannot agree with the plaintiff’s submission. By its terms, s. 103 applies to any person who commences an action for Part 7 benefits. It is not framed as an obligation of the insurer, nor as a contractual term that must be incorporated by agreement before it may operate. No exception is made for contracts that provide to the contrary (and in any event, U Haul’s rental agreement did not do so.) The fact that the PAU may or may not constitute the wholesale adoption of the British Columbia compulsory insurance scheme, or that a PAU has contractual aspects, is irrelevant to the fact that the plaintiff in this case is making a claim under Part 7 and therefore comes within the plain wording of s. 103. This conclusion is consonant with McIlvenna, the ratio of which was that because a claim for the plaintiff’s worsened condition due to the non-payment of Part 7 benefits was not a claim “in respect of” Part 7 benefits, s. 103 was not applicable. As Tysoe J.A. stated for the Court, s. 103 was not construed to apply “to all causes of actions that the insured may have against ICBC as a result of their dealings.” (Para. 24.) Section 103 would have applied, one may infer, to a direct claim for Part 7 benefits.
[25] I conclude that the chambers judge erred in declining to apply s. 103 on the basis that the PAU does not constitute an agreement to incorporate into RWIC’s insurance policy all the terms that are required to be incorporated in a policy issued by ICBC. The fact that s. 103 was not incorporated into U-Haul’s rental contract did not make it somehow inapplicable to Mr. Moldovan, any more than the silence of a British Columbia policy on the question of limitation would make it inapplicable to a claim against ICBC. As a person claiming benefits under Part 7 in a British Columbia action, the plaintiff is subject to the statutory limitation in s. 103. No breach of the principle of extraterritoriality arises.
[Emphasis in original.]
[52] The most recent case cited to me was Budget Rent a Car v. Philadelphia Indemnity Insurance, 2018 BCSC 163, a dispute amongst insurance companies as to contribution to the costs of settling seven actions arising from a motor vehicle accident in Vancouver. The judgment includes a review of many of the same cases that I have already discussed, including a detailed discussion of Unifund in the context of whether a PAU constituted an agreement that could found jurisdiction for purposes of s. 3(c) of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28.
[53] Counsel, in submissions, canvassed the above-noted cases in detail, each finding excerpts that supported their respective positions.
[54] In my view, the substantial weight of the authorities supports the plaintiff's position that the PAU simply impacts the contractual relationship between an insurer and its insureds. It is, to use the words of Justice Binnie, about enforcement of insurance policies. It does not, to use the words of Justice Zuber (quoted by Justice Binnie) incorporate into an extraprovincial policy all of the language of the policy in the home jurisdiction.
[55] The PAU, on its face, prevents an out-of-province insurer from pleading or relying on policy terms that fall below the statutory minimums within British Columbia. It does not convert the policy as written into a completely different policy, simply substituting the defendants as insurers in place of ICBC, with the terms of a British Columbia policy otherwise applying. Rather, it provides certain minimum thresholds for the contract, including the extent of first-party accident benefits. To the extent the terms of the policy issued by the defendants do not fall below the applicable minimum thresholds, those policy terms continue to apply.
[56] I simply do not see, in the PAU, anything that could be said to import, as a necessary element of the parties' contractual relationship, a statutory dispute resolution scheme. It seems clear on the authority of Unifund that a British Columbia party could not force an out-of-province insurer to take part in a dispute resolution scheme established by a provincial statute. Given that, it cannot possibly be the case that an out-of-province insurer could opt in to that statutory dispute resolution mechanism, particularly where it does not seek to do so until after a limitation has expired.
[57] In my view, it cannot be said that the PAU transforms the plaintiff's claim for benefits pursuant to a contract for insurance into a claim for benefits "paid or payable under" the IVA. As such, s. 133(1)(a) of the CRT Act is of no effect. Rather, the plaintiff's claim is a claim under a contract of insurance issued by the defendants in Illinois, and nothing in the CRT Act gives the CRT jurisdiction over disputes arising with respect to such contracts.
[58] The application is dismissed.
[SUBMISSIONS RE COSTS]
[59] Costs to the plaintiff in the cause, which is the usual rule. The successful party on the application has its costs in the cause unless there is some reason to depart from that.
“Veenstra J.”